Midstates Petroleum Company filed with the U.S. Bankruptcy Court a First Amended Joint Plan of Reorganization, which incorporates the following adjustments: Allowed second lien notes secured claim’s pro rata share was changed from 96.3% to 97.5% of the new common stock (less unencumbered assets equity distribution). The Plan adds the following text, “The percentage of Unencumbered Assets Equity Distribution received by Holders of Unsecured Notes Claims and General Unsecured Claims (excluding Deficiency Claims) shall in no event exceed three and seven tenths percent (3.7%) of the New Common Stock (which shall be subject to dilution under the Management Incentive Plan, any other compensation arrangements under the Management Compensation Term Sheet, and New Common Stock issuable upon exercise of the New Warrants).”
Thornburg Mortgage’s Chapter 11 trustee filed with the U.S. Bankruptcy Court a monthly operating report for July 2016. For the period, the Company reported a net loss of $476,757 on $1,994 in net operating revenue (derived from mortgage servicing income). The Company paid $302,145 in legal and professional fees and $321,345 in total reorganizational expenses during July 2016.
Peabody Energy filed with the U.S. Bankruptcy Court a motion to compromise a controversy and memorializing the terms of a settlement between Debtor Big Ridge and the United Mine Workers of America (UMWA) in regards to the board’s compliance specification and notice of hearing to liquidate back pay and other monetary liability due under the board’s December 14, 2014 order finding Big Ridge in violation of the National Labor Relations Act. The motion explains, “[T]he Eighth Circuit has found that a suit brought by the Equal Employment Opportunity Commission (the ‘EEOC’) to enforce Title VII is not stayed under the Bankruptcy Code pursuant to the police power exception. Big Ridge determined that, in its reasoned business judgment, it was in its best interests to enter into this Settlement with the UMWA and the Board rather than subject Big Ridge and its estate to the time and expense of litigating the applicability of the automatic stay to the NLRB Proceeding before this Court….As set forth in the Compliance Agreement, the Parties have agreed that, commencing on the date the Compliance Agreement is approved by the Court: (a) the back pay amount owed by Big Ridge pursuant to the NLRB Order will be liquidated into a claim of $99,617 (the ‘Settlement Amount’); (b) Big Ridge will withdraw the answer it filed to the Compliance Specification; and (c) the Board will withdraw the Compliance Specification and Notice of Hearing.” The Court scheduled a September 15, 2016 hearing to consider the compromise motion, with objections due by September 8, 2016.
Fabricaciones y Reparaciones Industriales – FMERM, Fibras Marinas, ASAP Consulting Group, Paitan and G.I. Industria Peru (collectively, “the Peruvian Suppliers”) filed with the U.S. Bankruptcy Court an objection to the Club Lender Parties’ motion for the entry of an order directing the appointment of a Chapter 11 trustee to China Fishery Group case. The Peruvian Suppliers assert, “There are two additional reasons why the Peruvian Suppliers object to the appointment of a Chapter 11 trustee, which they believe will have a substantial detrimental and prejudicial impact on their rights as creditors of the Peruvian Companies. The first reason is evidenced by recent history….The loss of warehouse facilities meant that the Peruvian Companies’ operations in Peru were shut down and its revenue stream halted….The Peruvian bankruptcy case is the only forum in which the rights and debts of the Peruvian Suppliers can and should be exclusively determined. The appointment of a Chapter 11 trustee threatens the ability of the Peruvian Suppliers – indeed, all creditors of the Peruvian Companies – to protect their rights under the exclusive statutory scheme of the Peruvian Insolvency Law in the cases pending before INDECOPI….The Peruvian Suppliers submit that this Court should permit the Peruvian Companies’ cases in Peru to be decided exclusively under the Peruvian Insolvency Law without interjection by a Chapter 11 trustee who may have a different agenda, which appears to be the ultimate goal of the Club Lender Parties who seem to wish only to force a sale of the Peruvian Companies for their own parochial interests.”
Multiple parties – including Fidelity Management & Research Company, American Stock Transfer & Trust Company and Contrarian Capital Management – filed with the U.S. Bankruptcy Court separate objections to Energy Future Holdings’ (EFH) motion for order (a) authorizing entry into merger agreement, (b) approving a termination fee and (c) authorizing entry into and performance under plan support agreement. Fidelity Management & Research Company asserts, “In connection with the Debtors’ proposed sale of substantially all of the assets of the E-Side Debtors to NextEra Energy, the Debtors seek authority to pay NextEra a $275,000,000 break-up fee in the event the Agreement and Plan of Merger with NextEra is terminated and any alternative transaction is consummated. Third Circuit precedent dictates that the break-up fee may only be approved if it is an actual and necessary cost to preserve the value of the Debtors’ estates, and requires a showing that without the break-up fee, NextEra would abandon its bid. Given NextEra’s relentless pursuit of the Debtors’ assets for the past two-plus years, the Debtors have not and cannot make such a showing….Time and time again over the past two-plus years, NextEra has openly pursued its very serious interest in acquiring Oncor. NextEra’s persistence – often unsolicited – since the commencement of these chapter 11 cases proves that the Debtors cannot meet their heavy burden to show that the break-up fee was necessary to induce NextEra to bid or that its approval is necessary to prevent NextEra from abandoning its bid. In fact, NextEra’s conduct throughout these cases demonstrates the opposite – NextEra will continue to pursue Oncor with or without a break-up fee. Accordingly, approval of the break-up fee must be denied.”
