What We’re Reading This Week

Law360 reported that the U.S. Trustee’s Office filed a motion opposing a “death trap” provision contained in Avianca Holdings’ Chapter 11 plan of reorganization. In bankruptcy, so-called “death trap” provisions reward classes of creditors for voting in favor of plans of reorganization with higher payouts as an incentive for them to vote to accept a

The Wall Street Journal reports on bond managers’ continued chase for yield, in the continuing, historically low-rate environment, in which yields on even junk bonds have reached record lows not seen in over 30 years. In particular, the Journal notes that some fund managers have even started investing in unrated, illiquid bonds, increasing the risk

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’

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

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.

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

CNBC analyzes the Labor Department’s latest jobs report, which showed 850,000 jobs gained in the U.S. in June, much higher than economists expected.  The hospitality sector, particularly bars and restaurants, accounted for the largest share of employment gains, with education and professional services also seeing increased employment.  The article notes that hiring has accelerated as

Bloomberg Law analyzes how middle-market companies may be unable to address upcoming supply chain disruption shifts, leading to an increase in bankruptcy filings. [Bloomberg Law; June 22, 2021]

The Wall Street Journal discusses how the pandemic altered retail shopping habits, and the anticipated closure by 2025 of half of remaining mall-based retailers. [WSJ; June 25,