All items from Delaware Bankruptcy Litigation

Tuscany International Drilling Inc. (“TID”) and its subsidiary, Tuscany International Holdings (U.S.A.) Ltd. (“TIH”; collectively with TID, “Tuscany” or the “Debtors”) filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code late on Sunday, February 2, 2014 (the “Petition Date”) in the United States District Court for the District of Delaware.
According to the Declaration of Deryck Helkaa, Chief Restructuring Officer of the Debtors in Support of Chapter 11 Petitions and First Day Pleadings (the “Helkaa Declaration”), the Debtors “provide onshore drilling and workover services to oil and gas companies to support the exploration, development, and production of oil and gas.” Helkaa Declaration, ¶ 6. The Debtors have a strong competitive position in the key onshore drilling markets of Ecuador, Brazil and Colombia where they contract their fleet of technologically advanced onshore drilling rigs to customers.
As of the Petition Date, the Debtors owned 26 rigs, of which 12 are located in Colombia, nine in Brazil and five in Ecuador, with 15 of the rigs being contracted and operational, and five being directly owned by the Debtors.

Posted 30 weeks 4 hours ago

Plextronics, Inc. (“Plextronics” or the “Debtor”) filed for bankruptcy under Chapter 11 of the Bankruptcy Code on January 16, 2014 in the United States District Court for the District of Delaware.
According to the Declaration of William Snyder, Chief Financial Officer of the Debtor in Support of First Day Motions (the “Snyder Declaration”), the Debtor is a spinout from Carnegie Mellon University, and is headquartered in Pittsburgh, Pennsylvania.  Plextronics is an international leader in the research, development and commercialization of conductive and semi-conductive polymers and ink formulations, which enable the commercialization of printed electronic devices.
Events Leading to Bankruptcy
The Debtor is a high technology research and development company and has experienced operational losses since its inception. In the years leading up to 2011, while the Debtor generated relatively modest revenue and received governmental grants, the funds were insufficient to cover all of the expenses and such excess expenses were funded by equity infusions from shareholders. Since 2011, the operational losses have been primarily funded by draws from the Debtor’s secured creditors.
Objectives in Bankruptcy

Posted 30 weeks 3 days ago

Laboratory Partners, Inc., and various affiliates (collectively, “MedLab” or the “Debtors”), filed chapter 11 petitions for bankruptcy on October 25, 2013.  MedLab filed for bankruptcy protection in the United States Bankruptcy Court for the District of Delaware.  The company provides laboratory services to long-term care facilities, doctors’ offices and hospitals.  As for long-term care clients, Debtors operate in Illinois, Indiana, Kentucky, Maryland, Michigan, Missouri, Ohio, Virginia and Washington D.C..  Debtors provide lab work to physicians’ groups in Indiana and Illinois and service two hospitals in Indiana.  See Laboratory Partners’ Declaration in Support of First Day Relief (“Decl.”) at *3.  Going in to bankruptcy, MedLab employs approximately 1,034 employees, most of which are hourly employees working in the company’s long-term care division.  Id.

Posted 43 weeks 6 days ago

Green Field Energy Services, Inc. (“Green Field”), filed for bankruptcy protection yesterday in the United States Bankruptcy for the District of Delaware.  Green Field began in 1969 as Hub City Industries, LLC, a Louisiana limited liability company.  The company changed its name to Green Field Energy Services in 2011, at the same time converting to a Delaware corporation.  Up until 2010, Green Field focused its business on providing oil well-related services.  In recent years, however, the company has focused on hydraulic fracturing services.  See Green Field’s Declaration in Support of Chapter 11 Petitions and First Day Motions (the “Declaration” or “Decl.”) at *4-5.
Aside from hydraulic fracturing, Green Field provides cementing, coiled tubing, pressure pumping, acidizing and other pumping related services.  Hydraulic fracturing is the process where fluids are pumped underground at high pressure, causing the rock and sediment to fracture, which in turn releases oil and natural gas.  Decl. at *3.  The process uses “propping agents” which props open the cracks created by the fluid.  The propping agents often consist of sand, bauxite or ceramic particles.  Id.

Posted 44 weeks 22 hours ago

On October 16, 2013, North Texas Bancshares of Delaware, Inc. and North Texas Bancshares, Inc. (collectively, the “Debtors”) filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  Debtors are bank holding companies based in Dallas, Texas.  See Declaration in Support of Chapter 11 Petitions and First Day Pleadings at *2.  Debtors’ primary assets are their shares in Park Cities Bank (“Park Cities Bank” or the “Bank”), which is a Texas bank headquartered in Dallas.  Decl. at *3. 
Chartered in 2000, Park Cities Bank provides banking services to customers in University Park, Highland Park and the Dallas, Texas areas.  The Bank got its start by acquiring a branch of Eagle National Bank, located in Dallas, on November 6, 2000.  At the time of filing for bankruptcy, the Bank operated four branch locations.  As of the petition date, the Bank employs 71 employees and holds deposits totaling $396 million.  The Bank focuses on “hometown banking,” offering both consumer and commercial lending.  Decl. at *3.

