Bankruptcy

August 11, 2020
2nd Circ. Rejects Lehman's $1B Clawback Effort

The Second Circuit ruled Tuesday that a Lehman Brothers unit cannot claw back $1 billion in financial crisis-era payments distributed after Lehman filed for bankruptcy more than a decade ago, finding that the payments were protected by a safe harbor.
August 11, 2020
Dean Foods Strikes Ch. 11 Deal Over Gambler's Restitution

Milk producer Dean Foods told the Texas bankruptcy court Monday that it has reached a deal for its bankruptcy estate to get roughly $8.9 million in restitution from a professional gambler convicted of insider trading as part of an alleged scheme involving a former company officer.
August 11, 2020
Centric Creditors Want To Weigh In On Ch. 11 Brand Sale

Centric Brands' unsecured creditors have asked a New York bankruptcy judge to reject the licensing company's Chapter 11 proposal to sell off its SWIMS brand unless they are given a chance to meaningfully participate in the bidding process.
August 11, 2020
Tenn. DAs' Sackler Claims Still Blocked By Purdue Ch. 11

A New York federal judge won't let a group of Tennessee district attorneys pursue claims against the former president of Purdue Pharma LP, saying Tuesday their argument that a judgment against Richard Sackler wouldn't affect the Chapter 11 case "makes absolutely no sense."
August 11, 2020
Hertz Says It Will Need DIP Loan To Make Lease Payments

Bankrupt car rental agency Hertz Global Holdings Inc. told federal regulators it is seeking debtor-in-possession financing as it faces a Sept. 30 deadline to resume lease payments on its European vehicle fleet.
August 10, 2020
Shareholders Ask Judge To Sink Ultra Petroleum Ch. 11 Plan

Natural gas producer Ultra Petroleum told a Texas bankruptcy judge Monday it had settled creditor objections to its Chapter 11 plan, while equity holders urged him to reject the plan as unnecessary and flawed.
August 10, 2020
Calif. Judge Finds Del. Law Shields Directors In Ch. 11 Suit

Citing Delaware law that shields business entity directors, a California bankruptcy judge on Friday tossed Chapter 11 adversary suit claims against four outside directors of a life sciences company sold to creditors in 2018 amid lingering claims of mismanagement and insider self-dealing.
August 10, 2020
Permian Tank's Ch. 11 Sale Procedures OK'd In Del.

A Delaware judge gave her nod Monday to bidding procedures in Texas-based oil and gas storage tank maker Permian Tank & Manufacturing Inc.'s Chapter 11, after an agreement was struck putting off potential sale squabbles with unsecured creditors until another day.
August 10, 2020
Gibson Grabs Ex-Skadden Tax Partner For New York Office

Gibson Dunn & Crutcher LLP has announced that a former Skadden Arps Slate Meagher & Flom LLP partner joined the firm's New York office as a partner this month.
August 10, 2020
Victims Say Boy Scout Council Sheltered Funds From Ch. 11

A committee of sexual abuse tort claimants in the Boy Scouts of America's Chapter 11 asked a Delaware judge to void a local council's transfer of assets into a protective trust, saying the move could impact monetary distributions for victims.
August 10, 2020
Creditors Ask For Hold On Bonuses In 24 Hour Fitness Ch. 11

24 Hour Fitness' unsecured creditors have asked a Delaware bankruptcy judge to delay considering the gym chain's request to pay up to $9 million in performance bonuses to its executives until the creditors can get more information on the proposal.
August 07, 2020
Del. Judge Nixes Equity Panel In Biopharma Vivus' Ch. 11

A Delaware bankruptcy judge on Friday rejected a motion for a committee to represent stockholder interests in the case of bankrupt biopharmaceutical venture Vivus Inc, finding that the company's reports of insolvency and inability to cover shareholder claims were not unreasonable.
August 07, 2020
NAACP Wants Seat At Table In Purdue Bankruptcy Case

The NAACP on Friday asked a New York bankruptcy judge for a seat at the table in the Purdue Pharma Chapter 11, saying it needs to ensure a fair share of the proceeds of the case's opioid settlement goes to communities of color.
August 07, 2020
XFL Hands Off League To The Rock In $15M Ch. 11 Sale

