Below is our initial take on recent bankruptcy-related developments:
As Aeromexico Aims for Bankruptcy Exit, Junior Creditors Decry Reorg Plan | Reuters
Mexican airline Grupo Aeromexico proposed its bankruptcy restructuring plan in New York bankruptcy court, after filing for Chapter 11 nearly two years ago.
S&K Take: Aeromexico’s plan confirmation trial began Jan. 27 and is continuing as we speak. The debtors were able to reach a settlement with the UCC, providing a $40 million contingent value right based on future performance. One less objector to address. The OpCo creditors continue to press their objection, which largely argues discriminatory treatment, since they were not afforded an opportunity to participate in an equity offering. The case is before Judge Chapman in the SDNY.
Bankrupt Nursing Chain QHC Facilities Seeks Buyer as Cash Wanes | Bloomberg Law
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QHC Facilities LLC, the bankrupt nursing-home chain, needs a new owner as two of the facilities are at risk of losing Medicare funding and expenses are rising.
S&K Take: QHC is part of a larger trend of restructuring senior care facilities. While restructuring is largely quiet, this is one corner that has seen significant activity.
Bankruptcy Experts Join Call to Dismiss J&J Talc Ch. 11 | Reuters
A group of bankruptcy law professors requested court approval to submit a “friend of the court” brief in support of a committee representing the plaintiffs in Johnson & Johnson’s talc litigation to have the bankruptcy of J&J subsidiary LTL Management LLC thrown out.
S&K Take: A group of law professors filed a motion for leave to submit an amicus curiae brief supporting the dismissal of the LTL cases as contrary to the purpose of the Bankruptcy Code. The professors indicate they will argue that J&J should not be permitted to use the bankruptcy process (by forming and then filing LTL) to deal with talc-related litigation when the company is in fine financial condition.
How a Hong Kong Bankruptcy Sent a Miami-Bound Cruise Ship—With Hundreds of Passengers—on the Run From the Law | Fortune
Crystal Cruises, a cruise ship under the bankrupt parent company Genting Hong Kong, changed course from Miami to the Bahamas to avoid a court-ordered seizure of the ship upon arrival to the U.S. due to unpaid fuel bills of $4.6 million.
S&K Take: Really interesting one here. Hong Kong-based Genting operates cruises under a variety of names, including Crystal Cruises. Genting is subject to a Hong Kong proceeding, as well as a recently filed Bermuda joint provisional liquidation. One of its ships was set to arrive and dock in Miami. On arrival, one of Genting’s creditors (a bunker, or fuel supplier) was set to arrest and sell the vessel to pay its claims (suppliers of necessaries to vessels are able to obtain liens on the vessel for repayment, and can thus sell a $250 million ship to satisfy a $4 million claim). Genting got wind of this, and changed the vessel’s course so that it would dock in Bimini, Bahamas instead, thwarting the arrest in the US. Reminiscent of the Hanjin case, where ships were held outside of US ports to avoid arrest. We will be keeping a close eye on this one.