Category Archives: Bankruptcy

Oct. 21, 2020 23:09 UTC

PHILADELPHIA--(BUSINESS WIRE)-- In response to the pharmaceutical giant Mallinckrodt Pharmaceuticalsbankruptcy filing last week, Delaware Valley Health Care Coalition, Inc. (DVHCC) President John Heenan said, Its crucial for our members to have a seat at the table for the bankruptcy proceedings.

The DVHCC is a non-profit voluntary association comprised of multi-employer trust funds, governmental entities, labor unions, schools and school districts in over fourteen states and the District of Columbia.

Three of DVHCCs members have sued Mallinckrodt for their pricing scheme of the drug H.P. Acthar Gel. The drug cost just $40 a vial in 2001 and today costs $46,000 per vial.

H.P. Acthar Gel is a hormone used to treat conditions such as multiple sclerosis. It can reduce the symptoms but it is not a cure for these conditions.

Last week, Mallinckrodt filed for bankruptcy putting a stay on the current lawsuits in an attempt to avoid liability for its pricing scheme. Henry Donner, DVHCC Counsel said, We are asking the Bankruptcy Trustee to include a representative from our litigation on the bankruptcy committee which will decide, among other things, how unsecured creditors are paid.

Among the DVHCC members who have sued Mallinckrodt and are owed hundreds of millions of dollars are the Steamfitters Local 420, Operating Engineers Local 542 and Plumbers Local 322.

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Pharmaceutical Giant Mallinckrodt Bankruptcy Threatens Lawsuit Filed by Local Unions and Delaware Valley Health Care Coalition, Worth Hundreds of...

I love NABT and its members, and am deeply committed to making our organization even stronger and healthier in the next year, building on the great success of my predecessor presidents."

ATLANTA (PRWEB) October 24, 2020

The National Association of Bankruptcy Trustees (NABT) welcomed its newly inaugurated President, Neville Reid, during the 2020 Virtual Annual Conference. Mr. Reid will continue his efforts with his fellow board members in guiding NABT to a successful future.

Echoing his opening remarks from the annual conference, Neville commented: I love NABT and its members, and am deeply committed to making our organization even stronger and healthier in the next year, building on the great success of my predecessor presidents. In addition to continuing to fight for our well-deserved raise, I will diligently seek to expand member participation in committees and NABT initiatives at all levels, whether we get the raise or not, so that members continue to perceive and experience increased value to their investment in NABT. I am grateful for the eagerness of the respective NABT committee chairpersons to join me in achieving that goal of perpetuating NABT well into the future.

Neville is a 1984 magna cum laude graduate of Harvard College and 1987 graduate of Harvard Law School. As a veteran bankruptcy trustee for 26 years, he has acquired extensive experience either serving as a trustee or receiver, or representing receivers and trustees, in numerous cases of all sizes and complexity. His most recent representation of the chapter 7 trustee in the bankruptcy case of Johnson Publishing Company (N.D. Ill., Case No. 19-10236), in which he led the legal negotiation and structuring of a highly publicized auction of a rare collection of 4 million iconic media items of African American history from the past 70 years, enabled the estate to realize $30 million for creditors and ensured that the collection will be safely on display in public museums. Neville has been an active member of NABT for nearly 10 years, and a member of its board for 6 years, and his accomplishments include representing NABT as an amicus in the seminal appellate case In re Rowe, 750 F.3d 392 (4th Cir. 2014), an opinion which is cited by trustees across the country for the proposition that the trustee Section 326 fee is to be treated as a commission.

Neville also represents investors, secured and unsecured creditors and debtors in workouts and restructurings both inside and outside of bankruptcy court, giving him a broad command of insolvency laws that significantly augments his skills and effectiveness as a trustee. The NABT Board of Directors is currently comprised of esteemed members of the chapter 7 Trustee panel and professionals with which they work.

Elected positions for chapter 11 and subchapter V Trustees is expected during the next election, following their new membership status. 2020/2021 Officers include:

The complete list of the Board of Directors can be found at https://nabt.com. For any questions regarding NABT or the newly appointed board of directors, please contact Jennifer Brinkley at (678) 269-6566 or jbrinkley@nabt.com.

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National Association of Bankruptcy Trustees Announces 2020/2021 Board of Directors - PR Web

House Bill 7370 has gained additional support since we last reported on the Protecting Employees and Retirees in Business Bankruptcies Act of 2020 (PERBBA) and related Senate Bill 4089. Support for the bill now totals twenty-eight Democrat sponsors and co-sponsors. On September 29, 2020, House Bill 7370 advanced from the House Committee on the Judiciary to the full House for consideration, with a 20-10 committee vote along party lines.