A $15 million offer from a group that includes actor and former wrestler Dwayne "The Rock" Johnson got a Delaware bankruptcy judge's nod Friday as the winning bidder for the XFL's struggling assets, potentially salvaging another season of spring football.
August 07, 2020
Prysm OK'd To Tap Into DIP Funds In Fast-Track Ch. 11

Big-screen software and display maker Prysm Inc. received a Delaware judge's approval Friday to tap into $750,000 of its $3 million debtor-in-possession loan as it barrels toward speedy consideration next month of its prepackaged Chapter 11 plan.
August 07, 2020
Virgin Atlantic Lands US Recognition Of UK Refinancing

A New York bankruptcy judge Friday granted Chapter 15 recognition to Virgin Atlantic's U.K. restructuring proceedings and set the airline's U.S. contracts in place until the company goes to court in the U.K. in September.
August 07, 2020
Retailer Grupo Famsa Hits Bankruptcy In Mexico And US

Mexican retailer Grupo Famsa sought Chapter 15 recognition late Thursday in New York of its restructuring case in Mexico filed the same day, after several defaults on its bank, lease and trade obligations, saying its roughly $880 million in debt was more than double its total assets.
August 07, 2020
UK Litigation Roundup: Here's What You Missed In London

The past week in London has seen a U.K. insurance technology company take aim at PwC after an acquisition went south, a major cruise line sue to curb travelers' insurance claims, and the U.K.'s criminal investigator file for civil recovery from a real estate company. Here, Law360 looks at those and other new claims in the U.K.
August 06, 2020
Ill. Court Revives Think Tank CEO's Challenge To State Bonds

An Illinois appellate court on Thursday resurrected a challenge to $14.3 billion in state bonds that a conservative think tank CEO claims were issued unconstitutionally, ruling that his complaint wasn't frivolous or malicious and that a trial court shouldn't have denied his petition to file it.
August 06, 2020
Sandy Hook Families Can't Get Into Remington Ch. 11 Yet

An Alabama bankruptcy judge Thursday rejected a request by families of victims of the 2012 Sandy Hook Elementary School shooting for inclusion on the list of Remington Outdoor's top creditors, saying he doesn't have enough information on their claims.
August 06, 2020
Skillsoft Gets OK For Ch. 11 Plan Wiping Out $1.5B Of Its Debt

A Delaware judge on Thursday approved global digital training and talent management company Skillsoft Corp.'s Chapter 11 debt-for-equity plan, paving the way for the company to reduce its debt load by $1.5 billion.
August 06, 2020
24 Hour Fitness Floats Senior Manager Bonuses In Its Ch. 11

Gym chain 24 Hour Fitness told the Delaware bankruptcy court Wednesday it is seeking to pay 22 of its senior managers up to roughly $9 million in bonuses if certain performance benchmarks are met as the company moves forward with what has been a strife-ridden Chapter 11.
August 06, 2020
Exide's $179M Ch. 11 Sale Gets Smooth Approval In Del.

Bankrupt battery maker Exide Holdings Inc. coasted to approval of a $179 million sale of its American assets to affiliates of Atlas Holdings LLC on Thursday when a Delaware judge assented to the consensual transaction.
August 06, 2020
Tour Co. WorldStrides Gets Nod For $368M In Ch. 11 Financing

A New York bankruptcy judge on Thursday approved nearly $368 million in debtor-in-possession financing that bankrupt educational tour company WorldStrides says it needs to pay back customers for trips canceled by the COVID-19 pandemic.
August 06, 2020
Big Screen Maker Prysm Opens $274M Ch. 11 Eyeing Sale

California-based big-screen software and display maker Prysm Inc. has opened a sell-all, prepackaged Chapter 11 in Delaware, reporting $4.6 million in assets against $273.6 million in liabilities and naming Texas-based private equity ESW Capital as the buyer.

