Bittrex bankrupt

BY Richard Summerfield

Cryptocurrency exchange Bittrex Inc has filed for Chapter 11 in the US Bankruptcy Court for the District of Delaware, just weeks after the company was accused of operating an unregistered securities exchange by the US Securities and Exchange Commission (SEC).

At the end of April, Seattle-based Bittrex halted its US operations and noted that its international customers, which are served by its global platform based in Liechtenstein, would not be impacted by its US bankruptcy. Bittrex, which was founded in 2014, said it has more than 100,000 US-based creditors. Its estimated liabilities are between $500m and $1bn, according to the court filing. The US Treasury’s Office of Foreign Assets Control (OFAC) emerged as the company’s largest creditor, with a substantial claim exceeding $24m.

In mid-April, the SEC sued Bittrex on allegations it operated a national securities exchange, broker and clearing agency. The SEC also sued former Bittrex chief executive Bill Shihara and Bittrex Global. Oliver Linch, chief executive of Bittrex Global. said last month that the exchange intended to fight the charges in court, but a bankruptcy proceeding may make this more difficult.

“Having previously announced that Bittrex, Inc. would be ceasing all operations in the U.S. effective April 30th, we have now made the decision to file Chapter 11 bankruptcy in federal court in Delaware,” said Bittrex in a statement announcing the bankruptcy filing. “This announcement does not impact Bittrex Global, which will continue operations as normal for its customers outside the U.S.

“For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole. While the Bankruptcy Court will ultimately decide the method by which those funds can be claimed by and distributed to our customers, we intend to ask the court to activate those accounts as soon as possible so that customers meeting the necessary regulatory requirements will be able to withdraw them,” he added.

In filings made at the Delaware Court, Evan Hengel, the co-chief restructuring officer of Bittrex, said that customers would get a “100 percent like-kind cryptocurrency distribution” under its liquidation plan, enabling them to access the Bittrex platform and withdraw their funds.

News: Crypto exchange Bittrex files for bankruptcy after SEC complaint

Lannett Company files for Chapter 11 bankruptcy

BY Richard Summerfield

Generic drug manufacturer Lannett Company has filed for a prepackaged Chapter 11 bankruptcy in the US Bankruptcy Court for the District of Delaware.

On 1 May, the company announced it had agreed to a restructuring support agreement (RSA) with holders of more than 80 percent of its 7.750 percent senior secured notes and 100 percent of the lenders party to the company’s second lien credit and guaranty agreement. The RSA will see the company seeking to significantly improve its financial position by eliminating approximately $597m of funded debt, including $511m of secured debt, through conversion of the secured debt into equity in the newly reorganised company.

Lannett, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications.

“The significant support of our debtholders and other stakeholders demonstrates their confidence in the Company’s business plan and Lannett’s long-term strategy,” said Tim Crew, chief executive of Lannett. “Commencing our Chapter 11 cases is an important step toward strengthening our financial position, and we intend to move through this process quickly and without disruption for our customers and partners. We believe that implementing these transactions will enable us to continue manufacturing and producing safe, life-enhancing, and affordable generic pharmaceutical medicines.”

The company expects to continue to operate throughout the Chapter 11 process. The RSA and the prepackaged plan provide for vendors, employees and other partners to be paid in the ordinary course of business for obligations incurred prior to and after the commencement of the Chapter 11 cases. Lannett said it had sufficient liquidity to operate its businesses, including the payment of all such obligations. It expects to move through the process seamlessly, emerging as a stronger company better able to build for the future.

In April, Lannett was removed from the New York Stock Exchange (NYSE) after it fell below the continued listing standard requiring listed companies to maintain an average global market capitalisation of at least $15m over a consecutive 30-trading day period.

In December 2022, Lannett announced plans to close two research and development centres in Philadelphia, as well as eliminate 64 jobs, about 11 percent of its workforce. In a filing to the Pennsylvania Department of Labor and Industry, the company said these decisions were made in order “to streamline and realign our operations to ensure the continued progression of our existing pipeline and future growth”. The company said the facilities would be closed by 30 June 2023.

News: Generic Drugmaker Lannett Files for Chapter 11 Bankruptcy

Cineworld files bankruptcy exit plan

BY Richard Summerfield

Cineworld, the London-listed cinema chain, which filed for bankruptcy protection in the US in autumn 2022, has filed a reorganisation plan with a Texas bankruptcy court which will effectively wipe out its existing shareholdings.

The filing with the US Bankruptcy Court for the Southern District of Texas, Houston Division formalises a deal that was first outlined on 3 April, which intends to cut the company’s debt by about $4.53bn and raise $2.26bn in funds to emerge from bankruptcy. The plan does not provide for any recovery for its existing shareholders, the group said.

Cineworld is “seeking to confirm the plan on an expeditious timeline” and reiterated its expectation that it can emerge from the Chapter 11 bankruptcy strictures “during the first half of 2023”. The plan is subject to court approval and Cineworld acknowledges that court approval depends on certain creditor approvals.

