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Tuesday, June 1, 2021

Welcome to the Bankruptcy
Today Newsletter.

Your daily access to recent significant Chapter 11 case filings, relevant restructuring news and samples of some of our current distressed company profiles.

Featured Recent Filings

CourtFiledDebtorCase NoAttorneyAssetsLiabilities
D. Del.6/1/2021JDS Fourth Avenue LLC21-10888Scott D. Cousins$1M - $10M$1M - $10M
N.D. Ill.6/1/2021Freight-Base Customs Brokers, Inc21-06991Timothy M. Hughes$100k - $500k$100k - $500k
N.D. Ill.6/1/2021Freight-Base Services, Inc.21-06990Timothy M. Hughes$100k - $500k$100k - $500k
S.D. Tex.6/1/2021Tex-Gas Holdings, LLC21-80092T. Josh Judd$1M - $10M$1M - $10M
D. Del.5/31/2021Avadim Health IP, Inc.21-10884Laura Davis Jones$100k - $500k$100M - $500M
D. Del.5/31/2021Avadim Health, Inc.21-10883Laura Davis Jones$10M - $50M$100M - $500M
D. Del.5/31/2021Bionome Properties Corp.21-10885Laura Davis Jones$100k - $500k$100M - $500M
D. Del.5/31/2021Quality Assurance Associates, Inc.21-10886Laura Davis Jones$100k - $500k$100M - $500M
D. Del.5/31/2021Relion Manufacturing, Inc.21-10887Laura Davis Jones$1M - $10M$100M - $500M
S.D.N.Y.5/31/2021Kumtor Gold Company CSJC21-11051James L. Bromley$1B - $10B$100M - $500M
S.D.N.Y.5/31/2021Kumtor Operating Company CSJC21-11052James L. Bromley$1B - $10B$100M - $500M
C.D. Cal.5/31/2021Levant Group21-14537RoseAnn Frazee$100k - $500k$100k - $500k
S.D. Tex.5/31/2021ALH Properties No. Fourteen, LP21-31797Eric M. English$50M - $100M$10M - $50M
S.D. Tex.5/31/2021OFS International, LLC21-31784Joshua W. Wolfshohl$10M - $50M$50M - $100M
S.D. Tex.5/31/2021Original Riverfront RV Park, LLC21-60054Susan Tran Adams$500k - $1M$100k - $500k
S.D. Tex.5/31/2021Threading and Precision Manufacturing LLC21-31787Joshua W. Wolfshohl$10M - $50M$50M - $100M
N.D. Ga.5/31/2021Atlanta Metro Greater Builders, LLC21-54171Edward F. Danowitz$1M - $10M$1M - $10M
N.D. Ga.5/31/2021Rabun Manor Resort, LLC21-20596Theodore N. Stapleton$1M - $10M$1M - $10M
S.D.N.Y.5/30/2021Certa Dose, Inc21-11045Norma Ortiz$10M - $50M$50M - $100M
E.D. Tex.5/28/2021Arlington Double Down Enterprises, LLC21-40796Christopher J. Moser$1M - $10M$1M - $10M

View All Filings
Featured Article

Third Circuit Holds Film Production Contract Was Not Executory in Bankruptcy Case

“[B]ankruptcy inevitably creates harsh results for some players,” explained the U.S. Court of Appeals for the Third Circuit on May 21, 2021, when it denied a film producer’s claim for contractual cure payments. In re Weinstein Company Holdings, LLC, 2021 WL 2023058, *9 (3d Cir. May 21, 2021). Affirming the lower courts, it held that a “work-made-for hire” production agreement (“Agreement”) with the debtor (“TWC”) was “a non-executory contract that is in essence … a liability for [TWC] that can be sold” to an asset purchaser “under … Code § 363 without the need to cure existing defaults.” Id. In practical terms, the decision means that the buyer of this valuable contract only had to “satisfy post-closing obligations but need not worry about [the debtor’s] pre-closing breaches or defaults, which typically remain unsecured claims against the debtor’s estate.” Id. at *1.

“[W]hether a contract is classified as executory or non-executory,” said the court, “has significant implications for its treatment in a bankruptcy sale.” Id. “[A]n executory contract [ordinarily] can be ‘assumed’ and then ‘assigned’ to a buyer under § 365 of the Bankruptcy Code provided all existing defaults are cured.” Id. “At stake” in TWC was whether the buyer of the debtor’s contract (“B”) had to “cure existing defaults and pay around $400,000 owed to” the non-debtor contracting party (“C”) “before the sale’s closing,” but only if the contract was executory. Id. TWC owed the $400,000 to C under the Agreement, but C had “no material obligations left to perform,” having produced and released the relevant film years prior to bankruptcy. Id. at *9.

Read the full article

Schulte Roth & Zabel LLP by Michael L. Cook. Published May 26, 2021.

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