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Showing 9 posts in Insider's Scoop.

Insider’s Scoop: Judge Sontchi’s Decision to Confirm Horsehead’s Plan Was One of His Honor’s Most Difficult and Closest Calls in Ten Years on the Bench

In re Horsehead Holding Corp., No. 16-10287 (CSS) (Bankr. D. Del. Sept. 2, 2016) [Transcript Ruling]

Following a three day confirmation trial, which attracted scores of shareholders and running commentary via live tweets from the courtroom, Judge Sontchi confirmed the second amended plan of reorganization (the “Plan”) proposed by Horsehead Holding Corp. and its affiliated debtors (“Horsehead”) over the objection of the official committee of equity holders (the “Equity Committee”), holding that the Plan was proposed in good faith and satisfied the absolute priority rule.  His Honor described the decision as one of the most difficult and closest calls that he has had to make during his time on the bench. Read More ›

UPDATE – Insider’s Scoop: Recently Appointed Equity Committee’s Professional Fees Preliminarily Capped by Bankruptcy Court

In re Horsehead Corp., No. 16-10287 (Bankr. D. Del. June 20, 2016) (CSS) [Transcript Ruling]

In the Horsehead family of cases, Judge Sontchi ruled, in the context of considering the equity committee professionals’ retention applications, that a preliminary reasonable global cap of $1.75 million on the equity committee’s professional fees was warranted.  See generally Hr’g Tr. 24:17-29:17.  Our previous blog post analyzing the appointment of the equity committee in these cases can be found here.  The Court had stated at a telephonic discovery conference held just a few days prior that it had “serious concerns that the equity committee is overstepping its charge.” Read More ›

Insider’s Scoop: Bankruptcy Court Grants Motions to Form an Official Equity Committee Due to Dramatic Adjustments to Valuation Over a Short Period of Time

In re Horsehead Corp., No. 16-10287 (Bankr. D. Del. May 2, 2016) (CSS) [Transcript Ruling]

In a packed courtroom, full of shareholders appearing pro se, Judge Sontchi granted motions to appoint an official equity committee.  Acknowledging that he was going “out on a limb here from the standpoint on where the law puts me”, Judge Sontchi cautioned that “something doesn’t smell right to the Court.”  Hr’g Tr. 100:17-19, 100:25-101:1.  The Court based its ruling on His Honor’s experience and the “unusual circumstances” attendant to the Debtor’s valuation, which had decreased drastically since shortly before the filing of the bankruptcy case.  Horsehead Corporation and four affiliates (the “Debtors”) filed bankruptcy petitions on February 2, 2016. Read More ›

The Insider’s Scoop: Boomerang Tube is the Law in the Delaware Bankruptcy Court

In re Magnum Hunter Resources Corp., Case No. 15-12533 (KG) (Bankr. D. Del. Feb. 26, 2016)

In re Newbury Common Assocs., LLC, Case No. 15-12507 (LSS) (Bankr. D. Del. Feb. 29, 2016)

On February 26, 2016, the Honorable Kevin Gross of the Delaware Bankruptcy Court was asked to weigh in on the attorneys’ fees issue recently addressed in Judge Walrath’s Opinion in Boomerang Tube. Read More ›

The Insider’s Scoop: “Unwise” to Approve Retention of Dechert LLP As Debtors’ Counsel Due to Actual and Potential Conflicts of Interest

In re Newbury Common Assocs., LLC, Case No. 15-12507 (LSS) (Bankr. D. Del. Feb. 12, 2016) [Transcript Ruling]

In a bench ruling, Judge Silverstein denied Newbury Common Associates, LLC’s (and its affiliated debtors, the “Debtors”) application to retain and employ Dechert LLP (“Dechert”) as its bankruptcy counsel.  The Court held that Dechert’s prior representation of certain individuals—William Merritt and Thomas Kelly (the “Individuals”)—in a matter related to the Debtors’ bankruptcy, no matter how short in duration or extent, created an actual conflict of interest.  To the extent there was not an actual conflict, the Court held that it was within its discretion to find that numerous potential conflicts warranted disqualification. Read More ›

The Insider’s Scoop: Boomerang Tube Decision Already Endorsed in Delaware

In re Samson Resources, Corp., Case No. 15-11934 (CSS) (Bankr. D. Del. Feb. 8, 2016) [Letter Ruling]

[Update - The Honorable Brendan Linehan Shannon has also followed suit, issuing a letter ruling in In re Gulf Resources, LLC.  Therein, His Honor agreed with Judge Walrath's holding in Boomerang Tube "including comments contained in Footnote 6 of the Opinion applying its rationale to the retention of debtor's counsel."]

The Boomerang Tube decision has already been followed by one other Delaware bankruptcy judge.  In a letter ruling in In re Samson Resources Corp., Judge Christopher S. Sontchi agreed with, endorsed, and applied Judge Walrath’s ruling to deny fee defense provisions in retention applications for debtors’ counsel. Read More ›

The Insider’s Scoop: Caesars Moving from Delaware to the Northern District of Illinois

In re Caesars Entm't Operating Co., Case No. 15-10047 (KG) (Bankr. D. Del. Jan. 28, 2015) [Transcript Ruling]

[Update – Judge Gross issued his formal written Opinion on February 2, 2015.  The Opinion, which lays out his transcript ruling in further detail, can be found here.]

On January 28, 2015, in a bench ruling and Order to be followed by a written Opinion, the Honorable Kevin Gross ruled that the voluntary chapter 11 bankruptcy proceeding of Caesars Entertainment Operating Company, Inc. (“CEOC”), that was currently pending but stayed in the United States Bankruptcy Court for the Northern District of Illinois (the “Illinois Court”), may proceed in the Illinois Court. Read More ›

The Insider’s Scoop: EFH Bidding Procedures Approved But Significant Modifications Necessary To Cure Fundamental Flaws

In re Energy Future Holdings Corp., No. 14-10979 (CSS) (Bankr. D. Del. Nov. 3, 2014) [Transcript Ruling]

Upon commencement of this mega-chapter 11 case, the Debtors filed and pursued assumption of a restructuring support agreement (“RSA”), which contemplated, among other things, the tax-free spinoff of the Debtor entities that control the economic interest in their non-debtor affiliate, Oncor, a company that provides residential and commercial electricity in Texas and has been estimated by the Debtors to be worth as much as $18 billion.  Over the summer, however, the Debtors were forced to abandon the RSA when certain bidders offered more value than was to be provided under the RSA transactions.  Read More ›

The Insider’s Scoop: May Investment Bankers be Retained by Debtors as Independent Contractors? “No” Says the Delaware Bankruptcy Court

In re MacKeyser Holdings, LLC, No. 14-11550 (CSS) (Bankr. D. Del. Aug. 7, 2014) [Transcript Ruling]

In the recently filed chapter 11 proceedings of MacKeyser Holdings, LLC and its affiliated debtors (“Debtors”), the Debtors sought to retain Hammond Hanlon Camp (“H2C”) as their exclusive investment banker under sections 327 and 328 of the Bankruptcy Code.  H2C’s proposed engagement agreement included a provision disclaiming its role as a fiduciary to the Debtors.  More specifically, it provided that “H2C shall act as an independent contractor under this Agreement and not in any other capacity including any fiduciary capacity.” Read More ›