Bankruptcy Case Updates

Recently in the RadioShack Corp. case, the Delaware Bankruptcy Court granted the debtor’s bid procedures motion allowing the debtor to auction certain of its assets, including trademarks and collection of customer data, while directing RadioShack to provide more information in terms of what personal information has been collected by the company and is to be sold.  The Texas Attorney General, among others, made requests that further information be disclosed in order for the Bankruptcy Court to determine whether certain information should be sold at auction.

According to debtor’s counsel, RadioShack’s assets to be auctioned include U.S. trademarks, patents, customer data, Asian sourcing operations and franchise networks.  Prospective suitors can bid on the assets individually or combine them.  To date, there is presently no stalking horse bidder for the assets.

Carl D. Neff is a bankruptcy attorney with the law firm of Fox Rothschild LLP.  Carl is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.

In the Frederick’s of Hollywood bankruptcy proceeding, a formation meeting has been scheduled for Wednesday, April 28, 2015 at 10:00 a.m. (ET) at the J. Caleb Boggs Federal Building, 844 King St., Room 5209, Wilmington, DE 19801.  Click Here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee.  If you want to be considered for Committee membership, you MUST complete a questionnaire and return it to the U.S. Trustee no later than April 27, 2015 at 10:00 a.m. (ET).

In addition, the U.S. Trustee has requested that a Section 341 Meeting of Creditors be scheduled for Thursday, May 27, 2015 at 10:00 a.m. (ET) at the J. Caleb Boggs Federal Court House, 844 N. King Street, 2nd Fl., Room 5209, Wilmington, DE 19801.

My colleague, Carl Neff, provided an overview of the Frederick’s of Hollywood bankruptcy here.

One way in which creditors can assert their interests is to attend the Formation Meeting and become a part of the creditors’ committee.  The creditors’ committee is one of the most active participants in a corporate bankruptcy, and has access to a significant amount of information not available to normal creditors.  There are, naturally, trade-offs to gaining access to this information (including limitations on a company’s ability to trade in securities of the debtor), but you will be far better informed of what occurs in the bankruptcy proceeding.

Another way creditors can assert their interests is to attend the Section 341 Meeting of Creditors to depose the debtor’s representative regarding the assets and liabilities of the bankruptcy estate.  Creditors may retain counsel to conduct such an examination of the debtor’s representative.  The Section 341 meeting of creditors is an integral component of a bankruptcy proceeding.

General topics that are discussed during a Section 341 meeting may include the following:

  • The nature and scope of a debtor’s assets and liabilities;
  • The amount of accounts receivable and accounts payable;
  • The extent that the debtor is able to repay its creditors;
  • Whether insurance remains active;
  • The condition and location of goods received in the 20-45 days before bankruptcy;
  • The debtor’s or trustee’s plan to reorganize its debt or liquidate its assets;
  • The debtor’s plan after it emerges from bankruptcy (not applicable to a Chapter 7 debtor);
  • Whether the debtor experienced any changes in revenue since filing for bankruptcy; and
  • Potential avoidance actions to be commenced by the debtor or trustee

In the Karmaloop, Inc. bankruptcy proceeding, a formation meeting has been scheduled for Wednesday, April 1, 2015 at 10:30 a.m. (ET) at the DoubleTree Hotel, 700 King St., Salon C, Wilmington, DE 19801.  Click Here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee.  If you want to be considered for Committee membership, you MUST complete a questionnaire and return it to the U.S. Trustee no later than March 30, 2015 at 5:00 p.m. (ET).

In addition, the U.S. Trustee has requested that a Section 341 Meeting of Creditors be scheduled for Thursday, April 16, 2015 at 10:30 a.m. (ET) at the J. Caleb Boggs Federal Court House, 844 N. King Street, 2nd Fl., Room 2112, Wilmington, DE 19801.

One way in which creditors can assert their interests is to attend the Formation Meeting and become a part of the creditors’ committee.  The creditors’ committee is one of the most active participants in a corporate bankruptcy, and has access to a significant amount of information not available to normal creditors.  There are, naturally, trade-offs to gaining access to this information (including limitations on a company’s ability to trade in securities of the debtor), but you will be far better informed of what occurs in the bankruptcy proceeding.

