Below is our initial take on recent bankruptcy-related developments:
Purdue Pharma files new bankruptcy plan for $7.4 billion opioid settlement | CNN
Purdue Pharma filed another chapter 11 reorganization plan aiming to implement $7.4 billion in opioid settlements.
S&K Take: Purdue has filed its long-awaited amended plan and DS, with an eye towards a disclosure statement hearing in early May (although that is not official at this point). We have covered plan terms in prior editions of What’s News, so we won’t belabor the point. Does not seem as though there are any surprises. The various trusts are laid out in detail, which may make for some interesting bedtime reading (sure to cure any insomnia). As promised, the releases are only opt-in. If you opt-out, you won’t receive your direct settlement distribution and are free to sue a still-well-heeled Sackler family. Will be very intriguing to see the voting results in early summer.
Forever 21 set to shut down its U.S. operations as it files for bankruptcy | NBC
Fashion retail chain Forever 21 has filed for chapter 11 bankruptcy protection for the second time and is set to shut down all of its U.S. stores.
S&K Take: As expected, Forever 21 filed its chapter 22 with an eye towards liquidation. The Debtors have stated that they are going to give a going concern sale a shot, but will nevertheless file a liquidating plan within 10 days of the petition date. If liquidation is the plan, the ABL lenders will soak up at least 94% of the net sale proceeds while GUCs will receive what seems to be a relatively generous death trap – 6% if you accept the plan and 3% if you reject. Given the circumstances, that doesn’t seem too off-putting. I imagine this will be the last time that we are covering this name, but you never know.
The Matrix film producer files for bankruptcy | BBC
The film production company behind The Matrix and Oceans 11, Village Roadshow Entertainment Group, has filed bankruptcy protection in the U.S. blaming its financial troubles on a legal battle with its former partner Warner Bros.
S&K Take: The production industry has taken an absolute beating, mainly due to industry labor unrest, which shut things down for a few months last year. That interrupted the pipeline, and if you were in not-so-great shape, greatly exacerbated any problems you had. That does not seem to be the case with Village Roadshow, which has a pretty impressive film library, including the aforementioned Matrix, Oceans 11, Mad Max: Fury Road, The Lego Movie, Training Day, Mystic River, and Miss Congeniality among other absolute classics. That library would spin off about $50 million in cash a year. Not too shabby. So what happened? Turns out that Village Roadshow partners with major studios to make their films, namely Warner Bros., which was VR’s partner in 91 out of 108 pictures. VR and WB apparently got into a dispute over The Matrix Resurrections, which resulted in an arbitration in which VR has spent $18 million in fees (which are apparently unpaid – that is painful to see). Even if VR wins, it has lost its main partner in crime, essentially killing the business. The company has a $365 million stalking horse for the library assets, which is nice.
