Chinese developer Sunac China Holdings has filed for chapter 15 protection from creditors in a U.S. bankruptcy court, court documents showed, Reuters reported. Creditors of Sunac China Holdings approved its $9 billion offshore debt restructuring plan on Monday, marking the first approval of such debt overhaul by a major Chinese property developer. Sunac is among a string of Chinese property developers that have defaulted on their offshore debt payment obligations since the sector was hit by a liquidity crisis in 2021, roiling global markets.
SVB Financial Group, the former parent of Silicon Valley Bank, is closing in on a deal to sell its venture-capital and credit-investment arm out of bankruptcy, the Wall Street Journal reported. Two front-runners are vying in the bidding process for SVB Capital: a duo of Anthony Scaramucci’s SkyBridge Capital and Atlas Merchant Capital, and San Francisco private-equity firm Vector Capital. A court decision on a winner is expected in the next few weeks. The business could fetch anywhere between $250 million and $500 million, the people said, cautioning that a transaction still isn’t guaranteed and would need to be reviewed by the creditors’ committee too. Bankers at Centerview Partners have been advising the parent company on the process. In March, Silicon Valley Bank failed and was taken over by regulators, kicking off a mini-banking crisis that later took down Signature Bank and First Republic. SVB Financial Group filed for chapter 11 protection in New York bankruptcy court, paving the way for a sale of its assets after the technology-focused lender at the core of its business was seized by regulators.
A retailer in the Fashion District has shuttered and filed for bankruptcy protection as the Center City mall and its tenants struggle to recover from the effects of the pandemic, the Philadelphia Business Journal reported. RBJ Philly LLC, which operates the Beef Jerky Experience store, filed for chapter 7 bankruptcy protection in U.S. Bankruptcy Court for the Eastern District of Pennsylvania on Aug. 30 and closed its doors the same day. Beef Jerky Experience set up shop on the mall's concourse level shortly after the Fashion District opened in late 2019. Brad Sadek of Sadek Law Offices, the attorney representing franchisee owners Randy Giandonato and Richard Kromer in the chapter 7 case, said that the duo chose to file for bankruptcy because reduced foot traffic in the Fashion District and the “rapid pace” of store closures have resulted in low visitation levels over the past four years. Handicapped by COVID-19 shutdowns and the accelerated rise of e-commerce, the Fashion District has not lived up to the expectations co-owners Macerich and PREIT had when it debuted on East Market Street in September 2019 following a $420 million redevelopment of the former Gallery mall. Prior to its opening, PREIT CEO Joe Coradino told the Business Journal he believed the retail complex would be a "resounding success" and would "transform" the struggling company. Instead, the Fashion District was derailed when COVID-19 hit the U.S. six months later. PREIT gave up most of its involvement after going through chapter 11 bankruptcy in late 2020, and Macerich has substantially controlled the Fashion District’s operations and decisions since then.
The Fourth Circuit says that bankruptcy courts have broader jurisdiction than other federal courts and that some of their decisions are unreviewable by Article III courts.
Just when you think the debate about the legal, ethical or practical implications surrounding third-party releases in mass tort chapter 11 cases cannot get any more convoluted, another real-world example rears its ugly head and makes our brains hurt again, according to a new commentary from Tom Salerno of Sintson LLP (Phoenix). Truth is indeed stranger than fiction! In last Monday’s Law360, it was reported that LTL Management LLC (LTL), the Johnson & Johnson (J&J) subsidiary into which its talcum powder claims were deposited, is suing a doctor who published a report linking talcum powder (specifically asbestos in talcum powder) to personal injuries (mesothelioma). Of course, we are all aware that prior to this announcement, J&J and LTL had been dealing with thousands of claims that talcum powder produced by J&J caused cancer (the “Cancer Talcum Claims”). It is unclear how widespread the victim class is for this new aspect of poisonous talcum powder (the “Asbestos Talcum Claims”), but let’s posit for a moment that this becomes a large class of victims. To set the stage, we are all aware that LTL has been bounced out of bankruptcy not once, but twice by the Third Circuit based on essentially lack of good faith and the unavailability of third-party releases for mass tort trust settlement devices to deal with the Cancer Talcum Claims. Let’s call this the “Mass Tort Settlement Protocol,” which funnels victims’ claims into a trust funded by the debtors and third parties (such as insurance companies and, in the Purdue Pharma case, Sackler family members and controlled entities), and which provides releases to those third parties who fund the trust, exchanging civil liability for payments to the trust. Not surprisingly, third-party releases are an integral and essential part of the Mass Tort Settlement Protocol. No release, no funding. Read the full commentary. *The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.
