It isn’t only the athletic-wear retailers going through bankruptcy (Sports Authority and Golfsmith), but retailers on the other end of the athletic spectrum – think t.v. and tobacco.

Delivery Agent, a company which has developed technology focused on allowing television watchers to easily purchase any items they see in a television show or advertisement, has filed for bankruptcy protection in Delaware.  Its formation meeting is scheduled for September 29, 2016 at 10:00 a.m. at the The Double Tree Hotel, 700 King Street, Salon C, Wilmington, DE 19801.  Until the Formation Meeting occurs, a copy of the Notice will be available here.  In its first day pleadings, Delivery Agent has represented that it intends to sell all of its assets, and divide the sales proceeds among its creditors.

The second case with a formation meeting scheduled for this week is NJOY, Inc.  NJOY is a producer and seller of e-cigarettes.  Its formation meeting is scheduled for September 27, 2016 at 2:00 p.m. at the Office of the United States Trustee, 844 King Street, Room 2112, Wilmington, DE 19801.  Until the Formation Meeting occurs, a copy of the Notice will be available here.  Like Delivery Agent, NJOY has represented that it intends to sell its assets and divide the sales proceeds among its creditors.

As prior posts on this blog have stated, a Creditors’ Committee (which will be created at each of these formation meetings) is the best vehicle for an unsecured creditor to have an influence on a bankruptcy.  Counsel for the Creditors Committee attends every hearing in a case and works to increase recoveries for the unsecured creditors – all at the direction of the members of the Committee.  If you are a creditor of either of these companies and want to discuss how membership in the Committee may affect you, feel free to give us a call.

On March 2, 2016, each of the seven debtors which collectively comprise Sports Authority filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. The cases are jointly administered under Case No. 16-10527 before the Honorable Mary F. Walrath.   The “first day” hearing occurred on Thursday, March 3, 2016, and the “second day” hearing is scheduled for March 29, 2016 at 1:00 p.m.  It was an exceptionally long first day hearing, mainly because of the massive amount of consigned goods at Sports Authority stores; somewhere north of $85 million of inventory is consigned goods.  It made for an interesting and lively debate, and I encourage anyone interested in the debate to read Judge Gross’ opinion in Whitehall – 2008 WL 2951974.

I presume everyone who sees this post is familiar with Sports Authority, so rather than go into any detail about the company, I’ll only repeat a portion of what was said at the first day hearing – The company has been suffering because of increased online competition and filed for bankruptcy with the intention of exploring both a restructuring and a sale, depending on what they can garner support for.  The Debtors’ claims agent has created a website for those interested in following the case: http://www.kccllc.net/sportsauthority.

A formation meeting is scheduled for March 10, 2016 at 10:00 a.m. at the The Hotel DuPont, 11th & Market Streets, Wilmington, DE 19801.  Until the Formation Meeting occurs, a copy of the Notice will be available here.  The 341 Meeting is scheduled for March 29, 2016 at 9:00 a.m.  This looks to be a case with complex issues that will affect a huge number of stakeholders, including vendors, landlords, contract counterparties and employees.  The United States Trustee will monitor this case, but as we saw at the first day hearing, parties’ rights can be affected quickly and suddenly.  All creditors involved should make sure they stay informed about the case.

On December 17, 2015, New Gulf Resources, LLC and 3 affiliated debtors (collectively, the “Debtors”) each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.  The cases are jointly administered under Case No. 15-12566 and are pending before the Honorable Brendan Linehan Shannon. The first day hearing was held on December 18, 2015.  The “second day” hearing is scheduled for January 19, 2016 at 12:00 p.m.

A majority of the information available about the Debtors can be found in one of three places: the Declaration of Danni Morris in Support of the Debtors’ First Day Motions [D.I. 13] (the “Declaration”); the website established by the Debtors’ claims agent, Prime Clerk, https://cases.primeclerk.com/newgulf; and the website created by the Debtors to inform investors about the bankruptcy, http://newgulfresources.com/about/restructure_information.asp.  The Debtors constitute yet another in a growing stream of energy providers to have declared bankruptcy in recent months.  In this case, they were engaged in the acquisition, development, exploration and production of oil and natural gas properties, focused primarily in the East Texas Basin.  As of November 2015, the Debtors’ properties were producing approximately 3500 net barrels of oil equivalents per day.  Declaration at *3.  The intent of the Debtors in filing this bankruptcy is to ‘right-size’ their balance sheets so that they can move forward profitably.

