2018 has seen a wave of company voluntary arrangements ("CVAs") hit the market, with high profile companies such as House of Fraser, Carpetright, New Look and Homebase (to name a few) all making use of this restructuring tool. This briefing note explains how a CVA works, provides an overview of current "market" themes, and makes some predictions on the future of CVAs

EVOLUTION OF THE CVA

PGHC Holdings, Inc., along with eight affiliates and subsidiaries, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12537).

Dixie Electric, LLC, along with twelve affiliates and subsidiaries, has filed a petition for relief under chapter 11 in the Bankruptcy Code for the District of Delaware (Lead Case No. 18-12477). Dixie Electric, based in Houston, Texas, is a provider of electrical infrastructure materials and services to the upstream and midstream oil industries.

On October 26, 2018, the U.S. Supreme Court granted a petition for a writ of certiorari in the case of Mission Product Holdings, Inc. v. Tempnology, LLC, to decide the issue of whether a debtor-licensor’s rejection of a trademark license agreement under section 365 of the Bankruptcy Code terminates the rights of the licensee to use the applicable trademarks. No. 17-1657, 2018 WL 2939184 (U.S. Oct. 26, 2018). The appeal arises from a decision by the U.S.

Egalet Corporation (OCTQX: EGLT), along with two of its affiliates and subsidiaries, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12439). Egalet, based in Wayne, Pennsylvania, is a specialty pharmaceutical company that develop and manufactures pain-relief medications.

NSC Wholesale Holdings, LLC, along with six affiliates and subsidiaries, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12394).

In In re Sandia Tobacco Mfrs, Inc., 2018 WL 4964295 (Bankr. D.N.M. Oct. 12, 2018), the Bankruptcy Court for the District of New Mexico recently held that certain outstanding “assessments” arising under the Fair and Equitable Tobacco Reform Act of 2004, 7 U.S.C. §§ 518-519(a), and its accompanying regulations were excise taxes entitled to priority under Section 507(a)(8)(E) of the Bankruptcy Code.

ONE Aviation Corporation, along with eleven subsidiaries and affiliates, has filed a petition for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12309).

Mattress Firm, Inc., along with forty (40) affiliates and subsidiaries, has filed a petition for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12241). Mattress Firm’s petition estimates its assets and liabilities to both be between $1–$10 billion.

ATD Corporation, along with nine affiliates and subsidiaries, has filed a petition for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12221).