Creditor – Loro Dinapoli http://lorodinapoli.org/ Tue, 17 May 2022 20:34:17 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 http://lorodinapoli.org/wp-content/uploads/2021/07/icon-2021-07-06T154208.998-150x150.png Creditor – Loro Dinapoli http://lorodinapoli.org/ 32 32 OFFICIAL ARCHDIOCESE OF SANTA FE CREDITORS COMMITTEE CONCLUDE SETTLEMENT OF SEXUAL ABUSE CLAIMS AGAINST THE ARCHDIOCESE OF SANTA FE http://lorodinapoli.org/official-archdiocese-of-santa-fe-creditors-committee-conclude-settlement-of-sexual-abuse-claims-against-the-archdiocese-of-santa-fe/ Tue, 17 May 2022 20:13:00 +0000 http://lorodinapoli.org/official-archdiocese-of-santa-fe-creditors-committee-conclude-settlement-of-sexual-abuse-claims-against-the-archdiocese-of-santa-fe/ LOS ANGELES, May 17, 2022 /PRNewswire/ — After more than three years of intense work, the Official Creditors Committee (“OCC”), the trustee for all survivors in the Archdiocese of Santa Fe (“ADSF”) Chapter 11 case , negotiated a settlement of sexual abuse claims filed against the ADSF. OCC is represented by Pachulski Stang Ziehl & […]]]>

LOS ANGELES, May 17, 2022 /PRNewswire/ — After more than three years of intense work, the Official Creditors Committee (“OCC”), the trustee for all survivors in the Archdiocese of Santa Fe (“ADSF”) Chapter 11 case , negotiated a settlement of sexual abuse claims filed against the ADSF. OCC is represented by Pachulski Stang Ziehl & Jones LLP (“PSZJ”). The settlement provides for the payment of $121.5 million to a settlement trust that will be distributed to approximately 375 survivors pursuant to a plan of reorganization. The settlement will be funded by ADSF, its affiliates (including parishes) and ADSF insurance companies. In exchange for payment of the settlement, ADSF will receive a bankruptcy discharge and affiliates and carriers will be released from liability for sexual abuse claims.

In addition to the monetary settlement, the OCC negotiated an unprecedented non-monetary agreement with the ADSF to create a public archive of documents regarding the history of sexual abuse claims against the Archdiocese. The negotiated settlement, which does not include the settlement of any claims against religious orders, will be incorporated into a plan of reorganization on which survivors will have the opportunity to vote.

“Through the hard work of the nine members of the Committee of Official Creditors, the Archdiocese of Santa Fe has been held accountable to the survivors. The tenacity and courage of the survivors in New Mexico have allowed us to reach a recommended settlement that meets to the needs of survivors on a The bankruptcy process has been a long one, and ultimately survivors will receive unprecedented transparency into the Archdiocese’s sexual abuse claims history and just compensation,” said Charles PaezPresident of the OCC.

“The OCC has always stood for fair compensation and transparency. The nine members of the OCC have dedicated thousands of hours over three years to getting the right outcome for all survivors,” said james stang of Pachulski Stang Ziehl & Jones LLP, bankruptcy counsel with the OCC.

SOURCE Pachulski Stang Ziehl & Jones

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Orphazyme A/S in connection with a court-ordered restructuring to sell substantially all of its assets and business operations to KemPharm, Inc. http://lorodinapoli.org/orphazyme-a-s-in-connection-with-a-court-ordered-restructuring-to-sell-substantially-all-of-its-assets-and-business-operations-to-kempharm-inc/ Sun, 15 May 2022 21:00:00 +0000 http://lorodinapoli.org/orphazyme-a-s-in-connection-with-a-court-ordered-restructuring-to-sell-substantially-all-of-its-assets-and-business-operations-to-kempharm-inc/ ORPHAZYME A/S Orphazyme A/S in restructuringcompany announcementNo. 24/2022Inside informationwww.orphazyme.comCompany registration number 32266355 KemPharm to acquire the assets of Orphazyme, including those related to the development and approval of arimoclomol, for a total of $12.8 million in cash and assumed liabilities estimated at approximately $5.2 million The majority of approximately 20 current Orphazyme employees will become […]]]>

ORPHAZYME A/S

Orphazyme A/S in restructuring
company announcement
No. 24/2022
Inside information
www.orphazyme.com
Company registration number 32266355

  • KemPharm to acquire the assets of Orphazyme, including those related to the development and approval of arimoclomol, for a total of $12.8 million in cash and assumed liabilities estimated at approximately $5.2 million

  • The majority of approximately 20 current Orphazyme employees will become KemPharm employees

  • KemPharm intends to pursue approval of arimoclomol as a treatment option for NPC

Restructuring Orphazyme A/S (ORPHA.CO; ORPH) (“Orphazyme” or the “Company”), a late-stage biopharmaceutical company developing arimoclomol for Niemann-Pick type C (NPC) disease, today announces have today signed an agreement to sell substantially all of the Company’s assets and business operations to KemPharm Denmark A/S, a wholly owned subsidiary of KemPharm Inc. (KMPH: NASDAQ, NY). KemPharm is a specialty pharmaceutical company focused on the discovery and development of novel treatments for rare diseases of the central nervous system.