Salerno will be one of the featured panelists on the "SCOTUS Crossfire: Will Purdue Be the Last Mass Tort Bankruptcy?" abiLIVE webinar on Oct. 4. See the full panel of experts and register today for FREE by clicking here.
Yellow Corp. received U.S. bankruptcy court approval on Friday to sell its vehicle fleet by October, while continuing to market its real estate assets, which have already received a $1.525 billion bid, Reuters reported. The freight shipping company, which went bankrupt in August after a protracted labor dispute, owns approximately 12,000 trucks and 35,000 trailers, according to its bankruptcy court filings. Yellow has set an Oct. 13 bid deadline for those assets. Hundreds of buyers have already expressed interest and signed non-disclosure agreements, and some have begun conducting on-site inspections, Yellow attorney Allyson Smith told U.S. Bankruptcy Judge Craig Goldblatt at a court hearing in Wilmington, Delaware. "The sale process is well underway at this point," Smith said. Yellow intends to conduct an auction for the vehicles by Oct 18 and seek court approval for the vehicle sale on Oct. 27.
Lordstown Motor Company has extended the deadline for bids to purchase its assets in the bankruptcy court, wfmj.com reported. The company quietly filed the motion on September 12th, extending the deadline for others to make bids on its assets from September 8th until September 18th, and extending other deadlines in their bidding procedures by between one and two weeks. The filing sets the new date for closing of all asset sales at October 31st, a week later than the original closing date of October 24th. LMC began the process of selling its assets after declaring chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware back in June.
Los Angeles developer Elite Investment Management Group has filed for chapter 11 protection about a month after it was sued for fraud involving an unfinished Bel Air mansion, the Real Deal reported. The filing gave the location for the company’s principal asset as 10710 Chalon Road. In 2018, the Bel Air megamansion project was touted for its stratospheric price of $88 million. The unfinished mansion is the focus of the lawsuit against Elite Investment in Los Angeles Superior Court. The voluntary bankruptcy, filed Sept. 5, is intended to protect the company from creditors. It gave an estimated value of assets from $10 million to $50 million, with estimated liabilities in the same range. A telephonic meeting for creditors is scheduled for Oct. 4.
A New Jersey man pleaded guilty yesterday to tax evasion, employment tax crimes, aiding the filing of false tax returns and making false statements in bankruptcy, according to a DOJ press release. According to court documents and statements made in court, Zeki Donuk, of Landing, operated a construction business first under the name Titan Builders LLC and later as Titan Steel Construction LLC (collectively, “Titan”). From at least 2016 through 2019, Donuk cashed checks payable to Titan instead of depositing them into business bank accounts. Donuk concealed the cashed checks and did not report them either as gross receipts on Titan’s corporate tax returns or as income on his or his wife’s personal returns. As part of his plea, Donuk admitted that from the third quarter of 2016 through the third quarter of 2017, he also did not collect, account for or pay over to the IRS employment taxes withheld from employees’ wages, despite a legal obligation to do so. For those quarters, Donuk also did not file quarterly employment tax returns on behalf of the businesses. In 2019, Donuk made false statements on documents he filed in a personal bankruptcy case. Specifically, he concealed from the bankruptcy court that he owned a vacation property in Pennsylvania, had signatory authority over certain bank accounts, owed tax debts to the IRS and operated his construction business as Titan Builders and Titan Steel.
