Bankruptcy

Brentwood Based Healthcare Company to Assume Control of Bankrupt Hospital Group

Brentwood-based RCCH Healthcare Partners could take control of recently bankrupt Trios Health facilities in less than a month, reports the Tri-City Herald. The transfer is part of a bankruptcy plan that earmarks $3.95 million for unsecured creditors, with RCCH contributing most of the money. RCCH pledged to employ all Trios employees, saving an estimated 1,000 jobs. You can view the order here.

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Stormy Daniels' Attorney Tested Legal Boundaries in Bankruptcy

Michael Avenatti was caught in a downward spiral of financial trouble last year when Jerry Tobin, a private detective sometimes used by his law firm, filed a court petition to force the firm into bankruptcy, the Los Angeles Times reports. The bankruptcy triggered the end to an arbitration between the firm Eagen Avenatti and a lawyer who used to work there who claims to be owed more than $14 million.
 
U.S. Bankruptcy Judge Karen Jennemann immediately questioned whether Eagan Avenatti was colluding with Tobin in order to stall the arbitration — or “just got plain lucky.” The judge dismissed Tobin as a “screwy small creditor” who couldn’t, on his own, figure out how to initiate the rarely used involuntary bankruptcy process. “We have an involuntary case that has a stench of impropriety,” said Jennemann.
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Investment Trust to Buy HCR ManorCare Real Estate

Welltower Inc, a real estate investment trust, is purchasing the real estate of recently bankrupt nursing home giant HCR ManorCare for $2.7 billion, Reuters reports. Welltower will team up with non-profit hospital operator, ProMedica, which purchased ManorCare’s operations for $1.3 billion, to create a 30-state health care system. The partnership plans to capitalize on the trend of more health care taking place outside of hospitals.

If the U.S. Bankruptcy Court approves the deal, the merger stands to boost the group into the 25 largest U.S. health systems by revenue alongside names like Mayo Clinic, Geisinger and Johns Hopkins. ManorCare, which was the second-largest U.S. nursing home operator, filed for Chapter 11 protection in March, with $7.1 billion of debt, as part of a prearranged deal to transfer ownership to its landlord Quality Care Properties Inc.

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National Conference of Bankruptcy Judges 2018: All of the Usuals and Plenty of Surprises

This letter is from the president of the National Conference of Bankruptcy Judges:
 
Dear Tennessee Insolvency Professional,
 
Remember the Alamo! That phrase became the battle cry of Texans in their struggle for independence. Today, the Alamo is just one part of the rich history of San Antonio, the host city for this year's National Conference of Bankruptcy Judges (NCBJ) Conference. San Antonio is celebrating its tricentennial and this fall is the perfect time to visit this infamous city of the old west and at the same time enjoy everything you have come to expect from the NCBJ experience.
 
The Education Committee -- made up of bankruptcy judges, legal scholars and preeminent professionals, and headed by Judge John Hoffman -- is preparing programs that will both educate and entertain. Our affiliates will offer their usual incredible programs and NCBJ has created even more networking/socializing opportunities (we listened!). To put it simply, post-October, you will remember more than the Alamo ... you'll remember a conference that was well worth your while. Please contact NCBJ Registration Manager Rebecca Meekma with any additional questions. 

When: Oct. 28–31

Where: Marriott Rivercenter, 101 Bowie St, San Antonio, TX 78205

See you there.
 
Honorable Michael E. Romero
President, NCBJ

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FirstEnergy Strikes Creditor Deal in Subsidiary Bankruptcies

FirstEnergy Corp. has reached a settlement with creditors of its bankrupt power-generation businesses that would simplify its restructuring while extricating the parent company from the chapter 11 case, The Wall Street Journal reports. If approved, the agreement covers potential claims surrounding FirstEnergy’s obligations toward money-losing coal and nuclear power plants in Ohio and Pennsylvania. FirstEnergy said it would try to bring the court-appointed committee of unsecured creditors on board with the settlement terms.
 
The company filed for Chapter 11 recently, asking the United States Department of Energy for a bailout to keep dozens of coal and nuclear power plants in the large PJM Interconnection LLC (PJM) grid region operational, arguing the closure of these plants constitutes a national grid emergency. PJM coordinates the movement of wholesale electricity in Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.
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U.S. Says Bankrupt Tennessee Nursing Home Chain Must Transfer Liability

The U.S. government has objected to a plan by Orianna Health Systems nursing home chain to protect companies that would acquire facilities through its restructuring from successor liability, Reuters reports. Filed on April 9, the motion contends that the ultimate control over the legal issues surrounding the transfer of Medicare provider agreements, not a bankruptcy court — and that Orianna cannot expect a new operator to assume control over the properties without also dealing with its existing liabilities. The Nashville based company, which operates skilled nursing facilities in seven states, with around 4,500 beds and 5,000 employees, initially revealed its bankruptcy plan last month after falling behind on rent payments to landlord Omega Healthcare Investors. 
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Nominations Accepted May 2 for Bankruptcy Judges' Next Generation Program

Please mark your calendars for the "nomination window" for the National Conference of Bankruptcy Judges  Next Generation Program. NextGen is part of the NCBJ's Annual Meeting, which will be held this year in San Antonio, Texas, Oct. 28 to 31. Each year, NextGen provides 40 up-and-coming bankruptcy practitioners with exclusive, substantive programs, including a judicial roundtable, which affords NextGen participants the chance to interact informally with judges in small groups, as well as networking and social events with NextGen alumni. This year, NextGen participants also will have an opportunity to play a meaningful role in at least one of NCBJ's open sessions.
 