Posted 45 weeks 1 day ago

Savient Pharmaceuticals, Inc. (“Savient”) filed chapter 11 petitions for bankruptcy on October 14, 2013. Savient filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  According to the company’s bankruptcy petition, Savient heads in to bankruptcy with $73 million in assets and $260 million in liabilities.  The company’s origins go back to 1980 when it started under the name Bio-Technology General Corp and changed its name to Savient in 2003.  See Declaration of Savient’s CFO in Support of First Day Pleadings (the “Declaration” or “Decl.”) at *3.  Savient describes itself as a “specialty biopharmaceutical company” which focuses its business on the sale of Krystexxa throughout the United States and around the world.  Decl. at *4.  Krystexxa is a drug used to treat patients suffering from “Refractory Chronic Gout,”  a form of arthritic condition.  Id.

Posted 45 weeks 4 days ago

Last week, Charles M. Forman, acting as Chapter 7 Trustee (the “Trustee”) for Open Range Communications (“Open Range”) began filing complaints to recover what the Trustee contends are avoidable preferences. The Trustee filed the preference actions in the Delaware Bankruptcy Court and argues that the transfers, or payments, received by various defendants are avoidable and subject to recovery under 11 U.S.C. § 547 and 548 of the United States Bankruptcy Code. This post will look at the Open Range bankruptcy proceeding, why the company filed for bankruptcy as well as key developments during the course of the bankruptcy proceeding.
Open Range is a Delaware corporation based out of Colorado. The company was founded in 2004 in order to provide broadband access to areas of the country that are underserved. See Open Range’s Declaration in Support of First Day Motions (the “Decl”) at *2. In 2009, Open Range executed a $267 million Loan and Security Agreement which it intended to use over a five year period to build broadband networks in over 500 communities in 17 states. Decl. at *3.
In order to obtain wireless spectrum, in 2007 Open Range entered into a Spectrum Manager Lease with Globalstar Licensee LLC (“Globalstar”). After entering into the Spectrum Manager Lease, Globalstar experienced problems retaining the spectrum which Open Range intended to use for its services. Spectrum availability was critical to Open Range’s success as its loan agreement to fund operations was contingent on the continued availability of the wireless spectrum. Decl. at *3.

Posted 46 weeks 5 days ago

On October 1, 2013, Nirvanix, Inc. (“Nirvanix”) filed a chapter 11 petition for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Nirvanix describes itself as a provider of “enterprise-class cloud storage services.” See Declaration of Nirvanix’s CEO in Support of Chapter 11 Petition and First Day Motions at *2. Nirvanix’s cloud storage services fall in to two categories: a cloud file system and a cloud storage network. Under the Nirvanix Cloud File System, the company provides software capable of handling “millions of users and billions of files in a single global namespace.” Decl. at *2. The Nirvanix Cloud Storage Network offers eight data centers that allow customers to store data within close proximity and access certain redundancy levels for data storage. Decl. at *2-3.
In addition to data storage services, Nirvanix offers security safeguards at the user level and physical data center level. Decl. at *3. Security offerings include password, token-based authentication and encryption services. The company’s physical storage centers are located globally in “Carrier Class-III facilities” which utilize financial-grade safeguard procedures and access. Decl. at *3. The company’s eight data storage facilities are located in the U.S. and around the world. Decl. at *4.
Business Operations

Posted 47 weeks 4 days ago

On Monday, Fresh & Easy Neighborhood Market (“Fresh & Easy”) filed chapter 11 petitions for bankruptcy in the United States Bankruptcy for the District of Delaware. Fresh & Easy is a grocery chain with stores in California, Nevada and Arizona. See Fresh & Easy’s Declaration in Support of First Day Motions and Applications (the “Declaration” or “Decl.”) at * 2. Founded in 2006, Fresh & Easy experienced rapid growth, opening 200 stores by 2012. The company describes its grocery business as “offering healthy and wholesome foods, including prepared foods at affordable prices.” Id.
Fresh & Easy operates multiple types of retail stores. Its largest stores are approximately 10,000 square feet, while its second largest stores are generally 7,000 in size. These “large footprint” stores are intended to provide shoppers with a one-stop location for weekly shopping. In addition to the large retail stores, Fresh & Easy also operates 3,000 square foot “market concept” stores which offer more convenience-based shopping and fresh meal products. Decl. at *3. The company currently operates 167 store locations, some of which are owned outright by Fresh & Easy while the others are operate through ground or store leases.

Posted 47 weeks 5 days ago

In a 14 page decision signed September 30, 2013, Judge Walsh of the Delaware Bankruptcy Court provided a primer on one of the limitations of standing provided in the bankruptcy code in his opinion granting a motion to dismiss.  Judge Walsh’s opinion is available here (the “Opinion”).
On May 21, 2004, the Circuit Court for Montgomery County, Maryland entered four separate judgments pursuant to a civil action against Richard and Graciela Redden (“Debtors”).  All four judgments were transferred on July 15, 2004 to the Superior Court of Delaware in New Castle County, at which time they became judgment liens against the primary residence of Debtors.
On August 12, 2004, the Debtors filed a joint Chapter 7 bankruptcy petition.  The order of discharge was entered on September 2, 2005.  Their case was reopened and they filed a complaint to avoid and recover a preferential transfer from one of the four judgment creditors.  The Court granted the Debtors motion to avoid the judgment lien and the case was again closed on October 29, 2006.  The other three judgment liens remained outstanding.

Posted 48 weeks 23 hours ago