Below is our initial take on recent bankruptcy-related developments:
Infowars, the far-right conspiracy website, used controversial tactics by filing for bankruptcy to avoid damages to his company in the defamation suit brought by Sandy Hook parents. The Department of Justice is seeking to dismiss the bankruptcy case, which they see as “undermining the integrity of the bankruptcy system.”
S&K Take: The InfoWars debtors have agreed to dismiss the cases now that the defamation claims are outside of the purview of the bankruptcy. Seems like an ill-fated attempt to quarantine the defamation liability in the debtor entities, like a Texas Two-Step light. All in all, it’s a pretty odd situation, although perhaps that was to be expected knowing the debtor.
Stemming from debt and legal fees resulting from an explosion at one of its plants in 2019, Texas-based chemical producer TPC Group, has filed for Chapter 11 bankruptcy, hoping to eliminate the majority of its $1.3 billion in debt.
S&K Take: Another mega-bankruptcy in 2022. Has the tide turned? Anecdotally, it feels like there has been more restructuring activity and inbound inquiries. In any case, this one should be interesting, starting with the DIP. It seems like Judge Goldblatt is inclined to approve the proposed DIP, although it seems certain that the roll-up aspect will be challenged by a motivated group of non-participating noteholders.
The real estate company established by David Tepper, the billionaire owner of the NFL’s Carolina Panthers, filed for Chapter 11 bankruptcy, ending the team’s pursuit of the largest team headquarters in the NFL.
S&K Take: Another sizable filing, this one is also interesting. It appears as though the Panthers are walking away from building a new facility. Their plan in the bankruptcy is currently a mystery. Pony up and complete the build? Walk away? Sell the asset? Although how much will someone want to pay for a half-baked NFL facility? We will keep an eye on this one.
Hilco Real Estate will sell the circular 5,200-square-foot 70th floor penthouse unit of Lake Point Tower in Chicago in a bankruptcy sale open for bidding.
S&K Take: This feels like the tip of the iceberg for distressed real estate. With interest rates rising quickly, a lot of projects might become untenable from an economic perspective. It is something S&K will be keeping a close eye on.