%1

The owners of Old Country Buffet, Hometown Buffet and several other all-you-can eat restaurant chains are planning a quick bankruptcy sale for their assets and some of their leases, with hopes to sell them off by the summer, WSJ Pro Bankruptcy reported. San Antonio-based Fresh Acquisitions LLC and Buffets LLC along with several affiliates filed for chapter 11 protection Tuesday, marking the fourth trip through bankruptcy since 2008 for some of the sister chains. Together, the companies owe about $13.5 million in secured debt and more than $5.3 million in unsecured liabilities, according to court papers. The companies said that they filed for bankruptcy again after the Covid-19 pandemic and government-mandated shutdowns disrupted their restaurant operations and severely limited customer demand. Before the pandemic, the companies operated 90 restaurants in 27 states, including other brands such as Furr’s Fresh Buffet, Country Buffet, Ryan’s, Fire Mountain, and Tahoe Joe’s Famous Steakhouse. But the steep decline in sales at the restaurants from occupancy restrictions and the banning of family-style buffet dining forced the companies to close all of their all-you-can-eat locations. The only locations currently open are six Tahoe Joe’s restaurants in California, which had revenue of about $21 million a year before the pandemic, court papers show. Out of their remaining 71 leases, the companies plan to turn over 57 locations to their landlords to stop the continued payment of about $1 million in rent a month. The remaining 14 leases could potentially be transferred through the sale process so that a buyer could use them for future operations. If not, the leased locations could be handed back to the landlords.

Cranberry Taxi Inc. has filed for chapter 7 bankruptcy in the U.S. Bankruptcy Court for the Western District of Pennsylvania, according to court documents, the Pittsburgh Business Times reported. Downtown-based Robert O. Lampl, a law firm that specializes in bankruptcy filings, is the listed firm representing the taxi company, according to court documents. A representative from the offices of Robert O. Lampl did not respond to requests for comment as of publication. Cranberry Taxi could not immediately be reached for comment. The company's website no longer works, and a phone call placed to the company's listed number on Yelp and Yellow Pages returned a disconnected tone when dialed.

Citing multiple pressures on liquidity, Delaware's largest outpatient drug and mental health provider filed for chapter 11 protection on April 19, Becker's Hospital Review reported. The embattled Connections Community Support Programs, based in Wilmington, is aiming to induce a bankruptcy-shielded sale of the company, according to court documents. The bankruptcy filing comes days after a third lawsuit was filed against the company by Delaware and federal agencies alleging improper billing practices and violations of the Controlled Substance Act, according to Law 360. The False Claims Act cases are seeking triple damages, according to the report. Connections Community Support Programs has appointed EisnerAmper's Robert Katz as chief restructuring officer to help it through the bankruptcy process and potential sale. In the court documents, Connections Community Support Programs said it has 10,000 to 25,000 creditors and lists assets of $50 million to $100 million and debts of $50 million to $100 million.

Opioid maker Mallinckrodt Plc filed a plan of reorganization Tuesday that has the support of opioid litigation claimants, holders of 84% in principal amount of unsecured notes and an undisclosed portion of term loan holders, according to court filings, Bloomberg News reported. The plan provides for the company’s revolving credit facility to be paid in full in cash. First- and second-lien term lenders would either be repaid in cash or with new takeback term loans plus cash for accrued interest and other payments, depending on the allowance of each group’s make-whole claims at the time of confirmation. Unsecured noteholders would receive a pro rata share of the takeback second-lien notes and equity shares in the reorganized company. The disclosure statement stipulates that the ad hoc group of unsecured noteholders hasn’t yet approved the language allocating takeback loans to the first- and second-lien holders. Opioid litigation claims would be channeled into a trust set aside for their settlement and payment. The company has previously said it would total $1.6 billion in structured payments. Mallinckrodt was the third major opioid maker to go under after being swamped by lawsuits alleging it profited by fueling the U.S. opioid epidemic.

Members of the Sackler family who own bankrupt OxyContin-maker Purdue Pharma LP are worth approximately $11 billion, documents released yesterday by a congressional committee show, the Wall Street Journal reported. Members of the Sackler family have agreed to pay $4.28 billion over the next decade as part of a proposal for Purdue to exit bankruptcy and settle thousands of lawsuits filed by states, local governments and individuals blaming the company and its owners for helping fuel the nation’s opioid crisis. Summaries of the family wealth, turned over to Rep. Carolyn Maloney (D-N.Y.), also were seen by Purdue’s creditors during settlement talks, according to representatives for the two branches of the company’s family owners. A third branch of the family is no longer involved in Purdue Pharma and wasn’t included in Tuesday’s release by Rep. Maloney, who chairs the House Committee on Oversight and Reform. The documents show the Sacklers’ wealth includes more than $950 million in cash, more than $1 billion in real estate, another $1 billion in private-equity investments and $250 million in art, jewelry and other collectibles. The family owns stakes worth more than $1 billion in international drug companies, which are expected to be sold to help pay back creditors. The documents show much of the family’s wealth is held in dozens of trusts. A spokesman for the descendants of the late Mortimer Sackler said no party in the bankruptcy has challenged the accuracy or completeness of the wealth disclosure and that “we hope the focus will now be on concluding a resolution that will deliver timely resources to individuals, families and communities in need.”