If enacted as proposed, PERBBA would make significant changes to the bankruptcy process by, among other things, giving higher priority to claims related to worker compensation and benefits, allowing secured loans to be surcharged to pay employees, making it more difficult to reject collective bargaining agreements, and heightening the standard for allowing executive bonuses in bankruptcy.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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U.S. House Bill Expanding Worker Protections and Limiting Executive Pay in Bankruptcy Gains Support - JD Supra

Photo courtesy of Le Pain Quotidien

The pandemic hasnt been good to the restaurant industry and the result has affected a wide range of concepts, from child-focused chains such as Chuck E. Cheese to urban bakery/caf concepts like Le Pain Quotidien.

But most them have something in common: They were not necessarily prepared for the financial onslaught that started in March. Many either had too much debt or were in decline going into it.

All told, 17 restaurant chains and one large-scale operator have sought debt protection since the outset of the pandemic. All but one of which has filed for Chapter 11:

The venerable steakhouse chain declared bankruptcy this month, saying that it needs to renegotiate leases and cut back on debt. But its unit count has declined by 19% over the past five years. The pandemic was particularly tough on the chain given that 40% of sales come from its popular salad bar, which is difficult to replicate on a takeout basis.

The parent company of the U.S. operations of the bakery concept declared bankruptcy earlier this month. It has about $73 million in secured debt, plus a $6.7 million Paycheck Protection Program loan received in April. Aurify Brands bought the debt and has an initial offer to buy the chain.

The North Carolina-based cafeteria chain declared bankruptcy this month after closing nine of its locations. The 73-year-old chain, which went into the pandemic with 28 locations, is looking for a buyer.

The Portland, Ore.-based gourmet doughnut concept shut down its eight locations and is shifting to a wholesale operation.

The Centennial, Colo.-based fast-casual franchise has 25 locations, all but four operated by franchisees. It was struggling last year with $22.5 million in negative retained earnings and hired a restructuring adviser in February. Sales declines from the pandemic gave it little choice but to seek debt protection.

The high-end chain put seven of its 16 locations into bankruptcy in August as part of what was described as a chess match to keep a creditor from taking control of company.

The 12-unit casual dining operator has units in the D.C.-Maryland area as well as Texas and Florida and declared bankruptcy to reorganize the business and close locations.

Another well-known brand name declared bankruptcy in July. It wanted to close some of its 200 locations and cut down on its $400 million in debt.

The nine-unit upscale Mediterranean chain filed for bankruptcy in July. It has been plagued by lawsuits and other challenges dating back to 2015.

NPC International

The lone franchisee on this list, NPC International, is a big one. The largest operator of Pizza Hut and Wendys locations declared bankruptcy in July and is selling itself in total or in parts. The company has $900 million in debt and has been considered a bankruptcy risk even before the pandemic. NPC is shutting down 300 Pizza Hut locations.

The Texas-based burger chain filed Chapter 11 proceedings for several of its restaurants, hoping that doing so would enable the company to help keep the company afloat.

The biggest restaurant chain to end up in bankruptcy is Chuck E. Cheese, which has $1 billion in debt and ended up in bankruptcy court amid lawsuits from landlords. The company recently received a $200 million lifeline and wants to destroy some $7 billion worth of paper tickets.

The parent chain of HopCat brewpub filed for bankruptcy in June, blaming the impact of the pandemic on sales at beer-focused restaurants.

The fast-casual chain filed for bankruptcy in May. Aurify Brands bought the chain for $3 million and will reopen 35 of its 98 locations.

The lone restaurant chain on this list to actually shut down operations, Garden Fresh decided that a world with limited buffet service was not a workable option. The company filed for Chapter 7, shutting down all of its 97 locations.

The parent company of Bamboo Sushi and QuickFish filed for bankruptcy in May, when it had 10 locations.

The 28-unit New York-style deli concept filed in April, blaming the shutdown for taking a profitable concept and making it unprofitable.

The first U.S. restaurant company to end up in bankruptcy after the pandemic, the owner of Bravo Fresh Italian and Brio Italian Mediterranean ultimately sold to Robert Earl, who bought up 45 of its 92 locations. The price: $50,000 in cash plus $29 million in forgiven credit and assumed liabilities.

The German chain was the first concept to file for bankruptcy after the pandemic began back in April, though it had financial problems long before then. The concept operated six units in the U.S.

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These restaurant companies filed for bankruptcy during the pandemic - Restaurant Business Online

Laura Ungar| Laura Ungar

Matthew Fentress was just 25 when he passed out while stuffing cannolis as a cook for a senior living community six years ago. Doctors diagnosed him with viral cardiomyopathy, heart disease that developed after a bout of the flu.

Three years later, the Kentucky man's condition had worsened, and doctors placed him in a medically induced coma and inserted a pacemaker and defibrillator. Despite having insurance, he couldn't pay what he owed the hospital. So Baptist Health Louisville sued him and he wound up declaring bankruptcy in his 20s. "The curse of being sick in America is a lifetime of debt, which means you live a less-than-opportune life," said Fentress, who still works for the senior facility, providing an essential service throughout the coronavirus pandemic. "The biggest crime you can commit in America is being sick."

