Mid Cap
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August 02, 2024
Creditors Seek Bankruptcy For Smart Home Co. Pepper
Three creditors of SmartHome Ventures, a Kansas-based company that does business as Pepper, have filed an involuntary Chapter 11 petition in Delaware bankruptcy court claiming $5.6 million in debt, the latest sign of stress for companies that make "smart" home technologies.
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August 01, 2024
Alter Egos Say Rival Pool Co. Jumped The Gun On Discovery
The alter egos of bankrupt pool supply company Blueworks Corp. have rebuffed claims that they "simply refuse to answer" requests for discovery from rival Hayward Industries Inc. in its quest to secure a $16 million false advertising and deceptive trade practices judgment.
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August 01, 2024
'Texas Two-Step,' 3rd-Party Releases In Congress' Crosshairs
The "Texas two-step" bankruptcy maneuver is facing another congressional challenge from a bill that also aims to codify the U.S. Supreme Court's decision barring involuntary third-party releases in bankruptcy plans.
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August 01, 2024
Insys Trust Sees $6M Clawback For Ex-CEO's Defense Upheld
A Delaware federal judge has ruled a liquidating trust for drugmaker Insys Therapeutics can claw back $6 million paid out for the criminal defense of ex-CEO John Kapoor, affirming a bankruptcy court's ruling last year.
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August 01, 2024
Pioneer Health Approved For $450K To Fund Ch. 11 Sale Plan
Bankrupt clinic operator Pioneer Health Inc. received approval from a Delaware court to borrow $450,000 as it pursues a sale of its assets, but agreed to delay a hearing on a proposed Chapter 11 plan to give the company time to update the filings to reflect its new track.
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August 01, 2024
SouthRock Drops Request To Extend Bankruptcy Stay To CEO
SouthRock Capital Ltda., a Brazilian private equity company that operates international food brands including Starbucks and TGI Fridays, withdrew Thursday its request to extend an automatic stay to litigation against its CEO, who is not a debtor in the firm's Brazilian bankruptcy.
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August 01, 2024
3rd Circ. Says Enviro Fight No Reason To Reopen Ch. 11
The Third Circuit ruled Thursday that Bath Iron Works' potential liability over a polluted New Jersey river doesn't affect the Chapter 11 case of the shipbuilder's former affiliate, backing a district court that decided a bankruptcy judge erred in reopening the case.
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August 01, 2024
Biotech Co. Biedermann Motech Hits Ch. 11 With $34M Debt
Biedermann Motech, a maker of implants for spinal and extremity surgery, filed for Chapter 11 protection in Delaware bankruptcy court with $34 million in debt.
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July 31, 2024
Guardian Elder Care Nursing Homes in Pa., W.Va. Enter Ch. 11
A group of 19 skilled nursing homes in Pennsylvania and West Virginia filed for Chapter 11 bankruptcy protection amid declining patient numbers, telling a federal bankruptcy judge Wednesday that the plan was to stay in operation long enough to sell the facilities.
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July 31, 2024
NewAge Execs Deny Inflating Military Contract Prospects
Executives and board members of the defunct beverage company NewAge Inc. hit back at investors' allegations that they lied about having a deal to sell their products in military commissaries, saying the investors had failed to show that material misstatements were made.
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July 31, 2024
San Jose Says Hotel's Ch. 11 Plan Saved Tax Claims
The city of San Jose, California, asked a Delaware bankruptcy judge to allow it to pursue tax and utilities claims against the former operator of a high-end hotel that confirmed a Chapter 11 plan in 2021, saying the hotel's restructuring plan explicitly allowed those claims.
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July 31, 2024
Giuliani Strikes Fee Payment Deal For Ch. 11 Dismissal
Rudy Giuliani agreed to sell one of his multimillion-dollar homes to cover around $400,000 in administrative expenses that have held up dismissal of his Chapter 11 bankruptcy, the Republican firebrand and his creditors said in a letter sent Wednesday to a New York bankruptcy judge.
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July 31, 2024
Mercon Coffee's Ch. 11 Liquidation Plan Confirmed
A New York bankruptcy judge has confirmed the liquidation plan for coffee supplier Mercon Coffee Corp. after ruling earlier this month the company can't reward corporate insiders who stuck with it through its Chapter 11 case with a release from future litigation.
