The Wall Street Journal reports on Purdue Pharma’s continuing confirmation hearing covering the company’s proposed reorganization plan centered around a $4.5 billion settlement with its founders, the Sackler family. Currently, the Sackler family is named in civil litigation which alleges that the family knowingly fueled opioid addiction through the marketing of OxyContin, an opioid painkiller.
The Wall Street Journal reports on OxyContin-manufacturer Purdue Pharma LP’s efforts to defend its proposed chapter 11 plan including its proposed multibillion-dollar settlement with the Sackler family, Purdue’s former owners. The confirmation hearing on Purdue’s proposed plan is set to begin on Thursday, August 12th. The plan is supported by the unsecured creditors’
In a recent opinion from the Delaware Bankruptcy Court in the Dura Automotive Systems bankruptcy case,[1] Judge Karen Owens held that executory contracts cannot be impliedly assumed through course of conduct by the parties, under binding Third Circuit precedent, notwithstanding that a minority of courts outside of the Third Circuit have allowed it under
Bloomberg reports that the decrease in large U.S. bankruptcy filings may be attributable in part to the use of distressed exchanges in which creditors accept discounts on their debt in exchange for better claims on a borrower’s assets, a later maturity, or both.
The Wall Street Journal reports that Senator Elizabeth Warren plans to introduce
Perhaps proving the maxim that people should be careful what they wish for, in a second significant ruling stemming from the Jevic Holding Corp. bankruptcy case, on May 5, 2021, the US Bankruptcy Court for the District of Delaware found that Jevic’s Chapter 7 trustee, appointed following the conversion of the debtors’ cases from Chapter 11 to Chapter 7, did not have standing to continue claims originally brought against the debtors’ prepetition lenders by the Chapter 11 creditors’ committee. Assuming it is upheld on appeal, the decision leaves Jevic’s unsecured creditors without any further remedy against Jevic’s prepetition lenders—in other words, leaving those employees who successfully fought approval of a prior settlement offer by the same lenders all the way to the United States Supreme Court with no recovery from those lenders. Indeed, the decision appears to be a significant victory for secured lenders generally, underscoring the importance of “challenge” provisions typically included in DIP and cash collateral orders.
Continue Reading Be Careful What You Wish For: Jevic Court Denies Chapter 7 Trustee’s Substitution Request, Potentially Ending Action Versus Prepetition Lenders
Fallout continues from the November 2020 bankruptcy sale of Town Sports’ assets to a new entity backed, in part, by an ad hoc group of Town Sports’ prepetition lenders. A separate group of prepetition lenders who did not participate in the sale filed suit in May against the ad hoc group and the administrative agent for the lender syndicate, alleging that ad hoc group’s actions had rendered the non-participating group’s secured loans “essentially worthless.”[1] The case, which is still in its early stages, demonstrates the importance of properly documenting a multi-party transaction and also provides another recent example of “lender on lender” violence.
Continue Reading Credit Bidding Gone Awry: Town Sports’ Prepetition Lenders Sue Each Other
Reuters reports that Limetree Bay refinery in the U.S. Virgin Islands, which filed for chapter 11 bankruptcy protection on July 12, 2021, requires at least $1 billion in funding in order to continue operating as a going concern. The Limetree refinery, which was only recently resurrected, was in operation for only three months before U.S.
With more than $1.7 trillion in student loan debt outstanding in the United States, student loan borrowers sometimes try to turn to the bankruptcy courts for relief, often without success due to the fact that most student loans are presumed to be nondischargeable.[1] In its July 15, 2021 decision in In re Homaidan,[2] the Court of Appeals for the Second Circuit considered one aspect of this issue—whether certain private student loans made directly to a borrower are automatically presumed to be nondischargeable as “educational benefits” under Section 523(a)(8) of the Bankruptcy Code. The Second Circuit found they are not, ruling against the appealing student loan lender.
Continue Reading Opinion of Interest – In re Homaidan: Not all Private Student Loans are Presumptively Nondischargeable in Bankruptcy
Bloomberg reports on shifting dynamics in the retail sector caused by the COVID-19 pandemic, highlighting the transition that certain financial advisory firms have made from advising on liquidating retail assets to sourcing and selling goods at brick-and-mortar retail locations they operate. The article highlights a new off-price department store, Shopper’s Find, that two global financial
Mayer Brown Restructuring Partner Lucy Kweskin recently discussed the current state of the restructuring market with the legal news site Law360.
“I don’t think we’ll really know” where the market is headed, Kweskin noted, “until we see what happens at the end of the year and in the first quarter of 2022.” We need to