The fastest prepacks (i.e., a prepackaged Chapter 11 plan of reorganization for which votes were solicited by the debtor prior to the filing of the debtor’s Chapter 11 petition) are getting faster—a lot faster. Three years ago, Roust Corporation set a blistering record in the Southern District of New York when it filed for Chapter 11 relief on Sunday, Dec. 30, 2016, and confirmed its prepack only seven days later. See In re Roust Corp., Case No. 16-23786 (RDD) (Bankr. S.D.N.Y.). Roust’s time-to-confirmation record in the Southern District held up for only two years. FullBeauty Brands filed for Chapter 11 relief earlier this year on Sunday, Feb. 3, 2019, confirmed its plan the next day, and exited Chapter 11 only three days after that (on February 7). See In re FullBeauty Brands Holdings Corp., Case No. 19-22185 (RDD) (Bankr. S.D.N.Y.). Barely three months later, on May 1, 2019, Sungard Availability Services filed for Chapter 11 relief—then confirmed its plan and exited Chapter 11 the very next day. See In re Sungard Availability Servs. Cap., Case No. 19-22915 (RDD) (Bankr. S.D.N.Y.).
The speed by which the ultra-expedited prepacks (i.e., prepacks in which at least half of the 28-day period provided for filing objections to confirmation under Rule 2002(b) of the Federal Rules of Bankruptcy Procedure (the Rules) has elapsed prior to the filing of the debtor’s petition) in Roust, FullBeauty and Sungard were confirmed continues to be a topic of much academic discussion in the restructuring industry. We, in contrast, believe restructuring professionals in the Southern District should begin thinking of ultra-expedited prepacks practically. First, in FullBeauty, the Southern District explicitly confirmed that exigent circumstances are not required for confirmation of an ultra-expedited prepack. Second, the Southern District’s approval of the ultra-expedited prepacks in Roust, FullBeauty and Sungard has provided a clear picture of the underlying factual circumstances necessary for an ultra-expedited prepack to be a debtor’s highest-value restructuring solution.
