US Trustee Rips Calif. Gym's 'Excessive' Ch. 11 Break-Up Fee
Law360 (January 6, 2021, 3:54 PM EST) -- The federal bankruptcy watchdog took issue Tuesday with $1.5 million in proposed bid protections offered up by California-based fitness company In-Shape in connection with its potential $45.3 million sale to an affiliate of post-petition lenders, saying the steep break-up fee may discourage competing bids.
In-Shape, which sought Chapter 11 protection in mid-December citing COVID-19 restrictions that limited its ability to operate its health clubs, does not need a $1.5 million break-up fee to preserve the value of its estate under Chapter 11 because the potential purchaser already has a strategic incentive to bid, U.S. Trustee Andrew Vara told the court in...
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