Expert Analysis

Lesser-Known Litigation Funding Best Practices For Attorneys

Following the American Bar Association's recent publication of third-party litigation funding guidance, Jiamie Chen and Dai Wai Chin Feman at Parabellum Capital outline some additional considerations, including the ethical limitations on single-case funding and the futility of economic prenegotiations between attorneys and their clients.
Cos. Can Sell Future Asbestos Liabilities To Avoid Bankruptcy

Bankruptcy has become an increasingly common solution for asbestos defendants, but the sale of contingent liabilities to a third party may provide a less complex and costly resolution of asbestos claims, say Milan Ceppi and Charles Oswald at Financial Asset Recovery Analytics.
Key Points For Lenders Taking Control Of Oil And Gas Assets

As oil and gas producers' revenues fall, and their creditors see the value of their reserve-based collateral plummet, some lenders may want to protect their interests by taking temporary ownership of the assets through foreclosure, credit bid or other remedy, say attorneys at Hunton.
Opinion

ADA Protects Lawyers With Disabilities, But We Must Do More

As an attorney with cerebral palsy, Danielle Liebl at Reed Smith says that while the 30-year-old Americans with Disabilities Act has protected her against discrimination, the legal industry must do more to accommodate lawyers with disabilities and make them more comfortable in self-identifying.
Perspectives

Legal Deserts Threaten Justice In Rural America

Many small towns and rural counties have few lawyers or none at all, which threatens the notion of justice for all Americans and demands creative solutions from legislators, bar associations and law schools, says Patricia Refo, president of the American Bar Association.
How COVID-19 May Change Long-Term Aviation Outlook

Survival is an immediate concern for many airlines facing pandemic-related drops in air travel, which is exerting economic pressure that will fundamentally change the landscape for companies throughout the aviation ecosystem, say Matthew Herman and Amna Arshad at Freshfields Bruckhaus.
Restructuring Tips For Single Asset Real Estate Debtors

Although reorganization is notoriously hard to achieve in single asset real estate bankruptcies, a category of Chapter 11 cases that will spike following the pandemic, strategic filing decisions by prospective debtors can aid in a successful restructure, says Victor Vilaplana at Foley & Lardner.
Analyzing Upward And Downward Trends In Legal Tech

Advances in legal technology are often accompanied by bombastic overstatements, but it is important to separate the wheat from the chaff by looking at where various technologies stand on the hype curve, says Lance Eliot at Stanford Law School.
What UK Insolvency Law Changes Mean For US Finance Cos.

In light of recent amendments to the U.K. insolvency regime that enhance restructuring options, introduce stay and moratorium powers, and include new safe harbors, U.S. financial institutions should determine whether rights under existing arrangements could be stayed, say attorneys at Allen & Overy.
Opinion

ABA's New Guidance On Litigation Funding Misses The Mark

The American Bar Association should revise its recently approved best practices on third-party litigation funding as they do not reflect how legal finance actually works and could create confusion among lawyers, says Andrew Cohen at Burford Capital.
What Firms Should Ask Before Hiring Attorneys From Gov't

In the final year of any presidential administration, there is an undeniable appetite on the part of large law firms for government-savvy legal talent, but firms need to first consider how they will actually utilize their new star hire, says Michael Ellenhorn at Decipher.
The Ethics Of Using Chatbots For Legal Services

Delegating legal work to robots involves several risks, including running afoul of statutes dictating unauthorized practice of law, but with the right precautions, law firms can lawfully employ artificially intelligent chatbots that can imitate human conversations, say attorneys at Haynes and Boone.
Opinion

ABA Must Seize Opportunity To Respond To Bar Exam Chaos

The challenges of administering bar exams this year have put the future of the profession in jeopardy, but the American Bar Association at its ongoing annual meeting can adopt a resolution that would urge jurisdictions to take emergency actions with respect to licensure of new attorneys, says Nicholas Allard, former president of Brooklyn Law School.
How Pandemic Is Affecting The Pace Of Judicial Opinions

The COVID-19 pandemic has changed the way judges work, but how has it impacted the volume of work product they generate? Ben Strawn and Omeed Azmoudeh at Davis Graham investigate using data from the PACER federal courts registry.
6 Steps For Law Firms Looking To Improve Their Culture

The COVID-19 crisis represents an inflection point for law firm culture, and smart firm leaders will take advantage of this moment to build innovation-welcoming environments that support partners, associates, business services teams and clients alike, say Jennifer Johnson at Calibrate Legal and Kathleen Pearson at Pillsbury.