U.S. Bankruptcy Judge Jerry Funk issued an order confirming Stein Mart Inc.’s chapter 11 plan that pays off secured and priority claims in full but only a fraction of unsecured claims, the Jacksonville (Fla.) Daily Record reported. The April 13 order also cancels Stein Mart’s stock. Judge Funk had said at an April 8 hearing in U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, that he would confirm the plan. Jacksonville-based Stein Mart filed its chapter 11 petitions Aug. 12 and began winding down operations, closing the last of its 281 stores Oct. 26. “The Debtors have proposed the Plan in good faith, with the legitimate and honest purpose of maximizing the value of the Debtors’ Estates for the benefit of their stakeholders,” Judge Funk said in his order.
Family members of a Kroger real estate executive who died following an altercation at Shotgun Willie’s in 2019 say the Glendale strip club’s recent bankruptcy filing “is an attempt to use the COVID-19 pandemic as a smokescreen to limit the debtor’s liability in six pending lawsuits,” the Denver Post reported. “The truth is that the debtor is a profitable company that will likely recover quickly from the pandemic and has the financial wherewithal to provide a significantly higher return to unsecured creditors,” the surviving wife and children of Randall Wright wrote in a March 24 court filing. Wright was 48 when he died in May 2019 after being put into a chokehold by a bartender at the club, according to a wrongful death lawsuit his family filed five months later. The local district attorney’s office announced in September 2019 that it would not file charges in connection with the incident, citing multiple factors. The club disclosed the family’s lawsuit and others pending against it when it filed for chapter 11 bankruptcy protection in November. In a statement to BusinessDen at the time, Shotgun Willie’s attributed the filing to the pandemic, noting the club was prohibited from operating for weeks in the spring, and again around the time of the filing.
Latin American vehicle importer and distributor Automotores Gildemeister SpA has filed for bankruptcy protection in the U.S. with a prepackaged reorganization plan to cut about $200 million in debt, WSJ Pro Bankruptcy reported. The Santiago, Chile-based company, along with 12 affiliates, filed for chapter 11 Monday in the U.S. Bankruptcy Court in New York. The privately held company had warned earlier this month that it would file for reorganization in the U.S. with support from its international noteholders. The bankruptcy includes its businesses in Chile, Uruguay and Brazil, and excludes the operations in Peru and Costa Rica. Automotores Gildemeister, or AG, imports, distributes and sells new and used vehicles, provides maintenance and repair services, and brokers insurance and financing services. The company sells 12 brands, primarily Hyundai, through 70 company-owned vehicle dealerships, including 46 in Chile, 19 in Peru, 3 in Uruguay and 2 in Costa Rica. It also distributes vehicles to 158 franchised dealerships in Chile and Peru. The company has struggled financially due the Covid-19 pandemic and related government-mandated lockdowns, the sustained increase in the currency exchange rate in recent years and social unrest in Chile in October 2019 that have sapped consumer confidence and eroded demand for vehicles, according to court papers.
Attorneys for the Boy Scouts of America told a Delaware bankruptcy judge yesterday that they plan to file a new reorganization plan after gaining little support for a previous proposal that has been roundly criticized by attorneys for child sex abuse victims, the Associated Press reported. Jessica Lauria, an attorney for the BSA, told Judge Laurie Selber Silverstein that an amended plan would be filed Tuesday "unless the stars align" and the Boy Scouts reach a meaningful resolution with one or more other parties Monday night. Lauria said that the new plan is designed to continue momentum from a three-day mediation session that ended April 1 in Miami. She acknowledged, however, that differences remain among attorneys representing abuse victims, insurers and other parties. "There are some issues that will have to be litigated in connection with the plan," Lauria said. The revised proposal will include a default plan, or "Plan A," similar to what the BSA proposed in March. It calls for a global resolution of abuse claims that includes a "substantial contribution" to a victims trust fund by the BSA's local councils in return for a release from further liability. Local sponsoring organizations of Boy Scout troops that contribute to the victims trust also would be released from further liability under the amended plan, which, like the previous plan, also would provide a framework for settlements with BSA insurers. Unlike the previous plan, however, the new plan will include an estimation of the Boy Scouts' abuse liabilities, something that attorneys for abuse victims have said is critical in determining whether any reorganization plan adequately compensates victims.
Archegos Capital Management, the $10 billion firm that collapsed spectacularly last month, never publicly disclosed any stock investments, the New York Times reported. Even for a firm whose structure and strategy came with fewer regulatory requirements, that was a remarkable achievement. Money managers with $100 million or more in stocks are generally required to declare what securities they are invested in every quarter. But Archegos, a so-called family office that managed the fortune of the former hedge fund manager Bill Hwang, did not publicly file such a document — called a 13F — in its eight-year history. The lack of a paper trail is uncommon for a firm with so much money, according to securities experts. Thomas Handler, a lawyer in Chicago whose firm does work for more than 300 family offices, said it was highly unusual for such a large firm to have never filed a 13F. Much smaller family offices routinely make such reports, he said. Archegos stayed largely under the radar until it fell apart last month. As a family office — a firm generally created to handle the investments of a single wealthy person and a small circle around them — it did not have to register as an investment adviser with the S.E.C., because it did not manage money for outsiders. Also, the firm frequently employed a kind of derivative — called a swap — that allowed it to invest heavily in the stocks of certain companies, including ViacomCBS, without owning the shares itself. But Archegos invested substantial sums in plain vanilla stocks, according to a person briefed on Mr. Hwang’s portfolio and tax filings made by the Grace and Mercy Foundation, the charity Mr. Hwang founded and supported with some of his vast wealth. When it came apart last month, Archegos had more than $100 million in stock holdings, said the person, who spoke on the condition of anonymity because they were not authorized to speak publicly.
