Distressed M&A Bankruptcy Law Insights

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Commentary & Analysis on Current Events & Issues in Large & Mid-Market Chapter 11 Cases

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Judge Protects GM Against Most, But Not All, Ignition Switch Claims
By Ben Feder on April 20, 2015 Posted in Distressed M&A

Judge Robert Gerber ruled last week that General Motors LLC (« New GM »), the entity formed in 2009 to acquire the assets of General Motors Corporation (« Old GM »), is shielded from a substantial portion of the lawsuits based on ignition switch defects in cars manufactured prior to New GM’s acquisition of the assets of Old GM… Continue Reading

Is GM Shielded From Ignition Switch Defect Liability? Hearing Highlights Thorny Due Process and Bankruptcy Issues
By Ben Feder on March 2, 2015 Posted in Distressed M&A

Judge Robert Gerber will be stepping down at the end of this year, ending a storied judicial career highlighted by his oversight of the 2009 chapter 11 case of General Motors Corporation (« Old GM »). In one of the most frenetic bankruptcy cases of all time, Judge Gerber signed an order (the « Sale Order ») approved the… Continue Reading

No Easy Road – GM Ignition Switch Litigation Raises Difficult Bankruptcy-Related Questions
By Ben Feder on September 2, 2014 Posted in Distressed M&A

General Motors LLC (« New GM ») came into being in the summer of 2009, when it acquired substantially all of the assets of General Motors Corporation (« Old GM ») in a sale undertaken pursuant to section 363 of the Bankruptcy Code.  The July 2009 Sale Order approved by U.S. Bankruptcy Judge Robert Gerber transferred the assets to… Continue Reading

None Too Appealing – District Court Turns Aside Free Lance-Star Publishing Credit Bid Lender
By Ben Feder on May 22, 2014 Posted in Distressed M&A

A recent ruling in the Chapter 11 case of Free Lance-Star Publishing limited the credit bidding rights of a secured creditor.  The ruling has called into question the ability of the holder of secured debt to utilize such debt to acquire companies on a going concern basis in bankruptcy cases, particularly in instances where the… Continue Reading

Loan to Moan? Judge Limits Right to Credit Bid in Chapter 11 Case of Free Lance-Star Publishing Co.
By Ben Feder on April 21, 2014 Posted in Distressed M&A

A few months ago, a ruling in the Chapter 11 case of Fisker Automotive narrowed a secured creditor’s right to credit bid its debt in connection with a sale of the debtor’s assets.  The decision surprised many observers and resurrected uncertainty about a debtor’s ability to limit a secured lender’s credit bidding rights (a dispute… Continue Reading

Fisker Automotive Chapter 11 Case: a Two-Headed Stalking Horse and a New Credit Bidding Controversy
By Ben Feder on January 31, 2014 Posted in Distressed M&A

Fisker Automotive’s chapter 11 case began in what has become a depressingly familiar fashion – a fast-tracked sale to a secured lender.  However, two rulings by Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware have made this a fascinating case to follow.  Judge Gross has directed  Fisker to proceed with… Continue Reading

DeX Games – SuperMedia and Dex One File Simultaneous Chapter 11 Cases to Effect Merger
By Ben Feder on March 25, 2013 Posted in Distressed M&A

Distressed m&a is the “new normal” in Chapter 11 cases, as noted here and elsewhere. Two large media marketing and advertising companies, SuperMedia and Dex One, took the “new normal” to new extremes last week by filing simultaneous and coordinated “prepackaged” Chapter 11 cases in order to complete a merger of their businesses.  Both SuperMedia and… Continue Reading

Too Cool for School Specialty – Alternative DIP Financing Allows Educational Company to Avoid Immediate Sale
By Ben Feder on March 4, 2013 Posted in DIP Financing, Distressed M&A

The School Specialty chapter 11 case began in what has become all too typical fashion. The company, overleveraged and short of cash, had no choice but to accept a lifeline extended by its second lien secured lender, a private investment fund. The terms of the debtor in possession (“DIP”) financing required School Specialty to seek an immediate… Continue Reading

