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Chatham shopping center damaged in George Floyd protests being sold

  • May 16, 2023

The shopping center at 8500-8700 S. Cottage Grove Ave. suffered a major setback from the mayhem that followed the murder of George Floyd by a Minneapolis police officer in late May 2020. Chatham Village Square was “one of the epicenters of the most destructive forces related to the protests,” according to a court filing.

The Tadros ownership venture “has endured and overcome the unique challenges presented by COVID 19 and the stay-home orders and the unrest following the George Floyd protests, which sparked instances of full-blown riots which included significant damage to property, looting and in some instances the burning of buildings,” the filing says.

About a year later, after fixing up and re-opening the shopping center, Tadros and his lender squabbled over the use of roughly $3 million in insurance proceeds for the property, according to the filing. The lender, a Bank of America trust for investors that own commercial mortgage-backed securities secured by the debt on the shopping center, then filed to foreclose in late November 2021.

Now, after a year in bankruptcy, Tadros and a loan servicer representing the trust are moving forward with a settlement that would allow Tadros to pay off most, but not all, of the $23.3 million owed to the CMBS investors. The Tadros venture plans to sell the shopping center for $20.5 million and transfer the cash to the trust, which has agreed to accept less than the full amount of its claim, according to court documents.

Tadros did not return phone calls and his attorney declined to comment. An attorney representing the lender also declined to comment.

What’s unusual about the arrangement is that the Tadros venture would sell the shopping center to a company led by Nicholas Tadros, the son of Musa Tadros. The younger Tadros did not return phone

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Cancer victims urge US judge to dismiss J&J talc unit’s second bankruptcy

  • May 15, 2023

NEW YORK – Cancer victims on Monday urged a US judge to dismiss a Johnson & Johnson subsidiary’s second bankruptcy filing, saying that the company is abusing the bankruptcy system in its renewed attempt to resolve tens of thousands of lawsuits alleging that J&J’s baby powder and other talc products caused cancer.

The J&J subsidiary, LTL Management, filed in April for bankruptcy a second time, seeking to settle all current and future talc claims for a proposed US$8.9 billion (S$11.9 billion). LTL’s first bankruptcy was dismissed after a federal appeals court ruled that the company was not in financial distress and therefore not eligible for bankruptcy.

Plaintiffs have filed more than 38,000 lawsuits that have been consolidated in federal court in New Jersey alleging that J&J talc products sometimes contained asbestos and have caused their ovarian cancer or mesothelioma.

They portray J&J’s actions as an abuse of the bankruptcy system by a multinational conglomerate valued at more than US$400 billion and in little danger of running out of money to pay cancer victims.

J&J and LTL have argued that bankruptcy delivers settlement payouts more fairly, efficiently and equitably than a “lottery” offered by trial courts, where some litigants get large awards and others nothing.

J&J has said its talc is safe, asbestos-free and does not cause cancer.

J&J said its new settlement offer has broad support from cancer victims, a claim disputed by lawyers who objected to the deal. J&J has not estimated the total number of talc claims it faces, and lawyers opposed to the deal said J&J’s settlement support number is inflated by claimants who have never filed lawsuits against the company and whose claims may not be fully vetted.

The healthcare conglomerate has not filed for bankruptcy itself. Instead, it divided its consumer business into two

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Minnesota Firehouse Subs Franchisee Files for Chapter 11 Bankruptcy | Franchise News

  • May 14, 2023

A Minneapolis Firehouse Subs franchisee has filed for Chapter 11 bankruptcy, listing more than $1 million in debts, according to documents filed April 4.

MR Investments, led by Michael Ruoho, has two Firehouse Subs stores in two Minneapolis suburbs, as well as Pizza Man restaurants. MR Investments previously owned a third Firehouse location.

Ruoho’s attorney, John Lamey of Lamey Law Firm, provided no comment. Firehouse Subs did not respond to Franchise Times’ request for comment.

Ruoho listed liabilities totaling $1.14 million and assets totaling $68,376. MR Investments is based in Stillwater, Minnesota.

MR Investments received a $499,900 Economic Injury Disaster Loan from the Small Business Administration in June 2020.

