💥Hace Calor!💥
Updates: Publishers Clearing House LLC + Royal Interco LLC + Danimer Scientific Inc.
Shallow breaths everyone (callback alert!).
Can you believe it’s nearly Independence Day?! The PETITION team is hard at work on our midyear review so stay tuned for that. For today, though, let’s keep things chill and update coverage of some of the sh*tcos bankruptcies that filed in the Spring….
⚡️Update: Publishers Clearing House LLC⚡️
Let’s make this one quick. Back on April 9, 2025, Publishers Clearing House LLC (“PCH”) filed chapter 11 in the Southern District of New York (Judge Glenn) to clear out the house and find anyone willing to buy the obsolete, pointless biz:
On May 1, 2025, PCH filed a motion to approve bidding procedures sans stalking horse, which the Judge Glenn approved on May 29, 2025 and established a bid deadline of June 13, 2025. A few days after that, on June 19, 2025, PCH let us know how that process went by filing a notice of successful bidder. It disclosed that PCH received a whopping three bids, and ARB Interactive, Inc. emerged as the “winner” with its outrageously small check reflecting a “… purchase price of (i) $7,100,000 in cash, plus (ii) approximately $378,096.75 in cure costs … plus (iii) the assumption of certain prize winner liabilities” and the exclusion of ~$5.4mm in accounts receivable.*
Guess no one thought much of the debtors’ “… network of web and app-based entertainment platforms” …
Low-key surprised anyone was willing to pay that much when PCH runs at a loss and revenue looks like this.
Aside from that, nothing interesting has happened. An ad hoc group of WARN claimants, represented by Olshan Frome Wolosky LLP (Michael Fox), filed a notice of appearance in April ‘25 but nothing else, and the US trustee appointed (i) an official committee of unsecured creditors, represented by Rimon P.C. (Kenneth Silverman, Ronald Friedman, Brian Powers, Haley Trust, Courtney Roman), back on April 24, 2025 and (ii) Lucy Thompson as consumer privacy ombudsman on May 16, 2025.
A sale hearing is scheduled for today, June 25, 2025 at 2pm ET, after which we expect “nothing interesting” to continue until the cases confirm a liquidating plan, dismiss, or convert. Honestly, does anyone care which, 🤷♀️? We certainly don’t, which officially marks the end of our coverage of this sh*t stain.
*Back-up bidder PCH Interactive, LLC’s offer was substantially the same for an all-in $100k less.
🧻Update: Royal Interco, LLC🧻
Speaking of sh*t stains …
Recall that TP-producer Royal Interco, LLC (“Interco”) and three affiliates (with Interco, the “debtors”) filed chapter 11 back in April ‘25 to pursue a sale of their assets and flush out any other interest for ‘em.*
The debtors kicked off that process with stalking-horse-bidder Sofidel America Corp.’s (“Sofidel”) headline $126mm all-cash bid. But remember, in our earlier coverage, we commented “… this is a surprisingly decent business.” It turns out, we weren’t the only ones who thought so because, at the May 2, 2025 second-day hearing, the debtors announced that they “… have a bunch of bidders ….”
And while, on May 6, 2025, the court approved the stalking horse bid and the debtors’ proposed bid procedures, that new third-party interest triggered a May 15, 2025 auction. Sofidel, however, rolled into it with one thing to say:
And it backed it up. Despite the efforts of new competitors, including Kimberly-Clark Corporation (“KC”), represented by Kirkland & Ellis LLP (Steven Toth), over the course of a buncha rounds, Sofidel kept bidding the price ⬆️ until it landed at an auction-winning, 38.9% improved ~$175mm,** which the court approved at a short, 18-minute May 22, 2025 hearing.
A knock-out outcome for the debtors … and their DIP and prepetition lenders, agented by NXT Capital, LLC (“NXT”). GUCs, though? Probably still sh*t out of luck because NXT has never been shy about the lenders’ lack of appetite to carve out a recovery for lower priority claims. From the jump, they’ve intended to apply every last penny to the DIP and their ~$205.1mm in prepetition claims.
With no other material assets, the debtors’ likelihood of confirming a chapter 11 plan seems exceedingly remote, but they have another month and change to figure out what, if anything, is possible. The next hearing is slated for July 31, 2025 at 2pm ET.
*On April 18, 2025, the US trustee appointed an official committee of unsecured creditors, composed of Allen Lund Company LLC, Armstrong Transportation Group, LLC, and Print Pro, Inc. and represented by Lowenstein Sandler LLP (Andrew Behlmann, Colleen Restel, Bruce Nathan, Lindsay Sklar) and Gellert Seitz Busenkell & Brown, LLC (Michael Busenkell, Michael Van Gorder) as legal counsel and Province, LLC (Adam Rosen, Paul Navid, Derrick Laton, Daniel Radi, Ryan Carr) as financial advisor.
**The new purchase price excludes (i) $5mm of stalking horse bid protections and (ii) the value of (an unknown amount of) pre-closing accounts receivable Sofidel agreed to purchase.