Financial fears reignited this year when his cardiologist suggested he undergo an ablation procedure to restore a normal heart rhythm. He said hospital officials assured him he wouldn't be on the hook for more than $7,000, a huge stretch on his $30,000 annual salary. But if the procedure could curb the frequent extra heartbeats that filled him with anxiety, he figured the price was worth it. He had the outpatient procedure in late January and it went well. Afterward, "I didn't have the fear I'm gonna drop dead every minute," he said. "I felt a lot better." Then the bill came. Patient: Matthew Fentress is a 31-year-old cook at Atria Senior Living who lives in Taylor Mill, Kentucky. Through his job, he has UnitedHealthcare insurance with an out-of-pocket maximum of $7,900 close to the maximum allowed by law. Total Bill: Fentress owed a balance of $10,092.13 for cardiology, echocardiography and family medicine visits on various dates in 2019 and 2020. UnitedHealthcare had paid $28,920.52 total, including $27,561.37 for the care he received on the day of his procedure. Service Provider: Baptist Health Louisville, part of the nonprofit system Baptist Health. Medical Service: Fentress underwent cardiac ablation this year on Jan. 23. The outpatient procedure involved inserting catheters into an artery in his groin that were threaded into his heart. He also had related cardiology services, testing and visits to a primary care doctor and a cardiologist before and after the procedure. What Gives: Fentress said he always made sure to take jobs with health insurance, "so I thought I'd be all right." But like nearly half of privately insured

Americans under age 65, he has a high-deductible health plan, a type of insurance that experts say often leaves patients in the lurch. When he uses health providers within his insurer's network, his annual deductible is $1,500 plus coinsurance. His out-of-pocket maximum is $7,900, more than a quarter of his annual salary. Fentress owed around $5,000 after his 2017 hospitalization and set up a monthly payment plan but said he was sent to collections after missing a $150 payment. He declared bankruptcy after the same hospital sued him. He faced another bill about a year later, when a panic attack sent him to the emergency room, he said. That time, he received financial aid from the hospital. When he got the bill for his ablation this spring, he figured he wouldn't qualify for financial aid a second time.

So instead of applying, he tried to set up a payment plan. But hospital representatives said he'd have to pay $500 a month, he said, which was far beyond his means and made him fear another spiral into bankruptcy. This precarious situation makes him "functionally uninsured," said author Dave Chase, who defines this as having an insurance deductible greater than your savings. "It's a lot more frequent than a lot of people realize," said Chase, founder of Health Rosetta, a firm that advises large employers on health costs. "We're the undisputed leaders in medical bankruptcy. It's a sad state of affairs." Jennifer Schultz, an economics professor and co-director of the Health Care Management program at the University of Minnesota-Duluth, said Fentress faces a difficult financial road ahead. "Once you declare bankruptcy, your credit rating is destroyed," she said. "It will be hard for a young person to come back from that."

A recent survey by the Commonwealth Fund found that just over a quarter of adults 19 to 64 who reported medical bill problems or debt were unable to pay for basic necessities like rent or food sometime in the past two years. Three% had declared bankruptcy. In the first half of 2020, the survey found, 43% of U.S. adults ages 19 to 64 were inadequately insured. About half of them were underinsured, with deductibles accounting for 5% or more of their household income, or out-of-pocket health costs, excluding premiums, claiming 10% or more of household income over the past year. In Fentress' case, the $10,092 he owed the hospital was more than a third of what his insurer paid for his care. The majority of his debt $8,271.56 was coinsurance, about 20% of the bill, which he must pay after meeting his deductible. Because the bill covered services spanning two years, he owed more than his annual out-of-pocket maximum. If all his care had been provided during 2019, he would have owed much less and the insurer would have been responsible for more of the bill.

Dr. Kunal Gurav, an Atlanta cardiologist who wrote about medical costs for the American College of Cardiology, said ablation usually costs about $25,000-$30,000, a range also confirmed by other experts. The insurer's payment for Fentress' care that January day around $27,600 falls into the typical cost range, Gurav said. Fentress is being asked to pay $9,296, meaning the hospital would get more than $36,000 for the care. Schultz, a state representative from Minnesota's Democratic-Farmer-Labor Party, said nonprofit hospitals could potentially waive or reduce costs for needy patients. "They definitely have a moral responsibility to provide a community benefit," she said. Resolution: Charles Colvin, Baptist Health's vice president for revenue strategy, said hospital officials quoted Fentress an estimated price for the ablation that was within a few dollars of the final amount, although his bill included other services such as tests and office visits on various dates.

Colvin said there appeared to be some charges that UnitedHealthcare didn't process correctly, which could lower his bill slightly. Maria Gordon Shydlo, communications director for UnitedHealthcare, said Fentress is responsible for 100% of health costs up to his annual, in-network deductible, then pays a percentage of health costs in "coinsurance" until he reaches his out-of-pocket maximum. So he will owe around $7,900 on his bill, she said, and any new in-network care will be fully covered for the rest of the year.

