You Used to Say LIV and Let LIV, Sack Lunch, and Truck Stop

Below is our initial take on recent bankruptcy-related developments:

LIV Golf, BC Partners file restructuring support agreement in bankruptcy case | Golf Channel

LIV Golf and BC Partners have filed a $300 million restructuring support agreement. LIV Golf CEO Scott O’Neil shared the investment will include a scaled-back schedule and a more “disciplined” approach. According to LIV Golf’s agreement with BC Partners, players would receive equity in the restructured league as well as signing bonuses and “certain NIL [name, image and likeness] rights.”

S&K Take: When we last covered the LIV situation, we were skeptical that the Debtors and parties-in-interest could live up to the tight timeline proposed in the original RSA.  That had the PIF, BC Partners and the individual players making significant commitments within weeks.  Unsurprisingly, several weeks passed and the cases remained idle.  Last week we saw an amended RSA with some altered terms and a new timeline.  The parties remain the same.  BC Partners put some new money into the game, taking a $4 million participation in the PIF DIP.  The PIF now needs to agree to the restructuring by October 30.  The player participation requirement went from a fixed number (two thirds in amount and one half in number of eligible claimants) to requisite support as determined by BC Partners in their sole discretion. Essentially, BCP determines if there is enough support to run a viable golf league.  Players must decide if they are in or out by Oct. 25.  This appears to be the most significant hurdle.  Recently, Sergio Garcia and Jon Rahm have indicated that they are unequivocally out, with Sergio’s contract being terminated (as opposed to rejected).  The wind seems to be blowing in the wrong direction for LIV.  We should know for sure pretty soon.

Judge Backs Purdue Trusts, Orders Sackler Filings Withdrawn | Law360

A New York bankruptcy judge ruled that Richard Sackler and his wife, Lin Gao, violated settlement agreements tied to Purdue Pharma’s bankruptcy plan by pursuing litigation and property ownership challenges that interfered with the family’s obligation to fund the plan. The court ordered them to halt those actions, withdraw related legal claims, and pay the trustees’ legal fees. The ruling reinforces efforts to secure the Sackler family’s $6.5 billion contribution to Purdue’s $7 billion opioid settlement plan.

S&K Take:  That cacophony you hear is thousands of plaintiffs’ lawyers muttering “I told you so” under their breath.  Three trustees of family trusts benefiting Richard Sackler, as a descendant of Raymond Sackler, brought an action to enforce the terms of the Purdue chapter 11 plan and settlements, arguing that Richard Sackler was taking steps to hinder those settlements, which the trusts had agreed to.  That included taking actions to slow down the liquidation of a Greenwich, CT property, as well as filing a new action in a Wyoming litigation related to administration of the family trusts.  Judge Lane ruled in favor of the trustees, directing Richard Sackler to end the title challenges with respect to the property and the Wyoming litigation.  The Judge also ordered Mr. Sackler to cover the trusts’ legal fees in bringing the action.

Trucking industry hit by string of bankruptcy filings as diesel costs surge | Fox Business

Due to rising diesel and insurance costs, a string of trucking and freight companies have filed for Chapter 11 bankruptcy protection in September. The bankruptcy filings span trucking and freight companies across several states, with some reporting liabilities above their assets, as the trucking industry faces challenges.

S&K Take: There have been a rash of bankruptcies in smaller trucking companies, with the pain extending to independent operators as well.  Diesel hit $6+ per gallon, a $3 increase from a year prior.  Many of these operations already have thin margins, and the increase in diesel costs created by worldwide conflict is taking a serious toll.  Recent efforts to provide relief, such as the deal with Russia to release a small amount of diesel, have not stemmed the tide (diesel prices increased on the announcement of the Russia deal). Certainly, an industry to monitor which could very well have knock on effects for the broader economy.