As discussed in previous posts, the Consolidated Appropriations Act of 2021 (the Act) was signed into law on December 27, 2020, largely to address the harsh economic impact of the COVID-19 pandemic. For bankruptcy litigators or any business which has been frustrated to receive a demand letter after one of its customers filed bankruptcy one particular amendment stands out in the sprawling 5,593-page bill. The Act amended Section 547 of the Bankruptcy Code to provide suppliers and landlords with an additional potential challenge to actions brought to claw back payments made by a debtor in the 90 days preceding bankruptcy.

Generally speaking, Section 547 of the Bankruptcy Code enables a bankruptcy trustee (or debtor-in-possession) to claw back certain payments made by a debtor to its creditors in the 90 days preceding a bankruptcy case, unless the creditor can establish one of the statutory defenses, including: (1) the payment was made at the same time as the creditor provided goods or services to the debtor (i.e., a contemporaneous exchange); (2) the payment was made in the ordinary course of business (i.e., in the same manner as payments were made before the debtor experienced financial distress) or according to ordinary business terms; or (3) the creditor provided additional goods and services to the debtor on credit after receiving the payment. The purpose of Section 547 is to prevent creditors from racing to dismantle a financially distressed company, and more importantly, to ensure certain creditors are not receiving preferential treatment by the company while others are left holding the bag.

The Act added a new subsection 547(j) to the Bankruptcy Code, generally providing that a trustee (or debtor-in-possession) may not avoid and recover as a preferential transfer:

This new provision, which sunsets on December 27, 2022, is subject to certain limitations, including:

The policy objectives underlying new Section 547(j) seem apparent: (i) ensuring landlords and suppliers are not penalized for accepting deferred payments (out of the ordinary course) under arrangements they have entered into with businesses hit hard by the global pandemic, and (ii) incentivizing landlords and suppliers to explore financial accommodations with their distressed counterparties going forward, instead of exercising default and termination rights under existing agreements. While salutary, these policy objectives are, to some extent, in conflict with Section 547s general purpose of ensuring equal distributions for all creditors of businesses in distress. Notably, the statute does not protect certain types of creditors such as lenders even though an agreement by any creditor to accept a deferred payment would, presumably, benefit a distressed business just as much as a suppliers or landlords agreement to do so.

In any event, the actual language adopted by Congress leaves plenty of room for interpretation. For instance, a payment to a supplier must be made pursuant to an executory contract. But it is unclear whether the contract need still be executory on the petition date. If the supplier accepts an otherwise exempt deferred payment and then terminates the contract prior to bankruptcy, does the supplier still have the benefit of Section 547(j)?

In addition, it is likely the courts will face questions regarding what constitutes a deferral agreement or arrangement for purposes of the statute, and whether such agreement or arrangement qualifies for protection if deferring or postponing payment of arrearages is part of a larger agreement to restructure the parties business relationship involving various forms of consideration. Finally, the language of the statute may leave room for parties to potentially game the system. For instance, Section 547(j) is an exception from the avoidance power under 547(b), not a defense, meaning payments to insider landlords and suppliers during the year preceding the bankruptcy appear to also be subject to the exemption. Thus, affiliated companies with intercompany debts may be incentivized to enter into friendly agreements to defer payments for the purpose of ensuring catch-up payments are exempted from avoidance.

Only time (and the courts) will tell whether this new provision will accomplish the intended Congressional objectives, and what avenues parties may exploit to take advantage of this otherwise well-intentioned response to the fallout from the coronavirus pandemic. In the meantime, landlords and suppliers who have deferred payments during the pandemic should ensure they document these deferrals and avoid charging interest or penalties prohibited by statute in order to take advantage of Section 547(j) should their tenant or customer file bankruptcy.

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Consolidated Appropriations Act of 2021 Amends Bankruptcy Code - Part 3: Congress Gives Suppliers and Landlords a Shiny New Arrow in their Quiver to...

This year started where 2020 finished, with another bankruptcy record.

Some 56 New Hampshire individuals and businesses filed for bankruptcy in January, the lowest number seen in any January indeed, any month since January 1988. The total was 11 fewer than December 2020 and four fewer than November 2020.

The low number of bankruptcies persists despite the resurgence of the pandemic in December and January and the states relatively high unemployment, particularly in the hospitality industry, with some restaurants and hotels going into hibernation following a muted Christmas.

Bankruptcy filings in the state have been in the double digits for 10 straight months, dropping in April just after the pandemic first struck and after a generation of monthly bankruptcy filings in the hundreds.

For months, bankruptcy attorneys have predicted an increase in filings, but that hasnt happened. Businesses and individuals, bolstered by federal and state aid and sheltered from most evictions and foreclosures, have managed to hang on, with the hope of future assistance or an easing of the pandemic as the vaccine rollout continues. Others particularly brick-and-motor retailers might have been hanging on at least until Christmas before making any decision.

But Christmas is long gone, and most businesses and individuals are not throwing in the towel.

Januarys total is less than a sixth of the 381 that were filed in January 2010, in the midst of the last recession. It was less than half of the 121 filed in January of 2020, a 54% decrease.

In all of total there was a total of 1,054 filings, or an average of 88 a month. In 2019, the total was 1,774, for a monthly average of 148. In 2010 the yearly total was 5,507, or 459 a month. You have to go back to 1988 in the midst of a booming economy to get a lower annual total 835, or 70 a month.

In January there were three bankruptcy filings with business-related debt, but only one was filed by the business directly, and it is conjunction with a sale free and clear of all liens:

Parrillo Designs LLC, dba Derailed Boutique, Kingston, filed Jan. 15, Chapter 7. Assets: $37,405. Liabilities: $82,201.

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Bankruptcy filings continue their record lows in New Hampshire - New Hampshire Business Review

(Reuters) - U.S. shale oil and gas producer Chesapeake Energy Corp plans to cut 15% of its workforce, an email sent to employees revealed, as it closes on new financing that will allow it to emerge from bankruptcy court protection next week.

Once the second-largest U.S. natural gas producer, Chesapeake was felled by a long slide in gas prices. The company is resetting our business to emerge a stronger and more competitive enterprise, according to the email to employees by Chief Executive Doug Lawler dated Tuesday, and reviewed by Reuters.

Most of the 220 layoffs will happen at the Oklahoma City headquarters, the email said.

Chesapeake on Tuesday said it planned to raise $1 billion in notes to complete its bankruptcy exit.

The companys bankruptcy plan was approved by a U.S. judge last month, giving lenders control of the firm and ending a contentious trial.

Chesapeake filed for court protection in June, reeling from overspending on assets and from a sudden decline in demand and prices spurred by the coronavirus pandemic.

