A corporate restructuring and bankruptcy BLOG

    Cineworld on Fire, Good Voyager News, Celsius Fiduciary Forthcoming, Boy Scouts Out of the Woods (Almost)!

    What's News
    September 9, 2022

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

    Cineworld, the World’s Second Largest Movie Theater Chain, Files for Bankruptcy | CNN

    Cineworld, which owns more than 500 cinemas in the United States, including the Regal brand, and movie theaters around the world, began Chapter 11 proceedings this week moving to shed company debt and added that it has access to almost $2 billion in financing from existing lenders to continue operations.

    S&K Take: The theater industry has been struggling for some time, with AMC in the news throughout the pandemic. Massive chains were obviously hit hard by the pandemic and gathering restrictions, but also face a paradigm shift in the industry, with streaming services pushing to the forefront of entertainment and disrupting the theater business model. There has been some recent success for movie chains, such as the box office for the new Top Gun flick, but it will be interesting to see if a chain like Cineworld can adapt its business model to remain a going concern under the new circumstances.

    Bankrupt Crypto Lender Voyager Digital Heads to Auction Block | Bloomberg

    Voyager, the bankrupt crypto lender, has garnered enough interest from potential buyers and will now be up for auction next week, according to a notice filed in bankruptcy court this week.

    S&K Take: Good news for Voyager customers here. Hopefully the auction will be a robust process and could include some transition of customers to a new platform where they can access their crypto (or some of their crypto). That would be a home run – although it remains to be seen if this is possible since bids will remain confidential. We will keep an eye out for the winner.

    State Securities Regulators Seek More Transparency in Celsius Crypto Bankruptcy | Reuters

    Three state securities regulators have joined the DOJ’s request for a court-appointed examiner to help provide more transparency in Celsius’ bankruptcy to protect retail investors, especially those that deposited college or retirement funds with Celsius based on false promises of outsized returns.

    S&K Take: Pretty clear that management has completely lost the trust of customers and regulators alike. There is a dispute among those constituents about whether a trustee should be put in place to run the business or whether an examiner is more appropriate. It’s an interesting question – a trustee would certainly have more on his or her plate but would have the benefit of displacing management. That would be a significant and expensive endeavor, of course. An examiner could be a more refined tool to look at a narrow scope of issues, but management would keep their foot in the door. Will be fun to see where we end up.

    Boy Scouts Set to Exit Bankruptcy After $2.46 Billion Sex Abuse Settlement Approved | Reuters

    A U.S. bankruptcy judge approved the Boy Scouts of America’s $2.46 billion reorganization plan which will allow the BSA to exit bankruptcy and settle more than 80,000 claims of sexual abuse spanning decades.

    S&K Take: Looks like the end of a hard-fought battle. As we have detailed here previously, Boy Scouts’ counsel scuttled a challenged settlement with the Mormon church and has now been able to get their plan of reorganization over the finish line. It is a monumental accomplishment and establishes one of (if not the) largest sexual abuse settlement in history. It looks like appeals will be had, but for the moment, debtors’ counsel can relax.

    The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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