MR Investment’s Woodbury, Minnesota, location has equipment assets totaling $56,873, but the liquidation price amounts to $28,314. The Plymouth, Minnesota, store’s assets total just shy of $55,000, with liquidation price amount to $27,483. The stores’ fixtures make up nearly all of his assets, with $8,000 listed for inventory and $4,578 for cash and other financial assets.

Ruoho is one of a handful of franchisees under the Restaurant Brands International umbrella who have filed for Chapter 11 bankruptcy this year. RBI owns Tim Hortons, Burger King, Popeyes and Firehouse Subs.

Two large Burger King franchisees, TOMS King and Meridian Restaurants Unlimited, filed for bankruptcy in January and March, respectively. TOMS, a franchisee with 90 Burger King locations, cited a loss of foot traffic for its declining revenue. Meridian listed increased costs, as well as a low sales. Meridian has 118 Burger King units.

Premier Cajun Kings, a 19-unit Popeyes franchisee, filed for bankruptcy in March. The company’s owner, Manraj “Patrick” Sidhu, died suddenly in March 2022, which Premier said “triggered great operational instability.”

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US veterans suing 3M over earplugs seek to stop unit’s ‘false alarm’ bankruptcy

  • May 13, 2023

April 19 (Reuters) – U.S. veterans and members of the military on Wednesday urged a judge to dismiss 3M’s (MMM.N) bid to use the bankruptcy of its subsidiary Aearo Technologies to shield itself from nearly 260,000 lawsuits over military-issue earplugs that former users allege were defective and damaged their hearing.

3M and Aearo say the earplug litigation has spiraled out of control. But attorney Adam Silverstein, who represents veterans suing 3M over hearing loss, said at a court hearing in Indianapolis that filing for bankruptcy, like “pulling a fire alarm,” should be reserved for urgent threats.

Aearo was not in need of emergency rescue, because it had filed for bankruptcy solely as “a strategic alternative to managing 3M’s litigation,” Silverstein said.

“If the firemen determine something is a false alarm, they don’t wait around to see if a fire might start later or if there’s some other problem they can assist with,” he said. “They leave.”

Aearo, which made the combat arms earplugs, filed for bankruptcy last July, with 3M pledging $1 billion to fund its liabilities stemming from the lawsuits that accuse both Aearo and 3M of misrepresenting the earplugs’ effectiveness, leading to hearing damage.

The plaintiffs have called that move a bid to escape the Florida federal court where the earplug lawsuits are consolidated in a so-called multidistrict litigation, following a series of unfavorable legal rulings and trial losses.

On Tuesday, Aearo attorney Chad Husnick said U.S. law does not require the “house to be on fire” before a company files for bankruptcy. Aearo should be allowed to proactively resolve the growing problem of earplug lawsuits through a bankruptcy settlement, Husnick said.

U.S. Bankruptcy Judge Jeffrey Graham will continue to hear evidence on Thursday before he makes a ruling on whether to dismiss the case.

3M’s bankruptcy

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Verona council candidate has history of arrests, bankruptcy

  • May 12, 2023

A candidate for a Verona Township Council seat has a history of legal and financial difficulties, including multiple arrests on assault charges, that have not yet been raised before the May 9 non-partisan municipal election.

Christian Strumolo has faced a string of arrests and criminal charges over the last two decades, including a 2002 arrest for aggravated assault on a law enforcement officer that was later negotiated down to a guilty plea on a simple assault charge.

Over the years, Strumolo has pled guilty to impersonating a public servant or law enforcement officer, obstructing the administration of a government function, loitering while intoxicated, and assault.

Four years ago, Strumolo was arrested for drunk driving on Bloomfield Avenue in Verona within 1,000 feet of a school.  That was his second DUI conviction: the first came in 2008 while driving on Pompton Avenue in Cedar Grove, again within proximity of a school and with a refusal to take a breathalyzer test.

He filed for bankruptcy in 2015 after accumulating over $600,000 in debt and assets of roughly $6,000.  Between 2009 and 2018, the Internal Revenue Service and the New Jersey Division of Taxation filed about $500,000 in liens against Strumolo, according to filings with the U.S. Bankruptcy Court.  He also owed $8,500 to Caldwell College for unpaid tuition for his minor child.

That happened while claiming monthly take-home pay of $8,250 from a cleaning company he owned.