Bip . . . Bip . . . Bip . . . “Pong” Creator Atari Files for Chapter 11
By Ben Feder on January 22, 2013 Posted in Distressed M&A

Atari, Inc., the creator of the primordial video game “Pong”, filed for Chapter 11 yesterday in the U.S. Bankruptcy Court for the Southern District of New York. Its parent company, Atari SA, simultaneously sought bankruptcy protection in France. The moves were precipitated by a cessation of funding from Atari SA’s largest shareholder and primary lender. According to issued… Continue Reading

I Never Liked Twinkies
By Ben Feder on November 28, 2012 Posted in Distressed M&A

Sno-Balls, on the other hand, and virtually every type of Drakes confection – Yodels, Yankee Doodles, Devil Dogs – I enjoyed to excess at every opportunity.  Fortunately, none of these famous snacks are going away, feverish news reports of Twinkie hoarding and e-Bay price gouging notwithstanding. Hostess Brands in its current corporate form is headed for liquidation,… Continue Reading

Blink and You Missed It – Emergency Sale of Digital Domain Media Approved
By Ben Feder on October 4, 2012 Posted in Distressed M&A

Judge Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware last week approved the sale of Digital Domain Media Group, the special effects company founded by James Cameron, following one of the fastest distressed m&a transactions ever in a Chapter 11 case. The auction, held only 10 days after the petition date, nevertheless… Continue Reading

Chapter 11 Once Again Safe for Undersecured Lenders – Supreme Court Affirms Right to Credit Bid in RadLax
By Ben Feder on May 29, 2012 Posted in Distressed M&A

  The U.S. Supreme Court today in Radlax Gateway Hotel, LLC, et al. v. Amalgamated Bank unanimously upheld the right of secured creditors to credit bid their debt upon a sale of their collateral pursuant to a nonconsensual chapter 11 plan of reorganization.  As described in numerous prior posts on this site, the ruling resolves… Continue Reading

Supreme Court Indubitably Grapples With Credit Bidding
By Ben Feder on April 24, 2012 Posted in Distressed M&A

  The Supreme Court heard arguments yesterday in RadLAX Gateway Hotel over whether the Bankruptcy Code permits a debtor in a chapter 11 case to sell encumbered assets without providing its secured lenders an opportunity to credit bid their debt.  As previously described on this site, a circuit split arose last year, when the Seventh… Continue Reading

Does a Single “Or” Excommunicate Congressional Intent From the Bankruptcy Code? Supreme Court to Resolve Circuit Split on Credit Bidding
By Ben Feder on December 13, 2011 Posted in Distressed M&A

The U.S. Supreme Court will rule this term in RadLAX Gateway Hotel Inc. v. Amalgamated Bank on whether the Bankruptcy Code permits a debtor in a chapter 11 case to sell encumbered assets without providing the secured lender an opportunity to credit bid its debt. Determination of this question will require the Court essentially to choose… Continue Reading

Los Angeles Dodgers’ Chapter 11 Case: No Replay of Texas Rangers’ Drama
By Ben Feder on November 9, 2011 Posted in Distressed M&A

A World Series as exciting as any in memory ended two weeks ago. Notwithstanding the end of the season, the Los Angeles Dodgers’ chapter 11 case offered the promise of more baseball-related thrills. Dodger’s owner Frank McCourt and Major League Baseball (“MLB”) Commissioner Bud Selig appeared headed towards an epic courtroom showdown that promised to rival the… Continue Reading

So This Is Why Judges Bother to Write Dissenting Opinions — Seventh Circuit Decision on Credit Bidding Vindicates Judge Ambro’s Philadelphia Newspapers Dissent
By Ben Feder on July 26, 2011 Posted in Distressed M&A

Critics of last year’s decision on credit bidding by the Third Circuit Court of Appeals in the Philadelphia Newspapers chapter 11 case welcomed the Seventh Circuit’s recent unanimous opinion in River Road Hotel Partners LLC. The Seventh Circuit expressly adopted the Judge Tom Ambro’s cogent analysis in his Philadelphia Newspapers dissent.    In River Road, the debtors… Continue Reading

