“Alamo’s challenges mirror those of the entire cinema industry, which has just endured the most punishing 12-month stretch in its century-long history. Can it put its financial house in order while recapturing its pre-pandemic swagger? Will it be able to successfully remind customers of the fun they once had sipping a microbrew and munching on truffle popcorn while watching the latest Tarantino flick? Are its customers so eager to go out and socialize after a year of being housebound that they’ll see anything and everything that hits the big screen, or will COVID-19 prove to be the final nail in the coffin of the theatrical experience?”
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Danning Gill welcomes Alphamorlai “Mo” Kebeh as an associate at our firm and as a newly admitted member of the State Bar of California! Mo is a 2020 graduate of UCLA Law School.
Read about Mo, his recent publications and accomplishments here.
Law.com’s The Mid-Market Report
February 26, 2021
“Changes in the economy drive bankruptcy filings, even absent major events like a recession or pandemic,” according to managing partner Eric Israel was featured in a Q&A in Law.com’s Mid-Market Report. The profile was focused on the firm’s success and issues that impact mid-size firms.
In responding to the question about fostering the next generation of legal talent, Eric said, “The next generation is our future. We would all like to see our firms prosper long after we’re gone. To accomplish that, we need to groom our young folks, not just in substantive law (which is also important), but in the ethics of practicing law, marketing and law firm management. All are necessary for a properly working firm.”
Firm Name: Danning, Gill, Israel & Krasnoff
Firm Leader: Eric Israel, Managing Partner
Head Count: 10 attorneys
Locations: Century City (Los Angeles), California
Practice Areas: business bankruptcy, restructuring, insolvency, debtor-creditor disputes, fiduciary representation, related litigation, mediation
Governance structure and compensation model: LLP
Do you offer alternative fee arrangements? Yes, although most of our work is still on an hourly or fixed fee basis.
What do you view as the two biggest opportunities for your firm, and what are the two biggest threats?
Ironically, first off COVID is proving to be an opportunity for my firm, as we are a bankruptcy boutique firm. Changes in the economy drive bankruptcy filings, even absent major events like a recession or pandemic. The world is presently experiencing significant economic changes with the shift to remote working that I predict will have many long-term ramifications. The transition from brick and mortar to online business that was already underway will only accelerate. Manufacturers and even service providers will need to adapt or fail. This will also drive down rents for retail and office space, and in turn increase bankruptcy filings by landlords and lenders. Second, changes in technology drive increases in productivity, but they also can cause severe swings in the economy. For example, the shift away from oil and gas to renewables is affecting the price of oil, which this year crashed and has only started recovering. We have also seen many retail bankruptcies where management failed to shift to online marketing soon enough.
In terms of threats, as a countercyclical practice, the volume of our business typically decreases as the economy grows. Longer periods of economic growth put pressure on insolvency-centered practices. Second, as a boutique law firm, we are only as successful as our relationships. A challenge for an older firm is to maintain strong connections with our historic commerce partners while continually expanding our referral base as both our rainmakers and our clientele age and eventually retire.
There is much debate around how law firms can foster the next generation of legal talent. What advantages and disadvantages do midsize firms have in attracting and retaining young lawyers, particularly millennials?
The next generation is our future. We would all like to see our firms prosper long after we’re gone. To accomplish that, we need to groom our young folks, not just in substantive law (which is also important), but in the ethics of practicing law, marketing and law firm management. All are necessary for a properly working firm. We actively encourage our younger talent to join us at marketing functions and introduce them to ongoing clients to hopefully keep the relationship strong long term.
February 10, 2021
Before the pandemic, the trucking industry faced rising costs, evolving compliance mandates and multiple other challenges. Many fleets struggled; some filed for bankruptcy — according to Broughton Capital, 640 of them in the first half of 2019.
Then, along came COVID-19, and many of the smaller trucking companies couldn’t pivot as fast as the larger ones, to meet the demand for essential goods.
They didn’t have the right equipment, enough trucks, good contacts. So, they lost out, and many went out of business in 2020. What would have happened if these smaller trucking fleets had instead filed for Chapter 11 bankruptcy?
It depends, said Zev Shechtman, a partner at Danning, Gill, Israel & Krasnoff. “What happens hinges on how the company is situated — if it’s still allowed to operate, has the cash to operate and how deep in the hole the fleet is,” Shechtman said.
To read more insights from Zev in this article, click on the link here.
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.
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.
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.
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.
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.
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.
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