What We’re Reading This Week [March 1, 2021]
Reuters reports that the involuntary bankruptcy proceeding filed against Navient by three student loan borrowers on February 8, 2021 was dismissed on February 25, 2021. In dismissing the case, Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York noted that there was no evidence Navient was not paying its debts as they came due and that the borrowers did not hold claims that were not subject to a bona fide dispute. For more information on the involuntary bankruptcy case filed against Navient, see our previous post on the filing. [Reuters; Feb. 25, 2020]
The Wall Street Journal reports that 96 Wythe Acquisition LLC, which is the owner of the Williamsburg Hotel in Brooklyn, filed for bankruptcy on February 23, 2021. The filing comes after an approximately $68 million adverse judgment was rendered against the Debtor in New York state court arising out defaults under a loan agreement, the proceeds of which were used to complete construction on the hotel. The reporting notes that filings such as this may be indicative of significant strain placed on the New York hospitality industry as a result of the COVID-19 pandemic. [WSJ; Feb. 23, 2021]
Reporting from Bloomberg indicates that fast food chain Steak ‘n Shake recently retired the remaining balance of its $220 million term loan that was set to mature in March 2021, which will reportedly allow it to avoid a chapter 11 bankruptcy filing. Subsequent reporting indicates that Steak ‘n Shake sued one of its lenders, in Indiana state court arguing that the lender improperly used information that it received while negotiating a purchase of certain real estate assets from Steak ‘n Shake to purchase Steak ‘n Shake debt on the secondary market, and ultimately increase the cost to Steak ‘n Shake of retiring its outstanding debt. [Bloomberg; Feb. 22, 2021]
Puerto Rico has reportedly reached a deal with its creditors to reduce the country’s approximately $18.8 billion in debt to approximately $7.4 billion and exit its nearly 4 year long bankruptcy case, reports Yahoo Finance. Puerto Rico’s oversight board is expected to seek bankruptcy court approval of this deal in the third quarter of 2021 and exit bankruptcy by the end of the year. [Yahoo Finance; Feb. 24, 2021]
