Below is our initial take on some of the major bankruptcy-related developments from the past week:
A “South Park” enthusiast said in court papers that they have a better offer to buy Casa Bonita, the bankrupt restaurant and family entertainment center that was featured in an episode of the TV show.
S&K Take: Bit of a bidding war developing for Casa Bonita of South Park fame. Trey Parker and Matt Stone face a competing bid, which the competing bidder values at $3.5 million (to Parker/Stone’s $3.1 million). Interest is good for creditors, and we will see what ends up highest and best.
Elizabeth Warren Floats Expanded Powers for Bankruptcy Creditors Against Private Equity | Wall Street Journal
Senator Elizabeth Warren proposed a new version of her Stop Wall Street Looting Act aimed at empowering creditors in Chapter 11 cases to challenge alleged self-dealing by private equity owners.
S&K Take: It is getting hard to keep up with all of the proposed legislation related to bankruptcy. Senator Warren has reintroduced a bill targeting private equity firms and their investments. The legislation would have significant impact outside of bankruptcy, but would have massive implications on the in-court bankruptcy process as well, giving creditors first crack at bringing claims against sponsors (debtors control claims in the first instance in the current regime).
As Johnson & Johnson furthers its ‘Texas Two Step’ strategy, it has asked a federal judge to temporarily halt all lawsuits related to the talc in its baby powder product.
S&K Take: The J&J debtor-subsidiary has made its first move in the two-step bankruptcy, seeking a restraining order that would enjoin ongoing talc litigation against non-debtors. This is reminiscent of Purdue and other mass tort cases, and not unexpected. On the more unexpected side, the Judge will also consider transferring venue (another hot bankruptcy topic) based on LTL’s (the J&J sub) limited contacts to North Carolina. Buckle up, this case is going to be interesting.