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The Supreme Court yesterday granted certiorari in Czyzewski v. Jevic Holding Corp. to decide whether bankruptcy courts are allowed to dismiss chapter 11 cases when property is distributed in a settlement that violates the priorities contained in Section 507 of the Bankruptcy Code, according to an analysis by ABI Editor-at-Large Bill Rochelle. Although Jevic deals with structured dismissals, the Supreme Court’s decision might also have the effect of allowing or barring so-called gift plans where a secured creditor or buyer makes a payment, supposedly from its own property, that enables a distribution in a chapter 11 plan not in accord with priorities. Granting certiorari was not surprising because there has been a long-standing split of circuits. Click here to read Rochelle's exclusive analysis. 

Click here to view the certiorari petition and other Jevic case documents on ABI's Supreme Court page. 

ION Worldwide Inc., a maker of wearable digital recorders that competes with industry leader GoPro Inc., has filed for bankruptcy after seeing its revenue drop significantly last year, the Wall Street Journal reported today. The New Jersey company has already reached a restructuring support agreement with one of its lenders, which would cut more than $15 million in debt from its balance sheet and allow iON to stay in business. ION Chief Financial Officer Chris Oatway said in court papers filed last week that the cash-starved company has been mired with problems, including disputes with one of its licensed brands and an intellectual-property lawsuit with GoPro. ION makes a line of wearable cameras in a variety of sizes, home-security products and dash cams, among other products, under the iON and Contour brands. ION saw its revenue drop to $12.4 million in 2015 from more than $25 million in 2014, Oatway said in court papers. The company sought to cut costs, and it laid off employees, but that wasn’t enough to stave off bankruptcy.

Investors who bought interests into drilling ventures from Primera Energy LLC, a San Antonio company once headed by Brian K. Alfaro, will recover nothing from a bankruptcy reorganization plan confirmed yesterday by a bankruptcy judge, MySanAntonio.com reported. Alfaro has been accused of defrauding investors in the sale of interests in various oil and gas drilling ventures. The investors have more than $18 million in claims, making them Primera’s largest group of creditors. They will receive nothing under the plan, which bankruptcy trustee Jason Searcy said is a liquidation. Searcy is reviewing possible legal claims against Alfaro. Read more. 

For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case. 

A privately owned, Missouri-based hotel company founded by John Q. Hammons filed for bankruptcy protection Sunday, just weeks before the start of a trial to determine if the company must sell its hotels, Dow Jones Newswires reported on Friday. More than 70 affiliates owned by the John Q. Hammons trust filed for protection in U.S. Bankruptcy Court in Kansas City, Kan. Based in Springfield, Mo., the company owns and manages 35 hotels for companies like Marriott, Sheraton and Hilton's Embassy Suites. The companies listed assets and debts each of more than $1 billion, according to court papers. The bankruptcy filing involves a group of hotels that Hammons retained ownership of after the 2005 buyout of his hotel business by Jonathan Eilian, the former managing director of private-equity giant Starwood Capital Group. The 2005 buyout involved some 43 hotels owned by John Q. Hammons Hotels. Hammons himself received an equity interest in the acquiring company — a partnership with Eilian — as well as preferred stock valued at $328 million and some $300 million in loans.

Southern Season Inc., the North Carolina-based specialty food store that closed its Libbie Mill-Midtown store in Henrico County in April, has filed for chapter 11 protection, the <em>Richmond Times Dispatch</em> reported on Sunday. The Chapel Hill, N.C., specialty food retailer sought bankruptcy protection on Friday as it reorganizes its business to focus on smaller stores and growing online sales. Southern Season is in the midst of closing its store in Mount Pleasant, S.C., near Charleston, and is scrapping expansion plans in Atlanta as it focuses on smaller versions of its stores. Reproducing the big-format store concept that saw success at its flagship original location in Chapel Hill isn’t translating in other markets, the company said.

A group representing holders of Oi SA's bonds not guaranteed by unit Telemar Norte Leste SA is growing, underscoring the challenges facing Brazil's largest fixed-line phone carrier as it enters bankruptcy protection proceedings, Reuters reported yesterday. New York-based investment bank Houlihan Lokey Inc and Metrica Investments LLC have stepped up talks with owners of $6.4 billion worth of euro- and U.S. dollar-denominated Oi bonds in the wake of the largest bankruptcy protection filing in Brazilian history. The Houlihan-Metrica group is one of the few gearing up for tough bankruptcy talks with Oi, which succumbed to a heavy debt burden and mounting competition after years of shareholder disputes. At 65.4 billion reais ($19.4 billion), Oi's petition is fraught with challenges due to a complex capital structure and wide creditor base, analysts said.

Bankruptcy Judge Kevin Gross yesterday confirmed Verso Corp.’s bankruptcy reorganization plan, clearing the way for the beleaguered papermaker to emerge from bankruptcy, the Portland (Maine) Press Herald reported today. The confirmation order was signed less than five months after Verso and its subsidiaries filed for chapter 11 protection in late January. If Verso follows the reorganization plan as written, all of its pre-bankruptcy debts will be erased. New common stock will be issued to creditors that were owed money by Verso and its NewPage subsidiary before the bankruptcy. When that happens, Verso also must take the necessary steps to have its shares once again listed on the New York Stock Exchange. Verso’s stock was delisted in September because its share price fell below the required $1 minimum.