The bankruptcy filing on February 6, 2009 of Fluid Routing Solutions, Inc. demonstrates that the ability of US automotive suppliers to obtain institutional financing has reached the “lowest possible point”. By analogy, the “lowest possible temperature” is defined as that point when all atomic motion ceases. This bankruptcy filing shows that all institutional financing options have ceased for a US automotive supplier whose customer base consists of domestic automakers.
Bankruptcy Cases of Interest to Suppliers, Landlords, Lessors, Bankruptcy Creditors
Posts and discussion of recent bankruptcy cases of interest from a supplier, commercial landlord, equipment lessor or other unsecured creditor standpoint.
DESA’s Consolidated Initial Monthly Operating Report
This bankruptcy started under a terrible set of circumstances, and the strain is carrying over into the bankruptcy. Prior to filing, DESA sought to have a ‘heart-to-heart’ talk with its lead lender. The lender responded by sweeping its cash collateral, refusing to lend additional monies, and DESA was left with its one remaining option – a Delaware bankruptcy, with practically no operating cash.
Even with the protections afforded by bankruptcy, the situation looks bleak and very uncertain.
Circuit City Liquidation – Preliminary Bankruptcy Preference Assessment
On November 10, 2008, Circuit City Stores, Inc. (“Circuit City”) filed for reorganization relief under Chapter 11 of the United States Bankruptcy Code. Slightly more than two months later Circuit City announced abandonment of its plan to reorganize. Instead, Circuit City will liquidate all of its assets.
What does this liquidation of Circuit City mean in terms of the potential for bankruptcy preference claims?
We have looked at the financial and other public information available. Our preliminary assessment is that the Circuit City liquidation has the potential create a massive number of bankruptcy preference claims.
Suppliers Lining Up for 503(b)(9) Administrative Expense Claims
11 USC Section 503(b)(9) provides that a supplier shall be entitled to an “administrative expense claim” for “the value of any goods received by the debtor within 20 days before the date of commencement of a case under this title in which the goods have been sold to the debtor in the ordinary course of such debtor’s business.”
Clearly motivated by Cadence’s announcement that it is liquidating, suppliers are making sure that they are in line for allowance of administrative expense claims pursuant to
Retailer 99 Cent Stuff Inc. – Final Set of Preference Actions Filed
In what has aready been a very active case for Adversary Proceedings for recovery of bankruptcy preferences, the plan trustee for 99 Cent Stuff, Inc. filed 13 more banrkuptcy preference actions this week, including 7 today.
Pike Family Nurseries Liquidation – Trustee Estimates Net Preference Claim Recoveries
Trustee in Pike Family Nurseries Bankruptcy Liquidation Case Estimates Net Preference Claim Recoveries of $500,000 Will be Realized by 12/31/2009.
The case of:
In Re: Pike Nursery Holding LLC, d/b/a Pike Family Nurseries
d/b/a Pike Nurseries (“Pike”), Case No. 07-79129 in the United States Bankruptcy Court for the Northern District of Georgia
Cadence Innovation LLC – Decision to Liquidate Means Preference Claims are Coming
Original Post 12/28/2008; See Updates At End of this Post
For a supplier confronted with a customer bankruptcy, nothing changes bad to worse like the failure of the customer to successfully reorganize. This means that a filing under Chapter 11, which creates the possibility that the customer will continue operations, now becomes a liquidation under Chapter 7. Worse still, the supplier who has received payments on open account during the bankruptcy preference period will likely face a bankruptcy preference claim and faces the real prospect of receiving a demand for repayment of those amounts.
Allied Bankruptcy Preference Claim Status
Yes it is currently a mystery. Where are the Allied Bankruptcy Preference Claims?
Despite all our efforts — calls, emails, docket searches – we can not figure it out. The 2 year statute of limitations appears to have run.
We will continue to probe and let you know.