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E-cigarette maker NJOY received bankruptcy-court approval to sell itself to New York investment firm Homewood Capital in a deal valued at more than $30 million, the Wall Street Journal reported today. Bankruptcy Judge Christopher Sontchi authorized the sale this week, according to court papers. Through a credit bid, Homewood offered to forgive $29.5 million in debt in exchange for the assets. The investment firm also offered to take responsibility for NJOY’s senior loan debt and will pay at least $560,000 in cash as part of the transaction, court papers say. Three years ago, Homewood Capital contributed to a $75 million round of funding in the e-cigarette producer, according to an NJOY statement. Mr. Teitelbaum joined NJOY’s board of directors at the time, the company said. NJOY had a one-member board at the time of its chapter 11 filing, court papers say.

Bauer Hockey and Easton Baseball will need two bankruptcy judges, one in Canada and one in the U.S., to referee a fight among shareholders over how the sporting goods makers should be sold at a court-ordered auction, Bloomberg News reported yesterday. The companies, makers of skates, bats and other equipment used by pros and amateurs, are owned by Performance Sports Group Ltd., whose shareholders can’t agree on how to organize a sale. Lawyers will appear before judges in Toronto and Wilmington, Delaware, on Nov. 30 in a video-linked court hearing to sort out auction procedures. Performance and the Bauer and Easton units filed for creditor protection in the U.S. and Canada last month because the companies have assets in both countries. In a phone conference on Wednesday, the judges said that they were concerned Exeter, N.H.-based Performance Sports wasn’t giving them enough time to rule. Under deadlines imposed by the company’s lenders and the lead bidder for its assets, auction rules must be approved by Nov. 30. Bankruptcy Judge Kevin Carey told his Canadian counterpart, Ontario Superior Court Judge Frank Newbould, that he expects them to “have an opportunity to consult with each other privately so hopefully we can come to consistent rulings.”

Parting company with decisions from New York, the Third Circuit in Philadelphia reversed the lower courts in Delaware and ruled that so-called make-whole premiums must be paid to bondholders, at least when prepayment is voluntary in chapter 11 and the language of the indenture is not to the contrary, according to an analysis today in Rochelle’s Daily Wire. In a Nov. 17 decision in the wake of the reorganization of electric energy giant Energy Future Holdings Corp., the Third Circuit distinguished a Second Circuit decision and eviscerated a New York bankruptcy court opinion that favored large corporate debtors by holding that make-whole premiums are not owing if the debt was automatically accelerated by a bankruptcy filing. Immediately after the chapter 11 filing in Delaware, Energy Future refinanced the debt with court approval, leaving open the question of whether make-whole premiums were owing. Later, the bankruptcy court ruled that the premiums were not owing. The decisions by the bankruptcy court were upheld this year by a district judge in Delaware. Read more. 

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Dozens of former writers and editors at Gawker will receive a legal shield designed to protect them from lawsuits arising from stories they wrote for the entertainment and gossip website in return for backing the company’s liquidation plan, the Wall Street Journal reported today. Gawker and its sister sites had been the focus of a series of damaging lawsuits over posts it had published. One of those stories, which featured a sex tape involving former professional wrestler Hulk Hogan, resulted in a $140 million judgment that ultimately forced the company into bankruptcy. The mechanics of the arrangement with former editorial workers are laid out in Gawker Media Group Inc.’s proposed chapter 11 plan to pay its creditors including Hulk Hogan, whose real name is Terry Bollea. The arrangement, according to the court-filed plan, would allow the team of legal professionals now overseeing the Gawker estate to resolve indemnification claims brought in the bankruptcy on behalf of 62 writers, editors, freelance contributors and former officers and move a step closer to winding down the company’s affairs and, ultimately, distributing assets to creditors.

PMC Services LLC filed for chapter 7 bankruptcy with $3,063 in assets and a little over $1.53 million in debt, the Houston Business Journal reported yesterday. The company provided oil field housing for workers on site, according to its website. The filing shows the company’s revenue has been in sharp decline through the downturn, starting at $923,784 in 2014, then falling to $515,822 in 2015 before finally plunging to $63,298 in 2016. Read more. 

