What We’re Reading This Week

The Wall Street Journal reports on the winning bid in the 36-hour auction for control of Hertz in anticipation of its emergence from bankruptcy later this summer.  The winning bidders, a group of co-investors led by Knighthead Capital Management and Certares Management, will buy the bulk of Hertz’s equity upon emergence for $2.8 billion.  Assuming

The Wall Street Journal reports that hedge-fund founder, Dan Kamensky, was sentenced to six months in prison for bankruptcy fraud in connection with his attempt to quash a competing bid for shares of Neiman Marcus subsidiary MyTheresa during Neiman’s bankruptcy case.  As a member of the official unsecured creditors’ committee, Kamensky had a fiduciary obligation

Bloomberg reported that USA Gymnastics asked the Southern District of Indiana Bankruptcy Court to enforce the automatic stay and enjoin litigation filed by four plaintiffs seeking to hold the US Olympic & Paralympic Committee (USOPC) liable for sexual abuse committed by convicted child sexual predator Larry Nassar.  USA Gymnastics said allowing the litigation to proceed

The Wall Street Journal reported that the wave of cash raised by special-purpose acquisition companies (SPACs) is fueling activity in the junk debt market at levels not seen since the dot.com-boom from two decades ago.  So far this year, SPACs have issued roughly $100 billion of stock to purchase private companies and take them public,

Bloomberg and CNN reported on the potential impact the pause in the use of Johnson & Johnson’s Covid-19 shot could have.  In the wake of the announcement, stay-at-home company stocks bounced, while travel company stocks fell as investors worried about the potential long-term impact.  [Bloomberg; April 13, 2021 & CNN; April 14, 2021]

The Wall

A recent New York Times article highlights the challenges oftentimes faced by smaller vendors in large bankruptcy cases.  The article profiles a couple, who owns a warehouse leased to Brooks Brothers, who were left holding a $240,000 cleanup fee bill when Brooks Brothers rejected their warehouse lease and refused to clear the equipment and other

The American Bankruptcy Institute reported that President Biden signed the “COVID-19 Bankruptcy Relief Extension Act” into law Saturday, March 27, 2021, which extends through March 27, 2022, provisions providing financially distressed consumers and small businesses with greater access to bankruptcy relief.  The provisions were included in the original CARES Act that was passed in the wake of the Covid-19 outbreak and were originally set to expire this month. [ABI; March 29, 2021].

Continue Reading What We’re Reading This Week [March 29, 2021]

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

Reporting from the Wall Street Journal details an independent monitor’s conclusion that Texas’ Public Utility Commission overcharged market participants by approximately $16 billion dollars during Texas’ recent energy crisis by electing to keep wholesale prices raised for 33 hours longer than the monitor deemed necessary. Although the monitor urged the Public Utility Commission of Texas