To print this article, all you need to do is be registered or log in to Mondaq.com.
Judge David Jones of the Southern District of New York denied a request to create a formal committee of shareholders in Revlon’s Chapter 11 proceedings, as reported Reuters. The debtor’s attorney argued that stockholders “cannot” prove they are entitled to meaningful recovery at this stage of the bankruptcy proceedings, and the company’s lenders argued that recent share price fluctuations were “unrelated to market realities”. Judge Jones found that the cost of appointing a committee, the expenses of which were paid by the estate, exceeded its likely value.
[Reuters; Aug. 24, 2022]
The first non-bank mortgage lenders go bankrupt, a trend that Bloomberg forecasts will continue due to rising interest rates, a sharp decline in mortgage lending and the reliance of non-bank lenders on lines of credit which may be short-term. Independent lenders gained market share after 2008 when banks withdrew from the mortgage business. The situation is more serious for lenders who provide riskier loans that are not eligible for financing from Fannie Mae and Freddie Mac. [Bloomberg; Aug. 19, 2022]
The the wall street journal reports of the predicament retailers find themselves in as they struggle to unload inventory ahead of the holiday season and yet, at the same time, consumer spending has shifted towards essentials such as food and gasoline due to rising inflation. Retailers from Walmart to Nordstrom are offering deep discounts to eliminate inventory. The situation going forward is uncertain, as the industry anticipates its slowest sales growth between November and January in years. [WSJ; Aug. 28, 2022]
Lumileds has filed for Chapter 11 bankruptcy with a pre-packaged plan in the Southern District of New York, as reported by Bloomberg. The company’s lenders will take control of the Netherlands-based lighting maker with a plan that will reduce $1.3 billion in debt from the company’s balance sheet and provide the company with $275 million in DIP financing. [Bloomberg; Aug. 29, 2022]
Visit us at mayerbrown.com
Mayer Brown is a global provider of legal services comprised of law firms that are separate entities (the “Mayer Brown Firms”). The Mayer Brown firms are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, two limited liability companies established in Illinois in the United States; Mayer Brown International LLP, a limited company incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales under number OC 303359); Mayer Brown, a SELAS based in France; Mayer Brown JSM, a partnership of Hong Kong and its associated entities in Asia; and Tauil & Checker Advogados, a Brazilian legal partnership with which Mayer Brown is associated. “Mayer Brown” and the Mayer Brown logo are registered trademarks of Mayer Brown law firms in their respective jurisdictions.
© Copyright 2020. Mayer Brown Practices. All rights reserved.
This article by Mayer Brown provides information and commentary on interesting legal issues and developments. The foregoing is not a complete treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action regarding the matters discussed here.
POPULAR ARTICLES ON: Insolvency/Bankruptcy/Restructuring from the United States