On on March 2 and 3, 2012, KDW Restructuring & Liquidation Services, LLC, Litigation Trustee for the Jennifer Convertibles Litigation Trust in the Jennifer Convertibles, Inc. Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation in the United States Bankruptcy Court Southern District of New York .
On February 1, 2011, Sltn Trst, LLC, solely in its capacity as Creditor Trustee of the (1) Babystyle Creditor Trust; and (2) Right Start Creditor Trust in the Right Start Acquisition Company and Babystyle, Inc. Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation with the filing of 48 complaints in the United States Bankruptcy Court for the Central District Of California (San Fernando Valley).
Borders Group, Inc. and 7 associated debtors (the “Debtors” or “Borders”) filed voluntary petitions under Chapter 11 of the Bankruptcy Code on February 16, 2011 in the Bankruptcy Court for the Southern District of New York (Case No. 11-10614). The Honorable Martin Glenn has been assigned to the case. This initial note provides the Debtors’ consolidated list of their 30 largest unsecured creditors. See related list Borders’ top 50 recipients of payments in the 90 days prior to the Borders’ bankruptcy or read the complete Borders preference analysis by going here: For 1786 Borders’ Suppliers and Other Creditors, Its Not Time to Close the Books.
On February 4, 2010, Ultimate Acquisition Partners, LP d/b/a Ultimate Electronics (Delaware Case No. 11-10245) filed a motion seeking authority to engage in liquidating sales of its 46 stores. While not of the size of the Circuit City bankruptcy, the progression of the two bankruptcies is similar. The Circuit City bankruptcy is now in the midst of massive bankruptcy preference litigation. There is no reason to believe that Ultimate Electronics will not end up in the same place. In fact, the Ultimate Electronics bankruptcy looks far worse for the potential bankruptcy preference defendants. The filings made by Ultimate Electronics to date are replete with references to difficulties the debtor was having with suppliers – a bad flag for the availability of the ordinary course of business defense. For these reasons, Ultimate Electronics has been put on our bankruptcy preference watch list, even though the statute of limitations will not expire until January 26, 2013.
On February 2, 2011, S&K Famous Brands, Inc. Liquidating Trust in the S&K Famous Brands, Inc. Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation with the filing of 25 as of February 2, 2011 complaints in the United States Bankruptcy Court for the Eastern District of Virginia (Richmond).
Appleseed’s Intermediate Holdings, Inc. a/k/a Orchard Brands and 27 affiliates (the “Debtors” or “Orchard Brands”) filed for relief under Chapter 11 of the Bankruptcy Code on January 19, 2011 (Bankruptcy Court for the District of Delaware, Case No.11-10160). The case has been assigned to the Honorable Kevin Gross. This note briefly looks at the Debors’ business, discusses the trade debt picture and provides the list of the Debtors’ 50 largest unsecured creditors.
For an estimated 2,200 vendors, holding approximately $30 million in outstanding pre-petition claims, the bankruptcy filing on August 25, 2010 (Delaware Bankruptcy Case No: 10-12636) of Oriental Trading Company, Inc. and 4 affiliated companies (the “Debtors”), is cause to take a long, deep breath. A critical vendor motion, if granted by Bankruptcy Judge Kevin J. Carey, will offer the possibility of critical vendor payments capped out at $15 million, and the top 27 unsecured trade creditors (see chart below) are owed more than $18 million. Additionally, this bankruptcy fits a classic retailer bankruptcy profile for heightened risk of the case ending in the formation of a litigation trust for pursuit of preference claims.
Swoozie’s, Inc. (“Swoozie’s” or the “Debtor”) filed a petition on March 2, 2010 in the Bankruptcy Court for the Northern District of Georgia (case number 10-66316) for relief under Chapter 11 of Title 11 of the United States Code. The case has been assigned to Judge C. Ray Mullins. The bankruptcy petition was signed by Kelly Plank-Dworkin as President and Chief Financial Officer of the Debtor. The Debtor’s bankruptcy counsel is Wendy R. Reiss of the firm of Alston & Bird LLP of Atlanta, Georgia.
Southern Golf Partners, LLC (“Southern Golf” or the “Debtor”) filed a petition on January 20, 2010 in the Bankruptcy Court for the Northern District of Georgia (case number is 10-61636) for relief under Chapter 11 of Title 11 of the United States Code. Whether the case will generate bankruptcy preference claims will largely be determined by the direction of the case – if the Debtor seeks to sell its business operations under a Section 363 sale the events leading to the bankruptcy would seem to make it a ripe for bankruptcy preference actions to be brought. In the initial stages, however, this case seems focused on rejection of leases.
The case has been assigned to Judge C. Ray Mullins. The bankruptcy petition was signed by A. Boyd Simpson as Sole Manager of the Debtor. The Debtor’s bankruptcy counsel is J. Robert Williamson of the firm of Scroggins & Williamson of Atlanta, Georgia.
We have provided a courtesy copy of the Southern Golf Docsheet™ Report for further contact information for the Debtor’s counsel and the U.S. Trustee assigned to the case and “first day” docket entries in the bankruptcy. The Southern Golf Docsheet™ Report will be updated periodically to identify subsequent developments.
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.