Nominations will be accepted on Wednesday, May 2, 2018, from 12– 5 p.m. CDT. Applications will not be accepted before or after this five5-hour time slot. For more information, including qualifications and nomination instructions, please visit the conference webpage
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This Week: 15th Annual Bankruptcy Forum in Gatlinburg

The annual 15th Annual Bankruptcy Forum is just around the corner! This year’s programming will be held at the Hilton Garden Inn in Gatlinburg, allowing you to fill necessary CLE obligations while relaxing in the scenic Great Smoky Mountains. This must-see, must-do event will feature timely topics and expert analysis from judicial panelists and seasoned professionals, guaranteed to help you up your game and stay on top of trends and advancements relevant to your practice. The forum will feature first-rate programming from speakers and producers such as:
 
  • Joel Giddens, Wilson & Associates PLLC, Memphis 
  • Laura Ketcham, Miller Martin PLLC, Chattanooga
  • Michael McCormick, McCalla Raymer Leibert Pierce LLC, Roswell, Georgia
  • Hon. Paul Bonapfel, United States Bankruptcy Court, North District of Georgia, Atlanta 
  • Hon. James Croom, United States Bankruptcy Court for the Western District of Tennessee, Jackson
  • Hon. Randal Mashburn, U.S. Bankruptcy Court, Middle District of Tennessee, Nashville
  • Hon. Shelley Rucker, U.S. Bankruptcy Courts for the Eastern District of Tennessee, Chattanooga 
  • Kara West, Chapter 13 Trustee, Chattanooga
  • Lawrence Ahern III, Brown & Ahern, Nashville 
 
Ten hours of CLE credit are available for this program, including three hours of ethics. Judges, lawmakers and law students that are TBA members may attend programming at no charge, but there is a $75 fee to cover meals and the reception for guests who are not registered for the forum. Here’s the key info:
 
When: Friday, April 27, registration begins at 12 p.m., EDT
 
Where: Hilton Garden Inn Gatlinburg, 635 River Rd, Gatlinburg, TN 37738
 
 
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Toys 'R' Us Founder Dies as Company is Set to Begin Liquidation

In an unlikely sequence of events, the founder of Toys 'R’ Us has passed away just as the beleaguered retailer was set to begin its liquidation, The New York Times reports. Charles Lazarus opened the first Toys R’ Us in 1957 and led the company for several prosperous decades prior to stepping down as chief executive officer in 1994.

Lazarus’s death comes one week after Toys 'R' Us announced that it would start liquidating its stores in the United States. The company filed for bankruptcy last September and announced last Thursday that the company planned to close or sell all of its stores in the United States. That could result in more than 30,000 employees losing their jobs.

“There have been many sad moments for Toys 'R' Us in recent weeks, and none more heartbreaking than today’s news about the passing of our beloved founder, Charles Lazarus,” Toys “R’ Us said in its statement on Thursday afternoon. “We will forever be grateful for his positive energy, passion for the customer and love for children everywhere.” Lazarus was 94.

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Remington Declines to Say if Bankruptcy Will Put Existing Settlement at Risk

Remington, America's oldest gun manufacturer, filed Chapter 11 bankruptcy on Monday, sparking questions on how this will affect an agreement to repair millions of allegedly defective guns that resulted in a lawsuit. The suit began in 2010 when CNBC investigated allegations that for decades Remington covered up a deadly design defect that allows the guns to fire without the trigger being pulled. To this day, Remington denies the allegations and maintains the guns are safe.
 
The company said it was settling the case to avoid protracted litigation. An attorney for Remington refused to say whether the plan by America's oldest gun manufacturer to file for Chapter 11 bankruptcy protection will affect an agreement to repair millions of allegedly defective guns. "It is the company's position not to comment," said John Sherk, attorney for Remington.
 
An attorney representing plaintiffs in the case, J. Robert Ates, says the bankruptcy filing should be of no moment in terms of the class action case, particularly because the suit also named as a defendant E.I. du Pont de Nemours and Company, which owned Remington when the original trigger mechanism was developed. The company, which merged with Dow Chemical last year to form DowDuPont, recorded $24 billion in revenues 2016.
 
Under the proposed settlement - which Remington and plaintiffs have claimed could be worth upwards of $500 million - DuPont would fund only a tiny amount, covering product vouchers being offered to owners of some of the oldest Remington models. DuPont has also continuously maintained that the guns are safe.
 
Neither Remington nor its attorneys have indicated whether the company intends to abide by the agreement considering the bankruptcy filing. While the settlement includes a guarantee that the company will meet its financial obligations under the agreement, it does not address the possibility of a bankruptcy. The settlement is currently under appeal in the Eighth U.S. Circuit Court of Appeals.
 
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