As we prepare to conclude our restructuring, we continue to prudently manage our business and staffing levels to adapt to challenging market conditions and position Chesapeake for sustainable success, company spokesman Gordon Pennoyer said by email, when asked about the planned layoffs.

People losing their jobs will be given severance packages and career assistance, according to Lawlers email. The companys headquarters was closed on Wednesday and workers were notified by phone about layoffs because of the current health concerns known to all, the email said.

Reporting by Jennifer Hiller; editing by Richard Pullin and Marguerita Choy

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Chesapeake Energy cuts 15% of workers as it emerges from bankruptcy - Reuters

1. Hedge fund manager pleads guilty in Neiman Marcus bankruptcy case  Financial Times
2. New York Hedge Fund Founder Pleads Guilty To Bankruptcy Fraud In Connection With Neiman Marcus Bankruptcy  Department of Justice
3. Dan Kamensky Pleads Guilty to Bankruptcy Fraud Charge  Institutional Investor
4. Ex-BigLaw Bankruptcy Atty Pleads Guilty In Extortion Rap  Law360
5. View Full Coverage on Google News

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Hedge fund manager pleads guilty in Neiman Marcus bankruptcy case - Financial Times

Background

The Commodity Futures Trading Commission (CFTC) recently adopted final amendments to Part 190 of the CFTC's regulations (the "Final Rules"), governing bankruptcy proceedings with respect to commodity brokers.1 The Final Rules represent the first comprehensive update to the CFTC's bankruptcy rules since the Part 190 rules were initially adopted in 1983. Approved unanimously, the Final Rules serve to modernize and revise the CFTC's regulations to reflect changes in the commodity brokerage industry over that time.

Subchapter IV, chapter 7 of the Bankruptcy Code ("Code") sets out the essential provisions governing the liquidation of a commodity broker in bankruptcy. However, the CFTC is authorized under section 20 of the Commodity Exchange Act (CEA), "notwithstanding the Code," to adopt rules that provide, among other things: (1) that certain cash, securities, other propertyor commodity contracts are to be included in or excluded from customer property or member property; and (2) the method by which the business of such commodity broker is to be conducted or liquidated after the date of the filing of the petition under the Code. Part 190 of the CFTC's regulations are promulgated under this authority as well as the CFTC's general rulemaking authority under section 8a(5) of the CEA.

Since the initial adoption of the Part 190 rules, there have been significant developments in practices with respect to commodity broker bankruptcies, including as a result of judicial decisions and certain high-profile bankruptcies (like that of MF Global Inc. and Peregrine Financial Group Inc.). As emphasized in former Chairman Heath Tarbert's statement in support of the Final Rules, they seek to clarify and codify key principles and approaches or practices that have developed over time as the existing Part 190 rules were applied to real-world bankruptcy situations.

Highlights of the Final Rules

At a high level, the Final Rules address the following major topics:

Statutory Authority, Organization, Core Concepts, Scope and Construction. The Final Rules adopt new CFTC Rule 190.00, which sets forth the statutory authority, organization, core concepts, scope and rules of construction for Part 190 of the CFTC's regulations. In particular, new CFTC Rule 190.00 sets out the CFTC's intent regarding bankruptcies for the benefit of market participants, trustees and the general public.

Default of a Derivatives Clearing Organization. The Final Rules adopt new Subpart C to Part 190 of the CFTC's regulations, which governs the bankruptcy of a DCO. Among other things, new Subpart C provides that the trustee should follow, to the extent practicable and appropriate, the DCO's pre-existing default management rules and procedures and recovery and wind-down plans that have been submitted to the CFTC. These rules, procedures and plans will, in most cases, have been developed pursuant to Part 39 of the CFTC's regulations, subject to CFTC staff oversight. This approach relieves the trustee of the burden of developing, in the moment, models to address an extraordinarily complex situation.

Priority of Customers and Customer Property. The Final Rules clarify that shortfalls in segregated property should be made up from the general assets of the FCM. The Final Rules also clarify that, with respect to customer property, public customers are favored over non-public customers.

Securities Investors Protection Act (SIPA) and Federal Deposit Insurance Corporation (FDIC). The Final Rules confirm the applicability of Part 190 of the CFTC's regulations in the context of an FCM that also is registered with the Securities and Exchange Commission (SEC) as a broker-dealer and subject to a proceeding guided primarily by the SIPA. Likewise, the Final Rules clarify the applicability of Part 190 in the context of a proceeding in which the FDIC is acting as receiver.

Letters of Credit as Collateral. The Final Rules confirm the treatment of letters of credit used as collateral. Specifically, the Final Rules make clear that customers posting letters of credit as collateral will be subject to the same pro rata loss as customers that post other types of collateral, such as cash and securities, both during business as usual and during bankruptcy.The pro-rata loss would be calculated based on the face value of the posted letter of credit, even if only a portion was drawn down by a customer at the time of the bankruptcy.

Greater Trustee Discretion. The Final Rules grant trustees greater discretion by, among other things, permitting the trustees to treat public customers on an aggregated basis. This greater discretion generally favors the cost effective and prompt distribution of customer property over the precision of valuing each customer's entitlements on an individual basis.

Transferring Rather Than Liquidating Customer Positions. The Final Rules further confirm the CFTC's longstanding preference for transferring positions of public customers rather than liquidating the positions.

Reflect Changes to CFTC's Regulatory Framework. The Final Rules update Part 190 of the CFTC's regulations to better reflect changes to the CFTC's regulatory framework over the years, including the CFTC's recent revisions to its customer protection rules. The Final Rules also update cross-references to other CFTC rules.

Changes in Technology. The Final Rules also reflect changes in technology, including a recognition that many records are captured and stored electronically rather than on paper.

Non-Substantive Clarifications. The Final Rules provide non-substantive changes to clarify language in the CFTC's regulations. These clarifications are intended to address ambiguities that have complicated past bankruptcies.

A chart summarizing all of the provisions in the Final Rules is available in this advisory's appendix.

Effective Date of the Final Rules

The Final Rules are effective 30 days after publication in the Federal Register.

Principal Changes From the Proposed Rules and Supplemental Proposed Rules

The Final Rules differ from the proposed amendments2 and supplemental amendments,3 published in the Federal Register on June 12, 2020 and September 24, 2020, respectively, in a few key respects. In particular, the Final Rules clarify in CFTC Rule 190.11 that if a debtor clearing organization is organized outside the United States, then only selected provisions in Part 190 of the CFTC's regulations would apply, including (1) the general provisions in Subpart A to Part 190; (2) the reports and records requirements in CFTC Rule 190.12; and (3) the prohibition on avoidance of transfers in Rule 190.13 and the net equity calculation and treatment of property requirements in Rules 190.17 and 190.18, but only with respect to an FCM clearing member's public customers. The CFTC expressed its rationale in adopting the final scheme as a balance between protecting customers and mitigating conflict with foreign proceedings.