Under the agreement, KemPharm intends to retain substantially all of Orphazyme’s current employees, continue early access programs with arimoclomol, and pursue potential approval of arimoclomol as an option. treatment for NPC. KemPharm will pay Orphazyme a total of $12.8 million in cash and assume liabilities estimated at approximately $5.2 million. Completion of the transaction is expected to result in full or very high coverage of creditors with uncontested claims based on claims filed during the restructuring. The agreement is subject to the approval of Orphazyme’s creditors and the Danish bankruptcy court, and is expected to close no later than June 1, 2022.

“Given that Orphazyme is undergoing legal restructuring, the primary objective was to reach an agreement that satisfies our obligations to creditors, including our employees. We are pleased that this has been achieved. In addition, we have assured the pursuit of the development of arimoclomol in the hope of making it available to NPC patients, which has been our primary motivation since the creation of the company,” said Georges Gemayel, Chairman of the Board of Orphazyme.

Travis C. Mickle, President and CEO of KemPharm, said, “NCP is a devastating disease and there is a profound need for an effective treatment to help patients. We believe that the efficacy signal for arimoclomol is compelling and that there is a viable regulatory pathway to obtain marketing regulatory approvals. KemPharm has gained significant experience in difficult regulatory situations, and we welcome the opportunity to work with the team to resubmit regulatory submissions and make arimoclomol available to all who could benefit from the treatment.

After completion of the agreement, Orphazyme will have no ongoing operational business activities.

For more information, please contact

Orphazyme A/S undergoing restructuring

Anders Vadsholt, Managing Director and Chief Financial Officer +45 2898 9055

John Sommer Schmidt, Restructuring Administrator +45 8620 7500

About KemPharm
KemPharm is a specialty pharmaceutical company focused on the discovery and development of novel treatments for rare central nervous system (CNS) diseases through its proprietary LAT® (Ligand Activated Therapy). KemPharm uses its proprietary LAT® technology platform to generate improved prodrug versions of FDA-approved drugs as well as to generate prodrug versions of existing compounds that may have applications for new disease indications. KemPharm’s pipeline of prodrug product candidates is focused on high-need areas of idiopathic hypersomnia (IH) and other CNS diseases/rare diseases. Additionally, the U.S. Food and Drug Administration (FDA) has approved AZSTARYS®a once-daily treatment for ADHD in patients six years of age and older containing KemPharm’s prodrug, serdexmethylphenidate (SDX), which is marketed by Corium, Inc. in the United States, and APADAZ®an immediate-release combination product containing benzhydrocodone, KemPharm’s hydrocodone prodrug, and acetaminophen, which is marketed by KVK-Tech, Inc. in the United States. For more information on KemPharm and its portfolio of prodrug candidates, visit www.kempharm.com or join us on Twitter, LinkedIn, Facebook and Youtube.

About Orphazyme
Orphazyme is a late-stage biopharmaceutical company developing arimoclomol for Niemann-Pick type C (NPC) disease. Orphazyme is headquartered in Denmark. Orphazyme shares are listed on Nasdaq Copenhagen (ORPHA).

About arimoclomol
Arimoclomol is an investigational drug candidate that amplifies the production of heat shock proteins (HSPs). HSPs can rescue defective misfolded proteins and improve lysosome function. Arimoclomol is taken orally and has now been studied in 10 phase 1, four phase 2 and three pivotal phase 2/3 trials. Arimoclomol has received Orphan Drug Designation (ODD) for NPC in the US and EU. Arimoclomol has received Fast-Track Designation (FTD), Breakthrough Therapy Designation (BTD), and Rare Pediatric Disease Designation (RPDD) from the United States Food and Drug Administration (FDA) for NPC. On June 17, 2021, Orphazyme received a full response letter from the FDA regarding its New Drug Application for arimoclomol for the treatment of NPC. The company has requested that a Type B meeting be held early in the third quarter of 2022.

Forward-looking statement
This company announcement may contain certain forward-looking statements under the United States Private Securities Litigation Reform Act of 1995 and others, including forward-looking statements regarding the company’s sale of substantially all of its assets and business operations. to KemPharm Inc. Although the company believes that its expectations are based on reasonable assumptions, all statements other than statements of historical facts included in this company announcement regarding future events are subject to (i) change without notice and (ii) factors beyond the Company’s control, including by virtue of regulatory or judicial intervention. Except as required by law, the Company undertakes no obligation to update these forward-looking statements publicly, or to update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

