Pittsburgh Riverhounds Stumble as They Declare Chapter 11 Bankruptcy

By:  Justin A. Saporito

The  Riverhounds Event Center, L.P. and Riverhounds Acquisition Group, L.P., the limited partnerships that own and operate Highmark Stadium and the Pittsburgh Riverhounds Professional Soccer Club respectively,  jointly declared voluntary Chapter 11 bankruptcy on March 26, 2014.  Debtors filed in the United States Bankruptcy Court for the Western District of Pennsylvania, assigned case numbers 2:14-bk-21180 and 2:14-bk-21181 respectively.  Both cases have been assigned to the Honorable Jeffery A. Deller.

The Riverhounds Event Center, L.P. owns and operates the newly constructed Highmark Stadium located in the South Side area of Pittsburgh and claims assets ranging from $1 million to $10 million with liabilities between $10 million and $50 million.  Of those liabilities, $7.2 million is mortgage debt and $1.5 million in bank loans.  

The Riverhounds Acquisition Group, L.P. is the limited partnership that owns the Pittsburgh Riverhounds minor league soccer team and claims assets ranging from $500,000 to $1 million with liabilities between $1 million and $10 million.  The Pittsburgh Riverhounds  was founded in 1999 and currently plays in the United Soccer Leagues.  Much of the debt leading up to the bankruptcy was incurred in 2012-2013 during the construction of Highmark Stadium.  The bankruptcy is not expected to affect the 2014 season.

Debtors share some creditors such as Shallenberger Construction, Inc.,  First National Bank of Pennsylvania, and Urban Redevelopment Association of Pittsburgh.  Both debtors are represented by John M. Steiner of Leech Tishman Fuscaldo & Lampl, LLC.

Fat Lady May Sing for the Last Time: The New York City Opera Files Chapter 11

By:  Justin A. Saporito, MAZURKRAEMER Law Clerk and Salene Mazur Kraemer, Owner

New York City Opera, Inc. filed a petition for Chapter 11 bankruptcy protection on October 3^rd, 2013.  The petition was filed in the United States Bankruptcy Court for the Southern District of New York.  The case was assigned to the Honorable Judge Stuart M. Bernstein under case # 1:13-bk-13240.  Among the motions filed with the petition was a motion to authorize debtor to refund pre-paid tickets.  Please click here for a docket summary.

New York City Opera, Inc. was dubbed “The People’s Opera” by former NYC Mayor Fiorello LaGuardia.  It has hosted and performed traditional and contemporary operas since its founding in 1943.  Debtor filed for Chapter 11 protection due to a projected $44.1 million deficit for 2012 and a combination of a troubled economy, decreased donations, and increasing pension obligations.  The debtor raised approximately $1.5 million from an online fund-raising campaign (Kickstarter), but required $7 million by the end of September in order to fund itself through the end of the year.  The board and management have begun necessary financial and operational steps to wind down the company with no plans to borrow in order to fund the 2014 season.

Debtor claims assets and liabilities of between $1 and $10 million and 93 creditors including New York City Ballet, Inc. and the New York City Dept. of Finance.  Please refer to the docket summary for a complete list of creditors.  The debtor is represented by Kenneth A. Rosen and Nicole Stefanelli of Lowenstein Sandler LLP.

Salene and NYC Opera Debtor’s Attorney Nicole Stefanelli

Salene had the privilege of hanging out with Nicole over the weekend in NYC.   Nicole and Salene had met at the American Bankruptcy Institute this past Spring.  They were also friends via Twitter.   Nicole said that this Chapter 11 filing has been published in newspapers all over the world.  She also said that her firm was doing the representation PRO BONO.  She will be handling first day motions on Thursday!

This will definitely be an interesting case to watch.

Bankruptcy Docket Beat: Ashland, KY’s River Cities Glass & Construction Files for Chapter 11 in WV

On May 2, 2013, River Cities Glass & Construction, LLC, a glass and glazing contractors company, located at 4750 Winchester Avenue, Ashland, KY 41101 filed a voluntary Chapter 11 bankruptcy protection in the Southern District of West Virginia (Huntington), assigned case No. 3:13-bk-30226 (RGP).  The case was assigned to the Honorable Judge Ronald G. Pearson.  See docket here.  William Cox signed the Debtor’s Schedules as President of the Debtor.

