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Movie Financier Hedge Fund Files for Chapter 11 Over Increasing Litigation Costs

by Justin A. Saporito, Law Clerk

Aramid Entertainment Fund, Limited filed for Chapter 11 protection in the Bankruptcy Court for the Southern District of New York on June 13, 2014.  Debtor has declared assets of $237.3 million and consolidated debt of $11.5 million.  Debtor was assigned case number 1:14-bk-11802, a judge has yet to be assigned.  Approximately 96 creditors were listed in the petition; among them are several other Aramid entities including Aramid Liquidating Trust, Ltd. and Aramid Entertainment, Inc. which jointly filed with the Debtor and were assigned consecutive case numbers.

aramid-logo-618x400                    Aramid Entertainment Fund, Limited is part of Aramid Capital Partners, LLP, a London based hedge fund that specializes in financing movies.  According to their website, Aramid Capital has provided financing for thirty-two (32) movies including Paranormal Activity, W., and How to Lose Friends & Alienate People.  Please click here for a list of their productions.

                   Debtor filed for Chapter 11 protection due to the cost of ongoing litigation against several of its borrowers who failed to repay loans or violated film-financing agreements.  One such suit began in February 2012 and is over an alleged $44 million in losses.  Debtor invested $22 million in a financing deal between Relativity Media, LLC and Sony Pictures.  Debtor alleges that executives from Fortress Investment Group, LLC used Aramid’s confidential information, which was allegedly obtained during a 2010 portfolio review as part of a proposed purchase of Debtor’s assets, to make a deal with Sony that destroyed Debtor’s investments.

                     Debtor and its affiliates are represented by James C. McCarroll, a partner at Reed Smith, LLP who specializes in Financial Industry, Commercial Restructuring, and Bankruptcy.

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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.  riverhounds_logo

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.

Billing Services Company Penn Data Services, Inc. Makes a 2nd Trip to Bankruptcy Court

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

Penn Data Services, Inc. filed a voluntary petition for Chapter 11 bankruptcy protection on October 1st, 2013 in the Bankruptcy Court for the Western District of Pennsylvania (Pittsburgh).  The case has been assigned to the Honorable Judge Carlota M. Bohm under case number 2:13-bk-24153.  A summary of the docket can be found here.double bankruptcy

This is the debtor’s 2nd consecutive voluntary filing for Chapter 11 bankruptcy protection, having previously filed over a year ago on August 21st, 2012 (that is referred to as a “Chapter 22” by those in the industry).  That case was assigned case # 2:12-bk-24156 and was also overseen by Judge Bohm.  The 2012 case was dismissed on August 30th, 2013 for failure to timely file a Chapter 11 Plan and Disclosure Statement.  A docket summary of the initial filing for the 2012 case can be found here.

Penn Data Services, Inc. is a billing services company founded in 1996 and located in Natrona Heights, PA.  The debtor claims assets of less than $50,000 with liabilities between $50,000 and $100,000.  Christopher M. Frye of Steidl & Steinberg P.C. is again representing the debtor, having been debtor’s counsel for the 2012 case.

DragonFire, Inc. Running Out of Breath as it Files Chapter 11

By: Justin A. Saporito, MAZURKRAEMER Law Clerk

DragonFire, Inc. filed a voluntary petition for Chapter 11 bankruptcy in October 25th, 2013.  The petition was filed in the United States Bankruptcy Court for the Western District of Pennsylvania and has been assigned case number 2:13-bk-24517.  Debtor’s Disclosure Statement, Balance Sheet, Declaration of Schedules, and other documents were due by November 8th, 2013.  For a complete list of the documents due please refer to the document summary.1366998187

Debtor is the corporate entity for DragonFire Japanese Steakhouse and Sushi Bar located at 1500 Washington Rd. in the Gallery Mall in Mt. Lebanon, Pennsylvania.  As the name suggests, DragonFire specializes in hibachi and sushi.  For those unfamiliar with hibachi, it is a rectangular Japanese style barbecue grill.  Customers often sit at a counter that spans three sides of the grill.  The chef stands at the fourth side and prepares the meal (which typically consists of fried rice, vegetables, and various meats) with much fanfare.   DragonFire also boasts a robata grill, a traditional Japanese slow grilling method. For more information about DragonFire, you can visit their website here.

Debtor has declared between $50k and $100k in assets with between $500k and $1 million in liabilities with approximately 20 creditors listed in the petition.  Debtor is represented by Donald R. Calaiaro of Calaiaro  & Corbett, P.C.

Philadelphia’s Marathon Grill Hits “The Wall” with a Chapter 11

By: Justin A. Saporito, MAZURKRAEMER Law Clerk

The entities in charge of the 1818 Market Street location for the Marathon Grill Philadelphia restaurant chain, 1818 Market Street Marathon Grill, Inc. and its general partner 1818 Market Street Marathon Grill Associates , filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Eastern District of Pennsylvania (Philadelphia) on October 9, 2013.  1818 Market Street Marathon Grill, Inc. is the corporate entity for the 1818 Market Street location and has been assigned to the Honorable Judge Magdeline D. Coleman under case number 2:13-bk-18861.  1818 Market Street Marathon Grill Associates, the partnership in charge of the location filed separately and has been assigned to the Honorable Judge Eric L. Frank under case number 2:13-bk-18863.  (Please click the hyperlinks for docket summaries).  Motions for Joint Administration of both cases were filed by each entity on October 9, 2013.  The debtors listed the same creditors with the exception that 1818 Market Street Marathon Grill, Inc. also lists NNN 1818 Market, LLC, the building management company in charge of 1818 Market St.