Attachment

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Buxton Helmsley sends letter to shareholders and creditors of Endo International (ENDP), regarding corporate malfeasance and false financial statements http://lorodinapoli.org/buxton-helmsley-sends-letter-to-shareholders-and-creditors-of-endo-international-endp-regarding-corporate-malfeasance-and-false-financial-statements/ Fri, 13 May 2022 20:11:00 +0000 http://lorodinapoli.org/buxton-helmsley-sends-letter-to-shareholders-and-creditors-of-endo-international-endp-regarding-corporate-malfeasance-and-false-financial-statements/ Get instant alerts when news breaks on your stocks. Claim your one week free trial for StreetInsider Premium here. The Buxton Helmsley Group, Inc., the New York-based investment advisor for clients with financial interests in Endo International Plc. (NASDAQ: ENDP), today issued an open letter to shareholders and creditors of the Company, regarding corporate wrongdoing […]]]>

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The Buxton Helmsley Group, Inc., the New York-based investment advisor for clients with financial interests in Endo International Plc. (NASDAQ: ENDP), today issued an open letter to shareholders and creditors of the Company, regarding corporate wrongdoing and misrepresentation of financial disclosure.

The complete open letter to shareholders and creditors of the Company, as well as the private letters between BHG and the Company leading to this open letter, can be viewed at: http://www.exposingendo.com/

Members of Endo International Plc. Board of Directors: Mark G. Barberio, Jennifer M. Chao, Blaise Coleman, Shane M. Cooke, Nancy J. Hutson (Ph.D.), Michael Hyatt, William P. Montague and M. Christine Smith (Ph.D.).

About Buxton Helmsley: The Buxton Helmsley Group, Inc. (“BHG”) is a leading financial services, asset management and securities research firm, providing a range of services to a diverse group of individuals, corporations, trusts and other entities. The company is headquartered in New York.

Media:

Public Relations and Corp. Com.

The Buxton Helmsley Group, Inc.

+1 (212) 561 – 5540, Option 4

[email protected]

Source: The Buxton Helmsley Group, Inc.

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Bad reaction to Reliance Capital’s resolution: the creditors’ committee postpones the date to June 30 http://lorodinapoli.org/bad-reaction-to-reliance-capitals-resolution-the-creditors-committee-postpones-the-date-to-june-30/ Wed, 11 May 2022 23:00:00 +0000 http://lorodinapoli.org/bad-reaction-to-reliance-capitals-resolution-the-creditors-committee-postpones-the-date-to-june-30/ Reliance Capital’s (RCap) resolution process elicited poor response, with only eight companies expressing interest in bidding for the indebted company. Of the eight “potential resolution claimants” (PRAs), only three – an onsortium led by Piramal Group, Yes Bank and HDFC Ergo – held their own internal meetings. The resolution process administrator received inquiries and clarifications […]]]>

Reliance Capital’s (RCap) resolution process elicited poor response, with only eight companies expressing interest in bidding for the indebted company.

Of the eight “potential resolution claimants” (PRAs), only three – an onsortium led by Piramal Group, Yes Bank and HDFC Ergo – held their own internal meetings. The resolution process administrator received inquiries and clarifications from five others, while the other 46 PRAs remained “incommunicado”, sources close to the development told FE. The names of the five bidders, who had requested clarification, could not immediately be determined.

Following the lukewarm response, the Creditors’ Committee (CoC) has now decided to extend the deadline for submitting resolution plans to June 30 instead of May 26, they added. “The cold response from the majority of ARPs could be due to the unfavorable economic conditions and the challenging global environment,” one of the sources said, but did not elaborate.

Earlier in March, RCap secured a total of 54 EoIs from high-profile bidders including ICICI Lombard, Tata AIG and Nippon Life Insurance, with the majority of suitors interested in acquiring the business in its entirety. Other bidders included HDFC Ergo, Bandhan Financial Holdings, Cholamandam Investment, Adani Finserv, Yes Bank, OakTree Capital, Blackstone, New Quest, Indusind International, Brookfield, TPG Capital, Zurich, Ares SSG Capital, ArpWood Partners, Capri Global Holdings, Edelweiss Alternative, International Asset Reconstruction Company, JC Flower, Motilal Oswal, Square Four Housing and UV Multiple Asset Investment.

Following a good response in March, the administrator had also extended the deadline by two weeks from the previous March 11, with some bidders requesting more time. Creditors of the former Anil Ambani Group company were claiming Rs 23,666 crore in dues.

The resolution plan document only provides a “cash only” option for bidders from its subsidiaries, while those bidding for the entire company can make cash and deferred payment bids. However, there will be no possibility of making deferred payment offers for subsidiaries. All cash offers received for the bankrupt business would have the highest priority, in accordance with the Request for Resolution Plan (RFRP) issued by the lenders.

The lenders would be entitled to the money on the company’s books, and it will not be considered part of collection proceeds for the winning bidder.

On November 29, 2021, the Reserve Bank of India replaced RCap’s board of directors following defaults and governance issues, and appointed Nageswara Rao Y as bankruptcy process administrator. The regulator has also filed a request to initiate a corporate insolvency resolution process against the company. In April, Credit Suisse and Axis Bank – two lenders to RCap – had taken the indebted company to the National Company Law Tribunal (NCLT), seeking recovery of debts worth Rs 760 crore.

In February this year, the RBI-appointed administrator invited EoIs to sell the assets of RCap.