Additionally, the CFTC adopted a simplified CFTC Rule 190.14(b) that is consistent with DCO rules governing the default of the DCO. As originally proposed, Rule 190.14(b) included additional provisions that were intended to provide a brief opportunity, after the order for relief, to enable alternatives (i.e., resolution under Title II of the DoddFrank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") or the transfer of clearing operations to another DCO) in lieu of liquidation. In response to comments following the Proposed Rules, the CFTC withdrew proposed paragraphs (b)(2) and (b)(3) and issued the Supplemental Proposed Rules with an alternative approach to facilitate the potential resolution of a systemically important DCO under Title II of the Dodd-Frank Act. In adopting the Final Rules, the CFTC determined not to go forward with the Supplemental Proposed Rules. As adopted, Rule 190.14(b) provides only that subsequent to the order for relief, the DCO must cease making calls for variation settlement or initial margin. Relatedly, former Chairman Heath Tarbert noted that the CFTC will engage in "further analysis and development before proposing this, or any other, alternative approach."

Katten's prior advisory, "More Than a Refresh but Much Less Than A Substantial Overhaul: The CFTC Proposes Comprehensive Amendments to Its Bankruptcy Rules," includes a discussion of the Proposed Rules.

See the CFTC's Supplemental Proposed Rules.

_______________

Appendix: Chart Summarizing Changes to Part 190 of CFTC Regulations

Elias Wright, an associate in the Financial Markets and Funds practice and candidate for admission to the New York State bar, contributed to this advisory.

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The CFTC Adopts Comprehensive Amendments to Its Bankruptcy Rules - JD Supra

Thursday, January 28, 2021

The mammoth spending and COVID-19 pandemic relief bill contains provisions related to commercial real estate leases in bankruptcy. Landlords and business lessees in, or contemplating, bankruptcy will want to familiarize themselves with the new provisions.

By way of background, filing bankruptcy does not give you the automatic right to stop paying rent. Under the Bankruptcy Code, a Chapter 11 debtor must assume or reject its unexpired leases. There are conditions. First, assumption or rejection is subject to court approval. Second, the debtor must assume or reject within 120 days of filing bankruptcy or the date of an order confirming a plan of reorganization whichever is earlier. The debtor may get a 90-day extension if it can show good cause to do so, but any further extensions are subject to court approval and the lessor's consent. Third, to assume a lease, the debtor must cure all defaults. So if the lease is three months past due, the lessee must bring it current as a condition of assumption. Finally, before assuming or rejecting a lease, the debtor must "timely perform" all its obligations under the lease.

The CAA extends the assumption or rejection period from 120 days to 210 days with no court approval. Lessee debtors now have an additional three months of breathing room, and landlords now face an equally-extended period of uncertainty. A debtor can extend the period even further up to 300 days if the bankruptcy court finds good cause to do so.

As to payment of rent, bankruptcy courts now may grant subchapter V small business debtors additional time to satisfy post-petition rent obligations if the debtor is experiencing pandemic-induced financial hardship. Before the CAA, debtors could extend post-petition rent obligations up to 60 day after the petition date. Bankruptcy courts could not extend that time period beyond 60 days. The CAA allows bankruptcy courts to extend the 60-day period to 120 days for subchapter V debtors. Subchapter V debtors that receive this extraordinary relief may also repay the delayed administrative rent over time under their subchapter V plan, rather than repay it in full upon plan confirmation.

The Bankruptcy Code allows debtors and trustees to avoid and recover payments to creditors made within 90 days of the bankruptcy filing, subject to certain defenses. The specter of having to return payments can make it difficult for landlords to grant forbearance or deferralsto lessees in the shadow of bankruptcy. The CAA amends the Code to prohibit avoidance of preferential payments made by a debtor to landlords under agreements to defer or postpone payments entered into with a debtor after March 12, 2020.

These new CAA provisions are effective until the end of 2022.

2020 Ward and Smith, P.A.. All Rights Reserved.National Law Review, Volume XI, Number 28

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Breathing Room for Commercial Tenants in Bankruptcy - The National Law Review

Understanding each homeowners best options is key to being a real estate professional who advises homeowners in need of selling their home, especially when they are upside down or in default of their mortgage.

For many homeowners, bankruptcy may be a much smarter choice than facing foreclosure. But they may not have all the information they need to make the right decision. Thats where the agent comes in.

The purpose of bankruptcy is to offer financial relief to individuals when burdened with debt and looking for a fresh start.

In bankruptcy, homeowners have the option to retain or surrender their home. If they chose to retain, the homeowner must bring their home current or qualify for a modification. The harsh reality is that the vast majority of homeowners who are delinquent in bankruptcy end up in foreclosure. For homeowners that chose to surrender their home, the bankruptcy trustee becomes the legal seller and has the right to sell the home and settle the debts. However, over 98% of surrendered homes are abandoned by the trustee pushing the obligation back on the homeowner and right into foreclosure litigation.

Today many real estate professionals learn how to sell bankruptcy real estate and become something of a knight in shining armor to their clients in need.

Offering professional real estate experience to homeowners in bankruptcy is extremely rewarding and builds long term goodwill. It is always a good feeling to help a seller in need.

Selling properties in bankruptcy is complicated but can also be very profitable. ost real estate professionals shy away from them, unsure how to assist homeowners through the process. A homeowner in bankruptcy is called a debtor, and a debtor goes through many stages while in bankruptcy, and understanding these stages and what options they have is key. Debtors have many options.

Today, real estate agents and brokers have teamed up with BK Global, a company specializing in the sale of bankruptcy properties nationwide. BK Global has built an online platform giving the over 1,250 bankruptcy trustees and mortgage servicers the ability to connect and collaborate online to simplify selling real estate assets in bankruptcy.

BK Global offers a Bankruptcy Specialist Certification that empowers real estate agents and brokers with the knowledge and solutions needed to work with a homeowner in bankruptcy.

Weve put together a training program where we certify brokers as bankruptcy-certified specialists, and we train them so that they know how to work these situations in bankruptcy, said Brad Geisen, CEO of BK Global. Brokers and agents know the best way to assist through our program. When talking to a homeowner, they know what to do and what to say. There are over 800,000 properties in bankruptcy between Chapter 7 and Chapter 13 right now, and thats before the surge.

