Tidewater Inc., along with 25 of its subsidiaries and affiliates, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 17-11132). Tidewater, , a New Orleans-based company providing offshore and marine support services, previously announced on May 12, 2017, that it had entered into a restructuring support agreement with approximately 60% of its Senior Creditors and 99% of its Senior Noteholders. According to the First Day Declaration, the Debtors enter Chapter 11 with a prepacked plan of reorganization pursuant to which its senior debt and notes will be retired in exchange for (1) 95% of the new equity of the Reorganized Debtors, (2) $225 million in cash and (3) $350 million in new secured notes. Existing equity holders will receive 5% of the new equity of the Reorganized Debtors and warrants. The Debtors propose to pay their trade and other general unsecured creditors in full in the ordinary course of business. The Plan can be found here and the disclosure statement can be found here. Epiq Bankruptcy Solutions is the proposed claims and noticing agent. The cases have been assigned to the Honorable Brendan Linehan Shannon.
Upcoming Committee Formation Meeting: Friday, May 26, 2017, 10:00am
Case Name: 17-11101 (KJC)
Location: The Doubletree Hotel 700 King Street Wilmington, DE 19801
Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. See the First Day Declaration, joint administration of these cases, and proposed claims agent for further details.
GulfMark Offshore, Inc., a provider of marine transportation services, primarily to the offshore energy industry, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware. On May 16, 2017, GulfMark issued a press release announcing that it had reached a restructuring support agreement with approximately 47% of the holders of its Senior Notes. According to the First Day Declaration, GulfMark will soon file a prepackaged plan of reorganization, through which it will equitize $448.2 million of its unsecured bond obligations and bolster its liquidity through a $125 million rights offering. The First Day Declaration states that general unsecured creditors will be unaffected by the restructuring. GulfMark’s petition lists its estimated assets between $100 – $500 million and its estimated liabilities between $500 – $1,000 million. Prime Clerk, LLC is the proposed claims and noticing agent. The case has been assigned to the Honorable Kevin Gross.
Katy Industries, Inc., (OTC:KATY) a manufacturer, importer and distributor of commercial cleaning solutions and customer storage products, and 13 of its affiliates, has filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware (Lead Case No. 17-11101 KJC). The petiton lists between $1 and $10 million in assets and between $50 and $100 million in liabilities. According to the First Day Declaration, the Debtors intend to sell substantially all of their assets and are entering chapter 11 with Jansan Acquisition, LLC, a newly created entity co-owned by Highway Capital, LLC, a third party investor, and affiliates of Victory Park Management, LLC as administrative agent for the prepetition second lien lender, as the Stalking Horse. The Debtors secured $7,500,000 in DIP financing from Jansan Acquisition, LLC. The Debtors are seeking the joint administration of these cases. JND Corporate Restructuring is the proposed claims agent. The Honorable Kevin J. Carey will be presiding over these cases. The company has issues a press release that can be found here.
Upcoming Committee Formation Meeting: Thursday, May 18, 2017, 10:00 a.m.
Case Name: 17-11066 (BLS)
Location: The DoubleTree Hotel, 700 King St. Wilmington, DE 19801, Salons E and F
Marsh Supermarkets Holding, LLC, and 15 of its affiliates, has filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware (Lead Case No. 17-11066-BLS). The petition lists between $0 and $50,000 in assets and between $50 and $100 million in liabilities. The Debtors are seeking joint administration of these cases. Prime Clerk is the proposed claims agent. The Honorable Brendan L. Shannon will be presiding over these cases.
