Below is our initial take on recent bankruptcy-related developments:
GWG Holdings Inc, a financial services firm that’s being investigated for its accounting by the SEC, has filed for Chapter 11 bankruptcy protection in Texas with $2 billion in debt.
S&K Take: Billion-dollar bankruptcies have been few and far between recently, so the GWG filing is notable for that alone. This case also looks likely to raise some interesting issues, as it comes with an interesting organizational and capital structure. At first glance, it would seem like there is a low probability of an unsecured creditors’ committee, and certain other financial stakeholders look to be limited to recourse against specific Debtor entities. The Court, however, seems adamant that a UCC will be appointed per comments at the first day hearing. We will watch this case closely as it unfolds over the next few weeks.
Infowars, the far-right conspiracy theory website owned by Alex Jones, filed for Chapter 11 bankruptcy in Texas, with an estimated $10 million in liabilities.
S&K Take: Jones, an inflammatory (to say the least) political personality, is seeking to use subchapter V of the Code in these cases. The majority of the Debtors’ liabilities are contingent, so in theory the Debtors could be eligible for the more streamlined chapter 11 process. That process does not require the appointment of a creditors’ committee, although such appointment could be granted for cause. Such appointment will likely be the first battleground with litigation claimants, which account for the vast majority of the Debtors prepetition claims.
Northwest Senior Housing Corporation, a Dallas-based luxury senior living community, filed for Chapter 11 bankruptcy protection with nearly $112 million in debt.
U.S. Bankruptcy Judge Karen Owens, who is overseeing Gulf Coast Health Care LLC's bankruptcy, moved to postpone the final hearing of its proposed liquidation plan.
S&K Take: Senior living facilities continue to be prevalent in the restructuring landscape. These two cases are at different ends of the bankruptcy spectrum. Northwest just filed, while Gulf Coast is on the precipice of plan confirmation. Judge Owens, however, is requiring that plan objectors be provided a report analyzing litigation prospects in the case before the hearing proceeds.
Tarina Tarantino Management, the owner of a building in Los Angeles with a Banksy mural on the side of the building, has filed for Chapter 11 bankruptcy protection with an $8 million secured loan claim. The historic building is included in the filing and is up for sale.
S&K Take: Another recurring restructuring theme is real estate. This one has a few interesting angles given the names attached.