Once you complete the certification, you are part of the BK Global broker network. BK Global assigns listings from trustees to certified agents and brokers in the local market and will refer homeowner listing opportunities on select cases. As part of their network, BK Global will help you work with the trustee and obtain lender approval from the mortgage servicer.

BK Global also provides access to all of the bankruptcy listings in your area, and you can approach the homeowners directly. You would be surprised to see how many homeowners are in bankruptcy. You can click on the link below and type in your zip or city and see current bankruptcy opportunities.

To learn to become a Certified Bankruptcy Specialist click here.

BK Global was founded by Brad Geisen, a 35-year veteran of the default real estate industry, to mitigate real estate assets in bankruptcy better. In his career, he created or operated websites such as Foreclosure.com, HomePath.com, HomeSteps.com, TaxLiens.com, HUDHouses.com, and many more. He developed and ran a pilot program for the HUD, which became the highly effective HUD M&M Program that still operates today. Mr. Geisen created the first online offer management platform which has become the industry standard used by mortgage lenders and Government-Sponsored Enterprises (GSEs).He also created a national training and education platform for GSEs and Mortgage Servicers to improve vendor performance and ensure compliance. He also developed a National Short Sale Platform, to facilitate fast, efficient approvals.

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How to help homeowners when they file bankruptcy - Inman

The attorneys and professionals in the Weinstein Co. bankruptcy case have received $26 million in fees thus far, considerably more than the $17.1 million that Harvey Weinsteins victims will receive.

The legal bills are still coming in, and will likely exhaust the $3.3 million remaining in the companys accounts, according to testimony from Robert Peck, the companys former controller.

The fees represent a sizable chunk of the cost of resolving the case, but have received far less attention than the payouts to other stakeholders.

Last Monday, U.S. Bankruptcy Judge Mary Walrath approved a $35.2 million settlement, which includes the $17.1 million fund that will be paid out to more than 50 of Weinsteins sexual misconduct accusers. The plan, which is funded by insurance policies, will also pay $9.7 million to cover defense costs for Weinstein Co. directors and officers, and $8.4 million to the companys trade creditors, including law firms and other entertainment companies.

The women with the most serious allegations rape or sexual assault will be paid something in the range of $500,000 to $1 million. While not insignificant, that is much less than they would receive if the company were solvent. Likewise, the trade creditors will get just a small fraction of what they are owed.

But under bankruptcy law, the lawyers and professionals who worked on the case will be paid close to the full amount billed. Experts in the field said they were not surprised by the fee amount.

Is it a staggeringly high number? Absolutely, said Nancy Rapoport, a law professor at the University of Nevada, Las Vegas. Does it shock me for a big case? Absolutely not.

Lynn LoPucki, a law professor at UCLA, has tracked fees in bankruptcy cases for decades, and waged a lonely battle to try to rein them in. Asked about the Weinstein Co. fees, he said, Theyre high. They are high in all bankruptcy cases, because theres no one controlling them.

Cravath, Swaine & Moore, the debtors lead counsel, has billed more than $12.4 million in fees and expenses. Paul Zumbro, the firm partner who has done most of the talking in Delaware bankruptcy court, has billed the debtor at the rate of $1,725 an hour a substantial hike from the $1,360 an hour he was billing when the case began nearly three years ago. In total, Cravath has billed more than $12.4 million in fees and expenses.

The relationship between Cravath and the Weinstein Co. dates from before the companys collapse. In 2017, two Cravath attorneys Karin DeMasi and Evan Chesler represented the company in a distribution dispute. The firm continued to represent the company in litigation against Harvey Weinstein after he was fired in October 2017.

Richards, Layton and Finger, based in Wilmington, was brought in to represent the company as local counsel in the Delaware bankruptcy court. That firm, which advertises itself as Delawares largest, has billed another $4.4 million. And Pachulski Stang Ziehl & Jones has billed more than $4.8 million to represent the committee of unsecured creditors, which included three trade creditors and two sexual misconduct claimants.

Debra Grassgreen, a senior partner at Pachulski Stang who billed at the rate of $1,095 an hour, told the court at the confirmation hearing that she had had emotional conversations with many of the women. She argued that the settlement was best deal the victims were likely to get.

These women need closure, she said.

But the opponents of the deal argued that it offered protection to Weinstein and his cohorts, who otherwise could face civil liability for allegations that they enabled his abuses. The settlement bars anyone even those who opposed the bankruptcy plan from suing Weinstein Co. board members Bob Weinstein, Tarak Ben Ammar, James Dolan, Richard Koenigsberg, Marc Lasry, Lance Maerov, Jeff Sackman, Tim Sarnoff, Paul Tudor Jones, and Dirk Ziff. It also protects ex-Weinstein Co. employees Frank Gil, David Glasser, and Barbara Schneeweiss from liability.

The deal also also offers accusers a powerful inducement to settle their claims against Weinstein. A claims examiner will review each womans allegations and divide up the victims fund based on a point scale. But in order to get the full amount, the accusers must relinquish any civil claims against Harvey Weinstein. If they refuse, they will forfeit 75% of the award.

The objectors argued the deal granted Weinstein the benefit of discharging a liability, without forcing him to declare personal bankruptcy or forfeit his own assets.

Theyre effectively protecting Harvey Weinstein. Thats what the whole bottom line in this situation is, LoPucki said. Why is the bankruptcy court protecting Harvey Weinstein? Harveys not in bankruptcy. Why is he getting the same benefits he would get if he did file bankruptcy?

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Weinstein Co. Bankruptcy Attorneys to Receive Millions More Than Victims - Variety

On January 25, 2021, the Alberta Court of Appeal (the ABCA) released its reasons in PricewaterhouseCoopers Inc. v Perpetual Energy Inc., 2021 ABCA 16 (Perpetual Energy). While the issue before the ABCA was of a preliminary nature namely whether the claims of the trustee in bankruptcy (the Trustee) should be summarily dismissed or struck as not disclosing a cause of action the legal principles considered by the ABCA extend far beyond the immediate parties and include broader questions around the nature and role of abandonment and reclamation obligations (AROs) after bankruptcy, the scope of a trustee in bankruptcys duties to third parties, the duties of a director in respect of a companys environmental liabilities, and the scope of releases in favour of directors.

In particular, the ABCA considered (and in some cases, emphasized or determined) the following important issues:

In the result, the ABCA determined that the case management judges criticisms of the Trustee were entirely unwarranted. According to the ABCA, the claims raised by the Trustee were complex and, in some cases, raised novel issues, which did not permit for fair disposition on a summary basis. The ABCA accordingly allowed the Trustees appeal, set aside the award of costs made by the case management judge against the Trustee, found that the award of costs made by the case management judge against the Trustee in its personal capacity was inappropriate, and dismissed the appeal of Perpetual Energy Inc. (Perpetual Energy Parent), Susan Riddell Rose (Ms. Rose) and the other respondents.

