Below is our initial take on recent bankruptcy-related developments:
Judge delays sale of Genesis to insider, ‘concerned’ about creditors’ claims, bidder controversy | McKnights
The company had been seeking approval for a “stalking horse” bid submitted by an affiliate of Genesis’ private equity owner.
S&K Take: We hadn’t been closely following the Genesis Healthcare sale process in N.D. Tex. bankruptcy court, and man have we been missing out. The article is a touch stale, although through no fault of the publication. A lot has happened this week, and just yesterday Judge Jernigan denied the Debtors’ request for approval of a sale to the Debtors’ prepetition sponsor amidst accusations of auction irregularities and the Debtors’ selection of the winning bidder. Not something you see every day. The Judge denied approval under a heightened scrutiny standard despite the Debtors having a special committee in place (notable for future cases). Judge Jernigan was initially going to rule after a Dec. 17 exclusivity hearing but couldn’t wait. She issued her bench ruling without closing argument, commenting that “I hate it when I change my mind,” but found that she simply could not approve the sale given the evidence that there was not a fair auction process. The Debtors are directed to go back to the drawing board and confer with the parties about how to restart the auction. The Judge also directed that claims against insiders shouldn’t be part of the sale. In the absence of agreement, the UCC’s IB should run the process with oversight from the UST.
iRobot debt acquired by contract manufacturer as bankruptcy looms | The Robot Report
The robotic vacuum company, which owes $161.5 million in payments to its contract parts manufacturer, revealed in an SEC filing last month that its debt was acquired by a Chinese company.
S&K Take: We move from bankruptcy court to a developing situation. Frequent readers of The Robot Report might be ahead of the curve here, but it seems that a very large creditor of iRobot, Picea Robotics Co., through a subsidiary, has doubled down on the iRobot situation. Picea was already owed $161.5 million as a trade creditor, with $90.9 million overdue. Picea then purchased iRobot’s secured debt from The Carlyle Group, with $190.7 million outstanding. Stalking horse bid for the company, anyone? iRobot also disclosed that it “is unlikely that our ongoing strategic review process or our discussions with Picea will result in any transaction (including any potential transaction with Picea) being consummated outside of a bankruptcy process.” Picea has agreed to forbear until Jan. 15, as well as defer a $5.1 million interest payment. Seems like that gives folks about a month to prep the filing which will be coming soon to a bankruptcy court near you.