“Voters can’t make informed decisions unless they’re informed.  If you asked any self-respecting constituent of George Santos, they’d tell you they wish they knew then what they know now,” said Micah Rasmussen, the director of the Rebovich Institute of New Jersey Politics at Rider University.  “Voter diligence is the most bedrock, necessary principle of casting an informed vote.  It will do Verona zero good

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Nursing home owner must face NLRB case despite bankruptcy protections

  • May 11, 2023

A federal agency can proceed litigating allegations of unfair labor practices against the operator of several Connecticut nursing homes that declared bankruptcy in 2013.

The ruling from the 3rd Circuit Court of Appeals allows the National Labor Relations Board to move against 710 Long Ridge Road Operating Company II LLC, which has been in and out of bankruptcy and other courts for more than a decade. Court documents emphasize the “complex” nature of the case, but the ruling from a three-judge panel on the Circuit Court found the question “before [them] simple” before noting that the preliminary injunction filed against the NLRB was incorrect. That leaves the agency free to pursue its case against the owner, despite the bankruptcy proceedings. 

In June 2012, HealthBridge Management LLC, which managed several nursing homes owned by 710 Long Ridge Road,  announced that it had reached an impasse with unions representing workers at five nursing homes that operated under separate but similar collective bargaining agreements, according to court documents and local reporting. The unions represented approximately 700 employees at Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. The agreements were in effect from Dec. 31, 2004, to March 16, 2011. 

The management company then made its “Last, Best, and Final” offer on June 17, 2012, which was rejected by the union as being “unfair to the employees,” according to the Westchester & Fairfield County Business Journals. Employees went on strike on July 3, 2012, after which the company hired replacement workers, court documents noted. 

In February 2013, the US Supreme Court ruled against the company that wanted to delay a lower court ruling ordering it to reinstate the striking workers. The case took another twist about a year later

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Bed Bath & Beyond files for bankruptcy protection, begins liquidation sale

  • May 10, 2023

April 23 – Bed Bath & Beyond Inc (BBBY.O) filed for Chapter 11 bankruptcy protection on Sunday after the home goods retailer failed to secure funds to stay afloat, and has begun a liquidation sale.

The home goods retailer, which shot to popularity in the 1990s as a go-to shopping destination for couples making wedding registries and planning for new babies, has seen demand drop off in recent years as its merchandising strategy to sell more store-branded products flopped.

Last year’s moves to abandon that strategy, and to bring in more national brands that shoppers recognize, had not shown signs of working, with the company reporting a loss of about $393 million after sales plunged 33% for the quarter ending Nov. 26.

The Union, New Jersey-based retailer filed for bankruptcy in a District of New Jersey court, listing both its estimated assets and liabilities in the range of $1 billion and $10 billion, according to a court filing.

The company said that it has received a commitment of approximately $240 million in debtor-in-possession financing from Sixth Street Specialty Lending Inc, according to a statement.

While the retailer has begun a liquidation sale, it intends to use the Chapter 11 proceedings to conduct a limited sale and marketing process for some or all of its assets, according to the statement.

A person exits a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly

The company added that its 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open and continue serving customers as it starts efforts to effect the closure of its retail locations.

In January, the company raised doubts about its ability to continue as a going concern just months after it announced more than

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Bankruptcy Battle Breaks Out Over Greenwich Village Dev Site

  • May 8, 2023

UPDATED April 27, 10:50 p.m.: George Filopoulos gave up on a Greenwich Village building, but the troubled loans left behind have triggered a bizarre legal fight over the property, which is now being offered for sale as a condominium development site.

The drama began when the longtime real estate investor’s LLC was notified in August 2020 that it had defaulted its $9.3 million first mortgage at 307-309 Sixth Avenue.

The LLC — in which Filopoulos says he owned a 10 percent interest in separate from his firm, Metrovest Equities — failed to repay the loan at its maturity date and lender Castellan Capital filed to foreclose.

The case laid quiet during the pandemic and in December of 2021 Castellan sold its loan, according to property records. Filopoulos then transferred its interest in the property in May 2022, according to an attorney for his firm. A court filing does not say who took control of the ownership LLC. Paperwork for the entity was signed by a person named William Schneider, who in November filed project plans for a seven-story, 39-unit building with ground-floor retail and community space.