Take Me to the River (Road): The Seventh Circuit Prepares to Weigh In On Credit Bidding
By Ben Feder on April 25, 2011 Posted in Distressed M&A

The U.S. Court of Appeals for the Seventh Circuit has taken under advisement the latest case involving the now contentious issue of credit bidding.  Judge Bruce Black of the United States Bankruptcy Court for the Northern District of Illinois last year refused to permit the debtors in In re River Road Hotel Partners LLC, et… Continue Reading

Credit Bidding After Philadelphia Newspapers: Dissent 1, Majority 0
By Ben Feder on October 29, 2010 Posted in Distressed M&A

Bankruptcy lawyers who are regularly involved in distressed m&a deals have been wondering for the past few months about the potential fallout from Philadelphia Newspapers. In that case, as previously described on this site, the Third Circuit Court of Appeals upheld the debtor’s efforts to deny its secured lenders the right to credit bid in connection… Continue Reading

Sale of Liverpool Football Club – The Ox Getting Gored Is On the Other Foot
By Ben Feder on October 12, 2010 Posted in Distressed M&A

Tom Hicks spent months trying to push through a sale of the Texas Rangers over the strong objections of his bank lenders, who believed that the proposed deal substantially undervalued the team. The result was a nasty, brutish (though relatively short) slog through chapter 11 for Texas Rangers Baseball Partners.  Now, Liverpool Football Club, also substantially… Continue Reading

Texas Rangers Chapter 11 Saga – Lessons Learned?
By Ben Feder on August 25, 2010 Posted in Distressed M&A

The Texas Rangers Chapter 11 case is finally winding down, following several weeks of nearly non-stop legal wrangling and high stakes drama. Rangers Baseball Express, LLC (“RBE”), a group fronted by legendary pitcher Nolan Ryan, emerged as the winner following a lengthy and raucous auction.  There are numerous lessons which can be drawn from this fascinating… Continue Reading

Texas Rangers Chapter 11 Case Gets Curiouser and Curiouser
By Ben Feder on July 19, 2010 Posted in Distressed M&A

The Texas Rangers Baseball Partners (“TRB Partners”) Chapter 11 case descended into the realm of the bizarre several weeks ago. Even by the standards of this case, however, the latest line of attack by the lenders seeking to delay the sale of the team is an eyebrow raiser.     Bankruptcy cases regularly feature litigation over transfers… Continue Reading

High Stakes Drama in Texas Rangers Case Continues Unabated
By Ben Feder on July 16, 2010 Posted in Distressed M&A

The Chapter 11 case of Texas Rangers Baseball Partners (“TRB Partners”) has devolved into a slow motion train wreck.  It appeared that order might finally emerge from chaos earlier this week when Judge Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas scheduled an auction for August 4, approved the bid… Continue Reading

No Clear Exit Yet for Texas Rangers
By Ben Feder on July 9, 2010 Posted in Distressed M&A

The Chapter 11 case of Texas Rangers Baseball Partners (“TRB Partners”) continues to take fascinating turns, and is fast becoming a cautionary tale about the risks of using the bankruptcy process to achieve a quick result without the consent of all major parties.    As previously described, the team’s indirect owner Tom Hicks and Major League… Continue Reading

Hardball in the Texas Rangers’ Chapter 11 Case
By Ben Feder on June 28, 2010 Posted in Distressed M&A

The 2010 Major League Baseball season may not yet even be at the halfway point, but events in the Chapter 11 case of Texas Rangers Baseball Partners are beginning to resemble the taut back and forth of the final weeks of a pennant race.  It appeared last week that Judge Michael Lynn of the U.S. Bankruptcy… Continue Reading

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About Ben Feder is special counsel in Kelley Drye & Warren’s New York office. He focuses his practice on bankruptcy and restructuring matters. Mr. Feder represents bank lenders, debtors, bondholders, creditors’ More…
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