Tag Archives: Chapter 11

Delaware Judge Rejects Challenge to Payment of Fees for Indenture Trustee in Southeastern Grocers Chapter 11 Case

Southeastern Grocers (operator of the Winn-Dixie, Bi Lo and Harvey’s supermarket chains) recently completed a successful restructuring of its balance sheet through a “prepackaged” chapter 11 case in the District of Delaware. As part of the deal with the holders of its unsecured bonds, the company agreed that under the plan of reorganization it would … Continue Reading

Auto-Hauler Allied Systems Holdings’ Car Wreck of a Chapter 11 Case May Finally Be at an End

Many commentators have remarked that a “new normal” has evolved for Chapter 11 proceedings, wherein the major constituents negotiate the salient terms and exit strategy of the debtor’s restructuring prior to the filing of the bankruptcy petition, generally leading to shorter, less litigious cases. This dynamic, often evidenced by a plan support agreement, a proposed sale … Continue Reading

“Girls Gone Wild” Chapter 11 Case – [Insert Joke Here]

GGW LLC and its affiliates (“GGW”), which produce and distribute the soft core pornography videos known as “Girls Gone Wild”, recently filed for relief under chapter 11 of the Bankruptcy Code. The filing follows years of legal troubles for the company’s founder, Joe Francis, including criminal charges of racketeering and tax evasion, and civil litigation against … Continue Reading

Absolute Priority Rule Absolutism? Strict Interpretation of Bankruptcy Code Cramdown Provisions Nearly Causes Hawker Beechcraft Plan Confirmation to Skid Along the Runway

By nearly any measure, the Chapter 11 cases of Hawker Beechcraft and its affiliates (the “Debtors”) stand as a significant success. The cases began as a standalone reorganization predicated upon a restructuring support agreement (the “RSA”) among the Debtors’ senior lenders and noteholders, which soon thereafter gained the support of the creditors’ committee. The cases then switched … Continue Reading

A Messy Break-Up But a Clean Divorce: Dewey LeBoeuf Avoids Litigation Morass of Most Law Firm Bankruptcy Cases

Large law firm failures typically produce lengthy and litigious bankruptcy cases. A frustrated lawyer in one such case succinctly described the essential problem: “the assets walk, talk and, worst of all, have their own counsel.” To the inherent tensions and creditor demands of any large chapter 11 case are added  the raw pain, similar to divorce, that … Continue Reading

Not Required, But Still Appropriate – Judge Glenn Appoints Examiner in ResCap

The chapter 11 case of mortgage lender and servicer Residential Capital, LLC (“ResCap”) is fascinating on a number of levels. Its parent company, Ally Financial, Inc. (“AFI”), hopes to use ResCap’s bankruptcy to extricate itself from potential liabilities arising from the collapse of the residential housing market at the end of the last decade. To that end, … Continue Reading

NewPage – A Good Old Fashioned Free-Fall Chapter 11 Case

Last week’s Chapter 11 filing by NewPage Corporation, a company with assets and liabilities in the billions of dollars, stands as a relative rarity in the current restructuring environment. Running contrary to the “new normal” in larger restructurings, NewPage filed for bankruptcy protection without a pre-arranged or pre-negotiated exit solution, such as a back-stopped rights offering … Continue Reading

Keeping Pace With Chapter 11’s “New Normal”

I am serving this year on the Editorial Advisory Board for the Journal of Corporate Renewal, published by the Turnaround Management Association and available to all TMA members.   My guest editor’s column for the June issue, "Keeping Pace With Chapter 11’s ‘New Normal’", is available here. … Continue Reading

The Dog That Didn’t Bark – Second Circuit’s Opinion in DBSD North America Disallows Gifting, But Is Silent on Cramdown of Secured Creditor

As discussed in previous posts on this site, back in December the Second Circuit Court of Appeals issued a summary order that reversed the bankruptcy court’s confirmation of the reorganization plan (the “Plan”) of DBSD North America, f/k/a ICO North America (“DBSD”). The Court sustained a challenge to the Plan brought by Sprint-Nextel, an unsecured creditor, … Continue Reading

Second Circuit Affirms Unfavorable Plan Treatment of Senior Secured Creditor in DBSD North America

The Second Circuit Court of Appeals issued a summary order this week upholding the aggressively unfavorable treatment of a senior secured creditor under the reorganization plan (the “Plan”) of DBSD North America, f/k/a ICO North America (“DBSD”). (The Second Circuit upheld a separate challenge to the plan brought by an unsecured creditor). The summary order states that … Continue Reading

Court Tosses Life Vest to Trico Marine Services

Some legal commentators have lamented the extent to which lenders have been able to use debtor in possession (“DIP”) financing arrangements to gain control over an entire Chapter 11 case. DIP lenders have usually been able to justify aggressive provisions, and courts have approved them, on the basis that they may provide the only realistic chance … Continue Reading

Second Circuit Stays DBSD North America Plan

The chapter 11 case of DBSD North America, Inc. (“DBSD”), f/k/a ICO North America, has been marked by aggressive tactics and extreme positions from its commencement.  DBSD, a non-operating satellite communications company, and its second lien noteholders made clear their intent to cram down a plan of reorganization (the “Plan”) on DBSD’s first lien lenders.  A competitor … Continue Reading

Further Developments in Delaware Regarding Bankruptcy Rule 2019

Another member of the Delaware Bankruptcy Court has weighed in on the appropriate scope of Bankruptcy Rule 2019 (see previous post).  Judge Brendan Shannon signed an order a few days ago that directs the Ad Hoc Committee of Noteholders in the chapter 11 case of Accuride Corporation to comply with the rule’s disclosure requirements.  No written opinion has … Continue Reading

Delaware Bankruptcy Court Divided on Bankruptcy Rule 2019 Disclosure Requirements

  Last month, many distressed investors and chapter 11 professionals viewed Judge Mary Walrath’s decision on Bankruptcy Rule 2019 as a possible tipping point in the ongoing debate regarding the reach of Rule 2019’s disclosure requirements  with respect to so-called ad hoc committees.  These typically are groups of holders of a particular tranche of a debtor’s public bonds … Continue Reading