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July 31, 2024
Conn's Bankruptcy Shows Retail Stressors Converging
While retailers have been under pressure for years, Conn's bankruptcy last week illustrates the convergence of two acute and growing problems that have taken hold this year: lower-income consumers who are cutting spending and difficulty selling the same kinds of home goods that flew off the shelves earlier in the COVID-19 pandemic.
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July 30, 2024
Machine Toolmaker Hardinge Lines Up $100M Credit Bid
A Delaware bankruptcy judge said she would give interim approval to New York-based metal-cutting machine toolmaker Hardinge Inc. to access up to $24.2 million of a $27.35 million package to fund its Chapter 11 case, in which it has lined up a $100 million stalking-horse bid.
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July 30, 2024
Meet The Attorneys In Machine Toolmaker Hardinge's Ch. 11
A team of lawyers from Chipman Brown Cicero & Cole LLP and Ropes & Gray LLP is guiding machine toolmaker Hardinge's Chapter 11 case in Delaware, with a plan to sell its assets.
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July 30, 2024
Judge OKs $1.4M Deal With Ex-LeClairRyan Attorneys
A Virginia bankruptcy judge Tuesday approved a settlement of more than $1.4 million of claims against the estate of the defunct LeClairRyan law firm by two former firm attorneys.
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July 30, 2024
Ex-Ch. 11 Trustee Can't Retroactively File Legal Fees
A bankruptcy trustee who is removed can't retroactively receive administrative expenses, the Fourth Circuit has ruled, saying a former bankruptcy trustee is not allowed to later file an application for professional fees.
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July 30, 2024
NYC Condo Building Nears Peace Deal With Lenders In Ch. 11
Bankrupt New York City condominium complex Hudson 888 Owner told a bankruptcy judge Tuesday that it is days away from reaching a settlement for its Chapter 11 plan, which will see it hand over its real estate to its main lender to clear its debts.
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July 29, 2024
Amex Inks $3M Deal To Settle Girardi Bankruptcy Suit Claims
American Express reached a $3 million deal to settle claims brought by the Girardi Keese bankruptcy trustee accusing the credit giant's banking unit and another subsidiary of enabling $50.25 million in fraudulent transfers as part of the now-defunct law firm's scheme to defraud creditors.
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July 29, 2024
9th Circ. Rules Ch. 7 Debtor Can't Exempt Home From Estate
The Ninth Circuit ruled that a debtor in a Chapter 7 bankruptcy case in Washington state cannot pursue above-limit homestead exemption and that the remaining proceeds of her property should go to the bankruptcy estate, reversing the bankruptcy appellate panel's decision in 2022.
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July 29, 2024
J&J Ch. 11 Tossed, Steward Gets Subpoena, Zachry Settles
The Third Circuit threw out Johnson & Johnson's second attempt to use bankruptcy to deal with mass talc litigation, Red Lobster won court approval to solicit votes on its Chapter 11 plan, and a Senate committee voted to approve an investigation into bankrupt Steward Health Care and subpoena its chief executive officer. This is the week in bankruptcy.
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July 29, 2024
Irked Judge Says Late Filing 'Sandbagged' Conn. Firm
A Connecticut state court judge on Monday chided attorneys for an eleventh-hour filing and other missed deadlines on behalf of a couple lodging malpractice claims against Evans & Lewis LLC, blocking the wife from testifying to fight the firm's attempt to throw her husband out of the lawsuit.
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July 29, 2024
Machine Toolmaker Hardinge Files Ch. 11 With Plans To Sell
New York-based metal-cutting machine toolmaker Hardinge Inc. filed for Chapter 11 protection in Delaware bankruptcy court Monday with more than $100 million in debt and plans for a bankruptcy sale.
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July 26, 2024
Judge Requires 'Opt In' Releases For Red Lobster Ch. 11
A Florida bankruptcy judge said on Friday that she will conditionally approve disclosures for Red Lobster's reorganization plan after the seafood chain agreed to add "opt in" procedures that some creditors can use to release third parties from liability under its Chapter 11 plan.
Expert Analysis
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NC Rulings Show Bankruptcy Isn't Only For Insolvent Debtors
Two recent rulings from a North Carolina bankruptcy court show that lack of financial distress is not a requirement for bankruptcy protection, particularly in the Fourth Circuit, but these types of cases can still be dismissed for other reasons, say Stuart Gordon and Alexandria Vath at Rivkin Radler.
