Chapter 11 bankruptcy code

Sports Authority, Inc. (“Sports Authority”) appears to likely be the next big tenant Chapter 11 bankruptcy filing. Recent reports are indicating that the sporting and apparel chain is preparing to file for Chapter 11 bankruptcy protection, as debt payments are due in 10 days, according news reports from Bloomberg Business and other outlets. Of its 450 stores,Bloomberg reports that Sports Authority plans to close as many as 200 locations within a bankruptcy proceeding.Sports Authority was once the biggest sporting-goods chain in the U.S, but over the past few years has had difficulty competing with Dick’s Sporting Goods Inc., Lululemon Athletica Inc., Gap Inc.’s Athleta, and Amazon.com Inc. Landlord’s QuestionsIf you are a landlord, it’s a good idea to review your accounting and call any defaults that may exist. Furthermore and operationally, you may want your property manager to speak with the store … [Read more...] about Sports Authority Looks to be the Next Big Tenant Chapter 11 Bankruptcy Filing

On the heels of the Joyce Leslie and Sports Authority Chapter 11 bankruptcy filings, another retailer just filed for Chapter 11 bankruptcy protection, and it appears that two (2) more retailers are preparing to file to reorganize.PacSun, more formally known as Pacific Sunwear of California, Inc., just filed for Chapter 11 bankruptcy protection this morning in the United States Bankruptcy Court for Delaware, docket # 16-10882. High debt forced the teen retailer of surf/beachwear to file. PacSun operates 600 stores and is expected to close a number of stores either after the big back to school or holiday season. It lists total assets of $298,853,000 and liabilities of $305,056,000 in its petition.In addition to PacSun, two more retailers are expected to file shortly. Bloomberg recently reported that Vestis Retail Group, owner of Eastern Mountain Sports (68 stores), Bob’s Stores (35 stores), and Sport Chalet (51 stores), appears to be preparing for a Chapter 11 bankruptcy filing. … [Read more...] about PacSun Files for Chapter 11 protection in Delaware – Next Batch of Expected Retail Chapter 11 Bankruptcy Filings

A recent bankruptcy court decision could have wide-reaching implications for pipeline operators. Judge Shelley C. Chapman of the United States Bankruptcy Court, Southern District of New York, ruled last week that Sabine Oil & Gas, a bankrupt independent producer, could withdraw from its contract obligations with midstream providers to ship hydrocarbons through the pipelines of two different companies, even though the agreements governing their relations specifically stated that debtor/trustee Sabine's obligation to dedicate acreage to the agreements were covenants running with the land. This decision, which is at odds with rulings from other courts, sent shockwaves throughout the industry as shares of major pipeline operators fell upon news of the ruling, with the Dow Jones index of pipeline operators ending down more than five percent.The ruling by the Bankruptcy Court is the first major test of whether Chapter 11 can be utilized to terminate an executory contract with midstream … [Read more...] about Executory Contracts Rejected In Chapter 11 Bankruptcy; How Does This Impact Midstream Providers?

Did Trump win again?  Yes, but this time it was not “The Donald” but was instead the casino-operator Trump Entertainment Resorts, Inc. (“Trump Entertainment”).On January 15, 2016, Trump Entertainment was handed a victory by the Third Circuit Court of Appeals which held that Trump Entertainment could reject the continuing terms and conditions of a collective bargaining agreement (“CBA”) that had already expired by its terms.  See In re Trump Entertainment Resorts, Inc., Case No. 14-4807 (3d Cir. Jan. 15, 2016) (the “Opinion”).  This case is a matter of first impression among the courts of appeal and is likely to significantly alter the balance of power between debtor-employers and their unions.Complicating this matter is section 1113 of the Bankruptcy Code.  Section 1113 contains detailed rules and procedures governing a debtor’s ability to reject a CBA.  The procedures are exclusive and a debtor … [Read more...] about Trump (Entertainment) Wins! Chapter 11 Bankruptcy and Union CBAs

The U.S. District Court for the District of Delaware has affirmed a bankruptcy court order which approved both a sale of the debtors’ assets and the establishment of an escrow account, which essentially provides a “gift” to fund a distribution to the debtors’ unsecured creditors.  What is significant about this order is that it approved the use of gifting in a chapter 11 bankruptcy case.The concept of gifting in a bankruptcy case allows a secured creditor or purchaser to overcome objections to a sale of assets interposed by an unsecured creditors committee or other creditors in the case.  The gift usually consists of a pool of funds for distribution to the debtors’ unsecured creditors.  See In re SPM Mfg. Corp., 984 F.2d 1305 (1st Cir. 1993). Given that the creditors committee represents only unsecured creditors, the carveouts that are negotiated by creditors committees often bypass the claims of priority creditors, such as … [Read more...] about Delaware District Court Affirms Order Approving Gifting In Chapter 11 Case