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| vol 17, num 2 | November 2020 |
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| Yacht Successfully Auctioned in Abe’s Boat Rentals Inc. Despite COVID‑19 Pandemic |
| Abe’s Boat Rentals Inc. filed for chapter 11 on April 27, 2018, in the U.S. Bankruptcy Court for the Eastern District of Louisiana. On Feb. 22, 2019, the debtor filed an Application for Order Authorizing Employment of Whelton Marine LLC as Marine Broker (the “Application to Employ”) in order to sell a 2008 Tiara 4300 Sovran yacht (the “vessel” or “M/V Heaven”). On April 24, 2019, the court granted the Application to Employ and instructed that any sale of the vessel was subject to approval by the court and that the net sales proceeds from any approved sale would be held by debtor’s counsel in a trust pending further order by
the court.
The vessel, named M/V Heaven, was the one vessel in the debtor’s fleet of 17 total vessels that was not encumbered and was primarily used as a pleasure craft for entertaining and business development. A June 19, 2017, appraisal of the M/V Heaven estimated its market value to be $373,750. The Vessel Brokerage Central Listing Agreement, which was attached to the Application to Employ, listed the asking price of the vessel at $349,000.
After being marketed for sale on various websites for several months, on April 4, 2020, in the midst of the COVID-19 pandemic, the debtor was finally able to enter into a Vessel Purchase and Sale Agreement with a buyer (the “initial buyer”) to sell the M/V Heaven for $125,000, far below its appraised value. |
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| The 11 U.S.C. § 365(b)(3)(A) Adequate Assurance Standard: An Overlooked Tool for Shopping Center Landlords? |
| When a retail debtor seeks to sell its assets in a chapter 11 proceeding pursuant to § 363 of the Bankruptcy Code, one of the key issues that often arises is whether the debtor will be permitted, as part of such sale, to assume and assign its store leases to the proposed buyer pursuant to § 365 of the Bankruptcy Code.
Of particular relevance are the protections for shopping center landlords set forth in § 365(b)(3) of the Bankruptcy Code, which provides that when there has been a default in a shopping center lease that a debtor seeks to assume, adequate assurance of future performance must be provided to landlords, including adequate assurance
(A) of the source of rent and other consideration due under such lease, and in the case of an assignment, that the financial condition and operating performance of the proposed assignee and its guarantors, if any, shall be similar to the financial condition and operating performance of the debtor and its guarantors, if any, as of the time the debtor became the lessee under the lease;
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| WLC SESSION: But I’m Afraid of Needles: The Sale of Health Care Assets |
| The Asset Sales Committee will team up with the Health Care Committee on December 4 (2:30-3:45 p.m. EST) to discuss various issues and challenges accompanying sales of health care assets, including factors to consider in determining whether or not a sale is the best alternative. Such factors include the role of regulatory authorities, political challenges, reimbursement issues, issues related to urban vs. rural facilities, the evolution of the health care business, and best practices in navigating such challenges. |
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 In re Agera Energy, LLC , et al. |
| The ABI Asset Sales Committee announced the winner of the second annual Asset Sale of the Year Award at the beginning of a July 22, 2020, Asset Sales Committee webinar titled, Evolving Landscape of Distressed M&A Activity.
The winner of the 2020 Asset Sale of the Year Award is In re Agera Energy, LLC, et al., Case No. 19-23802 (Bankr. S.D.N.Y. - Judge Robert D. Drain). The Asset Sales Committee was very impressed by the number and kind of nominations this year, which reflected obstacles and challenges and the unique and creative ways that professionals overcame them.
The voting this year was especially energized and the results very close, but what put Agera Energy over the top is that the professionals involved were able to accomplish something that had never been done before. Specifically, this transaction was the first time that a retail energy supplier successfully sold its book of “in the money” customer contracts to a buyer in chapter 11 (as opposed to a platform sale for the entire business). This has been attempted in other retail energy cases, but due to the highly regulated nature of the industry, those efforts have failed. Agera Energy was nominated by Darren Azman, a partner at McDermott Will & Emery LLP who represented the debtors. GlassRatner was the debtors’ financial advisor, and Miller Buckfire was their investment banker. McGuireWoods,
LLP acted as counsel to Exelon Generation Company, which was the buyer, and Haynes and Boone LLP was counsel to BP Energy Company, the secured lender and the DIP lender.
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