A hospital representative suggested Fentress apply for financial assistance. She followed up by sending him a form, but it went to the wrong address because Fentress was in the process of moving. In September, he said he was finally going to fill out the form and was optimistic he'd qualify. The Takeaway: Insurance performs two functions for those lucky enough to have it. First, you get to take advantage of insurers' negotiated rates. Second, the insurer pays the majority of your medical bills once you've met your deductible. It pays nothing before then. High-deductible plans have the lowest premiums, so they are attractive or are the only plans many patients can afford. But understand you will be asked to pay for everything except preventive care until you've hit that number. And your deductible may be only part of the picture: "Coinsurance" is the bulk of what Fentress owes. Out-of-pocket maximums are regulated by federal law. In 2021, the maximum will be $8,550 for single coverage. Try to plan treatment and procedures with an eye on the calendar people with chronic conditions and this kind of insurance could save a lot of money if they have an expensive surgery in December rather than January. As always, if you face a big medical bill, ask about payment plans, financial aid and charity care. According to the Baptist Health system's website, the uninsured and underinsured can get discounts. Those with incomes equivalent to 200%-400% of the federal poverty level or $25,520-$51,040 for an individual may be eligible for assistance.

If you don't qualify for help, negotiate with the hospital anyway.

Arm yourself with information about the going rate insurers pay for the care you received by consulting websites like Healthcare Bluebook or Fair Health. As Fentress tries to move past his latest bill, he's now worried about something else: racking up new bills if he contracts COVID-19 down the road as an essential worker with existing health problems and the same high-deductible insurance. "I don't have hope for a financially stable future," he said.

"It shouldn't be such a struggle." Dan Weissmann, host of "An Arm and a Leg" podcast, reported the radio interview of this story. Joe Neel of NPR produced Sacha Pfeiffer's interview with KHN Editor-in-Chief Elisabeth Rosenthal on "All Things Considered." Bill of the Month is a crowdsourced investigation by KHN and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!

- Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente. Distributed by Tribune Content Agency, LLC.

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Heartbreaking bills, lawsuit and bankruptcy even with insurance - Pocono Record

The economic hardships brought about by the COVID-19 pandemic have impacted companies globally, leading many to consider both in-court and out-of-court restructurings. Because this trend will likely continue as the long-term effects of COVID-19 play out, companies with arbitration clauses in their commercial agreements may wish to consider the impact of insolvency on their options for pursuing pending or future arbitrations.

In In re Bethlehem Steel Corp., the U.S. Bankruptcy Court for the Southern District of New York acknowledged that the federal policies underlying the U.S. Bankruptcy Code, which exerts an inexorable pull towards centralization of claims, can conflict with those underlying the Federal Arbitration Act (FAA), which advocates a decentralized approach towards dispute resolution. Under the Bankruptcy Code, 11 U.S.C. 362(a), the initiation of insolvency proceedings results in an automatic stay of all civil proceedings brought against the debtor, including claims brought in arbitration. (Claims pursued on behalf of the debtor are not subject to the automatic stay, though counterclaims brought against the debtor in those proceedings may be.) An arbitration counterparty may ask a bankruptcy court to lift the stay, which the court is permitted to do under the Bankruptcy Code for cause. 11 U.S.C. 362(d)(1).

In considering whether to lift a stay and allow an arbitration to proceed, a bankruptcy court conducts a four-part inquiry to determine whether (1) the parties agreed to arbitrate, (2) the dispute falls within the arbitration clause, (3) the claims involve core or noncore bankruptcy matters, and (4) the court should stay any nonarbitral claims pending the outcome of the arbitration. A core bankruptcy matter invokes rights created by federal bankruptcy law or that would otherwise exist only in bankruptcy, or that would affect a core bankruptcy function. The decision to lift the stay is ultimately a matter of the bankruptcy courts discretion, though federal circuit courts have held that a stay of an arbitration involving a noncore matter generally must be lifted. The balance is particularly weighted in favor of arbitration in the international context, with the Bethlehem Steel court determining that with respect to international agreements, the Court has less discretion to deny motions to arbitrate than it does with respect to domestic agreements.

The Federal Rules of Bankruptcy Procedure require a creditor to register its claim with the bankruptcy court by filing a proof of claim, regardless of whether the claim will be pursued in bankruptcy court or arbitration. Filing a claim does not amount to a waiver of an arbitration agreement.

