Tag Archives: Distressed M&A

DeX Games – SuperMedia and Dex One File Simultaneous Chapter 11 Cases to Effect Merger

Distressed m&a is the “new normal” in Chapter 11 cases, as noted here and elsewhere. Two large media marketing and advertising companies, SuperMedia and Dex One, took the “new normal” to new extremes last week by filing simultaneous and coordinated “prepackaged” Chapter 11 cases in order to complete a merger of their businesses.  Both SuperMedia and … Continue Reading

Too Cool for School Specialty – Alternative DIP Financing Allows Educational Company to Avoid Immediate Sale

The School Specialty chapter 11 case began in what has become all too typical fashion. The company, overleveraged and short of cash, had no choice but to accept a lifeline extended by its second lien secured lender, a private investment fund. The terms of the debtor in possession (“DIP”) financing required School Specialty to seek an immediate … Continue Reading

Bip . . . Bip . . . Bip . . . “Pong” Creator Atari Files for Chapter 11

Atari, Inc., the creator of the primordial video game “Pong”, filed for Chapter 11 yesterday in the U.S. Bankruptcy Court for the Southern District of New York. Its parent company, Atari SA, simultaneously sought bankruptcy protection in France. The moves were precipitated by a cessation of funding from Atari SA’s largest shareholder and primary lender. According to issued … Continue Reading

I Never Liked Twinkies

Sno-Balls, on the other hand, and virtually every type of Drakes confection – Yodels, Yankee Doodles, Devil Dogs – I enjoyed to excess at every opportunity.  Fortunately, none of these famous snacks are going away, feverish news reports of Twinkie hoarding and e-Bay price gouging notwithstanding. Hostess Brands in its current corporate form is headed for liquidation, … Continue Reading

Blink and You Missed It – Emergency Sale of Digital Domain Media Approved

Judge Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware last week approved the sale of Digital Domain Media Group, the special effects company founded by James Cameron, following one of the fastest distressed m&a transactions ever in a Chapter 11 case. The auction, held only 10 days after the petition date, nevertheless … Continue Reading

Chapter 11 Once Again Safe for Undersecured Lenders – Supreme Court Affirms Right to Credit Bid in RadLax

  The U.S. Supreme Court today in Radlax Gateway Hotel, LLC, et al. v. Amalgamated Bank unanimously upheld the right of secured creditors to credit bid their debt upon a sale of their collateral pursuant to a nonconsensual chapter 11 plan of reorganization.  As described in numerous prior posts on this site, the ruling resolves … Continue Reading

Supreme Court Indubitably Grapples With Credit Bidding

  The Supreme Court heard arguments yesterday in RadLAX Gateway Hotel over whether the Bankruptcy Code permits a debtor in a chapter 11 case to sell encumbered assets without providing its secured lenders an opportunity to credit bid their debt.  As previously described on this site, a circuit split arose last year, when the Seventh … Continue Reading

Does a Single “Or” Excommunicate Congressional Intent From the Bankruptcy Code? Supreme Court to Resolve Circuit Split on Credit Bidding

The U.S. Supreme Court will rule this term in RadLAX Gateway Hotel Inc. v. Amalgamated Bank on whether the Bankruptcy Code permits a debtor in a chapter 11 case to sell encumbered assets without providing the secured lender an opportunity to credit bid its debt. Determination of this question will require the Court essentially to choose … Continue Reading

Los Angeles Dodgers’ Chapter 11 Case: No Replay of Texas Rangers’ Drama

A World Series as exciting as any in memory ended two weeks ago. Notwithstanding the end of the season, the Los Angeles Dodgers’ chapter 11 case offered the promise of more baseball-related thrills. Dodger’s owner Frank McCourt and Major League Baseball (“MLB”) Commissioner Bud Selig appeared headed towards an epic courtroom showdown that promised to rival the … Continue Reading

So This Is Why Judges Bother to Write Dissenting Opinions — Seventh Circuit Decision on Credit Bidding Vindicates Judge Ambro’s Philadelphia Newspapers Dissent