Another way creditors can assert their interests is to attend the Section 341 Meeting of Creditors to depose the debtor’s representative regarding the assets and liabilities of the bankruptcy estate.  Creditors may retain counsel to conduct such an examination of the debtor’s representative.  The Section 341 meeting of creditors is an integral component of a bankruptcy proceeding.

General topics that are discussed during a Section 341 meeting may include the following:

  • The nature and scope of a debtor’s assets and liabilities;
  • The amount of accounts receivable and accounts payable;
  • The extent that the debtor is able to repay its creditors;
  • Whether insurance remains active;
  • The condition and location of goods received in the 20-45 days before bankruptcy;
  • The debtor’s or trustee’s plan to reorganize its debt or liquidate its assets;
  • The debtor’s plan after it emerges from bankruptcy (not applicable to a Chapter 7 debtor);
  • Whether the debtor experienced any changes in revenue since filing for bankruptcy; and
  • Potential avoidance actions to be commenced by the debtor or trustee

In the Allied Nevada Gold Corp. bankruptcy proceeding, a formation meeting has been scheduled for Thursday, March 19, 2015 at 10:00 a.m. (ET) at the J. Caleb Boggs Federal Building, 844 King St., Room 2112, Wilmington, DE 19801.  Click Here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee.

In addition, The U.S. Trustee has requested that a Section 341 Meeting of Creditors be scheduled for Wednesday, April 15, 2015 at 2:00 p.m. (ET) at the J. Caleb Boggs Federal Court House, 844 N. King Street, 2nd Fl., Room 2112, Wilmington, DE 19801.

One way in which creditors can assert their interests is to attend the Formation Meeting and become a part of the creditors’ committee.  The creditors’ committee is one of the most active participants in a corporate bankruptcy, and has access to a significant amount of information not available to normal creditors.  There are, naturally, trade-offs to gaining access to this information (limitations on a company’s ability to trade in securities of the debtor), but you will be far better informed of what occurs in the bankruptcy proceeding.

Another way creditors can assert their interests is to attend the Section 341 Meeting of Creditors, in order to depose the debtor’s representative regarding the assets and liabilities of the bankruptcy estate.  Creditors may retain counsel to conduct such an examination of the debtor’s representative.  The Section 341 meeting of creditors is an integral component of a bankruptcy proceeding.  Creditors often want to know what information is made available, and what procedures are followed, during a typical meeting of creditors.

General topics that are discussed during a Section 341 meeting can include the following issues:

  • The nature of scope of a debtor’s assets and liabilities;
  • The amount of accounts receivable and accounts payable;
  • To what extent the debtor is able to repay its creditors;
  • Whether insurance remains active;
  • The condition and location of goods received in the 20 days before bankruptcy;
  • The condition and location of goods received in the 45 days before bankruptcy;
  • The debtor’s or trustee’s plan to reorganize its debt or liquidate its assets;
  • The debtor’s plan after it emerges from bankruptcy (not applicable to a Chapter 7 debtor);
  • Whether the debtor experienced any changes in revenue since filing for bankruptcy; and
  • Potential avoidance actions to be commenced by the debtor or trustee

In the Cal Dive International, Inc. bankruptcy proceeding, a formation meeting has been scheduled for Tuesday, March 17, 2015 at 10:00 a.m. (ET) at the Doubletree Hotel, 700 N. King Street, Wilmington, DE 19801.  Click here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee.

The U.S. Trustee has not yet requested that a Section 341 Meeting of Creditors be scheduled.

One way in which creditors can assert their interests is to attend the Formation Meeting and become a part of the creditors’ committee.  The creditors’ committee is one of the most active participants in a corporate bankruptcy, and has access to a significant amount of information not available to normal creditors.  There are, naturally, trade-offs to gaining access to this information (limitations on a company’s ability to trade in securities of the debtor), but you will be far better informed of what occurs in the bankruptcy proceeding.