Background

Perpetual Energy involved complex claims by the Trustee of Sequoia Resources Corp., formerly known as Perpetual Energy Operating Corp. (Perpetual/Sequoia), against a former director of Sequoia and certain other companies in the Perpetual Energy Group arising from a pre-bankruptcy multi-step transaction.

Transaction

In 2016, Perpetual Energy Parent entered into a multi-step transaction (the Aggregate Transaction) whereby certain mature legacy oil and gas assets, which had significant AROs associated with them, were sold to Kailas Capital Corp. (Kailas). The Aggregate Transaction was structured such that the legacy assets could be transferred without triggering a regulatory review process from the Alberta Energy Regulator (AER).

As part of the Aggregate Transaction, Perpetual Operating Trust, the holder of the legacy assets, initially transferred the beneficial interest in the assets to its trustee, Perpetual/Sequoia, which was then a member of the Perpetual Energy Group (the Asset Transaction). Then, Perpetual Energy Parent sold all of its shares in Perpetual/Sequoia to a subsidiary of Kailas for $1.00, resulting in Kailas becoming the new parent corporation of Perpetual/Sequoia. As is common in sale transactions, Kailas and the sole director of Perpetual/Sequoia, Ms. Rose, signed a resignation and mutual release (the Release) pursuant to which Ms. Rose and Perpetual/Sequoia released each other from claims that they might otherwise be entitled to bring against the other.

Approximately 18 months after the Aggregate Transaction, Perpetual/Sequoia assigned itself into bankruptcy, and PricewaterhouseCoopers Inc. was appointed as Trustee.

Dispute

Following its appointment, the Trustee reviewed Perpetual/Sequoias affairs and concluded that the Asset Transaction was not in the best interests of Perpetual/Sequoia. In particular, the Trustee alleged that Perpetual/Sequoia obtained only $5.67 million in value for the assets but assumed more than $223 million in obligations, including AROs.

The Trustee commenced litigation against Perpetual Energy Parent, Ms. Rose and other members of the Perpetual Energy Group, alleging that

Both the Trustee and the defendants applied for summary judgment of the claims.

Summary judgment decisions

The case management judge struck or summarily dismissed most of the Trustees claims. In particular, the Oppression Claim was struck for failure to disclose a cause of action, because the Trustee was not a proper person to be a complainant pursuant to the Business Corporations Act (Alberta), or alternatively because the oppression claim lacked merit. The claim against Ms. Rose was struck for failure to disclose a cause of action, and it was also summarily dismissed on the basis that the Release was a complete defence.

Subsequently, the case management judge ruled that the Trustee should pay 85% of Ms. Roses solicitor and client costs, and that the Trustee should be personally liable for those costs. In his costs judgment, the case management judge set out several new duties that he found the Trustee owed to Ms. Rose (which duties he found the Trustee had breached), including that the Trustee owed a duty of procedural fairness to Ms. Rose in the course of conducting its investigations.

The Trustee and the Perpetual Energy defendants both appealed the summary judgment decisions, and the Trustee also appealed the costs award.

Result

The ABCA:

Analysis

Nature of AROs

Central to these decisions was the SCCs decision in Redwater, which confirmed that the AER was not a creditor with respect to AROs and that AROs were not claims provable in bankruptcy. In reliance on this proposition, the case management judge determined that AROs were assumptions and speculations that did not exist, were not obligations of Perpetual/Sequoia, and therefore should be valued as nil on Perpetual/Sequoias balance sheet.

Rejecting the case management judges interpretation of Redwater, the ABCA noted that AROs may not be current liabilities or obligations of a company, but are nevertheless real liabilities. While such obligations may be contingent in the sense that the moment that production will cease and such obligations come into existence may be uncertain, they are not contingent in the sense that they will only come into existence upon the occurrence of a defined condition precedent. The existence of AROs is a certainty, as their coming into existence is inevitable.

As a result of this analysis, the ABCA noted that while AROs may not be conventional debt, they are an obligation of oil and gas companies owed to the public and surface landowners that the trustee in bankruptcy cannot ignore. AROs operate in the insolvency context by depressing the value of the assets and, as the SCC held in Redwater, are obligations that must be discharged even in priority to paying secured creditors.

The ABCAs conclusions regarding the nature of AROs had a significant impact on the result reached by the Court:

The ABCAs determination that AROs are real obligations and liabilities of oil and gas companies in Alberta accords with common understandings of the term in Alberta and with what the ABCA found to be common practice amongst many oil and gas companies to report such obligations on their balance sheets. The decision resolves what has been criticized as the absurd interpretation of AROs reached by the case management judge, which has been noted as open[ing] the door to interpretations where general laws become meaningless and only debts owed to creditors count[4] a result expressly rejected by the SCC in Redwater. The ABCAs decision resolves the apparent disjunction between, on the one hand, the polluter pays principle endorsed by the SCC in Redwater and, on the other hand, the case management judges application of Redwater in a manner that permitted the Perpetual Energy Parent to take the benefit of oil and gas assets while producing, and then shed associated AROs when no longer economically viable.

While simply a byproduct of the ABCAs decision, the result reached by the ABCA establishes a thread of consistency between the courts and the AER to create greater accountability for environmental protection and remediation by those who choose to participate in Albertas oil and gas industry. View information on the latest steps taken by the AER to implement its new Liability Management Framework.

The status of the Trustee in advancing oppression claims

In declining to grant the Trustee status as a complainant, the ABCA held that the case management judge failed to appreciate the collective nature of the role of the trustee in bankruptcy. The Trustee was not purporting to bring the oppression action on behalf of individual creditors, but on behalf of the entire estate of Perpetual/Sequoia. As the ABCA noted, by definition, the Trustee represents all creditors of the bankrupt, and the aggregate claims in a bankruptcy always consist of a number of individual claims.

Importantly, the ABCA confirmed prior jurisprudence establishing that oppression claims are not to be used as a method of debt collection; the mere fact that a corporation does not or cannot pay its debts as they come due does not amount to oppression. However, as the ABCA clarified, the Trustee was not asserting that Perpetual/Sequoia could not simply pay a debt. The Trustees allegation was that Perpetual/Sequoia had been reorganized in such a way that it had been rendered unable to pay its debts. The Trustee alleged that the Asset Transaction was unfairly prejudicial to the creditors of Perpetual/Sequoia.

