The company behind Waverly Restaurant, a legendary diner in New York City’s West Village that serves classic American-style comfort food, has filed for bankruptcy protection, the Wall Street Journal reported. Village Red Restaurant Corp., the diner’s corporate name, filed for chapter 11 protection on Friday in the U.S. Bankruptcy Court in New York. The restaurant is facing potential liability in two lawsuits alleging management didn’t pay overtime to a group of former waiters, dishwashers, busboys and delivery men. Filing chapter 11 bankruptcy halts the litigation and allows Waverly Restaurant to keep its doors open as it attempts to address its liabilities. The restaurant’s bankruptcy petition estimates it has up to $50,000 in assets and between $500,000 and $1 million in liabilities.
Struggling shoe retailer Nine West Holdings Inc. took its first steps under bankruptcy protection Monday during its debut hearing, WSJ Pro Bankruptcy reported. Bankruptcy Judge Shelley Chapman gave Nine West the green light to begin using its bankruptcy loan. Nine West’s $300 million bankruptcy financing package consists of two loans — a roughly $247.5 million loan from its prepetition bank lenders and a $50 million term loan from a group that includes Brigade Capital Management LP. The company will seek later approval to begin using the $50 million loan at its second-day hearing. The shoe retailer says that it plans to use the bankruptcy loan to repay some of its secured prepetition debt, as well as fund operations while under chapter 11 protection. Read more.
A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. To register for the Annual Spring Meeting, please click here.
Bon-Ton Stores Inc. said yesterday that it received an acquisition offer from an investor group, two months after the department store chain filed for bankruptcy protection, Reuters reported. The investor group includes U.S. mall owners Namdar Realty Group and Washington Prime Group Inc., for whom Bon-Ton is a significant tenant, and credit-focused fund manager DW Partners. The York, Pa.-based retailer, with 23,000 employees and 256 stores across 23 states, filed for creditor protection in February and said that it was on track to close 47 stores in 2018 as conventional brick-and-mortar operators are struggling to adapt to rapidly changing consumer tastes and a rise in e-commerce. Bon-Ton Stores said it received a signed letter of intent from the investor group with the parties finalizing an asset purchase agreement before an auction to be held on April 16. A hearing on the bankruptcy-court supervised sale process is expected later in April, the company said. Read more.
FirstEnergy Solutions Corp.outlined a bankruptcy strategy that reveals how its nuclear- and fossil-fuel assets will be treated and a legal path for restructuring a knotty sale-leaseback transaction, WSJ Pro Bankruptcy reported. A proposed agreement with creditors and bond trustees would fix a 180-day period for FES and its largest bondholder group to negotiate a standalone restructuring of its nuclear assets, two plants in Ohio and one in Pennsylvania that FES recently said that it might deactivate within three years. A standalone restructuring would turn creditors into owners of those units at a time when four other nuclear plants across the U.S. are slated to close by 2025, including Entergy Corp.’s Indian Point in New York, PG&E Corp.’s Diablo Canyon in California and Entergy’s Palisades unit in Michigan. Such a deal with FES creditors also presumably requires keeping its nuclear plants open, which may depend on an intervention from the Trump administration forcing the largest U.S. grid operator, PJM Interconnection LLC, to favor dispatching electricity from those assets over gas-fired and renewable sources.
Retailer Nine West Holdings Inc., best known for selling women’s shoes and accessories, filed for chapter 11 protection Friday with a deal to sell its Nine West and Bandolino footwear and handbag businesses to a licensing firm, WSJ Pro Bankruptcy reported. The chapter 11 filing in U.S. Bankruptcy Court in New York comes as Nine West faced debt maturities and has seen its revenue dwindle. The retailer has reached a deal to sell its Nine West and Bandolino businesses to licensing firm Authentic Brands Group Inc., which has also acquired other bankrupt retail brands including Aéropostale Inc. and Frederick’s of Hollywood. Authentic Brands has agreed to pay $200 million for the intellectual property associated with the Nine West, Bandolino, and associated brands plus some working-capital assets, Nine West Chief Executive Ralph Schipani said in court papers. The deal comes after Nine West, which is owned by private-equity firm Sycamore Partners, recently closed its remaining 71 remaining stores, a Nine West spokeswoman said. Read more.
A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. To register for the Annual Spring Meeting, please click here.
A U.S. bankruptcy judge approved on Friday procedures for auctioning the film studio co-founded by Harvey Weinstein, who was fired by the company last year in the wake of allegations of sexual assault, Reuters reported. The Weinstein Co. filed for bankruptcy last month with an initial or so-called stalking horse bid from an affiliate of private equity firm Lantern Capital Partners, estimated to be worth around $310 million. Interested buyers now have until April 30 to submit a higher bid. If multiple bids qualify, an auction will be held at the office of law firm Richards, Layton & Finger in Wilmington, Delaware, on May 4. More than 70 women have accused Harvey Weinstein, who was one of Hollywood’s most influential men, of sexual misconduct, including rape and assault. Weinstein has denied having non-consensual sex with anyone. When the allegations against Harvey Weinstein became public in October, the company’s board fired him, and Hollywood heavyweights distanced themselves from the studio. Bankruptcy will allow Weinstein Co. assets to be sold stripped of liabilities. Movie producer Killer Content Inc. said in January it might make a bid if the company was put into chapter 11 protection. Read more.
