Recent Events
The committee co-hosted a panel with the Health Care Committee at the Annual Spring Meeting in Washington, D.C., titled, “Unique Asset Sale Issues in Health Care.” Our fantastic panelists included Lorie Beers (Intrepid; New York), David Gordon (Polsinelli; Atlanta), Rob Orr (Chapel Hill, N.C.) and Cynthia Romano (FTI Consulting, Inc.; New York). This panel discussed how health care sales differ from other asset sales under § 363, and the role of various “players,” including debtor’s counsel, financial advisors (for both debtor and any committee of unsecured creditors), investment bankers, indenture trustees and the bankruptcy court judge.

At the conclusion of the panel, the committee announced the winners of the Fifth Annual Asset Sale of the Year Award: Akorn Holding Company, LLC, with professionals from Proskauer, Vedder Price, K&L Gates, Ropes & Gray, AlixPartners, Landis Rath & Cobbs, Ankura, WilmerHale, Pachulski Stang Ziehl & Jones, Gibson Dunn, Kirkland & Ellis LLP and Troutman Pepper.

In California, a nonprofit that operates or controls a “health facility” must obtain the Attorney General’s consent before it can sell substantially all of its assets. This includes nonprofits that operate or control a hospital, psychiatric hospital, skilled nursing facility, hospice facility, or similar facility that provides care to patients that are admitted for a stay of 24 hours or longer. Obtaining the Attorney General’s consent to the sale of substantially all of a health care nonprofit’s assets is an incredibly involved and time-consuming process that is squarely at odds with a fast and efficient sale free and clear of any interests pursuant to § 363(f) of the Bankruptcy Code.

Shift generated more than $670 million in revenue in FY22 by prioritizing growth over profitability. Shift deployed hundreds of millions of dollars to develop its technology solutions and to effectuate its various M&A activity, all with the expectation that its access to the capital markets would continue to support its growth strategies. The capital markets, however, began to tighten in early 2023, precipitated by the failure of Silicon Valley Bank. Coming off the heels of a costly restructuring plan and facing industry-wide headwinds, Shift needed to avail itself of chapter 11 by October 2023.

Thirty years ago, John Owoc — a self-professed avid fitness trainer, designer and producer of fitness supplements, weightlifter, motivational speaker and writer — founded Vital Pharmaceuticals, Inc. (“Vital”). He served as the company’s CEO and chief science officer, and his wife, Megan, served as senior vice president of Marketing until they both were terminated in March 2023. Vital is a pioneer in the performance energy drink industry and is perhaps best known for its flagship product, Bang Energy, one of the top-selling energy drinks in the U.S. In October 2022, Vital filed for chapter 11 protection. Instead of reorganizing, Vital utilized the bankruptcy process to effectuate a sale of substantially all of its assets to an affiliate of Monster Beverage Corporation (“Monster”).