Whether the Trustee will be able to prove this claim remains to be seen, but the ABCA held that the oppression claim ought not to have been summarily dismissed. Noting the complexity of the issues raised by the Trustee, the ABCA determined that the oppression claim should be restored and the Trustee granted complainant status to pursue such claim if it so wished.

The scope of directors duties

Without deciding the issue, the ABCA highlighted that a director may potentially owe an obligation to ensure that the corporation complies with its environmental obligations. Such obligation is currently potential and ill-defined, and could be owed to the public, not necessarily to the corporation exclusively. The ABCA emphasized that the Trustee sought to hold Ms. Rose to account for allegedly having structured the affairs of Perpetual/Sequoia in such a way that made it impossible for Perpetual/Sequoia to discharge its public obligations. This was a novel claim that should not have been resolved summarily.

The ABCA observed that generalized releases of directors (which are commonly used in change of control situations) may not cover a directors potential obligation regarding environmental liabilities. Since this obligation may be owed to the public, private parties may not be able to release a director from it.

The ABCA also emphasized that there is no change in a directors duties when a director is acting for a special purpose corporation or wholly owned subsidiary: a director must always act in the best interest of the corporation. As sole director, Ms. Rose was responsible for ensuring that the Asset Transaction was in the best interests of Perpetual/Sequoia: if Ms. Rose did not agree that the instructions [from Perpetual Energy Parent] were in the best interests of Perpetual/Sequoia, her obligation was to resign. At this stage, it was inappropriate to strike or dismiss the Trustees claim for breach of directors duties.

Finally, this decision suggests that directors and officers should take care to evaluate separately all steps involved in multi-step transactions, which are often used for tax planning purposes. Although it has long been accepted that a taxpayer can structure its affairs to reduce tax liability, that concept does not apply to Section 96 of the BIA. When addressing the Trustees claim that the Asset Transaction was void pursuant to Section 96, the Perpetual Energy Group argued that the Asset Transaction should be analyzed only as a component of the overall Aggregate Transaction which was, writ large, an arms-length transaction and not voidable under Section 96. However, the ABCA indicated a willingness to analyze the transactions on a step-by-step basis, and not in the aggregate. The ABCA observed that if a transaction is entered into in violation of Section 96, it is no defence that it was connected to a number of other transactions that did not engage Section 96 at all. The ABCA did not determine whether an oil and gas company can arrange its affairs so as to avoid regulatory scrutiny, in a manner that is analogous to income tax law. Redwater does not provide an answer on this point and this type of novel issue must be tested at trial.

The scope of the duties of a trustee

The case management judge heard a subsequent application by Ms. Rose for enhanced costs and concluded that the Trustee should pay 85% of Ms. Roses solicitor and client costs and that the Trustee should be personally liable for those costs. The case management judge made that determination on the basis that the Trustee, as an officer of the court, should be held to a higher standard than normal litigants. Such higher standard required the Trustee to comply with principles of procedural fairness; comply with duties imposed by the courts of equity on trustees in general (that is, not trustees in bankruptcy); present facts to the court without opinions, argument or evidence; and complete an appropriate investigation prior to commencing litigation. The case management judge concluded that in failing to meet those higher standards, the Trustees conduct was egregious and the Trustee exercised very poor judgment that equate to positive misconduct.

Overturning the case management judge, the ABCA found that there was nothing egregious about the Trustees conduct, that the criticisms levied by the case management judge against the Trustee were unwarranted, and that the case management judge had made errors both in principle and in law in awarding costs against the Trustee. Most importantly, the ABCA affirmed that while a trustee in bankruptcy is an officer of the court, a trustee in bankruptcys primary duty is to the creditors of the estate through the inspectors. A trustee in bankruptcy does not owe duties to potential defendants in estate litigation, and in fact would be placed in a conflict of interest if it was also under a legal duty to third parties. As the ABCA noted, a trustee in bankruptcy is not an administrative tribunal, and the principles of administrative law have no application in civil commercial matters. As a result, the Trustee had no obligation to hear the defendants views before pursuing litigation or provide the defendants with advance notice of a statement of claim.

Furthermore, as the ABCA noted, a trustee in bankruptcys position and exercise of judgment could require it to take an adversarial role in litigation. Once the Trustee came to the conclusion that Perpetual/Sequoia had potential claims against various defendants, the Trustee was not only correct to pursue those claims but obliged to do so.

Overall, the ABCA judgment strongly affirms a trustee in bankruptcys duty to creditors and its obligation to exercise its own judgment, under the supervision of inspectors, for the benefit of the bankrupt estate. In pursuing this duty, a trustee is not burdened by administrative law obligations and has no generalized duty of fairness to third parties.

PricewaterhouseCoopers Inc v Perpetual Energy Inc, 2021 ABQB 2

Prior to the release of the ABCAs decision, the case management judge released a further decision on the merits of the Section 96 Claim on January 14, 2021, in PricewaterhouseCoopers Inc v Perpetual Energy Inc, 2021 ABQB 2. In this decision, the Alberta Court of Queens Bench (the ABQB) found that Perpetual/Sequoia was not insolvent at the time of the Asset Transaction or rendered insolvent by the Asset Transaction. Underpinning this finding was the assertion that AROs should be valued at nil for the purposes of the BIA. As the ABCA has now unequivocally rejected this view, thereby undermining the foundation of the ABQB decision, the ABCA may have a further opportunity to revisit these issues in short order.

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Sequoia Resources: Environmental obligations and the role of the trustee in bankruptcy - Lexology

Fox Business Flash top headlines are here. Check out what's clicking on FoxBusiness.com.

The National Rifle Association (NRA) touted that it's in its bestfinancial position in years, despite declaringbankruptcyearlier this month.

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The nations most politically influential gun-rights advocacy groupannounced on Jan. 15 that it was seeking relief in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. However, the NRA has said it is looking to re-incorporate in Texas from New York where it has beenincorporated for 150 years. The group's longtime home state has filed a lawsuit to dissolve the organization.

According to a note on the NRA's website,however, the group isn't under financial constraints at all.

"Is the NRA going bankrupt? aQ&Asection on the gun lobbying group's website read.

The NRA's response: "No. In fact, this move comes at a time when the NRA is in its strongest financial condition in years."The group continued,saying "the NRA is not insolvent."

The NRA's website alluded to the fact that its decision to file had nothing to do with its financial position at all, but instead the result of a lawsuit against them from the state of New York.

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"This action is necessitated primarily by one thing: the unhinged and political attack against the NRA by the New York Attorney General," the NRA's website reads.

In August, New York Attorney General Letitia Jamessued the organization over claims that top executives illegally diverted tens of millions of dollars for lavish personal trips, no-show contracts for associates and other questionable expenditures.

