%1

The Archdiocese of Santa Fe, N.M., intends to hire a land use planning consultant to help it shed dozens of properties as part of its bankruptcy case, the Santa Fe New Mexican reported. Consultants with James W. Siebert & Associates, a Santa Fe land planning firm, would be among numerous experts the archdiocese has hired — attorneys, real estate brokers and accountants — drawing accusations from critics of wasteful spending that ultimately will affect payouts to hundreds of victims of sexual abuse by members of the clergy. An attorney with the Roman Catholic institution said, however, the experts are needed and that bankruptcy court is the most efficient place for settlements between victims and dioceses. Court records show the archdiocese has asked U.S. Bankruptcy Judge David T. Thuma for approval to hire the Siebert firm. The records say that Siebert can help the archdiocese comply with subdivision statutes and regulations. A court document said the Siebert company would charge $180 an hour if a principal of the firm worked on the case, $120 an hour if an associate worked on it, $95 an hour for a computer-aided designer and $45 an hour each for research and clerical work. An attorney for the archdiocese, Ford Elsaesser, said that real estate issues can involve broken lot lines or lots created long ago. Elsaesser, who is based in Idaho, said he didn’t want to contract properties for sale and then learn a step was missed in the process. “So that’s the reason why they’re being engaged,” Elsaesser said of Siebert. An auctioneer hired by the archdiocese recently began trying to sell 732 properties around Northern New Mexico.

Certain Boy Scouts of America insurers, as well as groups representing former Scouts who say they were sexually abused by Scouting leaders, are challenging the youth organization’s efforts to push through a reorganization plan by the end of the summer, Reuters reported. Despite being on opposite sides of the Boy Scouts’ bankruptcy – with the insurers potentially on the hook for covering sex abuse claims that span decades – Century Indemnity Co. and the official group representing survivors both filed objections to the Boy Scouts’ disclosure materials and related bankruptcy matters on Wednesday. The Boy Scouts, represented by White & Case, filed for bankruptcy in February to address nearly 300 lawsuits accusing leaders of sexual abuse. The objections come about a week ahead of a hearing in which U.S. Bankruptcy Judge Laurie Selber Silverstein will determine whether the Boy Scouts can begin soliciting creditor votes for its proposed reorganization plan. Century, represented by O’Melveny & Myers, argues that the organization has “effectively forfeited” defending itself against potentially fraudulent sex abuse claims.

Elliott Investment Management, the owner of Barnes & Noble, said on Tuesday that it will acquire gift and stationery retailer Paper Source, CNBC.com reported. The acquisition will provide Paper Source with the funding it needs to emerge from chapter 11 bankruptcy. Barnes & Noble CEO James Daunt will oversee both companies. While the two businesses plan to operate independently, it hinted at possible partnerships in the future. Paper Source plans to operate 130 stores in the U.S. as well as its website and wholesale division, Waste Not Paper by Paper Source. The stationery chain filed for bankruptcy on March 2 and was forced to close stores, cut jobs and reduce the pay of senior managers. Like many retailers, Paper Source’s sales fell last year after Covid pandemic shutdowns, capacity restrictions, and a wave of canceled weddings and events hurt sales of invitations. Paper Source had purchased 30 new stores from its competitor Papyrus just weeks before the pandemic hit in March 2020. At the time of its bankruptcy filing, Paper Source had 1,700 employees, 158 stores, and $100 million in debt and leases that cost $36 million annually.

Lenders to Revlon Inc. that received roughly $500 million from Citigroup Inc. last year due to a back-office blunder are allowed to use the money as they see fit, a federal judge ruled yesterday, unfreezing the funds, WSJ Pro Bankruptcy reported. Judge Jesse Furman of the U.S. District Court in Manhattan on Wednesday denied Citi’s request to continue to freeze the funds while the bank tries to persuade an appellate court it deserves the money back. The judge had frozen the funds in August while he considered the case. Citi wanted the freeze to be maintained, saying it feared that even if it won on appeal, it might have difficulty recovering the money once the asset managers distributed it to their clients. The dispute stems from a mistake in August in which Citi paid off—with its own money—a nearly $900 million loan balance owed by Revlon, when only an interest payment was due. When Citi asked for the money back, some of the recipients obliged, returning roughly $385 million. Others—including Brigade Capital Management LLC, Symphony Asset Management LLC and HPS Investment Partners LLC—declined to return more than $500 million, touching off a legal dispute with the bank. Citi is appealing the judge’s February ruling that the lenders could keep the funds they were wired by the bank, the loan agent in charge of collecting and distributing interest payments from Revlon. As the appeal continues, the bank had sought to prohibit the lenders from using the money as they wished.

In a deal that hands a huge victory to shareholders of bankrupt Hertz Global Holdings Inc., the car rental company picked Knighthead Capital Management and Certares Management to buy the company out of chapter 11, capping a dramatic tussle for control of the company, Bloomberg News reported. The deal, which gives a reorganized Hertz an enterprise value of $7.43 billion, was picked over an offer from a competing group led by Centerbridge Partners, Warburg Pincus and Dundon Capital Partners. The Knighthead-Certares plan would give equity holders a recovery of about $8 a share -- a package that’s made up of about $240 million in cash and warrants for nearly 20% of the reorganized company. Hertz shares -- which up until two months ago were faced with the prospect of being completely wiped out under an earlier plan -- soared as much as 41% Wednesday to as high as $5.19. That approached a high of $6.25 last June, when traders snapping up penny stocks on the popular Robinhood app sought to defy decades of convention and make money on a bankrupt company.

