Delaware Business Bankruptcy Report : Delaware Business Bankruptcy Report : Morris James LLP Lawyers & Attorneys

On February 3, 2010, Neenah Enterprises, Inc. and 17 of its affiliates sought chapter 11 bankruptcy protection in Delaware. The case has been assigned to Judge Mary F. Walrath, and has been designated case no. 10-10360.

According to the first day affidavit of Robert E. Ostendorf, Jr., President and CEO of the debtors, the debtors are one of the largest independent foundry companies in the U.S. and are one of the leading suppliers of castings to the domestic municipal products markets.

According to Mr. Ostendorf, reasons for the filing include “dramatic cyclical declines in some of the Company’s most important markets including trucks, railroad, construction, and agricultural equipment.” Additionally, there was a slow down in the orders placed by manufacturers in the residential segment leadings to lower demand for HVAC equipment, and increasing pressure from competitors and customers leading to reduced prices.

Prior to filing the bankruptcy cases, the debtors entered into a lock-up agreement with certain creditor constituencies to support a pre-negotiate plan that contemplates, among other things, according to Mr. Ostendorf, payment in full or reinstatement of the Prepetition Working Capital Lenders, exchange of Secured Notes for 97% of new common stock to be issued by the company, exchange of the Subordinated Notes for 3% of the company’s new common stock on the terms set forth in the Plan Term Sheet. Claims of general unsecured creditors are contemplated to be either reinstated or paid in full. Claims and interests of the company’s existing equity holders will be cancelled and extinguished.

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Today, January 20, 2010, Specialty Packaging Holdings, Inc. and five direct and indirect debtor subsidiaries commenced Chapter 11 bankruptcy proceedings in Delaware. 

According to the declaration of Michael J. Musso, CRO and Interim CEO of the Debtors, the Debtors are collectively an industry leading global developer and manufacturer of color cosmetics. They entered chapter 11 proceedings as a result of “extreme liquidity pressure” occasioned, in part, by “efforts to expand into new market segments, pricing and margin difficulties, lack of expense management, inadequate working capital planning, and initiatives that were not balanced with cash flow requirements.”

Among other matters, the certain of the debtors are seeking expedited consideration of bid procedures in connection with a contemplated sale of certain of the Debtors’ assets.

This case has been assigned to The Honorable Kevin Gross, and has been docketed at Case No. 10-10142.

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W.R. Grace & Co. v. Chakarian, Nos. 3697/3720, 2009 WL 5151089 (3d. Cir. Dec. 31, 2009)

In this joint appeal from decisions of the United States Bankruptcy Court for the District of Delaware and the United States District Court for the District of Delaware, the debtor, W.R. Grace & Co. (“Grace”) appealed an order denying expansion of an injunction under Section 105(a) of the Bankruptcy Code to bar claims brought by claimants (the “Libby Claimants”) against the State of Montana, alleged to arise out of Grace’s operation of a vermiculite mine near Libby, Montana.

On December 31, 2009, the Third Circuit affirmed the Bankruptcy Court and District Court’s refusal to extend the stay to the claims of the Libby Claimants against the State of Montana. In doing so, the Third Circuit found that the Bankruptcy Court properly determined that it did not have “related-to” jurisdiction over the claims.

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On January 15, 2010, California developer, Anaverde LLC, filed for chapter 11 protection in Delaware. In conjunction with the filing, Anaverde also filed a chapter 11 liquidating plan and disclosure statement. In addition, Anaverde is seeking approval of a sale process for its assets.

According to the declaration of John Miles in support of the filing, Anaverde owns a master-planned, partially entitled residential development in Palmdale, California. The project includes approximately 3500 undeveloped lots and an adjacent development known as Chandar is planned for 157 single family homes. Mr. Miles notes that the project is partially graded and has had some landscaping done, but is otherwise incomplete.

 The sub-prime crisis of 2008 is listed as one of the bases for the filing. Notes Mr. Miles: “there is very little market appetite for the homes which were to be built on the project site.”

According to a motion filed with the Bankruptcy Court, Anaverde seeks to sell substantially all of its assets to a stalking horse, New Anaverde LLC, an entity formed by some of Anaverde’s equity investors.

The Honorable Mary F. Walrath has been assigned to the case. The case number is 10-10113-MFW.

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On January 11, 2010, Haights Cross Communications, Inc. and four affiliates filed for chapter 11 protection in the United States Bankruptcy Court for the District of Delaware.  The case was filed as a pre-packaged bankruptcy.  A link to a press release announcing Haights' pre-petition solicitation results is here.

According to a declaration filed in support of the petition, the debtors are leading developers and publishers of products for the Kindergarten through Grade 12 education and public library markets.

The case has been assigned to The Honorable Brendan Linehan Shannon.

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On January 5, 2010, Delaware Bankruptcy Judge Mary F. Walrath confirmed the Second Amended Chapter 11 Plan of Simmons Bedding Company and related debtors.  Confirmation of Simmons' pre-packaged plan clears the way to closing an acquisition of Simmons by certain affiliates of Ares Management LLC and Teachers’ Private Capital, the private investment department of the Ontario Teachers’ Pension Plan.  To view the opinion, please click here.

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On January 4, 2010, International Aluminum Corporation (IAC) and 11 affiliates filed for protection under Chapter 11 of the Bankruptcy Code in Delaware. According to the supporting declaration filed by Jeffrey B. Park, CFO of certain of the debtors, IAC is an integrated manufacturer of quality aluminum and vinyl products for use in commercial and residential applications.

The Park declaration notes that the bankruptcy cases were commenced primarily because of the decline in the commercial and residential construction activity in the U.S.

According to the Park declaration, the Debtors, and certain “Required Supporting Holders” entered into a restructuring support agreement on December 31, 2009. In accordance with the restructuring support agreement, the Debtors filed their bankruptcy cases and a Plan and accompanying Disclosure Statement on January 4, 2010. The proposed plan – if confirmed – provides for payment in full of general unsecured claims. 

The case has been assigned to the Honorable Mary F. Walrath, and the main case number is 10-10003.

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Morris James was named Delaware's 5th Top Workplace in The News Journal’s Best in the Business survey for mid-sized companies.  This honor makes Morris James the highest-ranking law firm in the State within the "mid-sized company" category.

The survey, conducted for The News Journal by WorkplaceDynamics, measured factors such as management, environment, compensation and communication.

To view a copy of the Morris James article, please click here.

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The publishers of Chambers USA: America’s Leading Lawyers for Business today launched the 2009 Client’s Guide. Morris James partners, Stephen M. Miller and Carl N. (“Chuck”) Kunz, III, have been recognized by Chambers this year in the area of Bankruptcy/Restructuring. Mr. Miller appears in Chambers for the 5th time. Mr. Kunz appears for the second consecutive year. 

In its description of the Morris James Bankruptcy and Creditors’ Rights Group, Chambers notes: “This firm has a solid reputation for creditor-side work, and also draws admiration for its work on smaller liquidation matters. The pragmatic Stephen Miller is praised for his success in interested-party work and his proficiency in both debtor and creditor matters. Carl Kunz is regarded as ‘a good, bright negotiator’ by clients, who appreciate his calm demeanor and ability to ‘keep the volume down when there is acrimony.'"

Chambers ranks law firms and attorneys in particular areas of law based upon the results of tens of thousands of interviews conducted during a six-month period. The qualities assessed during the interviews are those most valued by the client: technical legal ability, professional conduct, client service, commercial awareness, diligence, and commitment.

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