Below is our initial take on recent bankruptcy-related developments:
Canadian movie theater chain Cineplex Inc. has begun discussions with the lenders of its recently bankrupt rival Cineworld, about taking over Cineworld’s Regal movie theaters in exchange for debt and stock.
S&K Take: The Court denied Cineplex’s request to continue the litigation related to the failed prepetition merger, although that was without prejudice. This is an interesting turn of events in the case at large, and definitely something to keep an eye on. This case is a bit of a blank canvas, so it will be fun to see the twists and turns coming around the corner.
Carestream Health, a medical imaging and x-ray firm once owned by Kodak, won court approval for its bankruptcy plan which will reduce the company’s debt by about $470 million and allow it to fully repay unsecured creditors.
S&K Take: All in all this looks like a very successful prepack. Creditors were paid in full, the DIP lenders got over par, and rights-offering subscribers took 80% of the equity at (what is currently) an attractive valuation. Time will tell if the company works in the long run and that value is realized. One interesting aspect of the case was the attempt to get approval for exit fees on the first day – Judge Stickles resisted that as a bridge too far. I am guessing it won’t be the last time we see it. In any case, job well done to those involved.
In the midst of the crypto lender’s bankruptcy proceedings, Celsius’ CEO has stepped down and will be replaced by the firm’s CFO. Celsius is currently seeking protection from creditors and has reported a more than $1 billion deficit.
S&K Take: Celsius customers rejoice. Mashinsky’s resignation closely follows a UCC filing stating that his continued employment was inappropriate. The question is whether the rationale behind that statement ever sees the light of day. Given the high-profile nature of the case and Mashinsky’s role in its downfall, whether perceived or real, my guess would is that it will be difficult for customers to move on without an explanation or a pound of flesh.