Celebrity chef Chloe Coscarelli is suing investors in the vegan restaurant chain that bears her name for alleged trademark infringement, WSJ Pro Bankruptcy reported. Coscarelli and her affiliate companies filed the lawsuit on Monday in federal court in New York against private-equity firm Bain Capital LP’s social impact fund and other investors in By Chloe. Most of the defendants are part of the investor group that bought By Chloe out of bankruptcy earlier this month. However, the lawsuit covers past use of the trademark, before the bankruptcy sale. By Chloe’s then-parent company, BC Hospitality Group Inc., filed for chapter 11 protection in December to ease a sale of the restaurant business. Coscarelli gained fame in 2010 after winning first prize on the Food Network show “Cupcake Wars” at age 22. She co-founded By Chloe, which opened its first location in 2015, but left the chain in 2017, after a dispute with shareholder ESquared Hospitality LLC. For years, she has litigated claims of trademark infringement against the restaurant chain. She has also pursued claims against ESquared Hospitality, but that company wasn’t named as a defendant in Monday’s lawsuit. Coscarelli had agreed to license rights to her name with ESquared Hospitality, subject to certain conditions. She terminated the chain’s license to her name in March 2018. But the chain’s then-parent company, BC Hospitality, continued operating restaurants, websites and social media accounts under the By Chloe brand name, even after it and Ms. Coscarelli parted ways, according to court documents. The investors together contributed more than $30 million that was used for the expansion of By Chloe restaurants, allegedly continuing the infringement of Coscarelli’s trademark rights, according to the complaint.

Subscription streaming video pioneer Roku on May 11 submitted a $5 million bid for the intellectual assets of bankrupt MobiTV, the Emeryville, Calif.-based company providing software for on-demand programming, live TV, catch-up TV, network DVR and content recommendations without the need of a set-top box, Media Play News reported. On March 1, MobiTV filed for chapter 11 protection, citing $10 million to $50 million in assets and $50 million to $100 million in liabilities. Roku, which co-started the streaming video on-demand (SVOD) market more than 10 years ago with Netflix, joined RPX, a patent license aggregator, in the bid. U.K.-based IPTV software provider Amino joined the companies, contributing another $10 million bid for the “going concern” of the MobiTV business. That consortium was then edged to the sidelines when TiVo Xperi upped its original $13 million bid to $15.5 million, and is now seen as the frontrunner for MobiTV assets — in an auction process that continues today.

A Monroeville, Pa.-based funeral service and cemetery business has filed for chapter 11 protection in the U.S. Bankruptcy Court for the Western District of Pennsylvania, the Pittsburgh Business Times reported. Restland Memorial Parks Inc. will submit a plan to reorganize, said Donald Calaiaro of law firm Calaiaro Valencik, who is representing Restland. Calaiaro said the business was impacted by “changing social trends,” with people across the country increasingly opting for cremations rather than burials during the past few years. “The business of cemeteries around the U.S. has changed, and this guy (Restland President Mark Lehnert) was put into a financial bind and had to adjust operations,” Calaiaro said. “He just didn’t do it fast enough.” Restland had originally filed chapter 11 in late 2018 but subsequently successfully asked the court to dismiss the case so it could deal with tax issues, according to Calaiaro. It refiled after Subchapter V went into effect in 2020. According to the filing and confirmed by Calaiaro, Restland’s debts are less than $7.5 million.

A Dallas judge has thrown the National Rifle Association out of bankruptcy court, calling into question the gun-rights group’s plan to reincorporate in Texas as it faces allegations of spending abuses and mismanagement in New York, WSJ Pro Bankruptcy reported. Judge Harlin Hale of the U.S. Bankruptcy Court in Dallas dismissed the NRA’s chapter 11 case, ruling that NRA CEO Wayne LaPierre filed the January bankruptcy “to gain an unfair litigation advantage” and “to avoid a state regulatory scheme.” Yesterday’s ruling follows arguments by New York Attorney General Letitia James and the NRA’s former ad agency Ackerman McQueen Inc. that the bankruptcy was filed in bad faith and didn’t have a valid purpose. James sued to dissolve the NRA in August, accusing LaPierre and other executives of corruption and financial mismanagement, which LaPierre and the NRA have denied. The New York lawsuit has continued while the NRA has been in chapter 11. James has oversight of the NRA, which has its headquarters in Virginia but was founded in New York in 1871 and is officially domiciled there. James said in a press conference after Tuesday’s ruling that her office continues to pursue its enforcement action against the NRA and that the group can’t reorganize in Texas without approval of the New York state attorney general. In his ruling, Judge Hale said, “The NRA is a solvent and growing organization using this bankruptcy as a tool to win its dissolution lawsuit, and that is not an appropriate use of bankruptcy.”

One lawyer negotiating a resolution to the multi-billion-dollar bankruptcy filed by the Boy Scouts of America billed $267,435 in a single month, the New York Times reported. Another charged $1,725 for each hour of work. New lawyers fresh out of law school have been billing at an hourly rate of more than $600. The high-stakes bankruptcy case has drawn in lawyers by the dozens, negotiating how to compensate tens of thousands of people who have filed claims of sexual abuse. Lawyers and other professionals — both those representing the Boy Scouts and some who are representing victims — have submitted fee applications with the court that have now surpassed $100 million. By August, they could reach $150 million. The hefty fees being charged to the Boy Scouts’ estate, which is money taken off the top of what could be offered to victims, have become a rising point of contention. U.S. Bankruptcy Judge Laurie Selber Silverstein, who is overseeing the case, has called the totals “staggering.” In a filing last week, one of the insurance companies that will be responsible for paying victims, Century Indemnity Company, asked the judge to hold back a portion of the legal fees until they can be more thoroughly reviewed.