Upcoming Committee Formation Meeting: Monday, May 15, 2017, 1:00 pm
Case Name: 17-10993 (LSS)
Location: Delaware State Bar Association 405 King Street, 2nd Floor Wilmington, DE 19801-2529
Searchmetrics, Inc., a search engine optimization services company based in San Mateo, CA, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 17-11032-CSS). The Petition estimates Searchmetric’s assets between $1–$10 million and its liabilities between $10-$50 million. According to the First Day Declaration, Searchmetrics seeks to expedite ongoing litigation against its competitor, BrightEdge, through the filing of this case and anticipates proposing a First Day Declaration plan of reorganization that will pay its creditors in full. JND Corporate Restructuring is the proposed claims agent. The case has been assigned to the Honorable Christopher S. Sontchi.
Following the commencement of an involuntary proceeding against the company by certain creditors in Illinois, Central Grocers, Inc., a retail food cooperative and distributor founded in 1917, and 11 of its affiliates, has filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware (Lead Case No. 17-10993 BLS). The petition lists between $100 million and $500 million in both assets and liabilities. According to the First Day Declaration, the Debtors intend to sell their assets as a going concern pursuant to section 363 of the Bankruptcy Code. Pursuant to the Company’s press release, “Central Grocers is also seeking to sell its distribution center in Joliet as it winds down its wholesale distribution operations.” The Debtors are entering chapter 11 without a Stalking Horse Bidder. The Debtors are seeking joint administration of these cases. Prime Clerk is the proposed claims agent. The Honorable Brendan L. Shannon will be presiding over these cases.
Globalization has led to a marked increase in international components to insolvency proceedings. Cross-border issues add a new layer of complexity to what is often a situation already fraught with obstacles. Courts and practitioners alike face additional difficulties communicating with other courts, resolving issues consistently in jurisdictions with different laws and policy objectives, and enforcing rulings and implementing orders adjudicated extraterritorially.
Historically, coordination between courts of different jurisdictions was executed on an ad hoc basis—an uncertain, expensive, and time consuming process that potentially reduced the value of the business and recoveries of stakeholders. Congress took note of the difficulty inherent with parallel insolvency proceedings, and in 2005, added Chapter 15 to the Bankruptcy Code. Chapter 15 is a significant revision to its predecessor, section 304 of the Code, and addresses issues with the enforcement of insolvency proceedings rooted outside the United States. However, the addition of Chapter 15 merely addressed some of the difficulties with cross-border insolvencies and only in the United States. A larger, global resolution was yet to be had.
In October 2016, judicial officials from key commercial insolvency jurisdictions met at the first ever Judicial Insolvency Network conference to address the issues plaguing cross-border insolvency proceedings. The solution they created was 14 guidelines, or best practices, as well as an annex on joint hearings (the “Guidelines”), all of which were crafted to aid courts and practitioners in cross-border insolvency cases. In February 2017, the United States Bankruptcy Court for the District of Delaware (via Local Bankruptcy Rule 9029-2) and the United States Bankruptcy Court for the Southern District of New York (via General Order M-511) along with the Supreme Court of Singapore (via Registrar’s Circular No. 1 of 2017) moved the ball forward by adopting the Guidelines.
The Guidelines focus on three primary areas beyond their own implementation and interpretation: communication between courts, the process by which rulings are submitted for recognition between courts, and joint hearings. The primary issue the Guidelines address is communication. They establish the bounds of inter-court communication and help to resolve issues about the propriety of ex parte communication between courts. The ex parte communication the Guidelines list as appropriate is generally limited to the forwarding of court documents and clerical coordination between support staff. Guidelines 7 and 8. However, when ex parte communication between courts may not be avoided and counsel is entitled to be present, those communications should be recorded and transcribed. Guideline 8(ii). The primary purpose of this kind of communication is clear: to keep sister courts apprised of concurrent proceedings.
The Guidelines also anticipate joint hearings; that is, hearings conducted by video conference to limit the costs associated with conducting multiple proceedings for the same issue. Guidelines at Annex A. Interestingly, the guidelines are entirely procedural—they specifically exclaim any effect on the substantive laws of their subscribing jurisdiction. Guideline 5. So, while a hearing may be conducted in front of multiple courts at once, it is up to the practitioner to establish a sufficient record for each jurisdiction.