Letitia James, New York's attorney general, speaks during a news conference in New York on Aug. 6, 2020. (Photographer: Peter Foley/Bloomberg via Getty Images)

The suithighlighted misspending and self-dealing claims that have roiled the NRA and its longtime leader, Wayne LaPierre, in recent years from hair and makeup for his wife to a $17 million post-employment contract for himself.

James said the group had been "failing to carry out its stated mission" for many years and rather"operated as a breeding ground for greed, abuse and brazen illegality."

NRA FILES FOR BANKRUPTCY, ANNOUNCES IT'S DITCHING NEW YORK FOR TEXAS

Meanwhile, NRA President Carolyn Meadows had labeled James a political opportunist who was pursuing a rank vendetta with an attack on its members Second Amendment rights.

The move to Texas and the decision to reincorporate as a nonprofit is part of the group's strategic plan called Project Freedom.

The group claims restructuring is a "proven mechanism for streamlining legal and business affairs" and will ensure its "continued success."

By moving to Texas, home to more than 400,000 NRA members, the NRA aims to "streamline costs and expenses" while proceeding "with pending litigation in a coordinated and structured manner."

However,their tactic drew even more criticism from James

The NRAs claimed financial status has finally met its moral status: bankrupt," she said in a statement after their Jan. 15 filing. "While we review this filing, we will not allow the NRA to use this or any other tactic to evade accountability and my offices oversight.

Although the NRA is headquartered in Virginia, the NRA was chartered as a nonprofit in New York in 1871 and is incorporated in the state.

The Associated Press contributed to his report.

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NRA says strongest financial position 'in years' despite filing for bankruptcy. Here's why - Fox Business

On December 3, 2020, the United States Bankruptcy Court for the District of Delaware entered an opinion in In re Extraction Oil & Gas, Inc., Case No. 20-11548 (CSS), holding that two entities (the State Court Plaintiffs) violated the automatic stay of 11 U.S.C. 362(a) when those entities commenced and prosecuted litigation against non-debtor entities in Colorado state court and entered into a settlement agreement with the non-debtor entities. The Courts opinion provides useful guidance regarding the scope of the automatic stay of 11 U.S.C. 362(a).

Prior to the commencement of the bankruptcy case, the Debtors who were in the business of extracting hydrocarbons from land in Colorado entered into a Transportation Services Agreement (TSA) with the State Court Plaintiffs. The Debtors TSA with the State Court Plaintiffs required, among other things, that the Debtors ship a minimum volume of oil using the State Court Plaintiffs pipelines or make cash payments to the State Court Plaintiffs if the Debtors failed to do so.

Post-petition, the Debtors moved to reject the TSA and engaged alternative service providers (the Alternative Service Providers) to transport the Debtors oil. Asserting that the Debtors actions would cause irreparable harm, the State Court Plaintiffs commenced the Colorado state court action against the Alternative Service Providers, but not the Debtors, and sought a temporary restraining order against those entities. The Court in the Colorado state court action granted the State Court Plaintiffs request for a temporary restraining order, requiring the Alternative Service Providers to cease all diversion and transport of crude oil from the Extraction wells. Thereafter, the State Court Plaintiffs and the Alternative Service Providers entered into a settlement agreement (the Settlement Agreement) in which the Alternative Service Providers agreed to, among other things, not receive oil from certain locations identified in the Colorado state court litigation.

In the bankruptcy case, the Debtors moved the Court for an order finding that the State Court Plaintiffs commencement of the Colorado state court action and entry into the Settlement Agreement violated the automatic stay of 11 U.S.C. 362(a). In response, the State Court Plaintiffs argued that the Debtors were impermissibly seeking to extend the automatic stay of 11 U.S.C. 362(a) to non-debtors as they commenced the Colorado state court action against the Alternative Service Providers, not the Debtors.

The Court disagreed with the State Court Plaintiffs. The Court explained that 11 U.S.C. 362(a)(3) prohibits any act to obtain possession of property of the estate or to exercise control over property of the estate. The Court further explained that the Debtors contractual and business relationships with the Alternative Service Providers are property of the Debtors bankruptcy estates. The Court then found that the State Court Plaintiffs attempted to exercise control over of the Debtors contractual and business relationships with the Alternative Service Providers through their prosecution of the Colorado state court action and entry into the Settlement Agreement. As such, the State Court Plaintiffs violated the automatic stay of 11 U.S.C. 362(a) despite the fact that they had commenced the Colorado state court action against the Alternative Service Providers and not the Debtors.

The key takeaway from the Courts decision is that a creditor may violate the automatic stay of 11 U.S.C. 362(a) even where it commences an action against an entity other than a debtor in bankruptcy. Indeed, the relevant inquiry for the Court was not whether the State Court Plaintiffs had taken action against the Debtors, but rather whether the State Court Plaintiffs sought to exercise control over property of the Debtors bankruptcy estates.

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Delaware Bankruptcy Court Provides Guidance on the Scope of The Automatic Stay - JD Supra

By Kevin Hardy

The Kansas City Star

AMC Theatres says it has raised nearly $1 billion in recent weeks a sum that should help the struggling movie theater chain avoid filing for bankruptcy protection.

The Leawood, Kan.-chain announced Monday that it had raised $917 million in new equity and debt financing. In a news release, AMC CEO and President Adam Aron said the sun is shining on AMC.

This means that any talk of an imminent bankruptcy for AMC is completely off the table, his statement said.

AMC operates movie theaters in Hummels Wharf, Williamsport and Bloomsburg.

In October, AMC warned investors it could run out of cash by the beginning of 2021. Movie theaters have been hit particularly hard by the pandemic, as both consumer demand has sunk and studios have limited the release of new films.

AMC, the worlds largest movie theater chain, said its latest infusion of cash should allow the company to make it through this dark coronavirus-impacted winter.

Still, the future remains uncertain: AMC lost money in 2017 and 2019, carried more than $4 billion in debt and had little cash on hand going into the pandemic. And its unclear how many consumers will go back to movie theaters after the pandemic is under control, particularly as Hollywood has more quickly moved content directly to streaming services.

One expert predicts as many as a quarter of the 7,800 movie theaters in the United States could close because of the pandemic.

Liberty, Mo.-based B&B Theatres, a family owned chain, also has publicly acknowledged the possibility of a bankruptcy restructuring,

In a filing with the Securities and Exchange Commission, AMC acknowledged that its survival is still dependent on future consumer traffic.

AMC says its latest fundraising should keep the chain alive through July 2021 if theater attendance does not improve. If attendance increases and the chain can obtain more rent concessions from landlords, it could have enough cash to operate through the end of 2021, the filing said.