After filing the claim, a creditor may petition the court to lift the stay and allow arbitration to proceed. Parties may consider various factors in deciding whether to file such a petition, including the nature of the insolvency proceeding itself: For example, in a prepackaged bankruptcy, which is typically resolved in a matter of months, general unsecured claims (including pending arbitration claims) are typically unimpaired by the debtors plan, in which case the counterparty will be permitted to proceed with the arbitration following the debtors emergence from bankruptcy. The status of the arbitration may also be relevant: Where an arbitration is not yet underway, a party may wish to consider how quickly the arbitration can be resolved and the likelihood of receiving a favorable ruling prior to the conclusion of the bankruptcy proceedings.

The decision to lift the stay is ultimately a matter of the bankruptcy courts discretion, though federal circuit courts have held that a stay of an arbitration involving a noncore matter generally must be lifted.

More broadly, arbitration claimants may wish to consider the nature of the claim and the likelihood of obtaining a more favorable result in arbitration. In a typical Chapter 11 bankruptcy proceeding, all claims that have not been allowed or adjudicated are considered general disputed unsecured claims and may be given an estimated value. If a party does not seek relief from the stay or if the bankruptcy court denies the motion to lift the stay, then the court will resolve the claim. The court may hold an evidentiary hearing, in which it will hear evidence and seek to arrive at a fair value. If the claim is resolved by arbitration, on the other hand, the creditor may file an amended proof of claim based on the award, which will replace the estimated value assigned by the bankruptcy court. The debtor may seek to avoid the arbitration award by asserting bases to vacate or refuse enforcement of the award. Assuming no bases for vacatur or nonenforcement exist, the resolved claim will be designated undisputed and liquidated. Regardless of whether the claim has been resolved in arbitration or before the bankruptcy court, the priority of payment provisions of the Bankruptcy Code still apply, and the creditor will only be entitled to receive a pro rata share of any distributions provided to the applicable class of claims under the debtors Chapter 11 plan.

The choice of arbitration by two contracting parties reflects agreement to a neutral, out-of-court forum, with disputes resolved by one or more arbitrators who may come from different legal traditions or have particular, specialized experience. Therefore, the resolution of those disputes before the bankruptcy court may fall well outside the expectations or desires of the creditor. The creditor will need to balance its interest in proceeding in arbitration against the more streamlined resolution the insolvency proceedings may offer.

While all of the above considerations are relevant to both domestic and international arbitrations, additional forces are at play when an arbitration involves a party not located in the United States or when the arbitration is seated outside the United States, thus giving rise to an international arbitration under the FAA. If an arbitration continues in contravention of a stay of proceedings or otherwise threatens the purpose of bankruptcy proceedings, bankruptcy courts have the discretion to issue orders to enjoin arbitration proceedings seated in the United States or abroad. However, where the arbitration is seated outside the United States (and thus not subject to U.S. arbitration or bankruptcy law), and the arbitration claimant or counterparty is a non-U.S. party, questions exist as to whether the arbitrators must obey the injunction and whether an arbitration award rendered in violation of a stay may nonetheless be enforced in the United States.

In the 1975 decision in Fotochrome, Inc. v. Copal Co. that remains relevant today, the U.S. Court of Appeals for the Second Circuit enforced an arbitration award that had been rendered in violation of the automatic bankruptcy stay, finding that a bankruptcy court has authority to stay an international arbitration only if it has in personam jurisdiction over the foreign party. In the Fotochrome arbitration proceeding, the Tokyo-seated arbitral tribunal was notified of the bankruptcy stay but declined to follow it, ultimately issuing an award in favor of a Japanese company and against a U.S. company in insolvency. Because the Japanese company did not have sufficient minimum contacts with the United States, the Second Circuit held that the bankruptcy court did not have jurisdiction to stay the arbitration or to void the award rendered in violation of the stay, and permitted its enforcement.

Similar international enforcement considerations arise where a party that wants to pursue arbitration confronts a debtor involved in insolvency proceedings in a country other than the United States. In the United States, a stay of litigation and arbitration proceedings will come into force only if the foreign insolvency is recognized in the United States under Chapter 15 of the Bankruptcy Code, in which case all of the relief available under 11 U.S.C. 362 including the stay of legal proceedings is available to the debtor. But this is far from a universal approach: The laws regarding whether arbitration may continue in light of pending insolvency proceedings vary widely across jurisdictions, with some countries declining to stay arbitration at all and others doing so without any option for lifting the stay. In some countries, enforcement of an arbitration award issued in contravention of an insolvency stay may be denied as contrary to the public policy.

The wide variance in approaches among jurisdictions has resulted in several well-known examples of arbitration awards being enforced against an insolvent debtor in some countries but not in others. Accordingly, companies considering their options for pursuing cross-border arbitrations against an insolvent debtor must consider the relevant laws in at least three regimes: the seat of the arbitration, the place in which the debtor has declared insolvency and any countries in which enforcement of the award may ultimately be sought.

