Danning Gill Represents Chapter 11 Trustee
in California Oil and Gas Bankruptcy & Sale

LOS ANGELES – Danning, Gill, Israel & Krasnoff, LLP represented  Michael A. McConnell, the Chapter 11 trustee (the “Trustee”) for the estate of HVI Cat Canyon, Inc. (“HVI”), which owned approximately 1,000 oil wells, most of which were idle or not performing.  The $26.75 million sale of the oil and gas assets located in Santa Barbara and Kern Counties closed on October 26, 2020.  HVI is affiliated with Rincon Island Limited Partnership that went through its own bankruptcy commenced in 2016.  The Trustee also closed a second sale for oil wells located in Orange County.  The Trustee was represented throughout by Danning Gill Partner Eric P. Israel.

The HVI bankruptcy case was filed in the Southern District of New York on July 25, 2019, transferred to the Southern District of Texas, and then transferred to the Northern Division of the Central District of California.  The Bankruptcy Court directed the appointment of a Chapter 11 trustee on motion by the State of California and others.  The Trustee was able to procure post-petition financing via a series of loans from the main creditor, UBS AG, and ultimately borrowed approximately $13.5 million.  With those funds, the Trustee operated the company for approximately one year.  During that time, the global price of oil crashed due to a price war between Russia and Saudi Arabia, and the effects of the COVID pandemic on global demand for crude oil.

In order to improve marketability of the company, the Trustee converted the company into a stand-alone vehicle instead of being part of a conglomerate of affiliated entities.  As part of the process, the Trustee rejected contracts with insiders and affiliates that had provided office space, equipment rentals, back office services and even sales of its product, replacing those arrangements with insiders and affiliated entities to third party vendors at market prices.

According to Mr. Israel, “The sale was complex, requiring settlements with numerous diverse parties in interest, including over 500 mineral owners, numerous governmental regulatory agencies and several secured creditors, and the County of Santa Barbara for many millions of dollars in real property taxes owed.  Ultimately, the mineral owners agreed to waive pre-petition back royalties of about $13 million in order to procure a responsible new operator.”

UBS was represented by O’Melveny & Myers, LLP.  The Official Committee of Unsecured Creditors was represented by Pachulski, Stang, Ziehl & Jones, LLP.  CR3 Partners was the Trustee’s financial analysts.

Wave of Bankruptcies Washes Over Los Angeles Businesses

Los Angeles Business Journal

October 12, 2020

John Tedford, partner at Danning Gill Israel & Krasnoff spoke with the Los Angeles Business Journal (LABJ) for an article about various industries hit hard financially by the COVID-19 pandemic.

One industry discussed is hospitality. According to the LABJ, there were 747 Commercial Chapter 11 filings recorded nationwide in September, a 78% increase over the same month in 2019, according to New York-based research firm Epiq Systems Inc. With a total of 5,529 filings during the first three quarters of 2020, Chapter 11 commercial filings are up 33% over the same period last year.

“The hotel space is really hurting,” said Tedford. “They aren’t receiving the revenues that they need from their hotels … and their lenders have decided enough is enough. I’m guessing that that case will get filed in and about in a couple weeks in Delaware.”

Tedford added that restaurants are also in a vulnerable position, but many may disappear without filing for bankruptcy.

“The restaurants generally are just leasing, and I think a lot of them, it’s better just to shut down, so we won’t necessarily see bankruptcy filings for them,” Tedford said. “I’m surprised that we haven’t seen more restaurants closed permanently. I don’t know how they can go this long without having sustained revenues at high levels. It doesn’t look like California is just going to be allowing full occupancy anytime soon.”

To read the full article, click here.


Bankruptcy Filings Are Coming, But How Many Will Hit the Real Estate Market?

Globe St.

September 15, 2020

Bankruptcy filings are a certainty at this point.  We are more than six months into the pandemic and businesses are continuing to lose revenue, leading to rent losses for landlords.  However, there is still some debate about the number of bankruptcy filings anticipated to hit the real estate market.  Some predict waves of bankruptcies, while Danning, Gill, Israel & Krasnoff, LLP Partner Uzzi Raanan told Globe St. that it is still too early to know whether COVID-19 will result in a surge or merely an uptick in future bankruptcies.

“It is difficult to predict whether we will see a surge in bankruptcy filings, or merely an uptick,” said Raanan. “We are still in the midst of an unprecedented—at least in recent times—pandemic that shuttered or greatly impacted most businesses, significantly increased unemployment, reduced economic activities in multiple sectors, and disrupted operations of the judicial system.  The reasons we have not experienced a deluge of bankruptcies include a large infusion of funds from the federal government through the CARES Act to businesses and the unemployed, as well as various statutes and emergency orders at the federal and local levels that effectively suspended evictions/foreclosures throughout the country.”

To read Mr. Raanan’s full interview with Globe St., click on this link.

Virginia, An Early Adopter Of Rent Relief For Retailers, Is Bankruptcy’s Latest Hot Spot

August 14, 2020

As retailers continue to file for Chapter 11 in droves, the Virginia court where many of them are seeking relief is joining the ranks of the most popular jurisdictions for large business bankruptcies, alongside New York, Delaware and Houston.

