In the Chapter 11 Bankruptcy case of Rocking M Media, a Manatt team led by Bankruptcy Partner Schuyler Carroll represented the Official Committee of Unsecured Creditors and its successor, the Liquidating Trustee. Prior to the bankruptcy filing, Rocking M Media entered into an agreement to sell several radio stations to Allied Media. Allied Media, however, never completed the purchase and litigation ensued. Allied Media alleged that it was not required to close because Rocking M Media had not provided certain documents that were required prior to scheduling a closing date.
At the time of the bankruptcy filing, the case was ready for trial. The litigation was stayed by the bankruptcy filing, however, until Rocking M Media sold all of its radio stations.
The creditors represented by Manatt would be the beneficiaries of any recovery, but after the radio stations were sold, Rocking M Media was ready to throw in the towel, which would have resulted in further loss to the creditors. Manatt stepped in and filled the void. The Manatt team of Schuyler Carroll, summer associate Maddie Horner and litigation specialist Sara Restrepo quickly became familiar with the years of litigation and set about readying for trial.
After a two-day bench trial, United States Bankruptcy Judge Dale Somers issued a 30-page decision, awarding judgment in favor of the Liquidating Trustee. Contrary to Allied Media’s assertions, Judge Somers found that Allied Media did not comply with the terms of the purchase agreement and that Rocking M Media did not breach the purchase agreement, but rather the failure to close constituted a breach by Allied Media.