Below is our initial take on recent bankruptcy-related developments:
The U.S.-based operator of clothing retail chain Forever 21 is planning to shut down at least 200 additional locations as part of a bankruptcy process expected to begin as soon as next month.
S&K Take: We threw this one up front solely based on the headline it permits us to use. In any case, Reuters is reporting that Bloomberg News reported (paywalls, am I right?) that Forever 21 is prepping for a filing as retail remains a disaster. The company is planning to shut down 200 locations and sell 350 more. If it can’t, then we liquidate. A tale as old as time. Fret not, intrepid Gen Z’er, you will still be able to buy Forever 21 branded clothes irrespective of any liquidation, as Authentic brands owns the IP. So we all have that going for us, which is nice. Not much else to see here. .
In its third attempt to resolve thousands of lawsuits alleging that its baby powder caused ovarian cancer, Johnson & Johnson has made a $10 billion proposal to end litigation.
S&K Take: Giddyup! Hope everyone is buckled in for 30 days’ worth of confirmation hearing! The Red River talc confirmation hearing commenced in earnest in front of Judge Lopez, who notably refused to send the cases back to NJ a few months ago. Issues abound, many of which relate to salacious accusations of voting improprieties. Voters were permitted to switch the votes from “no” to “yes”, but not “yes” to “no”. Plaintiff firms cast votes they didn’t have authority to cast and failed to provide relevant information to claimants to vote. You want it, you got it. Release issues? Absolutely. Bad faith? Now you’re talking. The Debtors, for their part, tout the largest asbestos settlement in history and the support of 93,000 claimants (and 198 out of 200 plaintiffs’ firms). This should be a captivating trial even if we all kind of think we know how this turns out. Stay tuned.
According to a statement released on Tuesday by bankrupt cryptocurrency exchange FTX, an initial group of customers are starting to receive their funds in the next one to three business days, while others are set to receive their share in the coming months.
S&K Take: Whatever your position on the FTX cases and the outcome thereof, the plan administrator initiated distributions to convenience class claimants on Feb. 18, and that is a serious accomplishment. There has been a massive amount of work done to get to this point, so congrats to those involved. No rest for the weary though as there is plenty of wood left to chop. The debtors also announced this week that the distribution record date for customer entitlement claims, entitled to the bulk of estate value (and an estimated 143% of the value of their claims, provided that you convert the crypto in those accounts to dollars as of the petition date when BTC was about $16,000), will be April 11 with distributions to commence on May 30. That is when the plan admin will pump some serious cash out the door. Hundreds of thousands of claimants wait with bated breath.