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When Arbitration Meets Bankruptcy: Considering Arbitration Options in the Wake of a Growing Rise in Corporate Insolvencies - JD Supra

Rockingham County-based gun manufacturer Remington Arms has been auctioned off in bankruptcy court.That's according to a report from Bloomberg. On Tuesday, the company laid off more than 100 people, as its plant in Madison closes.Remington filed for bankruptcy back in July. A court filing in Alabama says seven bidders bought part the company's business.Remington is working to pay off nearly a billion dollars in debt.Families of the Sandy Hook massacre are suing the gun maker over how it marketed the rifle used to kill 20 children and six adults in 2012.Click here for WXII's previous coverage of Remington's legal troubles.

Rockingham County-based gun manufacturer Remington Arms has been auctioned off in bankruptcy court.

That's according to a report from Bloomberg. On Tuesday, the company laid off more than 100 people, as its plant in Madison closes.

Remington filed for bankruptcy back in July. A court filing in Alabama says seven bidders bought part the company's business.

Remington is working to pay off nearly a billion dollars in debt.

Families of the Sandy Hook massacre are suing the gun maker over how it marketed the rifle used to kill 20 children and six adults in 2012.

Click here for WXII's previous coverage of Remington's legal troubles.

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Remington Arms auctioned off in bankruptcy court - WXII12 Winston-Salem

Photograph: Shutterstock

Dave & Busters stock price has taken a rollercoaster ride in the last day or so, after media reports highlighted concerns in the eatertainment chains quarterly report that raised the threat of possible bankruptcy.

The chains shares plummeted more than 26% Thursday, on reports that it might need to declare bankruptcy if it could not strike deals with lenders and landlords. By mid-day Friday, its stock price was up about 13%.

Some analysts said reports of the food-and-game chains demise were exaggerated.

In our opinion, shares will appreciate as the company demonstrates it can achieve profitability at lower sales volumes, reopen all of its stores by the end of December, and successfully restructure or amend its credit facility without the need for additional equity, the brokerage firm Stifel said in its latest guidance.

Nevertheless, it remains a perilous time for Dave & Busters, which is slowly reopening units closed at the outset of the pandemic while also issuing layoff notices to hundreds of workers around the country.

The Dallas-based company said in its latest quarterly report that it must obtain waivers from its lenders or else it may result in filing a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code to implement a restructuring plan.

Food-and-games concepts, especially, are struggling amid the pandemic, as they look for ways to safely bring back consumers while also boosting food and drink sales as amusements remain trickier to regulate.

Dave & Busters closed all of its locations in mid-March and only reopened three units, in very limited capacities, in Q1.

The Company is unable to determine whether, when or the manner in which the conditions surrounding the COVID-19 pandemic will change, including when any restrictions or closure requirements will be lifted or potentially re-imposed in certain states or local jurisdictions, whether it will be able to successfully staff stores, and the degree to which it will be able to re-engage customers, the chain said in its quarterly report. These developments have caused a material adverse impact on the Companys revenues, results of operations and cash flows, including the Companys ability to meet its obligations when due. These conditions raise substantial doubt about the Companys ability to continue as a going concern for a period of one year from the date the financial statements are issued.

This week, Restaurant Business reported on Dave & Busters plans to lay off 1,369 previously furloughed workers in seven states. Since then, the chain has issued new Worker Adjustment and Retraining Notification (WARN) alerts to 373 workers at four locations in New York about layoffs coming in December.

As of earlier this month, Dave & Busters said it had reopened 89 of its 137 stores. It had previously said all locations would reopen this month, but is now saying it expects to be fully operational by the end of December, with its 11 units in New York and 16 California stores among the last to return.

It reported a same-store sales decline of 87% for the quarter ended Aug. 2, with revenue also falling 85% to $50.8 million. Net losses for the quarter came to $58.6 million.

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Dave & Busters watchers wonder if the chain will declare bankruptcy - Restaurant Business Online

A bankruptcy judge blasted Hertz Global Holdings Inc.'s plan to pay top managers up to $14.6 million in bonuses after they collected millions in additional bonuses days before the rental car company filed for bankruptcy.

"It seems offensive to give senior executives bonuses when they were paid" retention compensation immediately before the bankruptcy was filed, Judge Mary Walrath said Thursday in U.S. Bankruptcy Court in Wilmington, Del. The 14 most senior executives could receive as much as $5.4 million.

"The incentive plan has serious problems," she said, asking Hertz to revise it.

The judge also said the financial targets the Hertz executives need to hit to qualify for the bonuses need to be tougher, echoing objections by a federal bankruptcy watchdog

That proposed $14.6 million in potential incentive compensation was on top of the $16.2 million in retention bonuses Hertz, just days before its May bankruptcy filing, said it would pay to about 340 employees in recognition of the uncertainty faced as a result of the novel coronavirus pandemic's impact on travel.

The new incentive plan would pay 309 employees.

The judge's ruling is a victory for a group of retired Hertz executives who criticized the new bonus plan, saying the company's promises to provide them with a secure retirement are being cast aside.