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Cannabis Ruling Lights Path For Bankruptcy Protection
A recent Massachusetts bankruptcy appellate court ruling in Blumsack v. Harrington leaves the door open for those employed in the cannabis industry to seek bankruptcy relief where certain conditions are met, but rescheduling marijuana as a Schedule III drug may complicate matters, say Jane Haviland and Kathryn Droumbakis at Mintz.
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What Bankruptcy Deadline Appeal May Mean For Claimants
If the Third Circuit reverses a recent appeal made in In re: Promise Healthcare, litigation claimants within the circuit will not be able to rely on the proof of claim process to preserve the claim — but if the court affirms, the U.S. Supreme Court may need to step in to resolve the circuit split on this issue, say attorneys at DLA Piper.
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Conn. Bankruptcy Ruling Furthers Limitation Extension Split
A recent Connecticut bankruptcy court decision further solidifies a split of authority on whether Bankruptcy Rule 9006(b) may be used to extend the limitations period, meaning practitioners seeking to extend should serve the motion on all applicable parties and, where possible, rely on the doctrine of equitable tolling, says Shane Ramsey at Nelson Mullins.
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A 5th Circ. Lesson On Preserving Indemnification Rights
The Fifth Circuit's recent decision in Raymond James & Associates v. Jalbert offers an important lesson for creditors and parties to indemnification agreements: If a debtor has indemnified a creditor, the creditor should consider participating in the bankruptcy case to avoid being deemed to have forfeited its indemnification rights, say Dania Slim and Alana Lyman at Pillsbury.
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Spartan Arbitration Tactics Against Well-Funded Opponents
Like the ancient Spartans who held off a numerically superior Persian army at the Battle of Thermopylae, trial attorneys and clients faced with arbitration against an opponent with a bigger war chest can take a strategic approach to create a pass to victory, say Kostas Katsiris and Benjamin Argyle at Venable.
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Del. Ruling Shows Tension Between 363 Sale And Labor Law
The Delaware federal court's ruling in the Braeburn Alloy Steel case highlights the often overlooked collision between an unstayed order authorizing an asset sale free and clear of successor liability under Section 363 of the Bankruptcy Code and federal labor law imposing successor liability on the buyer, say attorneys at Proskauer.
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How Clients May Use AI To Monitor Attorneys
Excerpt from Practical Guidance
Artificial intelligence tools will increasingly enable clients to monitor and evaluate their counsel’s activities, so attorneys must clearly define the terms of engagement and likewise take advantage of the efficiencies offered by AI, says Ronald Levine at Herrick Feinstein.
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Del. Insurance Co. Liquidation Reveals Recovery Strategies
Arrowood's recent liquidation in the Delaware Chancery Court offers a positive development for policyholders and claimants, providing access to guaranty association protections amid the company's demise, say Timothy Law and Ann Kramer at Reed Smith.
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The Pop Culture Docket: Judge D'Emic On Moby Grape
The 1968 Moby Grape song "Murder in My Heart for the Judge" tells the tale of a fictional defendant treated with scorn by the judge, illustrating how much the legal system has evolved in the past 50 years, largely due to problem-solving courts and the principles of procedural justice, says Kings County Supreme Court Administrative Judge Matthew D'Emic.
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Navigating Asset Tracing Challenges In Bankruptcy
A Virginia court’s recent ruling in Health Diagnostic Laboratory Inc.'s bankruptcy highlights the heightened demand for asset tracing and the strategic use of the lowest intermediate balance rule in recovering funds from commingled accounts, says Daniel Lowenthal at Patterson Belknap.
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Lender Agreements And Unitranche Facilities: A Fresh Look
Unitranche facilities — which offer blended interest rates in a single loan document — are gaining prevalence, and lenders and borrowers should understand their advantages, as well as concerns over the enforceability of a unitranche-style agreement among lenders in bankruptcy, say attorneys at Mayer Brown.
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What Banks Should Know About FDIC Assessment Rule
Max Bonici at Venable answers questions banking organizations may have about the Federal Deposit Insurance Corp.'s recent approval of a rule implementing a special assessment on banks to recoup costs associated with protecting uninsured depositors after the bank failures earlier this year, and highlights other considerations for uninsured deposits.