Author Archives: David A. Blansky, Esq.

Sbarro Inc., the fast-food pizza restaurant chain, won approval of its plan to restructure and exit bankruptcy protection.

Sbarro will give ownership of the reorganized company to senior lenders owed about $176 million under the proposal approved today by U.S. Bankruptcy Judge Shelley C. Chapman in Manhattan.

The company, based in Melville, New York, started as an Italian restaurant in Brooklyn, New York, in 1956 and has more than 1,000 company-owned and franchised restaurants, according to its court filings.Sbarro, acquired in 2007 by the private-equity firm MidOcean Partners, filed for bankruptcy in April, blaming reduced consumer traffic at shopping malls and increased competition at food courts. Increases in ingredient costs also led to higher costs, it said.

The bankruptcy plan gives first-lien lenders a recovery of from 69 percent to 95 percent on their claims, according to a plan description. The plan gives no recovery for second-lien claims of about $34 million and general unsecured creditors with as much as $173 million in claims, according to court documents.

Read the full article here: Sbarro Fast-Food Pizza Chain Wins Court Approval for Bankruptcy-Exit Plan – Bloomberg.

In a sharply worded court filing late Wednesday, Fox Sports said it would ask a U.S. Bankruptcy Court to dismiss the Dodgers from bankruptcy.

In the process, Fox slammed Major League Baseball as “Prime Ticket’s former ally” and claimed the only reason Dodgers owner Frank McCourt wants to sell the team’s television rights now is to put “value rightfully belonging to Prime Ticket in his own pocket.”

On Nov. 1, McCourt and MLB reached an agreement under which he would sell the Dodgers and the league would not oppose an effort by McCourt to market the team’s television rights.The Dodgers sued Fox earlier Wednesday, accusing the broadcaster of interfering with that marketing process; Fox previously sued the Dodgers for alleged breach of contract.

The Dodgers have asked the court to declare unenforceable a provision of the current Fox contract that forbids the team from negotiating with other media outlets before Nov. 30, 2012.In its filing, Fox called the sale agreement a “secret pact,” noted MLB previously had opposed the TV rights sale, and complained that the agreement has neither been provided to Fox nor filed with the court in the subsequent two weeks.

Fox asked that the hearing for approval of a TV rights sale be delayed beyond the scheduled Nov. 30 date.The sale agreement explicitly leaves the TV rights decision to the new team owner. Accordingly, the Dodgers have proposed proceeding with the marketing process — claiming that prospective owners would know the value of media rights before bidding on the team — but letting the new owner decide whether to sign whatever TV deal might be negotiated.”It is … wholly unclear why a new owner would not just engage in such negotiations itself,” the Fox filing read. “The only apparent explanation is that the entire point of the process is to allow McCourt, now with the agreement of MLB, to obtain the proceeds of such a deal for himself as he brokers the team.”

Read the complete article here: Fox wants Dodgers’ bankruptcy case dismissed, slams McCourt, MLB [UPDATED] – latimes.com.

Units of Goldman Sachs Group Inc. GS were sued by Capmark Financial Group Inc., which accused them of wrongly collecting $147 million five months before Capmark went bankrupt.

While they were co-owners of Capmark in May 2009, a group of Goldman units used their influence to help convince Capmark to refinance $1.5 billion in unsecured debt owed to Goldman, according to the lawsuit filed today in Manhattan federal court.

The refinancing allowed Goldman to collect $147 million, including $7 million in cash, based on the new secured loan, according to the lawsuit.“Despite these conflicts and close connections — indeed, as a result of the influence and insider status that its multiple simultaneous roles created — Goldman Sachs actively and directly participated in internal meetings and discussions that led to the secured credit facility, which gave it preferential treatment as a creditor,” Capmark claimed in the lawsuit.

Read the complete article via Goldman Sachs Sued by Capmark to Recover $147 Million – Bloomberg.

November 8, 2011 Alexandria, Va. — The total number of U.S. bankruptcies filed during fiscal year 2011 September 30, 2010-September 30, 2011 dropped 8 percent over fiscal year 2010 September 30, 2009-September 30, 2010, according to data released yesterday by the Administrative Office of the U.S. Courts. Total filings during fiscal year 2011 were 1,467,221, compared with 1,596,355 cases filed in fiscal year 2010.

“The decline in consumer bankruptcies is the residue of a sustained debt deleveraging by U.S. households,” said ABI Executive Director Samuel J. Gerdano.

Business filings decreased 18 percent for the nine-month period ending September 30, 2011, to 36,385 from the 43,016 filings in the same period in 2010. Chapter 7 business liquidations also fell by 18 percent, as there were 25,672 in the first nine months of 2011 compared with the 30,192 business chapter 7 filings during the same period in 2010. Chapter 11 business reorganizations registered the sharpest decrease, as the 7,417 filings during the first nine months of 2011 represented a 22 percent drop from the 9,058 total chapter 11 business filings during the same period in 2010. Total business filings decreased 5 percent from 12,304 in the second quarter 2011 April 1-June 30 to 11,705 in the third quarter 2011 July 1-September 30.

Read the full ABI press release here: American Bankruptcy Institute | Total U.S. FY 2011 Bankruptcies Down 8 Percent over FY 2010; Filings Fall Across All Chapters.