Velocity Express Corporation (“Velocity Express”) and its 12 affiliates who also filed bankruptcy on September 24, 2009 (the “Debtors”) have requested authority to file a consolidated list of the 30 largest unsecured creditors (the “Top Unsecured Creditor List”) in lieu of a separate list for each of the Debtors. The Top Unsecured Creditor List truly is remarkable – it includes 7 law firms owed a total of $2,553,339. In addition, Houlihan Lokey Howard & Zukin Capital Inc. is sixth on the list at $645,345. The complete Top Unsecured Creditor List is provided below.
Velocity Express Bankruptcy – Debtors, Petitions, Background Information
Velocity Express Corporation (“Velocity Express”) and 12 affiliated entities (“Debtors”) filed petitions on September 24, 2009 in the Bankruptcy Court for the District of Delaware for relief under Chapter 11 of Title 11 of the United States Code. The Debtors have moved for joint administration of the Debtors’ cases under case number 09-13294. The Debtors’ petitions and the first day motions are supported by the declaration of Vincent A. Wasik, Chief Executive Officer (the “Wasik Declaration”). The Wasik Declaration clearly identifies the direction of the bankruptcy – the immediate rejection of facility leases and a quick 363 sale.
363 Sale Plans Resurface in Grede Foundries Bankruptcy; Will this Bankruptcy be Different?
The Grede Foundries Official Committee of Unsecured Creditors (the “Committee”) confirmed on September 17, 2009 what only had been implied in other filings and indicated by a few of the Debtor’s maneuvers over the past several weeks – the Debtor is planning to sell all or a substantial portion its operations under Section 363 of the Bankruptcy Code. In an objection to Debtor’s motion to engage an executive headhunter, the Committee’s counsel stated:
The Committee is informed and believes that the Debtors intend to sign a stalking horse asset purchase agreement and file a motion for approval of sale procedures before the end of September, and to have the stalking horse bidder and sale procedures approved by mid-October.
The Committee went on to state that DDJ Capital Management, LLC (“DDJ”), the spoiler of Wayzata Opportunity Fund II, L.P. 363 sale plans, was one of the “the serious potential stalking horse bidders… .”
Daewoo Logistics Corp. Chapter 15 Bankruptcy – US Creditor Actions Stayed
Daewoo Logistics Corp. (“Daewoo”), a South Korean shipping, warehousing and logistics-services company, initiated a bankruptcy proceeding under Chapter 15 of the U.S. Bankruptcy Code on September 15, 2009 in the United States Bankruptcy Court for the Southern District of New York (“U.S. Bankruptcy Case”). The U.S. Bankruptcy Case has been assigned to Judge Burton Lifland as case number 09-15558. Chapter 15 of the U.S. Bankruptcy Code governs the relationship between U.S. bankruptcy laws, on the one hand, and the bankruptcy and insolvency laws of other sovereign nations, on the other, including administration by U.S. bankruptcy courts of matters that are ancillary to bankruptcy cases pending in foreign countries.
Barzel Industries Bankruptcy – Trade Debt Picture, Largest Unsecured Creditors
Barzel Industries Inc. (“Barzel”) and its 7 affiliates who also filed bankruptcy on September 15, 2009 (the “Debtors”) have requested authority to file a consolidated list of the 20 largest unsecured creditors (the “Top Unsecured Creditor List”) in lieu of a separate list for each of the Debtors. The Debtors estimate that they have, on a consolidated basis, outstanding pre-petition trade debt in the amount of approximately $5.6 million, out of which $2.4 million is owed to trade creditors and service providers on the Top Unsecured Creditor List. Given that the total of Debtors’ liabilities is approximately $365 million, trade debt will not have any significant effect on the direction of this bankruptcy.
Fluid Routing Solutions – Bankruptcy to Convert to 7, Preference Claims Coming
The other shoe in the Fluid Routing Solutions (now know as Carolina Fluid Handling Intermediate Holding Corp.) bankruptcy has finally dropped. On September 14, 2009, slightly more than 5 months from the 363 sale of most it operations, the Debtors filed a motion for an order converting the Debtors’ chapter 11 cases to cases under chapter 7 of the Bankruptcy Code. The motion was granted on September 28, 2009 and the trustee was appointed on October 2, 2008. We have provided a DocSheet for the period after the conversion of the Fluid Routing Chapter 11 to Chapter 7.
For suppliers, this is not the worst of the bad news. The really bad news for suppliers – the only hope of the Debtors’ trustee to avoid administrative insolvency is recovery of $2.5 million in preference claims.
Barzel Bankruptcy – Identification of Debtors and Petitions
Barzel Industries Inc. (“Barzel”) and 7 affiliated entities (”Debtors”) filed petitions on September 15, 2009 in the Bankruptcy Court for the District of Delaware for relief under Chapter 11 of Title 11 of the United States Code. The Debtors have moved for joint administration of the Debtors’ cases under case number 09-13204. The bankruptcy presents some potential challenges for suppliers at the most fundamental level – the correct identification of the supplier’s customer.
Cadence Innovation – Second Round of Bankruptcy Preference Settlements
Cadence Innovation LLC (the “Debtor”) is continuing to try and settle potential bankruptcy preference claims against vendors who received payments from the Debtor during the ninety (90) day period prior to the petition pate (the “Transfers). On August 28, 2009, the Debtor filed a motion for approval of its second round of bankruptcy avoidance action settlements. This round, like the first round discussed in an earlier post, demonstrates that the Debtor continues to attribute value to the 503(b)(9) administrative expense claims as well as the general unsecured claims. However, unlike the first round, several vendors in this round of settlements are making payments to the Debtors to settle the avoidance claims. Some of these payments are substantial.
FormTech Industries – 30 Largest Unsecured Bankruptcy Creditors
FormTech Industries, LLC. (“FormTech”) together with its parent, FormTech Industries Holdings, LLC (collectively “Debtors”) filed petitions on August 26, 2009 in Bankruptcy Court for the Delaware for relief under Chapter 11 of Title 11 of the United States Code (Case Nos. 09-12964 and 09-12965, respectively). FormTech is a leading manufacturer of precision hot forgings for sale to automotive equipment manufacturers and Tier 1 automotive suppliers. The filing represents the continued ravaging of the ranks of suppliers serving the automotive industries. Due to the large lead times for re-validation of new suppliers, close attention from the FormTech customers can be expected.
FormTech has requested authority to file a consolidated list of the 30 largest unsecured creditors (the “Top Unsecured Creditor List”) in lieu of a separate list for each of the Debtors. The list is heavily populated with raw material suppliers and automotive supplier subcontractors. The complete list is provided below.
Fountain Powerboats, Inc. – Largest Unsecured Bankruptcy Creditors
Fountain Powerboats, Inc. (“Fountain Powerboats”) together with 3 affiliated entities (”Debtors”) filed petitions on August 24, 2009 in Bankruptcy Court for the Eastern District of North Carolina for relief under Chapter 11 of Title 11 of the United States Code. The Debtors are the leading high-performance boat manufacturer in the United States. Debtors are engaged in the design, manufacture and sale of recreational offshore sport boats, sport fishing boats and sport cruisers. In 2008, the Debtors acquired the Baja line from Brunswick Corporation. The Debtors are seeking a court supervised auction and sale of substantially all of their assets. In its pleadings, the Debtor states that its secured lender is substantially under-collateralized. This bankruptcy looks like a rough one for the unsecured creditors. Identification of the Debtors and largest unsecured creditors is provided below.