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Developer Paddy McKillen jnr plans hotel business in Birmingham http://lorodinapoli.org/developer-paddy-mckillen-jnr-plans-hotel-business-in-birmingham/ Sun, 08 May 2022 11:33:13 +0000 http://lorodinapoli.org/developer-paddy-mckillen-jnr-plans-hotel-business-in-birmingham/ Developers Paddy McKillen Jnr and Matt Ryan’s Oakmount Company are planning to build a 155-bedroom hotel and leisure complex on a historic site in Birmingham, reports the Sunday Independent. Citing a local report, the newspaper said Oakmount is planning the project at Methodist Central Hall. The hotel will use the developers’ Dean hotel brand and […]]]>

Developers Paddy McKillen Jnr and Matt Ryan’s Oakmount Company are planning to build a 155-bedroom hotel and leisure complex on a historic site in Birmingham, reports the Sunday Independent. Citing a local report, the newspaper said Oakmount is planning the project at Methodist Central Hall. The hotel will use the developers’ Dean hotel brand and Sophie’s bar and restaurant brand.

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The Sunday Independent also reports that some creditors of collapsed construction company Roadbridge have demanded to see documents relating to the receivership of the firm, which went bankrupt in March, putting more than 1,700 jobs on the line. hazard. Commercial creditors owe €50m but rank behind the €30m in loans from the Bank of Ireland. Now, some creditors have asked Grant Thornton receivers to see the bank loan documents.

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Transport Infrastructure Ireland, the state agency responsible for road construction, has launched a review of its budget over fears it could ‘drop’ some new road projects due to soaring inflation in the transport sector. construction, reports the Business Post. The newspaper’s sources told him that TII was reviewing “how much the current budget can provide”, as the state reviews projects planned under the 165 billion euro National Development Plan.

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“At least a dozen” wealthy Irish taxpayers are seeking settlements with Revenue over a collective tax bill of around €100million linked to the company’s share rights transfer. The Business Post reports that high-income earners sought settlements after Revenue settled with a businessman for around 10% on €2 million in stock rights transfers. There have been disputes over whether these transfers are subject to income tax or whether they are considered capital gains.

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An Post is seeking government approval to take a stake in a new bank-planned and bank-led mobile money transfer app, which is being set up as an alternative to Revolut, reports the Sunday Times. Bank of Ireland, AIB and Permanent TSB are the main drivers behind Synch Payments, which is developing the app to enable instant money transfer. An Post wants to take a small stake as a junior partner.

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The Sunday Times also reports on Irish businessman Patrick Doran, who is expected to turn a $25,000 investment into an $85 million stake in a Nasdaq venture in just 20 months. Doran helped set up a Nasdaq-listed vehicle to seek merger candidates. The vehicle will soon merge with the software company, Telesign, resulting in the transfer of a 5% stake to a company controlled by Doran.

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Cohen Seglias Lands Burns White Atty for the Pittsburgh office http://lorodinapoli.org/cohen-seglias-lands-burns-white-atty-for-the-pittsburgh-office/ Fri, 06 May 2022 19:59:00 +0000 http://lorodinapoli.org/cohen-seglias-lands-burns-white-atty-for-the-pittsburgh-office/ By James Boyle (May 6, 2022, 3:59 p.m. EDT) – A bankruptcy and creditors’ rights attorney has moved his practice from Burns White LLC after more than 10 years to the Pittsburgh office of Cohen Seglias Pallas Greenhall & Furman PC. William Buchanan has been welcomed as an associate into Cohen Seglias’ financial services and […]]]>
By James Boyle (May 6, 2022, 3:59 p.m. EDT) – A bankruptcy and creditors’ rights attorney has moved his practice from Burns White LLC after more than 10 years to the Pittsburgh office of Cohen Seglias Pallas Greenhall & Furman PC.

William Buchanan has been welcomed as an associate into Cohen Seglias’ financial services and real estate groups, the firm announced this week. Buchanan told Law360 on Friday that he made the move after speaking with colleagues he knows at Cohen Seglias.

“They have a strong bench of lawyers here,” Buchanan said. “There are a lot of opportunities for good collaboration between the offices, and it’s a good…

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Is a post-petition court order of non-bankruptcy a violation of the automatic stay? : Ninth Circuit Bankruptcy Appeals Board Provides Clarification on Recent Detention | Fox Rothschild LLP http://lorodinapoli.org/is-a-post-petition-court-order-of-non-bankruptcy-a-violation-of-the-automatic-stay-ninth-circuit-bankruptcy-appeals-board-provides-clarification-on-recent-detention-fox-rothschild-llp/ Wed, 04 May 2022 15:08:26 +0000 http://lorodinapoli.org/is-a-post-petition-court-order-of-non-bankruptcy-a-violation-of-the-automatic-stay-ninth-circuit-bankruptcy-appeals-board-provides-clarification-on-recent-detention-fox-rothschild-llp/ On April 5, 2022, the Ninth Circuit Bankruptcy Appellate Panel (the “BAP”) issued a notice, Censo, LLC v. Newrez, LLCBAP No. NV-21-1125-LTF (April 5, 2022), which provides a framework for determining whether a non-bankruptcy court’s post-application order on an ongoing matter violates the automatic stay. In Census, the former owner of a mortgaged condominium unit […]]]>

On April 5, 2022, the Ninth Circuit Bankruptcy Appellate Panel (the “BAP”) issued a notice, Censo, LLC v. Newrez, LLCBAP No. NV-21-1125-LTF (April 5, 2022), which provides a framework for determining whether a non-bankruptcy court’s post-application order on an ongoing matter violates the automatic stay.