⚡️Update: Danimer Scientific Inc.⚡️
Recall that, back on March 18, 2025, Danimer Scientific, Inc. ($DNMWQ) and 9 affiliates (collectively, the “debtors”) filed chapter 11 bankruptcy cases to pursue a “value-maximization strategy” without anything specific locked up. We covered the filing here:
On March 27, 2025, the debtors settled on a then-stalking-horse-free sale path for their bioplastic business, and a day later, the US trustee (the “UST”) appointed a then-four-member official committee of unsecured creditors (the “UCC”),* which quickly turned around and engaged with the debtors and an ad hoc group of lenders (the “ad hoc group”) on the debtors’ second-day relief and proposed bid procedures. And while those conversations couldn’t have been much fun for the UCC in light of the debtors’ lack of liquidity and massive-for-the-biz prepetition debt stack …
… they ended remarkably well. Prior to the April 27, 2025 second-day hearing, a globally-supported “Committee Settlement” emerged, which agreed to (i) carve out certain litigation and preference claims solely for GUCs, (ii) formulaically split, after payment of the DIP and the super senior bridge loan ☝️, other estate assets between secured and unsecured creditors, (iii) carve out up to $1mm to confirm a plan of liquidation, and (iv) otherwise put the cases on a drama-free path to deal with the admittedly sh*tty situation the parties found themselves in. Given the consensus, Judge Walrath had zero problems giving a thumbs-up to that deal.
After a few more weeks of bidder engagement and kicking out deadlines, the debtors even found a buyer, which came in the form of a headline $19mm, stalking-horse bid submitted by Teknor Apex Company (“Teknor”).** And, um, good thing Teknor came knockin’ … because no one else did, at least for the whole biz.*** So, on May 20, 2025, the court blessed that too, and the transaction closed ten days later.
Which left the debtors with their last task: getting out of chapter 11. On June 11, 2025, they filed a combined chapter 11 plan and disclosure statement (the “combined plan and DS”) to liquidate their remaining assets and wind down the estates in accordance with the Committee Settlement ☝️. Because getting-along has been the theme of these cases, that too came easy; it took the court all of five minutes to conditionally approve it at a June 23, 2025 hearing, which sent the debtors off to solicit votes and scheduled confirmation for July 18, 2025.
The voting part will be straight vanilla too because, despite the UCC’s negotiation of a non-zero GUC outcome, they won’t be casting any plan votes. Instead, the debtors will seek to cram ‘em down come confirmation to save on stamps and other process costs. But assuming the lenders do their job and everything stays on track, and we have no reason to believe they won’t, the cases ought to be wrapped up in a neat little bow in the next 30-odd days.
Short of a disaster, we won’t be coming back to these cases, so an anticipatory kudos to all professionals involved for allowing reason to prevail (and, refreshingly, giving us jack sh*t to mock).****
*The UCC was initially composed of Diamond Family Investments, LLC, Winchester Warehouse Co. LLC, NatureWorks, LLC, and Blough Tech, Inc. (“Blough Tech”), but Blough Tech peaced out in mid-June ‘25. The UCC is represented by Brown Rudnick LLP (Robert Stark, Bennett Silverberg, Alexander Kasnetz, Cathrine Castaldi, Sharon Dwoskin) and Porzio, Bromberg & Newman, P.C. (Cheryl Santaniello, Brett Moore, Kelly Curtin) as legal counsel and Dundon Advisers LLC (Joshua Nahas) as financial advisor.
**Teknor’s bid also picks up cure costs, up to a $500k cap.
***The debtors only received three other bids, all for discrete assets, so they canceled the auction and pressed forward with Teknor.
****The debtors are represented by Vinson & Elkins LLP (George Howard, David Meyer, Trevor Spears, Sara Zoglman) and Richards Layton & Finger PA (Daniel DeFranceschi, Zachary Shapiro, Matthew Milana, Alexander Steiger) as legal counsel, AlixPartners LLP (Frank Pometti, John Creighton, Kaitlyn Sundt McClarren, Nick LoBiondo) as financial advisor, and Livingstone Partners LLC (Joseph Greenwood, Adam Green, Andi Lutolli) as investment banker. The ad hoc group of lenders is represented by Proskauer Rose LLP (David Hillman, Dylan Marker, Eric Reimer) and Landis Rath & Cobb LLP (Adam Landis, Matthew Pierce, George Williams III) as legal counsel. We noted the UCC’s profs above.
📚Resources📚
We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. 💥You can find it here💥.
🍾Congratulations to…🍾
DLA Piper LLP (James Muenker, R. Craig Martin, Dennis O’Donnell) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Mosaic Sustainable Finance Corporation chapter 11 bankruptcy cases.
Nick Kaluk on his promotion to Partner at Debevoise & Plimpton LLP.
Tom Schinckel on his promotion to Partner at Australian shop Corrs Chambers Westgarth.