U.S. Trustee Andrew Vara, the government's bankruptcy watchdog, also has criticized Hertz's bonus plan.

The trustee said the company's top executives were reneging on a deal they made to get their retention pay before bankruptcy. Those executives signed agreements waiving their rights to 2020 performance bonuses as a condition of collecting the retention bonuses, Mr. Vara said.

Now in bankruptcy, they were trying to revive the performance-bonus program, with targets set at much lower levels, he has said.

Some key Hertz creditors, however, had backed the company's bonus plan. Those creditors supporting the plan include a bankruptcy committee that includes the International Brotherhood of Teamsters.

A lawyer for Hertz said during the hearing that the incentive plan was developed by independent directors and advisers who had no direct financial stake in the bonuses.

Hertz representatives couldn't be reached for immediate comment after the hearing.

Peg Brickley and Alexander Gladstone contributed to this article

Write to Becky Yerak at becky.yerak@wsj.com

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Judge rejects Hertz's bankruptcy bonuses to execs - MarketWatch

Naples businessman David Hoffmann and the Hoffmann Family of Cos. has agreed to allow Hertz to store its idle rental cars on the arena grounds at no cost. Fort Myers News-Press

A U.S. bankruptcy judge has rejected Hertz's controversial employee incentive plans, calling them "offensive."

After hearing testimony from all sides and allowing for the cross-examination of a few witnesses in a Delaware courtroom Thursday afternoon,Judge MaryWalrath struck them down, going along withthe objectors.

Objectionscame from a group of former executives, who fear the big payouts will jeopardize their promised retirement income from the company, and the U.S. trustee overseeing Hertz'sChapter 11case, who questionedthe real intentions and purpose behind them.

While Walrath spurned the incentive plans, she left the door open for Hertz to come back with revised ones, moving to continue the hearing and her final decision to a later date.

Ex-CEO of Hertz agrees to pay back nearly $2 million in compensation after charges filed

Money issues: Hertz reports huge second-quarter losses amid coronavirus pandemic

As it fights to drive itself out of bankruptcy, Estero-based Hertz Global Holdings parent of The Hertz Corp. has argued suchincentives are critical for motivating and keeping the employees in its management ranks and necessary to compensate them for their extra hard work in challenging times.

As written, the plans could have resulted in payouts of more than $14.6 millionto hundreds of employees, including its top brass.

In her ruling after anhours-long hearing, Walrath said it seemed offensive to award senior executives bonuses as they're the very same ones who got hefty retention payments a few days before the company'sbankruptcy filing, even though they "weren't entitled to them under the debtors' ownpolicy."

Hertz doled out more than $16.2 million in "cash retention payments" to what it described as "a broad base of key employees at the director level and above," raising some eyebrows.

Under the incentive plan proposed for top executives, a little over a dozen of Hertz's highest-ranking employees could have earned more than $5.4 million in additional bonus pay if Hertz achievedits highest performance goals.

Barb and Pete Martinez of Estero chug past hundreds of rental cars now stored around the Hertz Arena off Ben Hill Griffin Parkway in Estero. Naples businessman David Hoffmann and the Hoffmann Family of Cos., whichbought the Everblades hockey team and the Hertz Arena in August, agreed to allow Hertz to store its idle rental cars on the arena grounds a few weeks ago. It's yet another sign of the devastating blow thetourism industry has taken from the pandemic locally, nationally and globally, due to travel bans and other restrictions designed to curb the spread of COVID-19.(Photo: Michael Braun/news-press.com)

More than 50 others who received retention pay would have been able to collect more money too under a second incentive plan.

Hertz filed for bankruptcy on May 22 after seeing its rental revenuevirtually vanish and the value of its rental fleet plummet with the spread of the coronavirus, leaving its U.S. operations in dire financial straits and unable to meet its heavy debt load.

While Hertz may have slipped into bankruptcy because of the outbreak of COVID-19 the incurable, sometimes fatal disease caused by the coronavirus and not due directly to any wrongdoing or mismanagement, Walrath said it shouldn't mean its leaders are entitled to bonuses because of the unforeseen disaster that's made their lives harder.

"There a lot of people who were affected by COVID," she said. "A lot of people have had their compensationcut as a result of COVID. Many people have been furloughed and lost their jobs completely."

In making her decision, Walrathquestioned the validity of the incentive plans, saying she had "serious problems" with them, including the three levels of metrics Hertz proposed to use as triggers for the payouts.

The judge arguedemployees should not be givenrewards for not allowing Hertz's situation to get any worse or for keeping conditions going in the direction they're already headed as proposed in the plans. Thepayouts, she said, should be based on meeting much harder goals or true "stretches," if they're really designed to be incentives.

"I am very concerned about the tying of these metrics to what the debtor is already doing," she said.

As a judge, she saidshe'd never seen a situation where a company paid out millions in bonuses days beforea bankruptcy filing, only to come back a few months later and ask for thesekinds of incentives post-bankruptcy.