In Census, the former owner of a mortgaged condominium unit (the “Property”) defaulted on his homeowners association (“HOA”) appraisals, and the HOA was seized on the Property. A successor debtor entity purchased the property in the 2013 foreclosure proceeding, subject to the mortgage, and transferred the property to the debtor entity in 2019.

In 2014, the former foreclosed owner sued the buyer, HOA, mortgagee and various other entities in federal district court, seeking a declaration that the foreclosure was invalid due to certain alleged defects in the mortgage. Various claims and counterclaims were filed by the buyer, arguing that the HOA’s foreclosure effectively extinguished the mortgage.

Ultimately, the mortgagee filed a motion for summary judgment, seeking declaratory judgment that the purchaser purchased the property subject to the mortgage. The buyer-turned-debtor then filed a Chapter 11 petition. Neither the debtor nor the mortgagee filed a notice of stay advising the district court of the bankruptcy case. Shortly thereafter, the district court issued an order granting the motion for summary judgment and declaring that the debtor had taken the property subject to the mortgage.

As part of the bankruptcy proceedings, the debtor filed a contradictory complaint against the mortgagee, again arguing that the mortgage was defective due, among other things, to an incorrect description of the Property. The mortgagee filed a motion to dismiss the opponent’s claim, which was granted by the bankruptcy court based on the exclusion of the matter following the district court’s decision after the motion on the motion for summary judgment.

The debtor appealed and ultimately only raised the issue of whether the district court’s post-application order was a violation of the automatic stay.

BAP analyzed each applicable subsection of Section 362(a) of the Bankruptcy Code, beginning with Section 362(a)(1), which it noted that the plain language of the provision indicated that the automatic stay applied only to actions against the debtor. Accordingly, the BAP described the distinction between “offensive” and “defensive” creditor claims as follows:

Cases where defending a creditor against claims brought by a debtor do not violate the automatic stay generally involve facial defensive actions such as seeking summary judgment seeking the dismissal of a claim brought by a debtor. On the other hand, the commencement or continuation of a creditor’s counterclaim for affirmative relief will generally be construed as a breach of the stay. Identifier. (quotes omitted).

Ultimately, the BAP determined that the debtor had engaged the mortgagee in an attempt to invalidate the mortgage, and that the mortgagee was only “defending its lien against [the debtor’s’] offensive.”

The BAP then analyzed section 362(a)(3), which prohibits any act aimed at taking possession of or exercising control over the property of the estate. The BAP, citing the Supreme Court decision in City of Chicago vs. Fultonheld that “acts that simply maintain the status quo do not violate automatic suspension”.

Accordingly, because the mortgage existed on the date of the petition, the district court order was held to have “merely affirmed the validity of the existing lien” and did not affect the possession or control of the property of the estate of the debtor.

Finally, in dealing with sections 362(a)(4) and (a)(5), the BAP pointed out that “all acts or omissions subsequent to the petition which may affect the property of the debtor or the estate do not constitute not a suspended sentence violation”. For this unfortunate debtor, no violation of Sections 362(a)(4) or (a)(5) was found because the district court order did not attempt to create, perfect or apply a lien on the property of the estate.

The BAP upheld the bankruptcy court’s decision to dismiss the opposing party’s complaint and provided the framework for determining whether the post-application order from a court other than bankruptcy should be considered a violation of the automatic suspension.

Going forward, the framework described by the BAP in the Census The ruling may empower non-bankruptcy courts to make post-petition orders on defensive creditor claims that may have previously been deemed violations of the automatic stay. However, on April 27, 2022, Censo filed a notice of appeal with the Ninth Circuit. It remains to be seen whether the Ninth Circuit will adopt the framework defined by the BAP, or apply another standard. If the Ninth Circuit adopts the framework, Ninth Circuit courts should carefully and carefully distinguish between creditors’ offensive and defensive claims to ensure the proper enforcement of the automatic stay.

[View source.]

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Sears creditors seek court approval for $35 million litigation funding deal http://lorodinapoli.org/sears-creditors-seek-court-approval-for-35-million-litigation-funding-deal/ Mon, 02 May 2022 21:03:00 +0000 http://lorodinapoli.org/sears-creditors-seek-court-approval-for-35-million-litigation-funding-deal/ A store closing sale sign is displayed next to a Sears logo in New Hyde Park, New York, U.S., October 10, 2018. REUTERS/Shannon Stapleton Join now for FREE unlimited access to Reuters.com Register Law firms Related documents (Reuters) – Creditors of bankrupt Sears Holdings Corp have run out of money to continue filing billion-dollar lawsuits […]]]>

A store closing sale sign is displayed next to a Sears logo in New Hyde Park, New York, U.S., October 10, 2018. REUTERS/Shannon Stapleton

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(Reuters) – Creditors of bankrupt Sears Holdings Corp have run out of money to continue filing billion-dollar lawsuits against former chairman Eddie Lampert and a host of other defendants they say have robbed the business of value brands and real estate assets as the retailer spun into insolvency.