Cal Dive’s Bankruptcy

According to the Declaration of Quinn J. Hébert, Document 15 in this case (Quinn Declaration attached here), Cal Dive and it’s bankrupt affiliates constitute a global marine contractor that provided highly specialized offshore services.  Over the past year, Cal Dive has been struggling with liquidity issues, which ultimately led to its bankruptcy filing.  Through its bankruptcy, Cal Dive intends to sell off certain underutilized assets through a 363 sale, and reorganize its core business, which it claims is still profitable.  See Quinn Declaration at * 5.  Given its declared intent to reorganize and the continued relationships Cal Dive will have with its creditors and suppliers, this is a case in which creditors should consider attending the Formation Meeting and (if possible) joining the creditors’ committee.

In the Altegrity, Inc. bankruptcy proceeding, a formation meeting has been scheduled for Tuesday, February 24, 2015 at 10:30 a.m. (ET) at the Doubletree Hotel, 700 N. King Street, Wilmington, DE 19801.  Click here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee.

In addition, The U.S. Trustee has requested that a Section 341 Meeting of Creditors be scheduled for Wednesday, March 18, 2015 at 3:00 p.m. (ET) at the J. Caleb Boggs Federal Court House, 844 N. King Street, 2nd Fl., Room 2112, Wilmington, DE 19801.

One way in which creditors can assert their interests is to attend the Formation Meeting and become a part of the creditors’ committee.  The creditors’ committee is one of the most active participants in a corporate bankruptcy, and has access to a significant amount of information not available to normal creditors.  There are, naturally, trade-offs to gaining access to this information (limitations on a company’s ability to trade in securities of the debtor), but you will be far better informed of what occurs in the bankruptcy proceeding.

Another way creditors can assert their interests is to attend the Section 341 Meeting of Creditors, in order to depose the debtor’s representative regarding the assets and liabilities of the bankruptcy estate.  Creditors may retain counsel to conduct such an examination of the debtor’s representative.  The Section 341 meeting of creditors is an integral component of a bankruptcy proceeding.  Creditors often want to know what information is made available, and what procedures are followed, during a typical meeting of creditors.

General topics that are discussed during a Section 341 meeting can include the following issues:

  • The nature of scope of a debtor’s assets and liabilities;
  • The amount of accounts receivable and accounts payable;
  • To what extent the debtor is able to repay its creditors;
  • Whether insurance remains active;
  • The condition and location of goods received in the 20 days before bankruptcy;
  • The condition and location of goods received in the 45 days before bankruptcy;
  • The debtor’s or trustee’s plan to reorganize its debt or liquidate its assets;
  • The debtor’s plan after it emerges from bankruptcy (not applicable to a Chapter 7 debtor);
  • Whether the debtor experienced any changes in revenue since filing for bankruptcy; and
  • Potential avoidance actions to be commenced by the debtor or trustee

In the Egenix bankruptcy proceeding, a formation meeting has been scheduled for Thursday, January 22, 2015 at 10:00 a.m. (ET) at the J. Caleb Boggs Federal Court House, 844 N. King Street, Fifth Fl., Room 5109, Wilmington, DE 19801.  Click here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee.

In addition, a Section 341 Meeting of Creditors has been scheduled for Tuesday, January 27, 2015 at 1:00 p.m. (ET) at the J. Caleb Boggs Federal Court House, 844 N. King Street, 2nd Fl., Room 2112, Wilmington, DE 19801.  Click here for the notice issued by the Bankruptcy Court.

One way in which creditors can assert their interests is to attend the Section 341 Meeting of Creditors, in order to depose the debtor’s representative regarding the assets and liabilities of the bankruptcy estate.  Creditors may retain counsel to conduct such an examination of the debtor’s representative.  The Section 341 meeting of creditors is an integral component of a bankruptcy proceeding.  Creditors often want to know what information is made available, and what procedures are followed, during a typical meeting of creditors.

