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| vol 21, num 1 | JANUARY 2024 |
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| Co-Chairs’ Corner |
| Hello and thank you to our existing members, and a warm welcome to those recently joining us. We hope this newsletter finds you well, and we look forward to seeing all of you in the coming year.
Recent Events
The committee partnered with the Real Estate Committee for ABI’s 2023 Annual Spring Meeting in April to discuss what happens when lenders default on paying borrowers for non-monetary reasons, and the impact and efficacy of this strategy. Two members of our very own leadership team, Jane Kim and William Hao, participated in what was a very lively and entertaining session with fellow panelists Prof. Andrea Coles-Bjerre and Robert LeHane.
At the conclusion of the panel, the committee announced the winners of the Fifth Annual Asset Sale of the Year Award: Electric Last Mile Solutions Inc.; LaForta Gestao E Investmentos Sociedade Unipessoal LDA; and Haven Campus Communities – Starkville, LLC. Each of the award recipients is featured in this issue of the committee newsletter, where you can read more about these award-winning deals. Stay tuned for details and deadlines to nominate for this year’s award. |
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| 2022 Asset Sale of the Year Award: Electric Last Mile Solutions |
| On April 21, 2023, ABI’s Asset Sales Committee announced that the 2022 Asset Sale of the Year was awarded to the case of In re Electric Last Mile Solutions Inc., et al. (Bankr. D. Del. Case 22-10537-MFW), for the sale of substantially all its assets to Mullen Automotive, Inc. (NASDAQ: MULN).
Electric Last Mile Solutions, Inc. and its subsidiary, Electric Last Mile, Inc. (together, "ELMS"), jointly filed for chapter 7 relief in Delaware on June 14, 2022. ELMS was a commercial electric vehicle solutions company founded for the purpose of designing, engineering, manufacturing and customizing electric delivery and utility vehicles. The company was headquartered in Troy, Mich., and operated a production facility in Mishawaka, Ind. ELMS had been in the process of designing and engineering two unique products: the Class 1 Urban Delivery vehicle, and the Class 3 Urban Utility vehicle. The company anticipated being the first provider of Class 1 electric vehicles in the U.S. market.
The company was formed on June 25, 2021, through a reverse merger between Electric Last Mile, Inc. and a special purpose acquisition company (SPAC) and subsequently began trading on NASDAQ. With a 675,000-square-foot production facility and a team of more than 200 employees, the company began executing its strategic plan of delivering an electric vehicle alternative to the last mile segment. Although ELMS generated demand from customers in all core end markets within the first six months and reached a record market cap of $1.4 billion, the company faced hardships in its inaugural year as a public company. These included an investigation by the SEC, the resignation of the company’s auditor prior to the filing of its FY2021 annual report, and a series of supply-chain issues that delayed vehicle production. The culmination of these issues, among others, contributed to the
company’s inability to support future operations, resulting in ELMS filing for chapter 7 relief. |
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| 2022 Asset Sale of the Year Award: Laforta: “Have I Got a Deal For You,” or How to Successfully Take Control of a Semi-Submersible Drilling Rig in Mexico and Sell it |
| In business restructuring and chapter 11 cases, it’s not all that unusual at the outset for professionals to exclaim at some juncture, “You want me to do what…?” That was the question prior to the initiation of the Laforta-Gestao e Investimentos, Sociedade Unipessol, Lda., et al. (“debtors” or “Laforta”) engagement for the eventual control and sale of the La Muralla IV, a 10-year-old, sixth-generation, ultra-deepwater semi-submersible drilling rig (“La Muralla”).
Laforta was just your typical, average operating investment that was held by a private limited liability company organized under the laws of Portugal that was a wholly owned subsidiary of Offshore Drilling Holding S.A., which was a private limited liability company incorporated under the laws of the Grand Duchy of Luxembourg. You see this every day — right?
The debtors were involved in the deepwater drilling industry in Mexico, but their contract had not been renewed and they had no revenue stream. Laforta had more than a billion dollars in secured debt and an uncertain path, to say the least, of realizing value from a sole asset. Oh, and La Muralla required material (read: tens of millions of dollars) worth of investment, maintenance, upgrades and improvements to return it to an active operating state. |
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| 2022 Asset Sale of the Year Award: Haven Campus Communities-Starkville, LLC |
| ABI’s Asset Sales Committee awarded the 2022 Asset Sale of the Year Award to counsel for the stakeholders involved in the successful 11 U.S.C. § 363 sale of the assets and interests of chapter 11 debtor Haven Campus Communities-Starkville, LLC in In re Haven Campus Communities-Starkville, LLC, which came before Hon. Selene Maddox of the U.S. Bankruptcy Court for the Northern District of Mississippi (Case No. 21-10931-SDM). The committee announced the winners during ABI’s Annual Spring Meeting in Washington, D.C., in April. |
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| 2023 Asset Sale of the Year Award Application Now Available |
| ABI’s Asset Sales Committee is seeking nominations for its Annual ABI Asset Sale of the Year award. Any bankruptcy sale that closed between January 1 and December 31, 2023, and involved at least one professional who is a member of ABI’s Asset Sales Committee is eligible. Nominations are due February 16; please send your nominations to Matt LoCascio and Leyza Blanco. |
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