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- Boxed, Inc. in Bankruptcy After Failing to Find a Buyer, Now Seeks a Private Sale of its Spresso Business In re Boxed, Inc., No. 23-10397 (Bankr. D. Del.) New York based e-commerce and software company, Boxed, Inc., filed for bankruptcy after failing to generate needed capital in a 2021 SPAC. Boxed, Inc. tried to sell its e-commerce retail business and its software and service business either together or separately in 2022, but despite an extensive process could not find a buyer. Boxed, Inc. now hopes to sell its software company via a private sale in bankruptcy and wind down the e-commerce business.... More
- Sale Procedures for 363 Sale of Compute North Partially Approved With Timing of Sale to Be Addressed at Supplemental Hearing In re Compute North Holdings, Inc., No. 22-90273 (Bankr. S.D. Tex.) The bankruptcy court approved a portion of proposed bid procedures for the sale of Compute North. Debtors sought an expedited sale timeline, with bids due by October 27, 2022, but the Compute North UCC objected. The parties agreed the sale timeline would be addressed at an October 21 hearing. Compute North contractual counterparties objected, seeking favorable carveouts and clarifications in the approved sale procedure, which were also pushed to the October 21... More
- Cryptocurrency Mining Data Center Files for Chapter 11 Amid Crypto-Recession In re Compute North Holdings, Inc., No. 22-90273 (Bankr. S.D. Tex.) Compute North Holdings, Inc., a large data center with a focus on cryptocurrency mining, files for Chapter 11 protection amidst an atrocious business environment for all things crypto. Compute North was pushed into bankruptcy after its relationship with one of its primary lenders broke down. Debtors’ plan to sell all its assets quickly may be a challenge for unsecured creditors. The Filing: Compute North Holdings, Inc. and related entities, a data center company... More
- Bankrupt Cryptocurrency Debtor Seeks Sale of Stablecoins Bankrupt cryptocurrency lender Celsius Network LLC recently sought permission to sell some of its “stablecoin” for U.S. dollars to continue operations through its Chapter 11. Celsius requires court approval for the sale pursuant to an earlier order requiring court authorization to convert its cryptocurrency to cash. According to Celsius, the sale of its stablecoins would pose no risk to creditors due to the relative stability provided by stablecoins versus traditional cryptocurrencies. Stablecoins are fiat-pegged cryptocurrency meant to track government issued... More
- There’s No Insolvency Exception to a Shareholder Vote Requirement to Transfer a Corporation’s Assets in Delaware In a recent Delaware Supreme Court decision, the Court held that there is no “insolvency exception” to the requirement in Section 271 of the DGCL that a transfer of all or substantially all of a corporation’s assets foreclosure transfer be approved by the corporation’s shareholders. The Delaware Supreme Court overruled a decision by the Delaware Chancery Court that used Section 271—which requires a shareholder vote when a corporation sells all or substantially all of its assets—to interpret a Class Vote Provision... More
- SDNY Changes Its Judge Assignment Rules For Major Chapter 11 Cases On November 22, 2021, the United States Bankruptcy Court for the Southern District of New York announced a modification to its judge-assignment scheme for “mega chapter 11 cases.” Under the new Local Bankruptcy Rule 1073-1(f), which took effect on December 1, 2021, mega chapter 11 cases will be randomly assigned among each of the district’s nine Bankruptcy judges irrespective of the courthouse in which the case is filed. A case will be considered a “mega” case if either the assets or liabilities... More
- Discharging Student Loan Debt: The ABA Takes a Stand The House of Delegates for the American Bar Association recently passed Resolution 512 urging Congress to amend the Bankruptcy Code to permit student loans to be discharged in bankruptcy without proving “undue hardship” as is currently required. The resolution was co-sponsored by the Young Lawyers Division, the Law Student Division and the Standing Committee on Paralegals. The Young Lawyers Division submitted a report in support of the resolution (the “YLD Report”) which discussed the history of student loans and borrowers’... More
- Discharging Student Loan Debt – Private Loans Are Not Always Exempt Student loans are a big issue in the United States. According to the most recent data by the Federal Reserve Bank of New York, there is currently $1.57 trillion in outstanding student debt, up from just $0.26 trillion 17 years ago.[1] Before the CARES Act suspended payments and interest accruals from August 2020-January 2022, student debt holders were also the most likely borrowers to be 90+ days delinquent, hovering around 11% from 2012 – 2019. Current bankruptcy law makes the... More
- Recovering a Fraudulent Transfer? A Slot Machine License Is No Safe Bet. Philadelphia Entertainment and Development Partners LP, the bankrupt limited partnership that did business as Foxwoods Casino Philadelphia (“Foxwoods”), will not be able to recover the $50 million it paid to the Pennsylvania Gaming Control Board for a slot machine license. Foxwoods planned to open a sizable slot machine facility in Philadelphia and paid for the license in 2007 before its location was final. Neighborhood opposition forced substantial delays and when Foxwoods missed a series of deadlines the Board revoked the... More
- Car Club Seeks Chapter 11 Protection Despite Growing Membership in “Defensive Move” Despite a relatively strong 2020, New York Classic Motors, LLC, a unit of Classic Car Club Manhattan, filed for chapter 11 protection on April 9, 2021. Classic Car Club Manhattan is a private club where members can drive an impressive fleet of luxury vehicles both new and restored classics. Members are also entitled to attend a calendar of events and access the private clubhouse on the Hudson River. The clubhouse is located at Pier 76, 408 12th Avenue, near the... More