General topics that are discussed during a Section 341 meeting can include the following issues:

  • The nature of scope of a debtor’s assets and liabilities;
  • The amount of accounts receivable and accounts payable;
  • To what extent the debtor is able to repay its creditors;
  • Whether insurance remains active;
  • The condition and location of goods received in the 20 days before bankruptcy;
  • The condition and location of goods received in the 45 days before bankruptcy;
  • The debtor’s or trustee’s plan to reorganize its debt or liquidate its assets;
  • The debtor’s plan after it emerges from bankruptcy (not applicable to a Chapter 7 debtor);
  • Whether the debtor experienced any changes in revenue since filing for bankruptcy; and
  • Potential avoidance actions to be commenced by the debtor or trustee.

Carl D. Neff is a bankruptcy attorney with the law firm of Fox Rothschild LLP.  Carl is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.

There have been several developments in the Egenix, Inc. (“Egenix” or “Debtor”) bankruptcy case pending in the District of Delaware.  To review the initial article posted about this bankruptcy action on December 28, 2014, click here.

Since the Debtor’s bankruptcy filing, Egenix has filed various motions, including a Motion (I) to Authorize Continued Use of Existing Bank Account and Business Forms, and (II) Waiving Requirements of 11 U.S.C. Section 345 on an Interim Basis.  In addition, the Debtor filed its creditor matrix and a list of its top 20 creditors, along with a motion to appoint Donlin, Recano and Company as claims agent to the Debtor.

Further, Egenix filed the Declaration of William T. Nolan in Support of Chapter 11 Petitions and First Day Pleadings (“Nolan Declaration”).  According to the Nolan Declaration, the Debtor seeks to reorganize its debt in bankruptcy.  As stated in the Nolan Declaration, “[t]he Debtor’s ultimate goal in this Chapter 11 Case is to create a sustainable capital structure for the future that maximizes the value of the Debtor’s estate for the benefit of all of the Debtor’s constituents.” (Nolan Decl., at 11).

The next hearing has been scheduled for Tuesday, January 6, 2015, at 1:30 p.m., at which time Egenix will present its pending motions to the Court for consideration.

Carl D. Neff is a bankruptcy attorney with the law firm of Fox Rothschild LLP.  Carl is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.

On December 28, 2014, Egenix, Inc. filed for bankruptcy with the United States Bankruptcy Court for the District of Delaware.  As of today’s date, the only document filed with the Court in this action is the petition itself.  According to the petition, Egenix has $500,000 to $1 million in estimated assets, and $1 million to $10 million in estimated debts.

Egenix is a privately held biotechnology company focused on developing innovative cancer therapeutics.  The company is based in LaGrangeville, New York.  Egenix is being represented in this bankruptcy action by the law firm of Cole, Schotz, Meisel, Forman & Leonard, P.A.  Stay tuned for further updates on this bankruptcy filing.

Carl D. Neff is a bankruptcy attorney with the law firm of Fox Rothschild LLP.  Carl is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.

In the decision of In re Fairfield Sentry Ltd., 2014 WL 4783370, *4-5 (2d Cir. Sept. 26, 2014), the U.S. Court of Appeals for the Second Circuit ruled that a U.S. Bankruptcy Court was required to review a foreign debtor’s sale of property within the territorial jurisdiction of the United States, relying upon the language of Section 1520(a)(2) of the Bankruptcy Code.  While this decision was rendered by the Second Circuit, it may have an impact on decisions within the Third Circuit, including the District of Delaware.

Moreover, the Second Circuit held that the bankruptcy court erred when it gave deference to a foreign court’s approval of the asset sale.  According to the opinion, regardless of what the foreign (BVI) court did, the U.S. bankruptcy court had an obligation to approve only the “best possible bid.”  Id. at 19.  It had no “good business reason” and no valid legal reason for deferring to the BVI court’s misjudgment. Id. at 10.

This opinion should be considered by any purchaser of U.S. assets of a foreign debtor in a Chapter 15 proceeding. Chapter 15 of the Bankruptcy Code is relatively new (adopted in 2005), and there is a dearth of case law interpreting its provisions.

Carl D. Neff is a bankruptcy attorney with the law firm of Fox Rothschild LLP.  Carl is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.