The U.S. Bankruptcy Court approved Aeropostale’s motion for an order directing the U.S. Trustee assigned to the Aeropostale case to appoint a consumer privacy ombudsman in connection with the Debtors’ sales process and in accordance with prior orders of the Court in advance of the hearing scheduled for September 6, 2016 because potential transactions may include the sale of personally identifiable information as defined in 11 U.S.C. section 101(41A). The order states, “William K. Harrington, United States Trustee for Region 2, hereby appoints Warren E. Agin, Esq. as Consumer Privacy Ombudsman in these cases.”
GreenHunter Resources filed with the U.S. Bankruptcy Court a monthly operating report for June 2016. Cash at the beginning of June 2016 and at month’s end was $1.16 million. The Company reported payment of zero professional fees and reorganization expenses, total assets of $3.2 million and total pre-petition liabilities of $17.8 million.
SFX Entertainment filed with the U.S. Bankruptcy Court a Second Amended Joint Plan of Reorganization and First Amended Disclosure Statement. The First Amended Disclosure Statement asserts, “The Plan proposes the issuance of two classes of securities: New Series A Preferred Stock and Reorganized SFXE Common Stock. The shares of New Series A Preferred Stock to be issued shall have a face amount and a liquidation value as of the Effective Date equal to (i) the Tranche B DIP Facility Claims, exclusive of any Incremental Tranche B DIP Loan Claims, plus (ii) the Original Foreign Loans Claims, plus (iii) an additional amount, earned on the Effective Date, equal to 2% of the amount of the Tranche B DIP Facility Claims (other than the Incremental Tranche B DIP Loan Claims) and the Original Foreign Loan Claims. The New Series A Preferred Stock shall, among other things, (i) accrue PIK dividends at 15% per annum and shall be perpetual preferred with a mandatory redemption at the Liquidation Preference, upon a Liquidity Event (ii) have voting rights entitling it to vote on a 20:1 ratio to the voting rights of the Reorganized SFXE Common Stock, and (iii) have such other terms and conditions as set forth in the Restated Charter Documents or the New Series A Preferred Stock Certificate. The shares of Reorganized SFXE Common Stock to be issued shall be issued pursuant to the Plan and the Restated Charter Documents. The Plan also proposes the issuance of three classes of CVRs: the Class A CVRs and, the Class B CVRs, and Litigation CVRs.”
The U.S. Bankruptcy Court issued an order approving Horsehead Holding’s compromise of controversy with U.S. Bank in its capacity as trustee and collateral agent, the indenture trustee, the ad hoc secured noteholders’ committee of 10 1/2% Senior Secured Notes due 2017 and First American Title Insurance Company. As previously reported, “The Settlement Agreement, inter alia, provides for the payment of $3,000,000 by First American to an account designated by the Debtors on account of claims held by the Indenture Trustee relating to the Debtors’ zinc production facility in Mooresboro, North Carolina….The primary terms of the Settlement Agreement are: Within 2 business days after the occurrence of the Payment Date, First American shall transfer cash via wire transfer in the amount of $3,000,000 to an escrow account maintained by a third-party escrow agent acceptable to the Parties, subject to the terms of an escrow agreement reasonably acceptable to the Parties to effectuate the transactions contemplated by the Settlement Agreement.”
The U.S. Bankruptcy Court approved LINN Energy’s motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including January 11, 2017 and March 17, 2017, respectively. As previously reported, “Extension of the Exclusive Periods is merited to provide the Debtors sufficient time to achieve the successful conclusion to these cases for which the Debtors have worked so hard thus far. Given the size and complexity of their businesses, the Debtors’ request for additional time to complete their key restructuring initiatives is amply justified. Additionally, such an extension will provide the Debtors sufficient time to satisfy the RSA milestone for the effective date of a plan of reorganization. For the foregoing reasons, the Debtors submit that an extension of the Exclusive Periods will serve the best interests of all parties, avoid wasteful distraction, and provide the appropriate environment for the major stakeholders in these chapter 11 cases to work collaboratively toward a value-maximizing restructuring. Accordingly, the Debtors respectfully request that the Court grant the Debtors’ requested extension of the Exclusive Periods.”
Payment Card Interchange Fee and Merchant Discount Antitrust Litigation