The judge in the foreclosure case ruled in June that the LLC’s debt had grown to about $15 million, and a foreclosure sale was scheduled for Dec. 14.

But on the eve of the auction, another stakeholder went to bankruptcy court to prevent it from going through.

William Rainero, whose family sold Filopoulos’ LLC the property in 2017, said in court papers that he had provided the buyer a $5 million mortgage to close the $17 million deal. That loan is in the second position behind the one originated by Castellan.

Rainero argued in court papers that the new owner was conspiring to wipe him out by agreeing to hand the property back to

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How Bed Bath & Beyond is hedging its bankruptcy bet

  • May 7, 2023

Bed Bath & Beyond (BBBY) is hedging its bankruptcy bets, simultaneously posturing for a wind down while also vying to stay in business.

The dual-track strategy emerged Sunday as the home goods retailer filed for protection of its assets under Chapter 11 of the US Bankruptcy Code.

A Chapter 11 filing typically helps financially distressed companies work out a plan with their creditors to reorganize debt and emerge as a viable entity. But Bed Bath & Beyond announced it would focus on liquidating assets, a path typically pursued as part of a Chapter 7 bankruptcy.

The failed housewares chain said the dual-track strategy was the best way to maximize value for stakeholders. A press release stated it had already initiated a liquidation sale, though would conduct a limited marketing process to solicit interest in some or all of its assets.

“In the event of a successful sale, the company will pivot away from any store closings needed to implement a transaction,” the company said.

Other distressed companies have taken a similar path. David’s Bridal, which filed for Chapter 11 protection on April 17, also elected for a dual-track sale-liquidation process. And retailer Toys R Us similarly chose the option for its 2017 Chapter 11 filing.

The dual-track, or “toggling,” strategy puts Bed Bath & Beyond in a more attractive position to potential bidders, said Elie Worenklein, a corporate restructuring attorney with Debevoise & Plimpton.

A customer walks into a Bed Bath & Beyond store in Novi, Michigan, U.S., January 29, 2021. REUTERS/Emily Elconin

A customer walks into a Bed Bath & Beyond store in Novi, Michigan, U.S., January 29, 2021. REUTERS/Emily Elconin

The stores can keep generating revenue from customers, while the company continues its marketing efforts to sell either all or a portion of its operations. Chapter 11 doesn’t require a company to shutter its doors.

In addition, Worenklein said, Chapter 11 permits

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Distressed Investors Appaloosa, Centerbridge Push for Big Payouts in SVB Bankruptcy

  • May 6, 2023

(Bloomberg) — Dying banks aren’t bad news to everybody. For some investors, they are a chance to make money.

Most Read from Bloomberg

Appaloosa Management, Centerbridge Partners and Silver Point Capital are among the titans of distressed debt investing pushing for big payouts in the bankruptcy case of the former owner of Silicon Valley Bank, new court papers show.

A group of eight firms holds more than $1.1 billion in senior notes and roughly $1.5 billion worth of preferred equity issued by SVB Financial Group, the holding company that went bust after a run on its bank earlier this year. By banding together and sharing the cost of attorneys and financial advisers, such groups can have enormous sway in major corporate bankruptcy cases.

Appaloosa holds $345 million worth of SVB debt, Silver Point $231.7 million and Centerbridge $199.8 million, according to the court filings. The other companies in the group are Citigroup’s distressed trading desk, Millennium Management, Citadel, Attestor and Redwood Capital Management.

Together, the group holds 35% of the $3.3 billion in senior notes SVB issued and 41% of the preferred stock. When such panels hold more than 34% of any class of debt, they often have veto power over any payout plan they oppose.

Distressed debt professionals rarely invest in the stock of bankrupt companies because shares are canceled in most Chapter 11 cases. In SVB, stock owners could get tax benefits from about $6.4 billion in net operating losses. Should SVB be reorganized and survive the bankruptcy case in some form, stockholders could use those losses to reduce their future federal income tax liabilities.

SVB filed for bankruptcy in March after the Federal Deposit Insurance Corporation placed its bank into receivership. Since then, a dispute has been simmering over whether SVB and its creditors can get back

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