Sidley Austin LLP announced that James Snyder has joined the firm in Chicago as a Partner in its Global Finance practice. He was formerly a Partner at Winston & Strawn LLP; and Snyder is focused on commercial finance matters, including corporate lending transactions, acquisition finance, specialty lending and other complex investments. He has considerable experience representing both banks and alternative lenders in senior secured and unsecured credit facilities, first-out last-out, unitranche and other one-stop financings, first and second lien transactions, mezzanine and subordinated financings and cash flow and asset-based transactions. Snyder has counseled both lenders and borrowers in connection with debtor-in-possession financings, bankruptcy exit facilities, workouts and restructurings and has also has advised private equity firms as well as public and private corporations in debt financings and general corporate matters.
The U.S. Trustee assigned to the Appvion case filed with the U.S. Bankruptcy Court an objection to the Company's proposed bidding procedures and stalking horse protections. The Trustee asserts, "The Debtors seek pre-approval of a Break-Up Fee of 1.5% of the aggregate purchase price, together with an Expense Reimbursement of up to $500,000 (collectively, the 'Stalking Horse Protections'), payable to the Stalking Horse upon the sale of the assets to a competing bidder or the Debtors' filing of a plan of reorganization that does not contemplate sale of the Debtors' assets to the Stalking Horse. While break-up fees serve as 'protections' to a stalking horse purchaser, they concomitantly serve as 'discouragements' to potential bidders who would only be permitted to transact business on a playing field that is tilted in favor of the stalking horse. Break-up fees are permitted, if at all, only when the Court has determined that they were an actual and necessary cost and expense of preserving the estate….The Debtors commit a logical fallacy by asserting that the proposed Stalking Horse Protections induced the Stalking Horse - in this case, the DIP Lenders, collectively - to make an initial bid and establish a floor price for the Debtors' assets. The DIP Lenders were already induced to bid on all of the Debtors' assets by their own need to liquidate their collateral at the lowest possible cost….The Debtors commit a second logical fallacy by asserting that the proposed Stalking Horse Protections are appropriate because the DIP Lenders' bid establishes a 'floor' on the sale price of the Debtors' assets, enabling the Debtors to seek better offers without losing the DIP Lenders' purchase commitment. The DIP Lenders hold a first lien on substantially all of the Debtors' assets. Their stalking hose bid merely establishes the lowest price that the DIP Lenders will accept to release their liens on the subject assets. At any lesser price, the DIP Lenders can simply reject all purchase offers and foreclose on their collateral. At any greater price up to the full amount of their collective claim, the DIP Lenders benefit from repayment of their claim, receiving the full benefit of their bargain as lenders."
Energy Future Holdings (EFH) filed with the U.S. Bankruptcy Court a first amended Supplement to the First Amended Joint Chapter 11 Plan of Reorganization of EFH/Energy Future Intermediate Holding (EFIH). The Supplement contains the following documents: Exhibit A - amended retained causes of action; Exhibit B: amended tax contingency disclosure; Exhibit C: EFH Plan administrator trust agreement; Exhibit D: merger agreement amendment No. 1: waiver agreement and Exhibit E: merger agreement amendment No. 2: settlement agreement. The second amendment in the merger and settlement agreement notes, "The EFH Plan Administrator Board shall distribute the amounts from the Accessible Account Deposit in accordance with the Plan of Reorganization. For the avoidance of doubt, the EFH Plan Administrator Board shall be entitled to create such sub-accounts in the EFH/EFIH Cash Distribution Account as necessary to consummate the transactions contemplated by the Plan of Reorganization. 'Cash Deposit Amount' shall mean $9,450,000,000, less the DIP Repayment; provided, that the Cash Deposit Amount shall be reduced in accordance with Section 1.8. In no event shall the amount deposited by Merger Sub pursuant to Section 1.7(a), plus the DIP Repayment, plus the value of the Trust Certificates issued pursuant to Section 1.8, exceed $9,450,000,000."
The U.S. Bankruptcy Court approved EXCO Resources' key employee retention plan (KERP) for non-insider employees. As previously reported, "By this motion, the Debtors seek entry of an order, approving and authorizing the Debtors to continue the KERP for approximately 144 of the Debtors' non-insider employees, providing for an award pool of approximately $3.3 million in the aggregate, approximately $1.8 million of which was earned and paid to participating employees prior to the Petition Date on account of the third and fourth quarters of 2017 and approximately $1.5 million of which may be earned by participating employees on account of continued employment with the Debtors through the first and second quarters of 2018….The Debtors respectfully request that the Court grant this motion for three independent reasons. First, the KERP should be permitted under section 363(c) of the Bankruptcy Code because it is a continuation of the Debtors' prepetition practices and thus is an ordinary course transaction entitled to significant deference from the Court. Second, continuing the KERP is a reasonable exercise of the Debtors' business judgment and is also appropriate under section 363(b) of the Bankruptcy Code. Third, the KERP is not subject to section 503(c)(1) of the Bankruptcy Code because no insiders are participants in the program. The KERP is justified by the 'facts and circumstances' of these cases and is therefore authorized under section 503(c)(3) of the Bankruptcy Code."
PhaseRx filed with the U.S. Bankruptcy Court a monthly operating report for January 2018. For the month, the Debtors reported a net loss of $821,52 and paid $821,608 in total operating expenses. Cash at the beginning of January 2018 was $1 million and $942,575 at month's end.