A top official with the Archdiocese of Santa Fe says a financial flood from clergy sex abuse claims is coming and a settlement would serve as the dam to prevent devastation to parishes across northern New Mexico, the Associated Press reported. A letter from the Rev. Glennon Jones is posted on the archdiocese’s website. It states that progress is being made in collecting donations for a bankruptcy settlement prompts by allegations of abuse perpetrated by priests and other clergy over decades. The letter states that should the bankruptcy fail, nothing would be safe from liquidation to pay for legal costs and lawsuit settlements. In October, a U.S. bankruptcy judge ruled that lawyers for clergy sex abuse survivors can file lawsuits alleging the archdiocese fraudulently transferred millions of dollars in property and other assets to avoid bigger payouts to victims. That decision in the chapter 11 reorganization case opened the door to what could be a multimillion-dollar boon to hundreds of alleged victims. It could also result in protracted, costly legal appeals that would tap funds that could have paid valid abuse claims. Mediation is ongoing in the case. James Stang, a Los Angeles attorney who represents a committee of abuse survivors in the case, said there is a “conditional settlement agreement” that would require certain actions by the archdiocese. Other parties such as insurers and parishes would need to be brought in and a plan of reorganization written.
Nearly one year into its bankruptcy, Intelsat SA is struggling to gain the support of a group of creditors that says the satellite operator’s proposed restructuring strategy improperly benefits other stakeholders at the group’s expense, Reuters reported. The dispute comes as Intelsat, represented by Kirkland & Ellis, prepares to ask U.S. Bankruptcy Judge Keith Phillips in Richmond, Virginia, for a nine-month extension of its exclusive period to file a chapter 11 plan at a virtual hearing on Wednesday. Though Intelsat filed a plan in February, it says the additional time is necessary to ensure that it maintains control of its case, which is especially complicated due to the various types and levels of debt at Intelsat’s multiple bankrupt entities.
Cable operator Charter Communications Inc. told consumers to say goodbye to competitor Windstream Holdings Inc. when it filed for chapter 11 bankruptcy in 2019. That farewell message could be costly following a bankruptcy judge’s ruling Thursday, WSJ Pro Bankruptcy reported. Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., said that Charter, which operates under the Spectrum brand, must pay more than $19 million in damages for sending “literally false and intentionally misleading” mailers urging customers to switch telecom providers after Windstream filed for chapter 11. The legal fight highlights the ways companies can try to capitalize when a competitor files for bankruptcy, and the perils that can invite. Mailers that Charter sent to Windstream customers in March 2019 said they should switch to Spectrum “to ensure you are not left without vital Internet and TV services” because of the bankruptcy and told consumers to say “Goodbye, Windstream. Hello, Spectrum.” The ads were mailed in envelopes with a color strip mimicking the bright pink and purple color scheme Windstream had used in its own advertising, court papers said, a similarity that Windstream argued was meant to confuse its customers. Judge Drain agreed, ruling that Charter, which could appeal, used misleading advertising to attract Windstream customers and therefore violated the automatic stay, a legal shield forbidding businesses from meddling with customer deals when a competitor files for chapter 11 protection.
A unit of Classic Car Club Manhattan, the private club that lets members drive its fleet of luxury vehicles, filed for chapter 11 protection on Friday in New York in an effort to preserve its location on Manhattan’s West Side, Bloomberg News reported. New York Classic Motors LLC holds the lease on the club’s space at Pier 76 near the Hudson River. The club is a tenant of Hudson River Park and received notice from the park in January that it needed to vacate the space as part of planned development, even though the club had more than four years remaining on its lease, according to co-founder Michael Prichinello. He called the bankruptcy a “defensive move” to preserve its space. The filing will delay any departure until a court ruling. “2020 was very difficult for everybody, and Classic Car Club did well,” Prichinello said in an interview. “We have a couple thousand members who are really dedicated. We are in a better financial position than we have ever been in our 17 years in New York City.” Other units of the company didn’t seek court protection. The club boasts a fleet of vintage and new luxury vehicles on its website including a 2016 McLaren 570S and a 1967 Porsche 912. Members pay $180 a month and buy points packages that grant them driving days for different types of cars. Prichinello said that while some members did leave the club due to pandemic-related moves, the club finished 2020 with more members than it had at the start of the year.
A popular Colorado landmark has filed for bankruptcy amid the crippling COVID-19 crises. Casa Bonita has filed for chapter 11 protection. Summit Family Restaurants, the company that owns the Lakewood restaurant, filed for chapter 11 protection in Arizona on April 6, according to court documents obtained by Denver7. The documents did not specify the exact amount of debt the company owes. However, the filing states that the company’s noncontingent liquated debts are below $7.5 million. Casa Bonita has been closed during the pandemic, but recently announced that they would be reopening soon. No additional details were provided. In November 2020, Denver7 spoke to Bob Wheaton, the president of Summit Family Restaurants. At the time there were rumors the popular spot wouldn't reopen, but Wheaton assured that wasn't the case.