"I think more has to be established on why the employees who got their retentionbonuses and agreed to stay with the company are not going todo their best to make sure this company survives and succeeds," Walrath said.

She questioned why the request for the incentiveshave come so soon, when the company has yet to file a reorganization plan.

Walrath suggested Hertz change its metrics or come up with better arguments for why it chose the ones it did to address a "gut feeling" that the incentives aren'tnecessary or may not be "appropriate at all."

Hertz rental car customers drop off vehicles at the Southwest Florida International Airport on Tuesday May 7, 2013.(Photo: Andrew West/news-press.com)

In his testimony, Hertz's attorney Jason Zakia defended the incentive plans, arguing they were crafted in everyone's best interest by consultants and outside directors who would not directly benefit from them.

As for the metrics, he said, none of them would allow the company to be "simply put on autopilot."

Zakia argued the metrics and goals can't be so difficult to meet that they're seen as unachievable or unattainable because they would then "serve no incentivizing purpose whatsoever."

"Indeed, they'd serve no purpose for anyone whatsoever," he said.

"You need to strike a balance between something that is achievable, possible, but something that's incentivizing and motivating, not automatic. That's exactly what happened here," Zakia said.

He emphasized that if the goals were achieved and all the bonuses paid out it would be "good news for everybody."

Even when counting the prior bonuses, Zakia said the compensation for plan participants in no case would have exceeded the median pay offered at industry comparable companies or for comparable jobs.

He described the incentives as a wise expense based on Hertz's business judgment.

Hertz's unsecured creditors' committee supported the plans, arguingthey'd result in a stronger company performance that could ultimately allow the car rental companyto pay back more of what it owes.

"They looked at this very carefully," Zakia said. "This committee is no rubber stamp and they weren't a rubber stamp here."

Thomas Mayer, an attorney representing the unsecured creditors' committee, agreed, saying the group had done a lot of research of its own on the plans and their metrics.

"I don't know how much, if any of these bonuses, will be paid. So we do not view these as layups. We do not view these aspayments for just showing up," he said.

There's a long road to recovery ahead and theplans, Mayer argued, could help the company get out of bankruptcy sooner.

"It is highly unlikely that this debtor is going to be able to exit bankruptcy bythe end of 2020," hesaid.

Starfish greet Hertz Gold Plus Rewards customers in the rental area at Southwest Florida International Airport.(Photo: Casey Logan/The News-Press)

Representatives with FTI Consulting, which recommended and helped create the incentive plans, defended themat the hearing too, answering tough questions asked by attorneys representing the other side, who drilled down into the nitty-gritty details of them.

LindaRichenderfer, counsel forU.S. TrusteeAndrew Vara, asked pointed questions about how the metrics were determined and where the company's current performancestood against those metrics.

"In some areas we are improving and are ahead of the metrics. Inothers, we still trail behind or have work to do," said Michael Buenzow, a bankruptcy consultant with FTI.

Based on the proposed metrics, he said, thecompany was pacingahead on the sale of its surplus rental cars, for example, but still hada long way to go to meet its goals for operating cash flow, which continues to be in the negative.

Richenderfer also picked apart the comparable analysis used to develop the plans, questioning the peer group the consultants considered in coming up with the scope and amounts for its requested incentives.

Attorney John Demmy, representing the retired executives group, questioned how the performance targets were determined for each of the metrics, suggesting that they seemed too low based on business improvements seen since the early onset of the pandemic.

He pointedly asked Buenzow if any of the proposed metrics could be achieved by management just showing up.

Buenzow answered with a firm "absolutely not."

"For each of themetrics, there is a significant amount of effort that needs to be undertaken by the employees," he said.

The judge and the objectors remained skeptical.

The executives Demmy representsagreed to defer part of their compensation in return for Hertz's promises to pay them back what they're owed in retirement benefits.

The group claims that a few days after Hertz's bankruptcy filing thecompany told them the lifetime benefits they had been receiving were "required to stop."

As a group, the executives estimate they're still owed more than $5.5 million in benefits based on "over 182 years of accumulated service" withHertz.

That's just a small fraction of what Hertz Global owes.

By the end of March, the companyhad racked up more than $24 billion in debt, according to its bankruptcy filing, with only $1 billion of available cash to operate and pay its bills.

The Hertz Corp. operates the Hertz, Dollar andThriftybrands, with thousands of corporate and franchise locations throughout the country.

Parent company Hertz Global also ownsDonlen,an American fleet leasing and management company based in Illinois, which is part of the bankruptcy filings.

The company completed its new multmillion-dollar global headquarters in Estero at the end of 2015. The companyreceived millions in state and local incentives to relocate from New Jersey to Southwest Florida.

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'Offensive.' Bankruptcy judge rejects Hertz employee incentive plans, executives would get second bonuses - News-Press