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Troubled hedge fund Platinum Partners is the focus of another investigation. Shareholders of Implant Sciences Corp., one of Platinum’s investments, is calling for the firm to open its books about its dealings with the company, which filed for bankruptcy last month, the Wall Street Journal reported today. Shareholders of Implant, a Massachusetts company that makes and sells high-tech detector systems and devices that trace amounts of explosives and drugs, said in a court filing on Tuesday that the company’s primary source of debt was a series of bonds issued to a family of funds managed by Platinum. Court papers show the bonds were allowed to be converted into equity interests. Implant is said to be a major position in Platinum funds. Shareholders are requesting documents from Platinum and its affiliated funds for a deeper look into Implant’s financial position, management and debt before the bankruptcy filing.

Regional carrier Republic Airways Holdings Inc., which sought chapter 11 bankruptcy protection in February, said yesterday that it filed a plan to emerge from bankruptcy in the first quarter of 2017, Reuters reported. A plan of reorganization was filed in the U.S. Bankruptcy Court for the Southern District of New York with the full support of its creditors committee, the company said in a statement. The plan outlines that the company will emerge as a single air carrier under the name Republic Airline Inc., it said.

A federal bankruptcy judge has temporarily disallowed the state of Minnesota’s attempt to rescind mineral rights beneath Essar Steel Minnesota’s property in Nashwauk, Minn., the Minneapolis Star Tribune reported today. Gov. Mark Dayton (D) tried to take away mineral rights the state granted to Essar because the company failed to live up to its promises to build a taconite mining and processing facility in Nashwauk. “A judge in the federal bankruptcy court in Delaware today issued a ruling denying Minnesota’s request to remove mineral rights from Essar’s bankruptcy,” Minnesota Department of Natural Resources spokesman Chris Niskanen said Tuesday. The order is temporary, Niskanen explained. It gives Essar until February to prove to the judge that it can put together a financial plan that will let it finish the Nashwauk project while also paying off creditors.

The fate of American Apparel’s 110-store retail chain should be known by the holiday season, when a bankruptcy auction will test the market’s appetite for distressed sellers of young-adult fashions, the Wall Street Journal reported today. American Apparel has an offer in hand from Gildan Activewear Inc. for its brand, some wholesale inventory and possibly some manufacturing and distribution operations. A spokeswoman for the company said yesterday there are other potential offers, including some that involve American Apparel’s retail operations. “There is an opportunity maybe for a going concern sale,” said Gerard Uzzi, a lawyer for lenders owed about $190 million. That is an improvement over a grim scenario that was taking shape last week, he said. Bleeding cash after a failed bankruptcy turnaround, American Apparel returned to chapter 11 bankruptcy protection Monday and yesterday won interim approval on a $30 million loan that will keep the store doors open and operating, at least for a time. Gildan is requiring that the American Apparel retail chain remains in operation while it moves toward a December auction, with a sale in January. Until Gildan closes a deal, the stores are safe, according to Scott Greenberg, a lawyer for American Apparel. Read mroe. (Subscription required.) 

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Creditors helping Linn Energy LLC raise $530 million in fresh capital to fund its restructuring stand to collect more than $20 million in fees for their efforts, Wall Street Journal Pro Bankruptcy reported yesterday. Bankruptcy Judge David R. Jones on Monday signed off on a deal between the oil and gas explorer and the bondholders that have agreed to buy unsold shares in a future sale of $530 million in new stock in the restructured company. Linn previously said in court papers that the fees were necessary to secure the commitments from certain junior bondholders and unsecured bondholders to backstop the stock sales. The success of its restructuring and future viability would be jeopardized if this agreement fell apart, Linn warned. Linn sought chapter 11 protection in May, one of dozens of oil and gas explorers to turn to bankruptcy as commodities prices took a nosedive. Through its restructuring, the Houston company is hoping to cut more than $5.7 billion off a debt load that tops $8 billion. Read more. (Subscription required.) 

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