Below is our quick take on recent bankruptcy-related developments:
Sackler Family Says Billions Collected From Purdue Not Abuse of Bankruptcy Law | Reuters
On Monday, the Sackler family denied a judge’s suggestion that the more than $10 billion the family received from Purdue Pharma before the 2019 bankruptcy was an abuse of the Chapter 11 process. The family said the money was a result of extra cash.
S&K Take: Based on the initial back-and-forth between Judge McMahon and the parties, Judge McMahon is taking a fresh look at the issues in the Purdue case. Whether this reinforces Judge Drain’s decision below or calls it into doubt is the $4.5 billion question.
Judge Orders New Bankruptcy Auction for Limetree Bay Refinery | The Virgin Islands Daily News
Following a Texas bankruptcy court order, Limetree Bay, the bankrupt refinery, will be up for auction again, and the winning bidder of the first auction will compete with additional bidders.
S&K Take: This surprising “do-over” could result in a windfall for debtors and creditors at the second auction. It could also set precedent for future bankruptcy sales, and could potentially give late bidders more traction.
Riverbed Technology Nets Approval of $1bn Debt-Cutting Plan | Reuters
U.S. Bankruptcy Judge Craig Goldblatt approved Riverbed Technology’s reorganization plan less than three weeks after the IT company filed for Chapter 11 protection.
S&K Take: Not Kirkland’s quickest pre-pack in recent memory, but still pretty good. In the end, the debtors needed to set aside $2.88 million for unsecured noteholders (a 30% recovery) to get across the finish line.
Mediator Ousted in Boy Scouts Bankruptcy; Deadline Extended | Associated Press
Judge Laura Selber Silverstein, presiding over the bankruptcy of the Boy Scouts of America, ruled on Tuesday to remove a former Delaware bankruptcy judge as a mediator over concerns of his impartiality.
S&K Take: Only one mediator is left standing of the three that were appointed by Judge Silverstein last year. It remains to be seen whether the Judge will appoint another mediator to help the parties work towards resolving the thorny issues that remain in these cases.
Nordic Aviation Prepares Bankruptcy to Give Creditors Control | Bloomberg News
Nordic Aviation Capital AS is planning to file for Chapter 11 bankruptcy before the end of the year, and the company has lined up funding for its operations as it navigates its restructuring plan.
S&K Take: The struggling aircraft lessor is reportedly shoring up its debt-to-equity conversion plans with its largest creditors, which would put creditors in the pilot’s seat as the business seeks to escape the air travel troubles of the COVID-19 pandemic.