The Debtors represent on their website (linked above and last accessed on 1/4/2016) that as of the petition date, they had entered into a Restructuring Support Agreement (“RSA”) with an ad hoc committee of creditors holding more than 72% of its second lien notes and 22% of its subordinated PIK notes, who have agreed, subject to the terms thereof, to provide at least $125 million of new capital to increase liquidity post-reorganization and permanently pay down existing first lien debt. Specifically, the RSA provides for $75 million in debtor-in-possession (“DIP”) secured credit financing to be funded by, and a $50 million rights offering to be backstopped by, the ad hoc committee RSA.  The Debtors are represented by Baker Botts L.L.P. and Young Conaway Stargatt & Taylor, LLP in these bankruptcy proceedings. Continue Reading New Gulf Resources – 341 and Formation Meetings Scheduled

On October 14, 2015, Affirmative Insurance Holdings, Inc. and 7 affiliates filed for relief under chapter 11 of the Bankruptcy Code.  The cases are jointly administered under Case Number 15-12136 and presided over by Judge Christopher S. Sontchi.  The first day hearing was held on October 19, 2015.  The second day hearing is scheduled for November 18, 2015 at 12:30 p.m.

The majority of the information available about the Debtors comes from the Declaration of Michael J. McClure in Support of the Debtors’ Chapter 11 Petitions and First Day Pleadings [D.I. 2] (the “Declaration”).  The Debtors offered non-standard personal automobile insurance (“NSPIA”) policies – policies that are provided to “drivers who find it difficult to obtain insurance from standard automobile insurance companies…”  These policies have a higher average premium, which “results from the increased frequency of loss costs…”

The Debtors’ bankruptcy petition lists assets of $10-$50 million and debt of $50-$100 million.  According to the Declaration, the NSPIA market segment is highly competitive and has few barriers to entry.  The Debtors have incurred losses from operations from 2008 until the present, and began selling portions of the business beginning in 2013.  While it is unclear from the Declaration whether the Debtors intend to liquidate or restructure, the significant NOLs (approximately $80 million) held by the Debtors may make them a prime takeover candidate.  The Debtors are represented by Polsinelli PC and McDermott Will & Emery LLP in these bankruptcy proceedings.

A formation meeting is scheduled for October 30, 2015 at 10:00 a.m. in the J. Caleb Boggs Federal Building, 844 King St., Room 5209, Wilmington, DE 19801.  The 341 Meeting is scheduled for November 18, 2015 at 2:00 p.m.

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 Boomerang Systems, Inc. bankruptcy proceeding (Delaware Bankruptcy Case No. 15-11729), a formation meeting has been scheduled for Thursday, August 27, 2015 at 10:00 a.m. (ET) at the J. Caleb Boggs Federal Building, 844 King Street, 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.  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 August 25, 2015 at 5:00 p.m. (ET).

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.

In the IMRIS, Inc. bankruptcy proceeding (Delaware Bankruptcy Case No. 15-11133), a formation meeting has been scheduled for Thursday, June 4, 2015 at 10:00 a.m. (ET) at the J. Caleb Boggs Federal Building, 844 King Street, 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.  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 June 2, 2015 at 5:00 p.m. (ET).

According to the Declaration of Jay D. Miller in Support of First Day Pleadings (the “Declaration”), IMRIS came into existence after acquiring Innovative Magnetic Resonance Imaging Systems Inc. in 2005.  IMRIS trades on the NASDAQ under the ticker “IMRS”.  The Debtors design, manufacture and market image guided therapy systems that enhance the effectiveness of therapy delivery, which include multiple field strength Magnetic Resonance systems, X-Ray Fluoroscopy systems, and Computed Tomography (CT) systems.  The Debtors’ products are installed in leading neuroscience centers around the world.  Declaration at *4.

The Debtors had a complex billing cycle as the installation of their products required substantial capital contributions be made by their clients.  Ultimately, the Debtors turned to a financial facility during a slowdown of business, and were unable to comply with their debt covenants.  Declaration at *9-10.  The Debtors have filed for bankruptcy with the belief that that an expedited sale of their business is essential to not only preserving the underlying value of their operations by providing customers and employees with a clear path forward, but in satisfying the Company’s obligations to its creditors.  Declaration at *13.  Thus, it appears that this case, like many in the current bankruptcy environment, will likely involve a 363 sale of assets followed by the proposal and confirmation of a liquidating chapter 11 plan.

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 Boston Restaurant Associates, Inc. bankruptcy proceeding (Delaware Bankruptcy Case No. 15-11101), a formation meeting has been scheduled for Tuesday, June 2, 2015 at 10:00 a.m. (ET) at the J. Caleb Boggs Federal Building, 844 King Street, 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 May 29, 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 Friday, June 19, 2015 at 12:00 p.m. (ET) at the J. Caleb Boggs Federal Building, 844 N. King Street, 2nd Fl., Room 5209, 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 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