“On May 31, 3031, Avadim Health, Inc. along with several affiliates, which operate an Asheville, North Carolina-based privately held skincare and wellness company, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 21-10883). The company reports $10 million to $50 million in assets and $50 million to $100 million in liabilities.
On May 31, 2021, Houston, Texas-based OFS International, LLC, also known as OFSi, a privately held company which provides a full complement of services required to supply oil country tubular goods for the oil and gas industry, along with affiliates, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of Texas (Case No. 21-31784).
On May 31, 2021, ALH Properties No. Fourteen, LP, owner and operator of the Embassy Suites Houston Downtown hotel in Houston, TX, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of Texas (Case No. 21-31797). The company estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities.
On May 30, 2021, Certa Dose, Inc, a New York-based pharmaceutical technology company that has developed a proprietary and patented method of delivering medicine to eliminate the risk of life-threatening overdoes, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of New York (Case No. 21-11045).
On June 1, 2021, JDS Fourth Avenue LLC, a New York-based real estate development company, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 21-10888). The company estimated $1 million to $10 million in both assets and liabilities.
The court found that it could not sanction the scheme, despite the requisite majority of creditors having voted in favour of it. The intervention by the FCA at the sanction hearing marks an interesting development in assessing the extent to which the regulator's views will be aired and considered.
On May 19, 2021, Hospitality Investors Trust Operating Partnership, L.P., a New York-based hotel industry real estate investment trust, severely impacted by the Covid-19 related travel drop-offs, along with affiliate Hospitality Investors Trust, Inc., filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 21-10830).
This case is a reminder to both debtors and nominees that corporate law formalities must be respected and that the insolvency lens may affect the treatment of connected party transactions in future valuations and restructuring processes.
The Regis landlords made multiple complaints regarding the disclosure and valuation of connected party transactions and the large uniform discount applied to multiple landlords for voting purposes (75%). The only argument found in their favour was the mistreatment of one of the intercompany loans.
Key takeaways -
On May 14, 2021, Gateway Kensington LLC, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of New York (Case No. 21-22274).
An important judgment by Snowden J yesterday, sanctioning Virgin Active's restructuring plans after a contested sanction hearing, which included a cram down of several landlord classes that did not approve the plans by the requisite majorities in those classes.
The decision is important as among the many points covered, it considers certain key issues including: