Below is our quick take on recent bankruptcy-related developments:
Following a second auction, the sale of Limetree Bay refinery to a Jamaican oil storage company was approved for $62 million.
S&K Take: This is a very interesting situation. The Debtors held an auction and fetched a winning bid of $20 million. The Debtors then requested to conduct a second auction because a bidder failed to participate in the prior auction because the CEO fell sick just prior to the bid deadline. Judge Jones permitted the second auction, which was won by a winning bid of $62 million. The winner of the first auction fell just shy at the second with a bid of $57 million. That bidder challenged the result to no avail, and Judge Jones approved. The result is clearly better for the estate, although one can understand the viewpoint of the disaffected former winner. That bidder has stated it will appeal, so stay tuned.
Purdue Pharma LP filed a motion this week requesting to continue a preliminary injunction which has frozen thousands of opioid-related lawsuits pending against the company after a court denied its Chapter 11 reorganization plan involving a $4.5 billion settlement with its Sackler family owners.
S&K Take: In the wake of Judge McMahon’s decision, Purdue is asking Judge Drain to continue the injunction prohibiting the continuation of lawsuits against the Sackler’s, which were the subject of the releases at issue on the appeal. This isn’t a surprising turn, but is indicative of the long road remaining ahead in this one. Appeal to the Second Circuit is on deck.
Hip-hop entrepreneur Sean “Diddy” Combs won a court-supervised auction to buy Sean John, the bankrupt fashion and lifestyle brand he founded in 1998.
S&K Take: Sean “Biddy” Combs (h/t to our colleague John Ashmead) ultimately won this auction after serving as the stalking horse. Nothing else to say here, just wanted to include what may or may not be a terrible (or terribly awesome) joke.
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The Financial Oversight and Management Board for Puerto Rico filed a suit to stop the local government from offering public workers new pension benefits citing the plan would create billions in new obligations.
S&K Take: This is a microcosm of the challenge facing many municipalities (in this case a territory). Workers want to maximize wages and retirement benefits, while the reality is that state and local governments can’t afford to pay those (and in many instances those that they are already on the hook for). Puerto Rico is under a microscope which will allow us to keep a close eye on this one.
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U.S. Bankruptcy Judge Laurie Selber Silverstein delayed the Boy Scouts of America’s Chapter 11 bankruptcy plan confirmation hearing by one month.
S&K Take: S&K Take: The Boy Scout cases continue to evolve, with certain insurers striking a settlement last week. The claimants committee continues to voice disapproval however, so this is not a done deal.