A corporate restructuring and bankruptcy BLOG

    Customer is Always Right, Setting the Bar, and Flipping Bird

    What's News
    December 22, 2023

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

    FTX Files Reorganization Plan to End Bankruptcy, Repay Creditors| CoinDesk

    On Saturday, the collapsed crypto exchange FTX submitted a reorganization plan which included plans to repay up to 90 percent of creditors’ funds.

    S&K Take: Big news week in the FTX case, with the Debtors filing a proposed plan on Dec. 16.  The plan provides a significant preference to customers, which are purportedly slated to recover in the 90 cent range.  BlockFi and Voyager took issue with the plan, with their claims in the decidedly “non-customer” bucket.  Voyager, through its plan administrator, claims over $500 million, and noted that the plan is internally inconsistent, calling for substantive consolidation in some places and constructive trust in others where those are mutually exclusive legal concepts.   Despite the admonition, both BlockFi and Voyager stated that they would work with FTX to seek an acceptable resolution.  The other news is the claim that could derail and FTX plan, Uncle Sam’s $24 billion tax claim.  Judge Dorsey seems skeptical of that, and has set an estimation hearing on the claim for Q1 2024.  Obviously the outcome of that will be critical to customers and general creditors alike.    

    Court Sets Deadline for Claims in Archdiocesan Bankruptcy| Catholic Review

    In a court hearing on Monday, Judge Michelle M. Harner stated she would create an order setting May 31 as the “bar date” in the Chapter 11 bankruptcy reorganization case of the Archdiocese of Baltimore. The order sets the deadline for survivors to file a claim against the Archdiocese.   

    S&K Take: The Archdiocese of Baltimore has set the bar date in the bankruptcy cases for May 31.  The creditors’ committee, comprised of 6 survivors, had requested June 1.  The Court sided with the UCC, granting May 31 (June 1 is a Saturday).  The claims will be filed on a confidential basis, with an opt-out if the claimant is willing for the claim to be public.  The Archdiocese and the UCC noted that the parties will be meeting to begin to discuss a settlement, although those negotiations can’t happen in earnest until the claims pool is ascertained (about 8 weeks post-bar date according to the Archdiocese).    

    Electric Scooter Company Bird Files for Bankruptcy| USA Today

    On Wednesday, the U.S. electric scooter company Bird filed for Chapter 11 bankruptcy protection. The Miami-based company stated that it has a “stalking horse” agreement and it will sell its assets within the next 90 to 120 days.

    S&K Take: Bird filed on Wednesday and had its first day hearing today.  The proposed DIP was approved on an interim basis and includes a pretty hefty roll-up, which is seemingly par for the course these days.  The Debtors also disclosed an RSA which would provide for the 2Ls to credit bid their junior debt for the Debtors’ assets.  1Ls would receive take back paper at the Newco or could be cashed out.  Bird pairs with Bang Energy as a couple sizable cases that found their way to SD Fla this year.  We will keep an eye on this one. 

    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.

    November 18, 2022

    This Week In Crypto Contagion



    Fill out the following form to receive our corporate restructuring and bankruptcy news and analysis.

    Group 25-1