Knighthead Capital Management and Certares Management for a second time sweetened their proposal to buy Hertz out of bankruptcy as the rental car company’s board meets to review bids, Bloomberg News reported. The latest plan, which was submitted yesterday, would hand shareholders more value — specifically a 40% stake in the reorganized company through a combination of direct investment and a more than $1 billion equity rights offering. The battle over ownership of Hertz has been heating up. The company earlier this month picked a plan from Centerbridge Partners, Warburg Pincus and Dundon Capital Partners that outbid an earlier Knighthead deal. Last week, Knighthead and Certares responded with a plan that assigned Hertz an enterprise value of around $6.2 billion, paid senior lenders and unsecured bondholders in full, and offered existing equity holders a shot at recovery. The deal was backed by investors including Apollo Global Management Inc. The Centerbridge-led proposal would swap unsecured funded debt claims for 48.2% of the equity in the reorganized company and the right to purchase an additional $1.6 billion of equity. Holders of general unsecured claims would recover around 75 cents on the dollar while existing equity holders would be wiped out. In a court hearing last week, U.S. Bankruptcy Judge Mary Walrath delayed approval of a creditor vote on the Centerbridge-backed reorganization to give Hertz time to consider both proposals.

Three current and former National Rifle Association board members testified yesterday that in favor of the appointment of an independent examiner to investigate the gun rights organization’s management, but said that efforts to dismiss its chapter 11 bankruptcy is a step too far, Reuters reported. The statements came during the seventh day of trial on motions from New York Attorney General Letitia James and the NRA’s former ad agency, Ackerman McQueen, that aim to have the case thrown out. They have argued that the bankruptcy was not filed for legitimate purposes under bankruptcy law.

Availability of cheap credit has masked distress, but it’s still out there, says BlackRock managing director Mark Kronfeld, Bloomberg News reported. “Just because you’re not seeing bankruptcy filings doesn’t mean there isn’t distress,” said Kronfeld, a member of the global credit platform at BlackRock Inc., which manages $9 trillion in assets. There will be fewer traditional bankruptcies — besides pre-packaged filings — as long as there’s enough liquidity to ride out the pandemic, according to Kronfeld, who focuses on special situations and distressed investments. Still, there may be more bankruptcy filings in the sectors most impacted by the pandemic, including retail and energy, Kronfeld said. “Companies, even with increased leverage, are able to get cheap financing,” but risks remain, he said on a virtual panel hosted by SierraConstellation Partners. There was about $90 billion of distressed debt trading as of April 16, down from almost $1 trillion in March 2020, according to data compiled by Bloomberg. That includes nearly $5 billion in retail bonds and loans, and $15 billion from oil and gas companies. Last week saw just one new bankruptcy filing from a firm with at least $50 million of liabilities, according to data compiled by Bloomberg. Weekly filings have been trending lower since the end of February. Bankruptcy filings this year “haven’t been prolific,” with many companies filing with less than $100 million in assets and liabilities, said Richard Bernard, partner at law firm Faegre Drinker Biddle & Reath. Potential pockets of stress in manufacturing and the higher education sector could emerge, depending on the lasting disruption from the pandemic, Bernard said.

Brazilian iron ore miner Samarco Mineração SA filed for U.S. bankruptcy protection Monday, after initiating similar proceedings in Brazil earlier this month amid mounting creditor litigation, WSJ Pro Bankruptcy reported. Samarco needed to seek protection under chapter 15 of the U.S. bankruptcy code, as well as Brazilian insolvency laws, after bondholders and bank lenders filed lawsuits in both countries to freeze and start the process of seizing the company’s assets, according to a sworn declaration by Chief Financial Officer Cristina Morgan Cavalcanti. One of the largest miners in the world, Samarco resumed operations in December, according to court filings, after ceasing operations in 2015 after the collapse of the Fundão dam in the municipality of Mariana, in Minas Gerais state. The dam failure killed 19 people and led to an environmental disaster that released a torrent of sludge that buried rural villages. The company, a joint venture between mining giants Vale SA and BHP Billiton Ltd., stopped making payments on its financial debt in 2016, including more than $4.6 billion in debt denominated in dollars to banks and bondholders, according to Ms. Cavalcanti. Beyond Samarco’s dollar debt, the company also has significant debt denominated in Brazilian reais, including obligations to owners BHP and Vale.