According to The Wall Street Journal, Teva Pharmaceutical Industries Ltd. has reached a national settlement agreement worth nearly $5 billion, including about $3.7 billion in cash, to resolve thousands of lawsuits over its alleged role in the opioid crisis.  The plaintiffs’ executive committee, which represents local and state governments and Native American tribes, reported

Shareholders in the Revlon bankruptcy have asked that an official committee of equityholders, not affiliated with the debtor-retailer’s majority owner Ron Perelman, be appointed in the case.  According to The Wall Street Journal, a group of minority shareholders sent a letter to the US Trustee on July 13th requesting the formation of an official

Background

In a recent opinion issued in LCM XXII Ltd. v. Serta Simmons Bedding, LLC, No. 21-CV-3987, 2022 WL 953109 (S.D.N.Y. Mar. 29, 2022), US District Judge Katherine Failla of the Southern District of New York denied defendant Serta Simmons Bedding, LLC’s (“Serta”) motion to dismiss an action challenging its June 2020 non-pro rata

The Wall Street Journal reports that Russia has taken another step closer to defaulting on its sovereign debts after an industry watchdog overseeing the credit-default swaps market ruled Wednesday that Russia failed to meet its obligations to foreign bondholders when it paid them in rubles earlier this month.  While Russia has continued to deny reports

US mortgage rates hit 5% this week for the first time in more than a decade, continuing a rapid ascent since the start of 2022.  According to The Wall Street Journal, interest on the average 30-year fixed-rate mortgage climbed from 4.72% a week ago to its highest level since early 2011.  Now, bankers and

After more than one year since the Paycheck Protection Program, or PPP, was established pursuant to the US Cares Act in March 2020, the Small Business Administration (“SBA”) has recently reversed its policy that prohibited companies in bankruptcy from applying for PPP funding due to their status as debtors in bankruptcy.  Specifically, on April 6, 2021, SBA released new guidance as part of its eighth version of Frequently Asked Questions for Borrowers and Lenders Participating in the Paycheck Protection Program,[1] which clarifies what it means to be “presently involved in any bankruptcy.”  As set forth in greater detail below, this newly-issued guidance removes bankruptcy as a roadblock to PPP funding and now permits companies on the road out of bankruptcy to apply for PPP loans before the program’s May 31, 2021 deadline.
Continue Reading Too Little Too Late? After Much Debate, SBA Allows Debtors to Access PPP Loans – But Only on a Limited Basis

In mid-February, Winter Storm Uri brought frigid air across the US from the Pacific Northwest to the Gulf Coast.  Most notably, Winter Storm Uri passed through Texas, resulting in large snowfalls and reducing temperatures to historic levels.  In advance of the storm, plants and utilities responsible for providing vital electricity and natural gas to Texas residents sought to prepare for the extreme conditions—but then, diesel fuel began to gel, generators and turbines froze, and electricity became scarce—leaving many market participants and end-user consumers with astronomical bills for power.  Some entities have since disputed the bills, while others have even declared bankruptcy or indicated the need for future bankruptcy court protection.

Continue Reading Texas Utilities Continue to Deal With Aftermath of Winter Storm Uri: CPS Energy Sues the Electric Reliability Council of Texas Alleging One of the “Largest Illegal Wealth Transfers” in Texas History

Bloomberg reports that HighPoint Resources Corp. received approval for its chapter 11 reorganization plan, clearing the way for its merger with Bonanza Creek Energy Inc. less than one week after filing for bankruptcy protection.  The fully-consensual plan, which carried the support of more than 99% of impaired claimants, deleverages HighPoint’s balance sheet by approximately $625 million vis-à-vis an unsecured debt-for-equity swap and an issuance of new unsecured notes totaling $100 million.  Existing equityholders are even slated to receive 1.6% of the new equity in the combined company.  [Bloomberg; Mar. 18, 2021].

Continue Reading What We’re Reading This Week [March 22, 2021]

Reporting from CNBC indicates that Purdue Pharma, the maker of OxyContin, has proposed a $10 billion plan to exit bankruptcy.  According to sources, the exit plan not only includes a significant contribution of more than $4 billion from members of the Sackler family who own the Connecticut-based pharmaceutical giant, but also calls for the pharmaceutical

CEC Entertainment, the parent company of kid-friendly and iconic “dinnertainment” restaurant and arcade chain—Chuck E. Cheese—sought and received Bankruptcy Court approval for three very unique settlement agreements, earlier this year, under which it will pay $2.3 million to three vendors to destroy roughly seven BILLION prize tickets –  i.e.,  enough tickets to fill approximately 65 forty-foot cargo shipping containers.1 The backlog was caused by Chuck E. Cheese placing orders for tickets at pre-COVID utilization rates, the resulting pandemic and rapid fallout in sales, and, most generally, Chuck E. Cheese’s efforts to transition from physical tickets to contactless transactions, like “e-Tickets.”2

Continue Reading The Costs of Destruction: Bankruptcy Court Authorizes Chuck E. Cheese to Spend Millions on Destruction of Prize Tickets