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The Marathon Grill began as a 10-seat hamburger restaurant in Northeast Philadelphia in 1984.  It eventually grew into a six location restaurant chain before shrinking back down to operating three locations at 1818 Market St., 19th & Spruce St., and 16th & Sansom St.  The bankruptcies affect the 1818 Market St. location, the largest of the three restaurants.  The filings were made in response to learning that the landlord intended to take possession of the restaurant space over an ongoing dispute over unpaid back rent and fees of approximately $540,000.

1818 Market Street Marathon Grill Associates declared assets between $500,000 and $1 million with liabilities between $100,000 and $500,000.  1818 Market Street Marathon Grill, Inc. declared assets between $50,000 and $100,000 with liabilities between $1 and $10 million.  The debtors entities are represented by Aris J. Karalis and Robert W. Seitzer of Maschmeyer Karalis P.C.  The bankruptcies do not affect the other Marathon Grill locations and the debtors have pledged that the 1818 Market St. location will remain open during the bankruptcy proceedings.

Salene: In my younger years as a lawyer at Weir & Partners LLP in Philadelphia (2002-2004), I used to grab many late dinners at the Marathon Grill location at Sansom Street.   It was hip, for sure.   What is the formula for sustainability in the restaurant industry?

Rhinoceros Visual FX and Design Firm Files for Chapter 11 Bankruptcy in New York

By:  Justin A. Saporito, MAZURKRAEMER Law Clerk

On September 17th, 2013 Rhinoceros Visual Effects and Design LLC filed a VictoriaSecretsvoluntary petition for bankruptcy relief under Chapter 11 of the U.S. Bankruptcy Code.  The filing was made in the U.S. Bankruptcy Court in the Southern District of New York and assigned case number 1:13-bk-13016. (A summary of the docket can be found here. )  The case has been assigned to the Honorable Judge Stuart M. Bernstein under case number 1:13-bk-13016.

The Debtor is a Multi-Video Group/Gravity Company.  The Multi Video Group, Ltd. owns and/or is associated with various companies that are in the business of graphic and audio design and editing.  Internationally, The Multi Video Goup, Ltd. is associated with companies such as Gravity Post Production in Tel Aviv, Israel and Digital Renaissance in Oberhausen, Germany.  Rhinoceros Visual Effects and Design LLC is, as the name implies, a visual effects and design firm located at 315 Madison Avenue, 3rd Floor New York, NY 10017.  Debtor’s clientèle has included Victoria’s Secret Stores, LLC, a subsidiary of Limited Brands, Inc., and Six Flags Theme Parks, Inc. (sources: VS, Six Flags)

The Debtor claims assets between $100,001 and $500,000 and liabilities between $1 and $10 million.  It has listed 62 creditors including various individuals and companies such as Bell Technologies and Verizon.  For a complete list of creditors please click here.  Debtor is represented by Paul H. Aloe of Kudman Trachten Aloe LLP.  A Scheduling Order was signed on September 17th, 2013 scheduling the Initial Conference Hearing to be held on September 31st, 2013 at 10:00 AM.

New Jersey Residential Developer Hovbilt, Inc. Seeks Chapter 11 Relief

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

bank. court of nj seal                Hovbilt, Inc. filed a voluntary petition for bankruptcy relief under Chapter 11 of the bankruptcy code on September 17th, 2013.  The case was filed in the Bankruptcy Court of New Jersey and the case was assigned to the Honorable Judge Michael B. Kaplan under case number 3:13-bk-30341.  For a summary of the docket please click here.

Debtor claims assets between $0 and $50,000 with liabilities of $1 to $10 million.  In its petition, it lists 10 creditors including Home Depot and Sovereign Bank.  (Please see the docket summary for a complete list of creditors.)  Sovereign Bank filed for a Notice of Appearance and Request for Service of Notice by its duly appointed counsel in response to Debtor’s voluntary petition for Chapter 11 relief.  The petition, as filed, was incomplete and the Attorney Disclosure Statement, Statement of Financial Affairs, Summary of Schedules, and Incomplete Filings are due by October 1st, 2013.

This Chapter 11 Debtor’s exclusive right to file a plan of reorganization expires on January 15, 2014.

CHAPTER 11 DEBTOR TIP: Every Chapter 11 Debtor should know that upon the commencement of a chapter 11 case, Bankruptcy Code section 1121 gives a debtor-in-possession (“DIP”) the exclusive right to file a plan of reorganization for 120 days (4 months).  The DIP also has the exclusive right to solicit acceptances (votes) for a plan filed within that 120-day period until 180 days (6 months) after filing for chapter 11.  (A debtor may file a plan but creditors may not actually vote on the plan until an accompanying approved Disclosure Statement and set of ballots are served).  No competing plans may be filed during this period of exclusivity.  A creditor, a creditors’ committee, or another special interest committee may be one of the parties filing a competing plan.   Sometimes various parties join together to file a “jointly proposed” competing plan.  See helpful article regarding exclusivity written by Salene’ brother-in-law’s fine law firm Jones Day.

This Debtor is a property developer specializing in residential housing developments located at 1 Dag Hammarskjold Blvd. Freehold, NJ 07728.  Hovilt, Inc. was established in 1969 as a private company categorized as a speculative building of single-family houses and primarily operated in Monmouth and Ocean Counties in New Jersey. (source)

Debtor is represented by James G. Aaron of Ansell Grimm and Aaron PC located at 1500 Lawrence Avenue CN 7807 Ocean, NJ 07712.