Below is our initial take on recent bankruptcy-related developments:
Saks Global files for bankruptcy after takeover leads to financial collapse | The Guardian
The high-end department store conglomerate filed for Chapter 11 on Tuesday.
S&K Take: 109 Saks’ entities filed their anticipated bankruptcy on Tuesday in where else, the S.D. Tex. This includes Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, among many others. The Debtors have a $1.75 billion new-money DIP, which is comprised of three separate facilities that are intertwined in ways that we will not detail in this blog. The Wednesday first day hearing went around 6 or so hours, mainly due to the challenge Amazon mounted to the DIP financing. Amazon sought an adjournment of the DIP so that it could evaluate the financing, but Judge Lopez ultimately ruled that the DIP was well-marketed and the only show in town, with the alternative being liquidation. Not going to usurp the Debtors’ business judgment in those circumstances. Amazon argued that DIP violated certain consent rights it had under a preferred equity investment and that the DIP was not necessary at certain entities. Axonic also objected to the priming of its interests at the entity that leases the famous Saks NYC location, also to no avail.
BREAKING: New bidder gets Genesis nod in latest bankruptcy auction | McKnights Long-Term Care News
101 West Street, a newly identified firm, beat out stalking-horse bidder Genie 3 Partners with a $1.015 billion bid.
S&K Take: Last we looked into the Genesis Healthcare case, Judge Jernigan had denied approval of a stalking horse bid to CPE, an entity affiliated with Joel Landau, the Debtors’ controlling investor. Since then, the UST sought appointment of a chapter 11 trustee, arguing that the case was controlled by “Landau Loyalists” (would be a great t-shirt), the UCC and the Debtors agreed on the format of a second auction, Genie 3 threatened to withdraw their bid, and then Genie 3 became the stalking horse bidder for Auction 2.0. That auction was held this week, and 101 West State Street, LLC edged out Genie 3 after 5 rounds of bidding at $996 million (net to the estate post-break up fee and expense reimbursement), increasing consideration to the estate by over $100 million. Pretty, pretty, pretty good. Judge Harlin Hale, acting as auction monitor, and the UST’s monitor, both deemed the auction to be a fair process. The sale would still be subject to Judge Jernigan’s approval, but with no shenanigans seemingly afoot, we would imagine that the sale is approved.
Supreme Court denies Hertz's petition for review. Here's what it means. | USA Today
Hertz was challenging a ruling stating that the company was to pay more than $270 million in interest to bondholders after it was revealed that, post-bankruptcy, it had paid its shareholders in full.
Supreme Court leaves multibillion-dollar Boy Scouts bankruptcy settlement in place | CNN
A group of victims had appealed the settlement, citing the rejected Purdue Pharma bankruptcy agreement that would have shielded the Sackler family from future lawsuits.
S&K Take: The Supreme Court has had enough of bankruptcy issues for the moment. The highest court in the land denied certiorari in two significant bankruptcies this week. On Monday the Court declined to reconsider the Third Circuit’s Hertz decision, which found that the solvent debtor exception applied to permit the payment of certain postpetition interest and make whole premiums in the case. Similarly, the Court declined to reconsider confirmation of the plan in Boy Scouts, which certain claimants argue contains releases that would violate the Court’s later ruling in Purdue Pharma.