“This agreement with our lenders represents a ‘vote-of-confidence’ in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment,” said Mooky Greidinger, chief executive of Cineworld. “With a growing slate of blockbusters and audiences returning to cinemas in increasing numbers, Cineworld is poised to continue offering moviegoers the most immersive cinema experiences and maintain its position as the ‘Best Place to Watch a Movie’.”

In a filing, Cineworld said that its proposal to the court is supported by lenders holding and controlling approximately 83 percent of the group’s term loans due 2025 and 2026 and revolving credit facility due 2023, and approximately 69 percent of the debtors’ outstanding indebtedness under the debtor-in-possession financing facility previously agreed with the court.

Cineworld last week dropped plans to sell its businesses in the US, the UK and Ireland after failing to attract a suitable buyer. The company is seeking to continue to operate its global business and cinemas as usual without interruption. However, the company will “continue to consider the proposals that were received in respect of its ‘rest of the world’ business”.

Cineworld, the second largest cinema operator in the world, also operates the Regal, Cinema City, Picturehouse and Planet cinema brands.

News: Cineworld Expects Exit From Chapter 11 in Next Three Months, Files Formal Reorganization Plan

Virgin Orbit comes back down to earth

BY Richard Summerfield

Virgin Orbit Holdings, Inc. and its US subsidiaries, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court in the District of Delaware. The company, which is 75 percent owned by Virgin Group, has filed for bankruptcy in order to seek a sale of its assets.

Virgin Investments, one of Virgin Orbit’s sister companies, will inject $31.6m into the satellite launcher to help it stay afloat while the business searches for a new owner. Virgin Orbit said it planned to pay its suppliers and vendors “to the fullest extent possible” and was committed to working with customers to try to find a buyer “able to continue to fulfil their needs”.

“The team at Virgin Orbit has developed and brought into operation a new and innovative method of launching satellites into orbit, introducing new technology and managing great challenges and great risks along the way as we proved the system and performed several successful space flights – including successfully launching 33 satellites into their precise orbit,” said Dan Hart, chief executive of Virgin Orbit. “While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business. We believe that the cutting-edge launch technology that this team has created will have wide appeal to buyers as we continue in the process to sell the Company. At this stage, we believe that the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale.

“I’m incredibly grateful and proud of every one of our teammates, both for the pioneering spirit of innovation they’ve embodied and for their patience and professionalism as we’ve managed through this difficult time,” he continued. “Today my thoughts and concerns are with the many talented teammates and friends now finding their way forward who have been committed to the mission and promise of all that Virgin Orbit represents. I am confident of what we have built and hopeful to achieve a transaction that positions our Company and our technology for future opportunities and missions.”

In late March, the company announced it was laying off 85 percent of its 750 staff and ceasing operations for the foreseeable future as it was unable to raise sufficient out-of-court capital to continue operating its business. The company aborted the UK’s first satellite launch from Cornwall in January, blaming an “anomaly”.

News: Virgin Orbit: Richard Branson's rocket firm files for bankruptcy

Mountain Express files for Chapter 11 bankruptcy protection

BY Richard Summerfield

Mountain Express Oil Company and certain other affiliated companies have filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of Texas.

According to the company’s court filing, Mountain Express’ retail network will continue normal operations. The company will use cash collateral to fund and protect its operations if the court rules in its favour, alongside normalising operating cash flows to reach “value-maximising”.

Mountain Express has also confirmed in a press release, that it was in advanced discussions with its secured lenders regarding a commitment of debtor-in-possession financing, which will provide additional liquidity to the company and assure its ability to meet its post-petition obligations in the ordinary course of business. Mountain Express will continue discussions with its financial stakeholders, including critical conversations with its landlords and other key constituents to maximise value for all stakeholders.

“Through this process, Mountain Express will continue to transform the business for the future while bolstering our financial position,” said Turjo Wadud, chief executive of Mountain Express. “I am confident in the strength of our business and our team and look forward to achieving a comprehensive resolution that will best position Mountain Express for long-term success. We continue to have a robust pipeline and will continue to provide opportunities for our dealers, partners, and employees. During this process, we intend to maintain the underlying durability of our business as well as our strong relationships in the industry.”

Mountain Express, which was founded in 2000, currently operates a network consisting of 828 fuelling sites and 27 travel centres throughout 27 states in the US. Its associations include partnerships with major firms such as ExxonMobil, BP, Shell, Chevron, Texaco and Sunoco. The company also has a dealer joint venture with Pilot Co., Knoxville, Tennessee Since 2013, Mountain Express has distributed more than 1.1 billion gallons of fuel, it said.

In 2021, Mountain Express completed a $205m debt financing, which the company said it will use to refinance its existing credit facilities and to support its growth objectives. Later in the year it acquired Brothers Food Mart in New Orleans, which had 50 locations. It also acquired 24 retail locations and the wholesale fuel assets of Texon Oil Inc. in Medford, New Jersey. And in 2022, Mountain Express purchased the 26-unit The Store brand of convenience stores from Team Schierl Cos.

News: Mountain Express Oil to Restructure Following Chapter 11 Filing