September 2022

Corvette parts supplier Erin Industries files for bankruptcy

Founded in 1975, the company “had a long history of profitability” that reversed as the result of a “disaster” deal with Nova Steel USA Inc., Steven Atwell, owner and president of Erin Industries, told Crain’s.

Now the company is hoping for debt relief and leverage to restructure unfavorable contracts by filing for Subchapter V of Chapter 11 bankruptcy protection — an option designed for smaller businesses that became available in 2020.

“We’re going to be able to work through this, and I think we’re going to survive. … I know we’re going to survive,” Atwell said. “Chapter 11 gives us some leverage to renew our contracts and try to get some of these (price) increases through.”

Erin Industries is the latest in a string of recent bankruptcies in Michigan, where financial woes are piling up on manufacturers and the weight of the pressure is falling on smaller companies. Machine shops and lower tier suppliers are increasingly turning to Subchapter V — a cheaper way to go bankrupt, as it were — to keep the lights on.

Atwell said most of his customers, which include major automakers and suppliers, offered price increases on steel, but not on other inputs, such as

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September 28, 2022 by ATTORNEY

Endorsement: Hydee Feldstein Soto for Los Angeles city attorney

For their next city attorney, Los Angeles voters will choose between two outsiders with very different legal backgrounds and different ideas of how to serve as the city’s lawyer.

Neither Faisal Gill, who took the lead in the June primary, nor second-place finisher Hydee Feldstein Soto have worked in City Hall or held political office in Los Angeles. That’s somewhat unusual. The city attorney’s office has often been seen by politicians as another rung on the ladder to higher office, including mayor, even though it’s an underappreciated and often-misunderstood position.

In the primary, we recommended Feldstein Soto as the best candidate because she would bring deep legal expertise and independence to the job. And we still think she is the right choice in the Nov. 8 general election.

Feldstein Soto was a partner in corporate law firms with specialties in bankruptcy and acquisitions. It was complex work that required collaboration and problem-solving to finalize deals, which is good training for city government. She managed teams of lawyers with different specialties, much like the city attorney’s office of 500-plus lawyers.

Unlike the county’s district attorney, which is primarily a prosecutorial role, the city attorney wears many hats that require

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September 27, 2022 by ATTORNEY

Infowars lawyer, manager barred from bankruptcy case over conflicts

Alex Jones attempts to answer questions about his emails asked by Mark Bankston, lawyer for Neil Heslin and Scarlett Lewis, during trial at the Travis County Courthouse, Austin, Texas, U.S., August 3, 2022. Briana Sanchez/Pool via REUTERS

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(Reuters) – A U.S. bankruptcy judge on Tuesday blocked a restructuring executive and an attorney from working for Infowars’ bankrupt parent company over a conflict of interest, potentially throwing the bankruptcy case and the company’s daily operations into disarray.

U.S. Bankruptcy Judge Christopher Lopez in Houston found that Marc Schwartz, chief restructuring officer of Infowars parent Free Speech Systems LLC, and attorney Kyung Lee failed to disclose that they sought work from Free Speech Systems before the conclusion of earlier Infowars bankruptcies.

The judge raised the conflicts issue because he presided over the earlier Infowars bankruptcies and was concerned about the apparent overlap of work. The judge said the two men showed a “lack of candor” regarding the overlap and other matters. The judge also said the problem was compounded by Schwartz’s tendency to defer to Alex Jones and his other companies instead of advocating on behalf of FSS alone.

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September 26, 2022 by ATTORNEY

Lawyers for Celsius investors file motion to have interests represented in court

An international law firm representing groups of Celsius investors has filed a motion to appoint a committee to represent their interests in the crypto lending firm’s bankruptcy case.

In a Thursday filing with the U.S. Bankruptcy Court in the Southern District of New York, lawyers with the law firm Milbank requested the appointment of an “Official Preferred Equity Committee” to represent certain Celsius shareholders. According to the filing, the equity holders “urgently require their own fiduciary” for representation in court alongside Celsius debtors and an Unsecured Creditors Committee, or UCC.

“The need for a fiduciary to pursue the Equity Holders’ interests is particularly critical when one considers the practical realities of these cases: There are only two groups of real economic stakeholders — the retail customers and the Equity Holders,” said the court filing. “Not only is the UCC laser focused on maximizing value for the customers, without regard for the Equity Holders, but the Debtors also have made it abundantly clear that the UCC is their partner, and these cases are ‘all about the customer.’”

The legal team added:

“An estate fiduciary is needed to take the other side of this dispute before a plan of reorganization is

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September 25, 2022 by ATTORNEY

Executive bonuses at opioid firm Endo were ‘excessive’ and ‘secret’ before bankruptcy, state AGs say

Seven state attorneys general and a court-appointed bankruptcy federal watchdog are opposing up to $94 million in pre-bankruptcy bonuses paid to top executives and other insiders at opioid drug firm Endo International in Chester County, court documents show.

The bonuses to the highest executives were doled out in “secret” and drain financial resources of the money-losing Endo available for victims of the Malvern company’s addictive pills, according to state attorneys general who filed their objections as a committee on Wednesday in New York.

Pennsylvania Attorney General Josh Shapiro is one of the seven whose court filing called the top executive pre-bankruptcy bonuses “excessive.”

Endo, facing mounds of litigation over its alleged role in the national opioid crisis, filed for bankruptcy protection on Aug. 16. The Inquirer first reported on the bonuses days later.

U.S. Trustee William Harrington, the watchdog, said in a separate court filing earlier this month that Endo paid $94 million in bonuses to top executives and other insiders in the months prior to the bankruptcy filing, while Endo’s restructuring plan leaves only $27.4 million initially for individual opioid victims who are not state entities.

Endo has “provided virtually no information, much less sufficient information” to evaluate the

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September 24, 2022 by ATTORNEY
September 2022
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