Norberg on the InfoWars/Onion Bankruptcy Controversy

I asked my colleague Scott Norberg, a bankruptcy expert and a member of the BK Rules Advisory Committee, for his thoughts on the InfoWars/Onion Bankruptcy controversy. (TL:DR -- The Onion bought InfoWars in the bankruptcy auction in a bid supported by the Newtown-parent creditors; InfoWars, the State of Texas, and a bunch of right-wing people are objecting in typically performative terms). Scott's comments after the jump.

The Onion’s bid is the best one for the estate, superior to First Union’s.  The trustee’s job is to maximize the proceeds from the sale of assets for the benefit of the unsecured creditors and he’s the expert in doing that.  (Indeed, his payment in the case is based on a percentage of the monies generated by the sale of assets.)  Further, the fact that the major creditors support the Onion bid validates the trustee’s assessment of the competing bids.  After all, he is liquidating the estate on their behalf.  I see the bankruptcy judge’s expressed concern about transparency, but the potential for some creativity in the bid packages was probably inherent in the secret written bid procedures and the fact that the sale of assets was not conducted by live auction.  Jones’s and First United’s allegations of collusion seem way overblown if not desperate.  Jones’s history of playing fast and loose with the legal system leaves him with little credibility.  That said, you know what they say about keeping of with the Joneses. . . . Ultimately, the bankruptcy judge’s decision regarding the better bid is subject to an abuse of discretion standard of review.  The appearance by the Texas Comptroller seems heavy-handed and political.  It will be interesting to see what they have to say at the hearing, or if they are even permitted to speak – not sure that they would be considered a party in interest.