Below is our initial take on recent bankruptcy-related developments:
U.S. Trustee Blows Whistle on Panthers-Tied Ch. 11 Plans | Law360
The U.S. Trustee’s Office rejected bankruptcy disclosure statements of an entity related to the Carolina Panthers construction of a new practice facility, explaining that the plan would funnel the claims of building contractors into a trust, a move generally used for mass torts cases.
S&K Take: Settlement trusts, so hot right now, settlement trusts. This is an interesting move by the debtor. We would have to take a closer look at the trust to understand the rationale behind this mechanism – the UST indicates in its objection that it is befuddled as well. Facts should come out, as this is only the disclosure statement stage. A settlement and release of claims can be accomplished by a typical plan, so color me curious as to why the channeling injunction is necessary here.
Endo Seeks to Block Government Opioid Lawsuits During Its Bankruptcy | Reuters
Bankrupt pharmaceutical company Endo International sued hundreds of state and local governments last week in an effort to pause the lawsuits accusing Endo of contributing to the opioid epidemic as it works through its bankruptcy proceedings.
S&K Take: Endo seeks the typical stay that has been previously afforded to opioid/mass tort debtors. We will see if this go-round is any different. Perhaps it will be in light of the Aearo decision – claimants will certainly dine out on that for some time to come. Our guess would be that is not the case, but we shall see.
Voyager Customers with Frozen Savings on ‘Edge of Seat’ Ahead of Auction | Bloomberg
Bankrupt crypto platform Voyager Capital was put up for auction this week leaving their customers on edge about the future of their accounts, which have been frozen on the platform since July.
S&K Take: Certainly a critical juncture for Voyager customers. As we have noted in these pages before, there is always a chance that a white knight shows up and saves the day for crypto customers (albeit unlikely). At the least, customers are hoping that the sale is gangbusters so that they can recoup cash, if not their coins.
Revlon to Pay Executives $36 Million in Bankruptcy Bonuses | Bloomberg
A federal judge overruled an objection from a DOJ watchdog to Revlon’s plan to pay executives $36 million in bankruptcy bonuses, including more than $10 million to the company’s CEO.
S&K Take: Another case, more staggering bonuses paid. These have become par for the course. Obviously, everything is relative, and $36 million in the context of a case like Revlon could be considered small potatoes. Many executives also have other options, so it makes sense in certain circumstances. Despite that, this will always draw the ire of creditors getting the short end of the stick.
Celsius Bankruptcy Judge Gives the Nod to Independent Examiner Probe | Cointelegraph
Following a motion in August, the U.S. Bankruptcy Court of the Southern District of New York has given approval for an independent examiner to investigate certain aspects of Celsius’ business.
S&K Take: Grab your popcorn, an examiner will be looking under the hood in the Celsius case. The last crypto case with an examiner produced a very intriguing report, so folks will want to stay tuned on this one.