Sears’ bankruptcy plan called for the estate to set aside $25 million to pursue claims, but that money disappeared, along with an additional $7.1 million owed to Akin Gump Strauss Hauer & Feld, lead attorney for the Sears Trust. liquidation.

Billions of claims and no money to litigate? That’s what litigation funding is for, according to an April 21 motion from Sears’ creditors’ committee.

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The motion asks U.S. Bankruptcy Court Judge Robert Drain of White Plains, New York, to approve an agreement between Sears, the creditors’ committee and financial backer Bench Walk Advisors LLC for financing of up to $35 million to pursue two adversarial suits, one against Lampert and his alleged allies, the other against 139 former Sears shareholders.

The agreement would put Bench Walk first in line to collect from any case recoveries, but limits the litigation funder’s initial entitlement to its principal plus 15% annualized interest. Bench Walk will only receive additional returns on its investment if the recovery is sufficient to repay administrative, priority and warranty claims against Sears’ estate.

The deal would reportedly be one of the largest litigation funding deals ever in a Chapter 11 bankruptcy. In a presentation last October to the National Conference of Bankruptcy Judges, litigation financier Omni Bridgeway (USA) LLC has identified a handful of other cases in which lenders have been allowed to invest in bankruptcy litigation through various mechanisms, including purchasing the debtor’s right to seek insurance payments and the partial purchase of a judgment obtained by a debtor.

The biggest deal cited in the Omni Bridgeway report was a $40 million investment in adversarial proceedings by litigation trust Paragon Offshore Plc against Paragon’s former parent company Noble Corp, though it’s hard to say. from Paragon’s proposal how much money came from an unidentified third-party litigation funder and how much was contributed by members of the existing litigation trust.

The Sears motion, on the other hand, stands out for its transparency. According to the filing, the litigation against Lambert and the case against former Sears shareholders were incredibly difficult. The creditors had to defend more than a dozen requests for the dismissal of the two adversarial proceedings. Their attorneys have issued nearly 200 subpoenas, received millions of discovery pages, and hired expert witnesses. The judge, Drain, has yet to rule on the defense motions to dismiss, but he appointed mediators last month to try to resolve the Lambert case. (Lambert’s attorney, Philip Anker of Wilmer Cutler Pickering Hale and Dorr, did not respond to my email inquiry regarding the litigation. The defendants have previously told Reuters that the creditors’ claims are “misleading or otherwise simply false” and that all disputed transactions conducted in good faith for the benefit of shareholders.)

The creditors’ filing shows the winding-up trust is down to its last $300,000, of the $25 million originally set aside for litigation. Defendants, according to the filing, explained much more: Former directors and officers of Sears have already spent nearly $27 million on D&O insurance for their legal defense, and that’s not counting the legal fees of defendants who are not covered by these Strategies insurance.

The committee said it recognized that in order to continue corresponding with these “well-heeled defendants” it needed a new source of funding. He drafted a litigation budget, then contacted 10 potential investors, including “both traditional litigation funders and investment managers.”

Eight potential backers signed nondisclosure agreements to learn more about the potential investment. (The winding-up trust argues, according to a statement from one of the five investment professionals appointed to oversee the litigation, that its claims total approximately $2 billion, plus interest.) Three backers ended up making presentations. Creditors rejected a lender’s offer because it offered unfavorable terms. He asked for the best final offers from Bench Walk and the other anonymous backer.

Even after receiving those offers, according to the creditors’ filing, the committee considered additional offers from four other institutions, then engaged in renegotiations with Bench Walk to ensure major creditors would be paid before the lessor of funds does not reap the windfall of litigation. Bench Walk also agreed, according to the filing, that it has no control over litigation or settlement decisions, which remain in the hands of the investment professionals named in Sears’ confirmation plan.

Creditors asked the judge, Drain, to approve the financing agreement as a good exercise in judgment, arguing that Bench Walk’s non-recourse loan requires only a minor modification to the distribution scheme in the bankruptcy plan already. confirmed. “The litigation funding arrangement resolves significant funding issues for jointly asserted causes of action, fulfills the purpose of the plan, and benefits all parties involved,” the filing states.

Neither Bench Walk nor Akin Gump’s lead creditors’ committee attorney Ira Dizengoff responded to my email questions.

The creditors’ file includes the Bench Walk agreement itself as an attachment, so no one can complain about the opaque terms. If Drain approves the deal, the funding agreement could serve as a template for future litigation funding agreements in Chapter 11 bankruptcies.

