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Stalking Horse Opportunity: Home Owners Bargain Outlet
Home Owners Bargain Outlet: Section 363 Bankruptcy Asset Sale Opportunity Prior to filing Chapter 11 on October 25th Home Owner’s Bargain Outlet (“HOBO”) was a leading regional home improvement bargain retailer of “special buys” (goods that come from opportunistic purchases of a wide array of products primarily from brokers and a handful of regular vendors/manufacturers- […]
From Penthouse to Ground Floor – The Penthouse Magazine Bankruptcy
The Life, Death and Many Reincarnations of Penthouse Magazine Penthouse International, publisher of Penthouse Magazine, sold for $11.2 million in June. The company was worth about $700 million (adjusted for inflation) at its height. The latest Penthouse Magazine bankruptcy highlights just how far Penthouse has fallen. The New Owner The buyer was WGCZ, which also owns […]
A Primer on the Chief Restructuring Officer (CRO)
A Brief History of the Chief Restructuring Officer The role of a Chief Restructuring Officer (“CRO”) is approximately four decades old. While still a somewhat new role in the 1990s, CROs are now ubiquitous in the restructuring community. Todd Zywicki, a George Mason law professor who specializes in bankruptcy law, traces the origin of the […]
Update on CFIUS National Security Review and the Section 363 Sale: Draper Athena as Stalking Horse for Assets of ATopTech, Inc.
A transaction in which a foreign company gains control of US assets can be hammered to sleep by the President acting upon the recommendation of the Committee on Foreign Investment in the United States (“CFIUS”). The delay of CFIUS review and its potential draconian consequence affect the viability of foreign purchaser participation in asset sales […]
Limiting Credit Bidding “For Cause” After In re Aeropostale
Section 363(k) of the Bankruptcy Code (the “Code”) allows a secured creditor to bid at a section 363 sale and use the amount of their claim to offset the purchase price at the sale, called “credit bidding.”[2] A court may limit this right “for cause.”[3] The “for cause” standard is not defined in the Code […]
Do’s and Don’ts of Gifting in Bankruptcy: When a Court Will Look a Gift Horse in the Mouth
The gifting doctrine in bankruptcy is not new and often is used to obtain creditor consensus to a debtor’s proposed exit – either through a chapter 11 plan or a 363 sale. A bankruptcy “gift” typically involves a structurally senior class voluntarily giving some of its property or distribution to a structurally junior class of […]
DOCKET BULLETIN: Court Overrules Chemours Objection / Approves Mississippi Phosphate’s Sale Motion
The United States Bankruptcy Court for the Southern District of Mississippi entered an Order last evening approving the amended sale motion of debtor Mississippi Phosphates Corporation (In re Mississippi Phosphates Corporation, et al., Case No. 14-51667-KMS, (the “Debtors”)), as well as separate settlements made between the Debtors and the Unsecured Creditors’ Committee (the “Committee”) and […]
Karmaloop Sale Approved Despite Committee Objection
A collection of Karmaloop’s creditors filed an objection in bankruptcy court to its proposed auction on Thursday, May14th. The objection was made as the Karmaloop auction was approaching, in which the company’s assets would be sold. This Official Committee of Unsecured Creditors felt that the sale, as proposed, would have allowed Karmaloop’s secured creditors to take the estate property and […]
RECOMMENDED READING: Not Necessarily Free and Clear IV: Antitrust Exposure of Purchaser of Assets From 363 Sale by Direct Competitor
Buying the assets of a competitor out of a section 363 bankruptcy sale? This site has explained here and here how section 363(f) of the Bankruptcy Code empowers a court to order that assets sold under section 363(b) of the Code are, in the hands of the purchaser, “free and clear” of any “interests” in […]
Not Necessarily Free and Clear III: Imposing Debtor’s Unemployment Insurance Ratings Onto Purchaser?
On April 30, 2009, Chrysler and 25 of its direct and indirect subsidiaries (collectively, “Old Chrysler”) commenced bankruptcy cases that became jointly administered.[i] Scarcely a month later, Old Chrysler sold its assets through a sale under section 363 of the Bankruptcy Code to a newly-formed entity that went on to do business as Chrysler (“New […]