Critics of last year’s decision on credit bidding by the Third Circuit Court of Appeals in the Philadelphia Newspapers chapter 11 case welcomed the Seventh Circuit’s recent unanimous opinion in River Road Hotel Partners LLC. The Seventh Circuit expressly adopted the Judge Tom Ambro’s cogent analysis in his Philadelphia Newspapers dissent.    In River Road, the debtors … Continue Reading

Credit Bidding After Philadelphia Newspapers: Dissent 1, Majority 0

Bankruptcy lawyers who are regularly involved in distressed m&a deals have been wondering for the past few months about the potential fallout from Philadelphia Newspapers. In that case, as previously described on this site, the Third Circuit Court of Appeals upheld the debtor’s efforts to deny its secured lenders the right to credit bid in connection … Continue Reading

Sale of Liverpool Football Club – The Ox Getting Gored Is On the Other Foot

Tom Hicks spent months trying to push through a sale of the Texas Rangers over the strong objections of his bank lenders, who believed that the proposed deal substantially undervalued the team. The result was a nasty, brutish (though relatively short) slog through chapter 11 for Texas Rangers Baseball Partners.  Now, Liverpool Football Club, also substantially … Continue Reading

Texas Rangers Chapter 11 Saga – Lessons Learned?

The Texas Rangers Chapter 11 case is finally winding down, following several weeks of nearly non-stop legal wrangling and high stakes drama. Rangers Baseball Express, LLC (“RBE”), a group fronted by legendary pitcher Nolan Ryan, emerged as the winner following a lengthy and raucous auction.  There are numerous lessons which can be drawn from this fascinating … Continue Reading

No Clear Exit Yet for Texas Rangers

The Chapter 11 case of Texas Rangers Baseball Partners (“TRB Partners”) continues to take fascinating turns, and is fast becoming a cautionary tale about the risks of using the bankruptcy process to achieve a quick result without the consent of all major parties.    As previously described, the team’s indirect owner Tom Hicks and Major League … Continue Reading

Hardball in the Texas Rangers’ Chapter 11 Case

The 2010 Major League Baseball season may not yet even be at the halfway point, but events in the Chapter 11 case of Texas Rangers Baseball Partners are beginning to resemble the taut back and forth of the final weeks of a pennant race.  It appeared last week that Judge Michael Lynn of the U.S. Bankruptcy … Continue Reading

Judge Clears Way For Sale of Texas Rangers

The Texas Rangers’ lenders thought they had thrown a perfect strikeout pitch to prevent the confirmation of the Rangers’ proposed plan of reorganization. Instead, they now know how Hugh Casey felt.  The Texas Rangers recently filed for bankruptcy under chapter 11 in order to consummate a sale of the team that is opposed by its lenders. Judge … Continue Reading

Philadelphia Newspapers – Will The Lenders Make the Check Out to Themselves?

In the end, all of the maneuvering in the Philadelphia Newspapers chapter 11 case appears to have done nothing but leave behind some very bad case law and a great deal of future uncertainty.  As previously described on this site, the Third Circuit Court of Appeals upheld the debtor’s efforts to deny the secured lenders the right to credit … Continue Reading

“Plain Meaning” Trumps Long Standing Commercial Lender Expectations in Third Circuit Philadelphia Newspapers Decision

Some cases really should not be all that difficult. However, when judges choose to divorce statutory text completely from any reference to underlying legislative intent and long standing commercial practice, inexplicable results follow.   A few months ago, I wrote of a decision by the U.S. District Court for the Eastern District of Pennsylvania that denied secured … Continue Reading

Use of so-called “Plain Meaning” Rule of Interpretation Vexes Lenders in Philadephia Newspapers

A recent decision regarding a secured lender’s right to credit bid its debt in the Philadelphia Newspapers chapter 11 case has raised significant concern among financial institutions and investment funds. The U.S. Court of Appeals for the Third Circuit has agreed to hear arguments on an expedited basis in the lenders’ appeal from the decision … Continue Reading