Below is our initial take on recent bankruptcy-related developments:

Company's PO Box Allows it to File for Bankruptcy in Texas, Judge Rules | Reuters

On Monday, U.S. Bankruptcy Judge Christopher Lopez in Houston, Texas, ruled that pharmaceutical company Sorrento Therapeutics may continue its Chapter 11 case in Texas, and rejected arguments that the company manipulated bankruptcy venue rules by claiming a newly opened P.O. box as a subsidiary’s primary address. Judge Lopez stated in the hearing on Monday that the U.S. Department of Justice waited too long before declaring that the case should be transferred to where Sorrento was incorporated in Delaware or where the company is headquartered in San Diego, California.

S&K Take: Judge Lopez handed down his venue decision in Sorrento this week, coming out as expected and denying transfer. You may recall that both the UST and a shareholder asked the Court to transfer venue alleging that Sorrento had manufactured jurisdiction by obtaining a PO Box for a dormant subsidiary and placing cash in a bank account for that same entity. While Judge Lopez did note that he disfavors venue based on these actions, they are nothing new, and, in this case, the request to transfer wasn’t timely. Basically, Judge Lopez reasoned that since the case has extensive history in the SD of Texas and that he had spent a lot of time getting up to speed and is in the best position to make upcoming decisions, transferring the case would not be the best result. This may have been a closer question if the UST had raised it at the outset of the case (Judge Lopez noted that the information was available). So mental note, if you are seeking to transfer venue, get on your horse early.

Wood-Pellet Maker Enviva Files for Bankruptcy | The Wall Street Journal

The largest wood-pellet exporter in the United States, Enviva, filed for Chapter 11 after a failed wager on the future prices of the fuel resulted in nine-figure losses. Enviva was to pay $296.3 million for 800,000 metric tons of wood pellets that would only be worth $156.9 on the open market, according to a securities filing in November. The company also said that they expected another $140 million in losses over the next two years based on pellet prices at the time for future deliveries.

S&K Take: Pretty substantial filing here, although perhaps the most notable thing about it is where it filed. The Eastern District of Virginia hasn’t seen many mega cases since the Ascena decision from the District Court struck down third party releases and called out the bankruptcy court for trying to appease debtors. Is the ED Va back to steal some thunder from the District of New Jersey? Time will tell I suppose. The case itself is also interesting. The debtors are a wood pellet manufacturer, which is a bit of a controversial business. Burning wood as an alternative to coal has been questioned, although it is prominent in Europe. One of the big case issues will be the debtors’ renegotiation of long-term offtake contracts. While there are two RSAs in place, this has the looks of a longer case.  

Electric-Vehicle Startup Fisker Prepares for Possible Bankruptcy Filing | The Wall Street Journal

Recently, the electric-vehicle startup Fisker hired restructuring advisors to assist with a possible bankruptcy filing following the going-concern risks they flagged earlier this month. Fisker faces the risk of running out of funds this year with more than $1 billion in debt and $273 million in sales last year.

S&K Take: The EV business has taken a beating in bankruptcy court recently, with Lordstown Motors a prime example. Looks like next in line is Fisker, which just started shipping vehicles last June. This wouldn’t be the first rodeo for Mr. Fisker, who filed another iteration of automaker in 2013 (which gave rise to an interesting decision on section 363 bidders and credit bidding). We will see if this one eventually winds up in court, although with Fisker retaining restructuring stalwarts Davis Polk and FTI it seems likely.