What We’re Reading This Week [May 10, 2021]
The Wall Street Journal reports that hedge-fund founder, Dan Kamensky, was sentenced to six months in prison for bankruptcy fraud in connection with his attempt to quash a competing bid for shares of Neiman Marcus subsidiary MyTheresa during Neiman’s bankruptcy case. As a member of the official unsecured creditors’ committee, Kamensky had a fiduciary obligation to serve the interests of all creditors, not just his own firm’s financial interests. Kamensky, who founded Marble Ridge Capital LP, pleaded guilty to the charge of bankruptcy fraud back in February 2021. [WSJ; May 7, 2021]
The New York Times reports that a Northern District of Texas bankruptcy judge dismissed the National Rifle Association’s bankruptcy case, writing that the NRA did not file in good faith since its filing was being primarily used to gain an unfair advantage in litigation brought by the New York Attorney General and to avoid the New York state regulatory scheme. The NYT had previously reported that in addition to vehement opposition to the filing from the New York Attorney General, the United States Trustee’s Office also joined the call for the case to be dismissed, which bankruptcy experts said underscored the unusual character of the NRA’s bankruptcy case. [NYT; May 11, 2021; NYT; May 3, 2021]
The Wall Street Journal reports that as much as $4 billion in Paycheck Protection Program (PPP) loans went to thousands of venture-backed startups, many of whom ended up raising hundreds of millions of dollars by going public just a year later. More than 30 such startups, each valued at more than $150 million, went public via special-purpose acquisition companies (SPAC) reverse mergers, and another 15, each valued at over $200 million, had initial public offerings within a year of taking the taxpayer-funded forgivable loans. [WSJ; May 9, 2021]