That Omni Bridgeway report that I mentioned noted that Burford Capital LLC had publicly stated that it had committed nearly $100 million in financing in insolvency and bankruptcy cases in 2020. Sears Creditors’ File suggests that even $100 million might look like a floor, not a ceiling.

Read more:

Sears is suing Lampert, claiming he looted assets and drove him out of business

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Our standards: The Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and non-partisanship by principles of trust.

Alison Frankel

Thomson Reuters

Alison Frankel has covered high-stakes commercial litigation as a columnist for Reuters since 2011. A graduate of Dartmouth University, she worked as a journalist in New York covering the legal industry and law for more than three decades. Before joining Reuters, she was an editor and editor at The American Lawyer. Frankel is the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin.

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IRS levy outweighs deceased’s children’s claim to money held in usufruct http://lorodinapoli.org/irs-levy-outweighs-deceaseds-childrens-claim-to-money-held-in-usufruct/ Sun, 01 May 2022 08:07:41 +0000 http://lorodinapoli.org/irs-levy-outweighs-deceaseds-childrens-claim-to-money-held-in-usufruct/ The Fifth Circuit upheld a district court ruling that an IRS levy on a deceased’s estate for unpaid taxes took precedence over his children’s claims to money, which the deceased held in usufruct under of Louisiana law, since the children were essentially unsecured. creditors. Facts: Henry and Tonia Goodrich, a married couple who lived in […]]]>

The Fifth Circuit upheld a district court ruling that an IRS levy on a deceased’s estate for unpaid taxes took precedence over his children’s claims to money, which the deceased held in usufruct under of Louisiana law, since the children were essentially unsecured. creditors.

Facts: Henry and Tonia Goodrich, a married couple who lived in Louisiana, owned community assets that included shares and stock options of Goodrich Petroleum Co. (the Goodrich securities). When Tonia died in 2006, she bequeathed her interest in part of the community property to the couple’s three children, subject to usufruct for the benefit of Henri. During his lifetime, Henry sold $857,914 worth of Goodrich securities. Ahalf of this amount belonged to Henry outright and the other half to the children but held in usufruct by Henry.

Henry died in 2014 and owed over $560,000 in income taxes for 2012, 2013 and 2014. His executor opened a bank account for the estate and placed estate funds in it. The IRS took a levy from the account and the bank returned the remaining funds, nearly $240,000, to the Service. After that, with penalties and interest, a combined outstanding tax balance of $472,000 rest.

The children filed a lawsuit, claiming the IRS wrongly withheld the funds under Sec. 7426(a)(1) and claiming that they owned nearly $500,000 of Goodrich securities which Henry held subject to usufruct. A magistrate judge ruled that the IRS claims took priority over the children’s claim because the children were essentially “unsecured creditors” of disputed funds in Henry’s estate. The children appealed the decision to the Fifth Circuit.

Issues: Because Henry held the titles in usufruct, the question was whether Louisiana law assigned the Goodrich children a primary interest in the titles as owners or a secondary interest as creditors. Under Section 535 of the Louisiana Civil Code, a usufruct is “a real interest of limited duration in the property of another”. According to article 538, “If the things subject to usufruct are consumable goods [including money], the usufructuary becomes the owner. … At the end of the usufruct, he is obliged either to pay to the bare owner the value which the things had at the beginning of the usufruct, or to deliver to him things of the same quantity and quality.”

While carrying: The Fifth Circuit found that the Goodrich children were the bare owners of consumables held in usufruct. Application of Louisiana case law (Capture Succession, 35 So. 3d 449 (La. Ct. App. 2010)), the court found that the children had a claim on Henry’s estate in connection with the titles, but did not immediately become owners of the titles upon his death . Therefore, they were unsecured creditors in respect of the claim and therefore did not legally own the property at the time the IRS seized it. Under Dry. 6323, the IRS has priority over other creditors, and thus the Fifth Circuit upheld the magistrate’s granting of summary judgment in favor of the IRS.

  • GoodrichNo. 2030422 (5th Cir. 01/25/22)

— Alistair M. Nevius, JD, is the Jofa‘s Editor, Tax.

To comment on tax issues or to suggest an idea for a story, contact Alistair M. Nevius at Alistair.Nevius@aicpa-cima.com.

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Is debt settlement hurting your credit? – Forbes Advisor http://lorodinapoli.org/is-debt-settlement-hurting-your-credit-forbes-advisor/ Thu, 28 Apr 2022 20:51:58 +0000 http://lorodinapoli.org/is-debt-settlement-hurting-your-credit-forbes-advisor/ Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors. Debt settlement allows an overburdened borrower to repay a loan in a lump sum that may be significantly less than what is owed to them. It’s a tactic that can dispel a […]]]>

Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.

Debt settlement allows an overburdened borrower to repay a loan in a lump sum that may be significantly less than what is owed to them. It’s a tactic that can dispel a dark cloud hanging over your finances. But beware that a new source of gloom might begin to loom, as debt settlement can be bad for your credit score.

Credit reports used to calculate your credit score will show a black mark for any debt settled for less than the full amount. So while settling a debt can provide tremendous relief, it can also create big problems when you need to borrow again, as lenders typically use credit scores to decide whether or not to extend loans.

