What We’re Reading This Week [July 13, 2020]
British communications and satellite internet company OneWeb, which filed for bankruptcy earlier this year in the United States Bankruptcy Court for the Southern District of New York, has received a $1 billion bid to purchase the company out of bankruptcy, reports CNBC. If the sale is approved, the U.K government and Bharti Global, which are reportedly contributing $500 million each, would become the company’s new owners. OneWeb is expected to challenge SpaceX’s starlink network in providing broadband internet service to consumers from satellites as opposed to traditional cable and fiber connections. [CNBC; July 10, 2020]
The Large Corporations Committee of the Bankruptcy & COVID-19 Working Group, a group of university professors studying the intersection of the COVID-19 pandemic and various areas of bankruptcy law, sent a letter to members of the United States Congress expressing the working group’s opinions that: (1) there is no current need for a federal lending facility targeted towards providing DIP loans to large corporations; (2) federal lending should be available to chapter 11 debtors on the same conditions as any other firm; and (3) federal lending support may be warranted for smaller businesses seeking to reorganize in chapter 11. [Large Corporations Committee of the Bankruptcy & COVID-19 Working Group; July 10, 2020]
Reporting from Bloomberg shows that since March of 2020, the COVID-19 pandemic has been a precipitating factor in at least 112 commercial bankruptcy filings by both large, multinational companies and smaller, regionally focused companies. [Bloomberg; June 9, 2020]
The Wall Street Journal reports that just two days after its June 8, 2020 bankruptcy filing, Brooks Brothers Group Inc. has purportedly been contacted by two potential bidders, apparel company Sparc Group LLC and mall owner Simon Property Group Inc., for the company’s assets. WHP Global Inc, the company’s DIP lender, is also reportedly preparing an offer to purchase the company out of bankruptcy. [WSJ; July 9, 2020]
In Nicolaus v. United States, the Eighth Circuit Court of Appeals overturned decisions by the bankruptcy court and district court by finding that debtor Anthony Nicolaus properly served the IRS with an objection to its claim by sending the objection to the IRS’s general notice address instead of to the local United States Attorney. The Eight Circuit further ruled that objections to claims need not be served in accordance with Federal Rule of Bankruptcy Procedure 9014, which applies to motions and requires that certain motions in contested matters must be served on the United States Attorney in the district where the action is pending. [8th Cir.; July 6, 2020]
