Bankruptcy News

PES Holdings New Intermediation Facility Approval Sought

PES Holdings filed with the U.S. Bankruptcy Court a motion seeking approval for certain implementation conditions with respect to a new intermediation facility (“the New Intermediation Facility”). The motion explains, “With this relief sought, the Debtors will be able to emerge from chapter 11 in advance of their deadline to do so under their Restructuring Support Agreement (the ‘RSA Emergence Deadline’)….The Debtors and ICBC Standard Bank Plc (“ICBCS”) have been working to finalize the documentation, implementation and necessary licenses and internal approvals to consummate the New Intermediation Facility, and ICBCS has committed to entering into the New Intermediation Facility with limited conditions that the Debtors expect will be satisfied, At the same time, the Debtors have been engaging in good faith discussions with their current intermediation providers, Merril Lynch Commodities (‘MLC’) and PES Inventory Company (PESIC), (together the ‘Protected Counterparties’) to effectuate a seamless transition to the new facility, a challenging task given the interconnectedness of the intermediation facilities with the Debtor’s businesses….The Master Transaction Term Sheet provides for a full transition to ICSCS of crude oil intermediation by October 8, 2018, and of refined products’ intermediation by January 15, 2019. ” The Court scheduled a July 23, 2018 hearing to consider the motion with objections due by July 19, 2018.

Weinstein Company Holdings – Notice of Lantern Sale Closing

Weinstein Company Holdings filed with the U.S. Bankruptcy Court a notice of closing of sale to Lantern Entertainment (Docket No. 1247). The notice states, “On July 11, 2018, the Court entered the Order Approving Amendment to the Asset Purchase Agreement Entered into by and between the Debtors and Lantern Entertainment LLC [Docket No. 1220] (the “APA Amendment Order”), which, among other things, authorized the Debtors to enter into the Second Amendment to the APA and consummate the Sale to Lantern pursuant to the Amended APA. The closing of the transactions contemplated by the Amended APA occurred on July 13, 2018.”

Orion Healthcorp – NYNM Sale Objection Filed

Elizabeth Kelly and Premier Network Management filed with the U.S. Bankruptcy Court an objection to Orion Healthcorp’s Sale Motion (Docket No. 366). The objection (Docket No. 398) asserts, “The Debtors are impermissibly cherry-picking one portion of an executory agreement entered into by the Objecting Parties and the Debtors, and then attempting to assume and assign that one portion to its stalking horse bidder without curing the significant monetary defaults that have accrued under the entire executory agreement. Section 365(b)(1)(A) of the Bankruptcy Code requires, as a condition of the assumption and assignment of any executory agreement, that the Debtors also cure all defaults under the entire agreement….Elizabeth Kelly founded and created the business which is now operated by Debtor, New York Network Management, LLC (“NYNM”) and its subsidiaries….Barely twelve months before the initial filing of these consolidated bankruptcy cases, the Debtors enticed Kelly to sell her business that she had built from the ground up over more than two decades, and then proceeded, in less than a year, to default on the payment of the purchase price….The Debtors agreed to pay cash for the purchase of NYNM, comprised of three tranches: (i) an upfront amount paid or escrowed at closing in the approximate amount of $22 million, (ii) a true-up of the actual working capital of NYNM as of the date of the sale in the amount of $1,874,662 (the ‘Working Capital Adjustment’), and (iii) an amount calculated by reference to the earnings of NYNM during the two years after the sale in the amount of $47,820,437 (the ‘Earn-Out Payment’). Although the Debtors made the upfront cash payment, Kelly received no payment whatsoever on account of the Working Capital Adjustment or the Earn-Out Payment. Kelly has filed a proof of claim in the case for such unpaid amounts….Despite the fact that the Executory Agreements are factually and legally an integral part of the Purchase Agreement, and despite the fact that the cure amount to assume and assign the Purchase Agreement totals $49,695,099, the Notice of Assumption and Assignment filed by the Debtors in this case attempts to cherry-pick the Executory Agreements for assumption and assignment to the stalking horse buyer without paying any cure amount whatsoever. It is axiomatic that a debtor cannot pick and choose which aspects of an integrated agreement to assume and cure. Accordingly, the Objecting Parties object to the assumption and assignment of the Executory Agreements unless the full cure amount of $49,695,099 is paid to Kelly….Pursuant to Section 365(b)(1)(A) of the Bankruptcy Code, all monetary defaults must be cured under the entire agreement, including the full $49 million due pursuant to the unpaid Working Capital Adjustment and the Earn-Out Payment.”

Scottish Annuity & Life Insurance Company – May M.O.R. Filed

Scottish Annuity & Life Insurance Company filed with the U.S. Bankruptcy Court a monthly operating report for May 2018. For the month, the Company reported a net loss of $3.9 million on $13.5 million in total revenue. The Company further reported $0.8 million in total operating expense and $17.3 million in total benefits & expenses. Cash at the beginning and end of the month was $4.3 million and $4.4 million, respectively, with a net change in cash of $16,589.

iHeartMedia – May M.O.R. Filed

iHeartMedia filed with the U.S. Bankruptcy Court a monthly operating report for the period of May 2018 (Docket No. 1132). For the month, the Company reported a net loss of $57.7 million on $318.6 million in revenue. The Company paid $89.7 million in direct operating expenses (excluding depreciation and amortization), $107.8 million in selling, general and administrative expense (excluding depreciation and amortization) and $21.5 million in depreciation and amortization during the period. The Company also reported $254.2 million in total operating disbursements.

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