But don’t assume that debt settlement is always a bad idea. It all depends on the circumstances. Here’s an overview of how debt settlement works and its potential impact on your access to credit, along with tips for choosing a financially sounder alternative.

What is Debt Settlement?

In debt settlement, you agree to repay part of the debt and your creditor agrees to wipe the rest of the slate clean. This can happen in several ways.

A debt settlement company might offer to negotiate with your lender to get you a good deal. But the Consumer Financial Protection Bureau warns that working with debt settlement companies can be ‘risky’, as the federal watchdog says they often charge high fees and encourage consumers to stop paying their bills in the first place. hope to have a leverage effect on lenders.

You could end up with less money and worse credit than before, and little or no debt relief.

Home debt settlement is another option. Consumers can contact their creditors themselves and ask if a partial payment would settle a debt. This works best for debts that have already been charged by creditors as uncollectible.

Sometimes creditors will take the initiative in settling the debt. They may reach out to a customer and offer to take a reduced gain as a last attempt at collection on a long overdue account.

Whether done with the help of a settlement company, through a do-it-yourself campaign, or in response to a creditor’s offer, debt settlement can yield huge savings of 25% , 50% or even more on balances due. It may be worth considering. But you also need to consider the potential impact on your credit score.

How Debt Settlement Can Hurt Your Credit

The problem with debt settlement is that when a creditor accepts less than the amount owed, the account isn’t quite marked as paid in full on the borrower’s credit report. Verbiage varies by credit bureau. TransUnion may label the payment status as “paid after being applied”, while Experian will say: “Account legally paid in full for less than full balance”.

Different credit scoring models also handle debt settlement differently.

But the effect of settling a debt with partial payment is usually negative, often significantly. Indeed, payment history is the most important factor in calculating a credit score, accounting for 35% of the result.

Debt settlement practices can reduce your credit score by 100 points or more, according to the National Foundation for Credit Counseling. And this black mark can persist for up to seven years.

It all depends on the circumstances. For example, a consumer with an already poor credit score due to a heavy history of late payments and collection actions will not be harmed by debt settlement as much as someone with a FICO score of 800 almost perfect. And sometimes debt settlement can actually help a score, at least in the medium term.

How Debt Settlement Can Help Your Credit

One of the benefits of settling an account is that it prevents the creditor from reporting updates on it to major credit bureaus. This starts the countdown to up to seven years that “derogatory information” can remain on your credit reports.

Another advantage of settling a debt is that the balance will not burden your credit utilization, which is the amount of your available credit that you use. High credit utilization lowers credit scores. Debt settlement alleviates this pressure.

The legal settlement of a debt also prevents the creditor from taking action for recovery, an undeniable advantage. When a creditor contacts a borrower with an offer of settlement, it may be a signal that the lender is moving towards seeking legal recourse. This alone is a reason to seriously consider a creditor’s settlement offer.

When you settle a debt that a creditor has assigned to a collection agency, you can negotiate to have the collection agent report the account as “paid in full” to the credit bureaus and remove derogatory information about the settled debt from your credit records.

The collector can say no to both requests, but it’s worth asking because you could score a double win: you’d avoid paying off the full amount of a debt and protect your credit score from major long-term damage.

Or, the collector could refer you to the original creditor to justify removing the black marks from your credit reports. You would need to show that you are making a serious effort to be more responsible with credit.

Debt Settlement Alternatives

If you don’t want to pursue debt settlement, you have other debt relief options that may be less detrimental to your credit score.

You could negotiate what is called a structured debt settlement with a creditor. This type of arrangement can give you more time to pay off the debt and even reduce the interest rate. The outcome can be as positive as debt settlement, but without credit history being affected.

A debt consolidation loan offers a way to restructure debt without creditor approval. Consolidation replaces your existing debt with an unsecured personal loan or home equity loan borrowed against your home.

These loans can lower the interest rate on your debt and extend your payment term, saving you money and reducing short-term cash flow pressures. But beware, if you can’t repay a home equity loan, you could lose your home.

A similar approach is to get a new credit card with an introductory rate of 0% and transfer the debts to the card. This can save you a lot of money on interest and won’t hurt your payment history.

Perhaps the smartest decision is to take your debt problem to a nonprofit consumer credit counseling agency. These experts can provide assistance with budgeting and also negotiate new terms with creditors while holding lenders accountable and managing your payments to keep accounts current and improve your credit score.

Bankruptcy is the most drastic approach to overwhelming debt. A Chapter 7 bankruptcy can erase most unsecured debt completely and permanently, usually in exchange for no payment. However, a black mark from a Chapter 7 bankruptcy remains on a credit report for 10 years.

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Conclusion

Debt settlement can help borrowers settle old debts, often for much less than the total amount owed. While it can save money and reduce your stress levels, debt settlement can be costly to your credit score and prevent you from getting new credit for years.

If you’re burdened with unsustainable debt, settlement is one potential solution worth considering, but others may be less detrimental to your credit rating.

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