The Richmond branch of the U.S. Bankruptcy Court for the Eastern District of Virginia has become a hot spot for financially strapped retailers, including J. Crew, Lord & Taylor, Ann Taylor’s parent company, Ascena Retail Group, and Pier 1 Imports. The sudden uptick may be due in part to an April ruling from U.S. Bankruptcy Judge Kevin Huennekens in that case that permitted Pier 1 to put rent payments on hold, restructuring experts say.

“It was kind of novel and not the kind of thing you see every day because usually the expectation is if a debtor is utilizing the leased space in the ordinary course, it’s supposed to stay current on its rent,” said Zev Shechtman, a restructuring partner at Danning Gill. “So we see a trend of a debtor-friendly judge willing to stretch out the landlords.”

U.S. bankruptcy law offers Chapter 11 debtors leeway in determining where they will file for bankruptcy. Debtors are not required to file where they are headquartered or incorporated and can opt for a district where they have assets or a subsidiary. And, legislation to narrow bankruptcy venue options has failed to gain much traction.

To read the full article, click here.

Big-Name Bankruptcies Flock to Two-Judge Court in Virginia

Bloomberg Law

September 15, 2020

By Zev Shechtman


The U.S. Bankruptcy Court for the Eastern District of Virginia has developed a reputation among corporate restructuring practitioners as a debtor-friendly venue that issues consistent rulings while running efficient operations.

So far in 2020, 9% of large, publicly traded company bankruptcies have been filed in the Eastern District of Virginia, according to the UCLA-LoPucki Bankruptcy Research Database.  That’s more than double the district’s share of major cases during the previous five years.

“Forum shopping is the story and Virginia is the flavor of the week,” said Danning Gill Partner Zev Shechtman.

Lord & Taylor, Ascena Retail Group, J. Crew, and Intelsat SA represent the large companies that filed for bankruptcy there this year following U.S. business shutdowns caused by the Covid-19 pandemic.

To read the full story, click here.

Danning Gill Partner Uzzi O. Raanan to be sworn in as Secretary of the California Lawyers Association’s Board of Representatives

On September 26, 2020, during the CLA’s virtual Annual Meeting, partner Uzzi O. Raanan will be sworn in as Secretary of the CLA’s Board of Representatives.  California Supreme Court Chief Justice Tani Cantil-Sakauye is scheduled to preside over the CLA officer swearing-in ceremony, which will be conducted in conjunction with the California Judge’s Association’s officer swearing-in ceremony.

 Click Here to read more.


Exiting Bankruptcy


August 30, 2020

A number of retailers that filed for Chapter 11 bankruptcy in the early months of the COVID-19 crisis are now at the finish line or close. To get here, retailers sought financing while facing the risks that come with months-long store closures, then reopened stores during the ongoing pandemic and struck deals with creditors, lenders, and in some cases, buyers. 

While the proceedings so far have shown courts willing to accommodate retailers’ requests and defer to their business judgment, there are still questions of long-term survival, bankruptcy attorneys said. 

“I think there’s going to be a tendency to approve things that may be less likely to be approved in a more healthy market environment,” said Zev Shechtman, partner at Danning Gill Israel & Krasnoff LLP.

“But in order to exit from bankruptcy, companies need to have a viable business plan going forward,” he said. “The question is, where is the money coming from on a going-forward basis?” 

“Bankruptcies can be really successful for reorganizations when there is an exit, a light at the end of the tunnel,” said Shechtman of Danning Gill.  “The bankruptcy story will be mirroring the general economic story in many ways,” he said. “If there is no end in sight for the economy, bankruptcy is not a silver bullet.”

To read the full article, click here.

Government Stimulus Has Held Off Bankruptcies – For Now

Daily Journal

July 28, 2020

Danning Gill Partner John Tedford was quoted in a July 28, 2020 article in the Daily Journal about trends in bankruptcy filings in the United States and California.

According to recent U.S. Bankruptcy Court statistics, overall, bankruptcy filings are down nationally and in California, as the worst may be yet to come.

‘It’s not a big surprise, what is a surprise is we haven’t seen a boom over the last couple of months in bankruptcy filings despite all the relatively bad news, “ says Tedford, who handles bankruptcies for businesses on the debtor and creditor side. He said the court is on pace to have the same number of Chapter 11 cases filed this year as in each of the last five years.

To read the full article, click on the link below (subscription required).

Click Here


Danning Gill Partners Participate in LABJ Bankruptcy & Restructuring Roundtable

Los Angeles Business Journal

July 27, 2020

Danning Gill Partners John N. Tedford IV and Uzzi O. Raanan participated in a Bankruptcy & Restructuring Roundtable with the Los Angeles Business Journal for its July 27, 2020 issue. The attorneys discussed the significant economic damages to businesses due to the COVID-19 pandemic, when it’s a good time for a business to file for bankruptcy as well as what are some bankruptcy pitfalls that businesses should avoid.

To read the full interview, click on the link below.

Click Here

Danning Gill News Quotes: Will Coronavirus Create a Debt Crisis for Movie Theaters?

As coronavirus cases rise in the United States, cinemas around the country are finding their plans for reopening in jeopardy, and that’s putting a greater strain on an economic sector that’s been hard hit by the public health crisis and was already facing challenges of evolving technology. Danning Gill Partner Zev Shechtman spoke with Variety about how entertainment businesses may be considering their options, including bankruptcy.

To read the full article, click here.