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With bankruptcies ending faster and the number of large filings dropping, the crisis management category, to spotlight one area, has seen a drop-off in both numbers and volume this quarter in The Deal Pipeline’s bankruptcy league tables. Database maintenance, however, has further depressed caseloads.
Usually when cases are dismissed or terminated, debtors have won confirmation of Chapter 11 plans or firms have filed their final fee application, The Deal Pipeline will close the assignments to maintain database accuracy and fairness.
Dan Scouler, CEO and founder of Scouler & Co., affirms those parameters for firms such as his own. “A crisis management firm is almost always done when the bankruptcy plan is confirmed,” he says. “A plan can take a form of reorganization, a sale of assets, etc., but when the outcome is achieved, usually a crisis management role is complete. There are exceptions, but that is generally when the job is over.”
(One such exception is when an adviser is retained as a liquidating trustee.)
Many crisis management firms have been hit hard by case losses.
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Frozen-food maker Contessa Premium Foods can begin cooking up a sale, even if it has yet to find a stalking-horse bidder.
Chief Judge Peter Carroll of the U.S. Bankruptcy Court for the Central District of California in Los Angeles approved the bidding procedures for the sale on Wednesday, according to counsel to the official committee of unsecured creditors, Mette H. Kurth of Arent Fox LLP. The company will sell substantially all of its assets, including its intellectual property, its environmentally friendly food processing plant in Commerce, Calif., and its seafood and convenience meals businesses.
The company’s seafood business sources and distributes frozen shrimp products procured from Southeast Asia. The convenience meal business develops and produces restaurant-quality frozen meals, fruits and vegetables procured from Asia, Central America, Mexico and the U.S.
Expressions of interest were due Thursday, and finalized bids with asset purchase agreements are due by June 8, Kurth said. There is no floor for bidding, but interested parties must deposit 10%.
An auction has been scheduled for June 13, and Carroll will consider the sale on June 18, Kurth said.
The debtor said in court documents that financial adviser Scouler & Co. LLC and investment banker Imperial Capital LLC marketed the assets for sale, contacting more than 145 potential strategic and financial buyers. Of those, 60 executed nondisclosure agreements, and Contessa is negotiating another five nondisclosure agreements.
The company is looking for a stalking-horse bidder but is open to having either an open auction or an auction with a lead bid. If an auction were held, bids would have to increase in increments of at least 0.5% of the beginning or stalking-horse bid. If the company named a stalking-horse bidder before the auction, it would receive a 3% breakup fee if it lost Contessa.
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