Chapter 11s Filed 10/26, Distressed Asset Sales Going on Right Now & Other Random Stuff

Anecdotal evidence suggests to me that Chapter 11 filings are finally ticking upwards in terms of frequency.

Newest Filings

Grupo Posadas, a hospitality company that owns, leases, and operates hotels, resorts and villas in Mexico under various brands, filed chapter 11 in the Southern District of New York today.

According to Posadas’ pleadings, it has interests in 181 separate hotel properties encompassing more than 28,500 rooms. The case is a classic prepack, so it should be in and out of chapter 11 pretty fast, with no need for a creditors’ committee. Cleary Gottlieb represents the Debtors.

While other factors are surely at play, the timing of this one- like the timing of most restructurings in the travel, hospitality, and movie theater industries- was also surely impacted by the unknowns of COVID.?As I’ve told many clients in the past year, until the music stops (i.e., until decision-makers are fairly confident that the post-COVID value of a business is and will remain fairly stable), it will be very difficult to reach a deal.

Turning West, today also saw the chapter 11 filing of Crestlloyd, LLC in Los Angeles by Levene, Neale, Bender, Yoo & Golubchik. Crestlloyd’s primary asset is residential real property it developed at 944 Airole Way in Los Angeles. Check it out if you’re in the market for a 20 bedroom, 30 bath, 105,000 square foot “glass and marble compound”

And, anecdotally speaking, I expect to file a chapter 11 tomorrow. That will make four new cases in just a few months. Not a lot for a big firm but for a firm of our size, it’s a lot. And it's four more than the first six or more months of 2021.

Speaking of 363 Sales & Other Distressed Acquisition Opportunities

Ravinia Capital LLC, the Chicago-based investment bank, is marketing Cycle Force Group LLC in a Chapter 11 363 sale process. The preliminary bid deadline is November 30th, and the auction is set for December 13th. Based in Ames, Iowa, Cycle Force is an importer and distributor of bicycles, parts, and accessories with sales into multi-channels throughout North America. The investment banker is Ravinia Capital LLC. More information here on DailyDAC.

Mannion Auctions is running the sale process in connection with a Lake Forest, IL shopping plaza. The asset being sold is 100% LLC interest in the owner of Deerpath Plaza, a/k/a 225 E. Deerpath, Lake Forest, IL 60045. One has to become a qualified bidder prior to the November 17th auction date. More information here on DailyDAC.

Auction Advisors is running the sale process of limited liability company membership interests in the developer of Bank Street Village (f/k/a City Line at Hightstown). It’s a large-scale property development consisting of 343 apartment units in three buildings, 43 townhouses, parking structures, related amenities, appurtenant structures, and improvements. The auction is going to be held on November 9th and deposits are due November 8th. More information here on DailyDAC.

Deal Finding Tools

If you have a need to know about companies that may go out of business, that are already in bankruptcy, receivership, or assignment, whose assets are being sold in Article 9, check this out DailyDAC. The deal-finding tools DailyDAC offers, give you all this and also:

Bulk Sales. For example:

Assisted Coastal Living. Assisted Living Center.?Bulk Sale.?The name and business addresses of the seller are: Ali Hamidi, 25011 Monte Verde Drive, Laguna Niguel, CA 92677, doing business as Assisted Coastal Living. The name and business address of the buyer is Chet Khay, 32531 Del Zura, San Juan Capistrano, CA 92675. The bulk sale is scheduled for November 8th. More info: Glen Oaks Escrow @?(661) 362-0400. Deal ID: 31042.

Rating Agency Alerts. For example:

Warpspeed Taxi, Inc. Ride-sharing app developer.?Rating Agency Alerts/Other Signs of Distress. A going concern opinion was filed for Warpspeed Taxi, Inc., a ride-sharing app developer based in Las Vegas, Nevada. The company has reportedly incurred losses since its inception. Further losses are anticipated and as a result, there is substantial doubt about the company's ability to continue as a going concern. Deal ID: 31051.

Mass Layoffs. For example:

The Woodlands Enterprises LLC. Security services company.?Mass Layoffs. The Woodlands Enterprises LLC has eliminated 181 positions in Montgomery, Texas. Deal ID: 31055.

Facility Closings. For example:

Acco Brands USA LLC. Warehouse operator. Plant/Facility Closing. Acco Brands USA, LLC will close its warehouse facility in Ogdensburg, New York. Deal ID: 30948.

These are just examples of the categories of information DailyDAC offers. Check it out.

Subchapter V of Chapter 11: A User’s Guide

If you are a lender thinking about foreclosing on a company’s assets, or a business owner thinking of agreeing to an assignment for the benefit of creditors or a friendly foreclosure, think again. And say hello to your little friend: Subchapter V of chapter 11. It’s chapter 11 but better and cheaper. Co-authoring this with three of my partners- Christopher M. Cahill, Mark Melickian, Jack O'Connor and Hajar Jouglaf- was a ton of fun. Check it out, and if you have questions, let me know!

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