October 18, 2018 – The Court hearing the Toys "R" Us case approved bidding procedures in respect of the sale of its shared services business (the "Shared Services Business") [Docket No. 5310]. Central to the bidding procedures motion is the agreement of the Debtors' Term B Lenders to serve as a stalking horse bidder with a credit bid of $57.5 million. As previously reported [Docket No. 5199], “Toys Delaware—through its Disinterested Directors—has determined that a potential sale of the Shared Services Business should be pursued prior to the effective date of the Plan. The Debtor believes that the proposed sale process will afford the most likely purchasers of the Shared Services Business—the now or soon-to-be independent regional enterprises and the Taj Noteholders—the opportunity to competitively bid for the Assets and assume responsibility for the operations of the Shared Service Business following the consummation of the sale. As part of this decision to market and sell the Shared Services Business, the Debtor and the Disinterested Directors negotiated an agreement of various significant terms and conditions, including, without limitation, an agreement by the Ad Hoc Group of B-4 Lenders (a) to withdraw their objections to entering into a Transition Services Agreement with the purchaser of the France business; (b) to cap their credit bid for the Shared Services Business at $57.5 million, subject to a minimum overbid of $500,000; and (c) that the applicable acquisition vehicle or Toys Delaware successor entity assume all obligations under the various Transition Services Agreements in connection with the Plan.”
The order also approved the following general timeline: (i) a November 8, 2018 deadline to submit qualified competing bids, (ii) an auction date, if necessary, of November 9, 2018 and (iii) a November 13, 2018 sale hearing.
October 18, 2018 – The U.S. Trustee assigned to the Westmoreland Coal Company case appointed an Official Committee of Unsecured Creditors [Docket No. 206] comprised of: (i) Walter C. Keal of Ohio Machinery Co.; (ii) Shane Norman of Wheeler Machinery Co.; (iii) Jason Baker of Nelson Brothers Mining Services; (iv) Timothy C. May of Tractor & Equipment Co.; (v) Martha Wiegand of Consol Mining Company; (vi) Michael Strollo of Pension Benefit Guaranty Corporation and (vii) Brian Sanson of United Mine Workers of America.
October 18, 2018 – OHI Asset RO and certain affiliates (the “Omega Entities”) filed an objection [Docket No. 1095] to the interim fee request of DLA Piper (US) as set forth in the fifth monthly application for allowance of compensation for services rendered and for reimbursement of expenses as counsel [Docket No. 1025]. The objection asserts, “The July Monthly Statement seeks $878,955.50 in fees and $42,142.42 in expenses….Following the Debtors’ admission of a flawed understanding of their plan of reorganization (originally filed at Docket No. 21), the Court concluded that the Plan has at all times been un-confirmable given the Debtors’ financial state….The Omega Entities submit that payment of any further fees pertaining to the Debtors’ Plan should not and cannot take place. To submit a plan based on either a misreading of its clear provisions, or based on a failed understanding of the Debtors’ finances (or both), runs afoul of section 330(a)(3)(C)….At a minimum, the Omega Entities respectfully submit that the payment of any amounts in this category is inappropriate at this time and not in conformity with sections 330(a)(3)(C) and (D) or the applicable Johnson Factors, based on this Court’s ruling that the Plan’s plain language renders it un-confirmable….In addition, in a separate category of “Court Hearings,” the July Monthly Statement seeks $72,285.50 in fees for court hearings and related preparation in connection with the Plan and Disclosure Statement….Finally, in a separate category of ‘Litigation and Contested Matters,’ the July Monthly Statement seeks $352,453.50 in fees. In addition, the July Monthly Statement seeks $72,285.50 in fees incurred for ‘Court Hearings.’ All of this time, save approximately $20,000 that was spent on the Committee’s motion to enforce its alleged settlement with the Omega Entities, related to the extensive litigation the Debtors had to undertake based on their mis-reading of the Plan.”
October 18, 2018 - The Court hearing the Sears Holdings case approved the Debtors’ motion to file commercially sensitive portions of a fee letter relating to its DIP ABL Financing Facility under seal. [Docket No. 177]. As previously reported [Docket No. 57], “The Fee Letter contains confidential commercial information concerning the commercial contract terms between the Company and the DIP Lenders. In accordance with custom and practice in the finance industry, proprietary pricing information is generally not made publicly available. Given the highly competitive nature of the investment banking and finance lending industries, disclosure of such pricing information would give competitors an unfair strategic advantage and thereby impair the ability of financial institutions to bid and compete for other financing's. Further, because debtor-in-possession financings are only a small fraction of all syndicated financing's arranged by the DIP ABL Credit Parties, requiring them to disclose certain information concerning their fees in this context but not in others could have a ‘chilling effect’ discouraging them and other competitor institutions from providing debtor-in-possession financing facilities on terms favorable to the debtors.”
October 18, 2018 - SAP America filed an objection [Docket No. 381] to Heritage Home Group’s motion for the sale of intellectual property and other assets related to the Broyhill, Thomasville, Drexel, Drexel Heritage, and Henredon Brands [Docket No. 217]. The objection asserts, “To date, the Debtors have not identified the Software License Agreement as an executory contract that could be potentially assumed and assigned as part of such sale. However, it is unclear from the Sale Motion and subsequent communications with Debtors’ counsel whether the Debtors intend to transfer SAP’s software as part of the sale of assets. To the extent that the Debtors wish to transfer SAP’s software to any purchaser, the Debtors must assume and assign the Software License Agreement and pay the applicable cure amount. The assumption and assignment of the Software License Agreement can only be effected with SAP’s consent, which the Debtors have neither sought nor obtained. In addition, the Software License Agreement expressly limits the use of the software provided thereunder for the benefit of any third party. To the extent the Debtors seek to provide any transition services to the purchaser, they must comply with the terms of the Software License Agreement.”