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A San Jose hotel owner is seeking bankruptcy court approval to file a malpractice lawsuit against Pillsbury Winthrop Shaw Pittman LLP, saying it didn’t realize it was granting legal immunity for its attorneys when it left chapter 11, WSJ Pro Bankruptcy reported. SC SJ Holdings LLC, owner of the former Fairmont San Jose hotel, on Monday asked the U.S. Bankruptcy Court in Wilmington, Del., for permission to walk back certain provisions of its chapter 11 plan, which was approved last August and took effect in November. The reorganization plan that Pillsbury drafted contains more than five pages about immunity in “legal jargon” that protects the law firm from a range of claims but was impossible to understand, SC SJ said in its filing on Monday. “Pillsbury never informed or explained” to SC SJ that the provisions about legal immunity could absolve the law firm of potential malpractice liability from representing the hotel owner, the filing said. The owner believes it is entitled to seek damages through a malpractice lawsuit. SC SJ said the bankruptcy court should give it limited relief from the part of the approved plan that spells out immunity provisions preventing it from suing Pillsbury for malpractice. “Doing otherwise rewards Pillsbury for obtaining the releases without” the consent of SC SJ “and without the benefit of independent counsel,” the filing said. The Fairmont San Jose hotel, a frequent venue for technology conferences, filed for bankruptcy last March and was closed after a downturn in business events during the pandemic. The hotel is remarketing itself by switching to Hilton Hotels & Resorts ’ Signia brand and is taking reservations for late next month.

Cirque du Soleil is planning a brand new, eye-popping show on the Las Vegas Strip this spring that appropriately flips its typical script, the Associated Press reported. “Mad Apple” will feature stand-up comedians, close-up magic and a live band playing pop music onstage alongside Cirque's famous acrobats in a new hybrid form of live entertainment. The show — inspired by New York City's eclectic nightlife of jazz cubs, street buskers, comedy shows and live music — will replace “Zumanity” at the New York-New York Hotel & Casino in May on the Las Vegas Strip. “Mad Apple” will be Cirque’s sixth Las Vegas show and the first all-new one since it emerged from bankruptcy protection with new owners. In 2020, it had to suspend its productions around the globe as the pandemic crushed live entertainment.

Last week, the most-awarded luxury cruise line in the industry, Crystal Cruises, unceremoniously shuttered its doors, with not a word to consumers nor travel agents. Abandoned by its parent company Genting Hong Kong Ltd., it leaves a trail of debt — to travelers, who’d put down payments and deposits for sailings into 2024; to agents owed commissions; to employees in offices; to crew still on ships; and to unpaid vendors, Bloomberg News reported. Although $4.6 million in outstanding fuel bills were central to Crystal’s demise, the signs of trouble appeared weeks earlier in a string of dominoes triggered by the insolvency of a German shipyard. Through it all — a petition to wind up the company, layoffs, a halt to future sailings — Hong Kong was still assuring Crystal employees that the brand was not in jeopardy. In fact, passengers were still on ships. By early February, when the line’s new 200-passenger expedition ship, the Crystal Endeavor, disembarked its final passengers in Ushuaia, Argentina, the cash had run dry. “Genting HK effectively washed their hands of Crystal when they filed liquidation in Bermuda,” says Jack Anderson, who served as president of Crystal Cruises until the company dissolved its operations on Feb. 11. “At that point our relationship with Genting was effectively severed, and we were cut loose to fend for ourselves,” he tells Bloomberg.

Brooklyn’s Williamsburg Hotel and its top lender are at odds as the property owners seek to end its bankruptcy by replacing its defaulted mortgage with a new, borrower-friendly loan, WSJ Pro Bankruptcy reported. The Williamsburg Hotel is attempting to exit from bankruptcy despite opposition from secured lender Benefit Street Partners LLC, which isn’t satisfied with the new loan terms dictated by the hotel’s owners. Unable to refinance and pay off the mortgage, they have offered a new loan instrument of $70.7 million to Benefit Street, bearing interest of 4% for four years and 5% for two more years. That proposed coupon is 2.25 to 2.75 percentage points lower than the original loan, according to Benefit Street, which has said it isn’t fairly compensated under the bankruptcy plan for the risk of investing in the 147-room hotel. Benefit Street has said the loan balance stands at $95 million including interest and fees, and it is entitled to either full payment from a sale of the hotel or a new loan with higher rates, which the hotel disputes. Exiting from bankruptcy is more difficult, but still possible, when secured lenders aren’t paid off in full. The hotel, backed by developers Toby Moskovits and Michael Lichtenstein of Heritage Equity Partners, argued in court papers Tuesday that the payment terms offered to Benefit Street are fair and consistent with its “minimal” degree of investment risk.

Norwegian Cruise Line Holdings Ltd. is offering about $2 billion of notes to refinance the expensive debt it took out in 2020 to weather the global lockdowns amid the pandemic, Bloomberg News reported. The company will tap the junk-bond market to sell $1 billion of secured notes due in 2027 and $600 million of unsecured notes due in 2029, according to a statement on Thursday. It is also offering $435 million of exchangeable notes due 2027 in a private offering. Price guidance on the deal tightened slightly with books expected to close at 2:30 p.m. in New York on Thursday. The secured portion of the deal is now discussed in the 6% area, while talk for the unsecured tranche is for a yield in the 7.75%-8% range. Earlier pricing discussions for the secured notes were in the 6.25%-6.5% area, while the unsecured notes were being discussed at a yield of 8%-8.25%. The secured debt is rated B1/B+, four steps into junk. JPMorgan Chase & Co. is leading the sale. Norwegian Cruise Line will use the proceeds to redeem all of its outstanding 12.25% notes and 10.25% notes, and to make principal payments on short-term debt that’s maturing, according to the statement. The secured notes and the related guarantees are backed by three of the company’s vessels.

Hertz Global Holdings Inc. will name Stephen Scherr, a former Goldman Sachs Group Inc. executive, as its next chief executive officer, the Wall Street Journal reported. Scherr, who retired as Goldman’s chief financial officer at the end of the year, will succeed Mark Fields, a former Ford Motor Co. chief who has been serving as interim CEO since October. He takes over a company that was a veritable bingo card of the pandemic economy. Hertz filed for bankruptcy in May 2020 after the falling value of its used-car fleet caused a debt crunch. It quickly became the original meme stock, cheered on by an army of retail traders — foreshadowing the Reddit-fueled mania around GameStop Corp. and others a year later. And it turned out to be a surprise winner as the pandemic reshaped Americans’ habits. Far from evaporating, demand for rental cars heated up during the pandemic as many consumers avoided public transportation and relocated for long stretches of remote work. When a group of investment firms took over the company last June, stockholders received $8 a share — almost unheard-of in bankruptcies, which typically wipe out shareholders. Hertz went public again in November and has a market value of about $9 billion, three times what it was before the pandemic hit. Read more. (Subscription required.) 

Did you Miss ABI's "Anatomy of the Hertz Chapter 11" program last year with the key professionals involved in the case? Watch a replay here.