Looking ahead, for AMC to succeed over the medium term, we are going to need for much of the general public in the U.S. and abroad to be vaccinated, Aron said in Mondays news release. To that end, we are grateful to the worlds medical communities for their heroic efforts to thwart the COVID virus. Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program.

We are making critical coverage of the coronavirus available for free. Please consider subscribing so we can continue to bring you the latest news and information on this developing story.

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AMC Theatres raises nearly $1 billion and avoids 'imminent' bankruptcy - Sunbury Daily Item

UPPER WEST SIDE, NY The Upper West Side recently lost another retail store, as the body, face, fragrance, and home retailer L'Occintane shuttered its Columbus location over the past week.

L'Occitane on Columbus Avenue and 69th Street had occupied the space for 31 years, becoming a staple of the neighborhood and earning a cameo in the 1998 film "You've Got Mail."

The L'Occitane at 75th and Broadway also looks to be closing soon. The store was shuttered over the weekend with no inventory in the retailer and a sign on the store window directing customers to its Columbus Circle location.

The closings come days after L'Occitane filed for bankruptcy.

L'Occtitane mentioned in the filings a 56 percent decrease in revenue from April to December 2020 due to the COVID-19 pandemic and that landlords have been reluctant to negotiate new leases given the current circumstances.

L'Occitane management intends to "reject certain leases in order to right-size its brick-and-mortar footprint to better position itself for long-term success," according to the filing.

The Columbus location was one of these leases rejected and it looks like the Broadway lease isn't far behind.

Additionally, the L'Occitane on Broadway was sued for back rent in December by its landlord. The lawsuit claimed that pay its $62,000 per month rent between April and December.

While the Upper West Side looks like it's losing two L'Occitane locations, at least one will remain within the Shops at Columbus Circle.

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UWS LOccitane Closes Amid Bankruptcy After 30 Years Of Service - Upper West Side, NY Patch

The dismal financial outlook in Newfoundland and Labrador was centre stage in an election debate Wednesday night, with party leaders sparring over what to do about the provinces massive debt and spending problems.

Liberal Leader and incumbent Premier Andrew Furey said he disliked how his opponent uses the term bankruptcy to define the provinces fiscal troubles. By using that word on the campaign trail, Progressive Conservative Leader Ches Crosbie was already waving the flag of defeat, Furey said.

Mr. Crosbie is campaigning to be the last premier of Newfoundland and Labrador, the Premier added.

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The Tory leader hit back: Im a straight shooter. And thats why I use words like bankrupt, because it cuts to the heart of the matter.

With a net debt of $16.4-billion, the Atlantic province of about 520,000 people has the highest debt-to-GDP ratio in the country. Debt-servicing costs are the provinces second-largest expense after health care. Experts say with no sign of resuscitation in the local offshore oil industry, those costs will only get worse if drastic measures arent taken.

The debate gave voters a look at Fureys fiscal priorities after a Liberal campaign defined largely by low-stakes announcements about community gardens and programs to unite youth and seniors.

Furey repeatedly brought up the troubled Muskrat Falls hydroelectric project, whose costs essentially doubled to $13.1-billion since it was given the green light in 2012 under a previous Tory government. Without a change in course, electricity rates in the province could also double, in order to pay for the project.

We have to deal with Muskrat Falls first, Furey insisted as he defended himself against attacks from Crosbie, who said Furey didnt know how to get the province out of its fiscal hole. Furey touted the recent deal hed struck with Ottawa, allowing the province to defer $840 million in financing payments for the project, emphasizing that talks with the federal government about the staggering costs and burden of the ill-fated project had only just begun.

These are all the things Ive brought to the table in the first five months gimme four years, he said.

The Liberal leader also had to fend off accusations from NDP Leader Alison Coffin, who said he wasnt willing to make the right investments to help struggling voters escape poverty.

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Furey said no magic bullet is going to fix Newfoundland and Labradors financial mess. He didnt give specific details on how he would pull the province out of debt, but said mass layoffs arent the answer.

We didnt get into these fiscal issue because of the hard work of nurses, Furey said.

Well Im glad to hear we wont be cutting, Coffin told Furey. But, she added, the province should be spending more on public sector employees like nurses and paramedics. Front-line health-care workers are overworked and stressed out, Coffin said, adding that they need more support, not less.

Furey, who was an orthopedic surgeon before he became premier in August, reminded his colleagues that he was the only one in the room who had direct experience working alongside overburdened health-care workers.

Coffin also called for a $15 minimum wage and dismissed Fureys suggestion that raising the minimum wage would make the province uncompetitive. We dont want to be known as the place where you can come and get cheap labour, she said.

Crosbie, meanwhile, said he wanted to go over the provinces expenditures line by line to cut waste. But thats only half of what is required, he said, adding that the province needs to increase economic growth.

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With just 10 days left before the Feb. 13 vote, only one party the NDP had released a platform by Wednesday night. The Liberals and Progressive Conservatives have said they will release their platforms this week, though neither provided an exact date.

Heading into the election, the Liberals held 19 of the legislatures 40 seats, the Progressive Conservatives held 15 seats, the NDP had three and there were three Independents.

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Party leaders spar over how to handle N.L. looming bankruptcy at leaders debate - The Globe and Mail

Photo courtesy Belk

The Belk department store chain announced this week it will file for Chapter 11 bankruptcy and enter into a restructuring agreement with majority owner Sycamore Partners.

Stores will remain open and Belk plans to continue normal operations throughout the process, the company said in a news release.

Customers will continue to receive the quality merchandise and service they expect when shopping at Belks stores across the southeast and online, the release said. The infusion of new capital is expected to support Belks continued investment in strategic initiatives, including delivering a seamless omnichannel shopping experience and expanding Belks product offerings in Home Goods, Outdoor and Wellness.

The Charlotte-based company said it has received financing commitments for $225 million in new capital from Sycamore, KKR and Blackstone, along with some of its existing lenders, CNBC reported.

Belk, which opened its first store in 1888, hopes to exit Chapter 11 bankruptcy by the end of February. Belk has an Outer Banks store in the Dare Centre in Kill Devil Hills.

Belk has a 130-year legacy of providing quality products at great prices, saidLisa Harper, Belk CEO. Like all retailers navigating COVID-19, our priority has been the safety of our associates, customers and communities. As the ongoing effects of the pandemic have continued, weve been assessing potential options to protect our future.

Were confident that this agreement puts us on the right long-term path toward significantly reducing our debt and providing us with greater financial flexibility to meet our obligations and to continue investing in our business, including further enhancements and additions to Belks omnichannel capabilities.

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Belk plans to file for Chapter 11 bankruptcy protection, but stores will remain open - OBXToday.com