All items from Delaware Bankruptcy Litigation

In the Tuscany International Drilling bankruptcy action, filed in the United States Bankruptcy Court for the District of Delaware, the United States Trustee recently filed a Statement that the Unsecured Creditors’ Committee Has Not Been Formed.  The Statement indicates that there was “insufficient response to the United States Trustee’s communications/contact for service on the committee.”
In Chapter 11 cases, an Official Committee of Unsecured Creditors is not uncommonly formed to collectively represent the interests of unsecured creditors.  Without a creditors committee, each unsecured creditor must represent their own interests in Court.
One way in which creditors can assert their interests is to attend the Section 341 Meeting of Creditors, in order to depose the debtor’s representative regarding the assets and liabilities of the bankruptcy estate.  As discussed in a prior post, the Section 341 meeting of creditors in the Tuscany bankruptcy action is scheduled for March 13, 2014 at 10:30 a.m.
To review prior articles related to the Tuscany bankruptcy, click on the following links:



Posted 29 weeks 4 days ago

Optim Energy, LLC and its subsidiaries and affiliates (“Optim” or the “Debtors”) filed for bankruptcy under Chapter 11 of the Bankruptcy Code on Wednesday, February 12, 2014 (the “Petition Date”) in the United States District Court for the District of Delaware.
According to Declaration of Nick Rahn, Chief Executive Officer of Optim Energy, LLC in Support of Chapter 11 Petitions and First Day Pleadings (the “Rahn Declaration”), the Debtors “are power plant owners principally engaged in the production of energy in Texas’s deregulated energy market.”  Rahn Declaration, ¶ 5.  The Debtors own and operate three power plants in eastern Texas.  Two of the plants are fueled by natural gas, and the third is coal fired.  See id.  According to the Petition, the Debtors’ assets are valued at $100 million to $500 million, and their debts are estimated at $500 million to $1 billion.
Events Leading to Bankruptcy



Posted 30 weeks 3 days ago

As discussed in the prior post, Tuscany International Drilling Inc., and its subsidiary, Tuscany International Holdings (U.S.A.) Ltd. (“Tuscany” or the “Debtors”) filed for bankruptcy on February 2, 2014 with the United States District Court for the District of Delaware.  On February 4, 2014, the Court held a “First Day” hearing to hear a number of preliminary motions filed by Tuscany.
At the hearing, the Court entered the First Day motions filed by the Debtors.  Among other things, the Court entered the following relief: (i) order authorizing the Debtors to pay pre-petition claims of certain critical vendors; (ii) order authorizing the Debtors’ continued use of existing cash management system; (iii) order approving the Debtors’ post-petition financing and authorizing use of cash collateral; and (iv) order authorizing payment of certain of the Debtors’ pre-petition workforce obligations.
In addition, the Court scheduled a Section 341 Meeting of Creditors to take place on March 13, 2014 at 10:30 a.m. (EST).  The Section 341 Meeting will be held at the J. Caleb Boggs Federal Building, 844 King Street, Wilmington, DE 19801.  Click here for a copy of this notice.



Posted 31 weeks 3 days ago

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 32 weeks 21 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 32 weeks 4 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 46 weeks 15 hours 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 46 weeks 1 day 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 47 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 47 weeks 5 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 48 weeks 6 days ago