In related news, James Stang of Pachulski Stang Ziehl & Jones, who has represented sexual abuse victims in Catholic Church bankruptcies, is now tasked with getting the best deal possible for women who allege Harvey Weinstein’s now-bankrupt studio concealed years of sexual misconduct by its co-founder and former chief executive, the Wall Street Journal reported. The group of creditors he represents includes women whose claims for damages against the studio must now be reconciled in bankruptcy court. Women who have filed lawsuits against Weinstein Co. are now unsecured creditors with claims in the company’s bankruptcy. Any additional women who come forward with misconduct allegations against the company will also have unsecured claims, which like all claims in chapter 11 will be meted out in an eventual debt-repayment plan that is subject to bankruptcy court approval. Read more. (Subscription required.)
Don't miss the "Restructuring a Firm After Discrimination or Sexual Harassment Claims" panel at #ABISpringMeeting! Hon. Judith K. Fitzgerald (ret.) of Tucker Arensberg provides a preview. Click here to register.
Cobalt International Energy won confirmation of a chapter 11 liquidating plan yesterday, clearing the way to closing on sales of its oil-and-gas assets in the Gulf of Mexico, WSJ Pro Bankruptcy reported. The confirmation decision capped two days of hearings that featured a deal that cleared away objections from unsecured creditors' committee. Announced at a hearing in the U.S. Bankruptcy Court in Houston, Texas, the confirmation decision sets the stage for sales that will pay only the top tiers of the company’s creditors. Cobalt’s Gulf of Mexico holdings fetched only $580 million, after fewer bidders showed up than were expected at a bankruptcy auction. Bankruptcy Judge Marvin Isgur overruled protests from the U.S. Securities and Exchange Commission, which said shareholders were treated unfairly, and from a group of junior bondholders that stand to lose all in the bankruptcy. Bondholders said Cobalt’s sale could have raised $200 million to $300 million more than it did, from deals the company spurned.
U.S. fashion footwear company Nine West Holdings Inc. intends to file for bankruptcy as soon as this week with a plan to sell the intellectual property of its flagship brand to Authentic Brands Group LLC, Reuters reported. The proceeds from the sale will pay down some of Nine West’s approximately $1.5 billion in debt, increasing the chances that the company will emerge from a planned bankruptcy. Nine West missed a debt interest payment in March, setting off a 30-day period in which the accessories seller must either make the payment or face bankruptcy. The company’s creditors plan to take ownership stakes in Nine West’s remaining business, including its denim line sold in mass merchandisers such as Walmart Inc. and Sears Holdings Corp., in exchange for forgiving some of their debt. Read more.
A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. To register for the Annual Spring Meeting, please click here.
The committee representing Weinstein Co. creditors said yesterday that it is examining whether a $310 million offer from investment firm Lantern Capital represents “a fair price” for the troubled film and TV studio’s assets, WSJ Pro Bankruptcy reported. The statement, made in a filing with the U.S. Bankruptcy Court in Wilmington, Del., comes a day before lawyers representing the company co-founded by Harvey Weinstein are expected to ask a judge to sign off on both the sale procedures and the Lantern offer, which would set the floor for the studio’s assets and would be subject to higher bids at a potential auction. The speed with which Weinstein Co. has been attempting to sell its assets in chapter 11 has been a source of concern for some creditors. The unsecured creditors committee, which is represented by law firm Pachulski Stang Ziehl & Jones, includes two women who have sued the studio and Harvey Weinstein individually. Advisers to the Weinstein Co. and Lantern agreed to push back the day of the proposed auction from May 2 to May 4 and also made other concessions to the sale process, according to Thursday’s filing. A hearing to approve a sale would be pushed back to May 8. Read more.
Don't miss the "Restructuring a Firm After Discrimination or Sexual Harassment Claims" panel at #ABISpringMeeting! Hon. Judith K. Fitzgerald (ret.) of Tucker Arensberg provides a preview. Click here to register.
A federal judge has thrown out the bankruptcy cases of three Maine housing companies tied to embattled developer Michael Liberty, the Bangor Daily News reported. The companies, which together own about 600 units of low-income and senior housing across the state, filed last year for chapter 11 protection. Opposing counsel argued that the companies were abusing federal bankruptcy law in attempts to break contracts with their property manager. And the top bankruptcy judge in Maine appears to have agreed. Last Friday, Chief Judge Peter Cary dismissed the cases of Pine State Housing Series, LLC, Montfort Housing and Birch Ridge Limited Partnership. Liberty, who was recently released from a federal prison and is facing new allegations of scamming investors out of millions of dollars, is named in court documents as a “general partner” in each of the companies. Drummond Woodsum lawyer Jeremy Fischer represented the companies’ property manager, Stanford Management, and filed the motion to dismiss the cases. He said that the “bad faith” cases were also an effort by Liberty to line his own pockets.