The Debtor is represented by Mitchell Lee Klein of the Klein Law Office, 3566 Teays Valley Road, Hurricane, WV 25526.  Klein’s disclosed a retainer of $5,000 and an hourly rate of $200/hour.

            The Debtor elected to be considered a “small business debtor” pursuant to Bankruptcy Code Section 1116.   Its Chapter 11 Plan is due in 6 months, or by October 29, 2013.  Its Disclosure Statement is also due on October 29, 2013.   The Debtor listed liabilities of $159,936.01 and assets under $50,000 with less than 50 creditors.  Simultaneously with its voluntary petition, the Debtor filed an initial operating report and an application to employ an attorney.  Because this is a “small debtor case”, in addition to filing a petition, schedules and a statement of financial affairs, the Debtor is required to also submit a balance sheet, statement of operation, and a cash flow statement, as well as a federal tax return.

New Bankruptcy Code Section 1116  imposes duties on a small business debtor beyond not required of other Chapter 11 debtors, beginning with the filing of the petition.  Under § 1116(1), the debtor must attach to its petition (or in an involuntary case, file within seven days after the date of the order for relief) either (a) its most recent balance sheet, statement of operations, cash flow statement and federal income tax return or (b) a statement made under oath that such documents have not been prepared and that such tax return has not been filed.

We found this listing on the salespider website for the Debtor; we are not certain when it was ever initially listed.  The listing stated that the company has about 7 employees and estimated yearly revenue of $1,200,000 and that the Debtor’s SIC Code is 5231.  This industry consists of establishments engaged in selling primarily paint, glass, and wallpaper, or any combination of these lines, to the general public.  While these establishments may sell primarily to construction contractors, they are known as retail in the trade.  Establishments that do not sell to the general public or are known in the trade as wholesale are classified in the wholesale trade industries.   See SIC Code article here.

Bankruptcy Docket Beat: Philadelphia’s Mike’s Open Face Breakfast Files for Chapter 11

On April 23, 2013, Debtor Mike’s Open Face Breakfast, Inc. of 107 W. Chelten Avenue, Philadelphia, PA 19144 filed a Chapter 11 bankruptcy petition in the Bankruptcy Court for the Eastern District of Pennsylvania (Philadelphia), Case No. 13-13583-elf.  Debtor’s counsel is Hae Yeon Baik, of Baik & Associates, PC, 2333 Fairmount Avenue,1^st Floor Left, Philadelphia, PA 19130.  The case has been assigned to Honorable Chief Judge Eric L. Frank.  The Debtor’s assets are  less than $50,000 and the liabilities are less than $50,000.   The Debtor has yet to file a full set of schedules and a statement of financial affairs.  The Debtor will have 15 days from the Petition Date in which to do so, unless the Debtor’s counsel seeks and extension of such a deadline.

A summary of the docket for this Chapter 11 can be viewed here.

Mike’s Open Face Breakfast operates as a breakfast and lunch spot in the Germantown area of Philadelphia, just outside of one of my old stomping grounds Chestnut Hill, Pennsylvania (got my first post-law school apartment there).

Notably, Mike’s Open Face Breakfast filed as a “small business debtor case” filed by a “small business debtor”.  Pursuant to Bankruptcy Code 101, in order to be a “small business debtor”, a debtor must have aggregate noncontingent liquidated, secured and unsecured debts as of the date of the petition in an amount not more than $2,190,000 (excluding debts owed to 1 or more affiliates or insiders). 11 U.S.C. ss 101(51D).  The debtor must be engaged in commercial or business activities (other than primarily owning or operating real property).  Also, the case must be one in which a U.S. trustee has not appointed a creditors’ committee, or the court has determined that the creditors’ committee is insufficiently active and representative to provide oversight of the debtor.  11 U.S.C. ss 101(51D).

What is the impact of the “small business debtor case” designation?  The most obvious benefit is that typically the case proceeds more quickly, but at that same time the debtor is subjected to more U.S. trustee oversight and is required to comply with more procedural filing requirements.  For a great article re: “small business debtor cases”,  click here.