Jaguar Distribution Corp. licenses independent films to airlines for in-flight viewing. The company filed for Chapter 11 reorganization on July 31, 2020 in Los Angeles (San Fernando Valley Division). The bankruptcy filing was apparently triggered by the pandemic-related reduction in airline travel worldwide.
The unique feature of this Chapter 11 filing is that virtually all of its creditors (including the 20 largest creditors) are movie licensors for whom Jaguar Distribution Corp. acted as licensing agent.
This puts the company in a difficult position under bankruptcy law: in order to stay in business, the company needs to affirm all its movie distribution contracts; but to do so it must cure past defaults AND provide adequate assurances of future performance under the contracts. This will be a tall order.
Jaguar Distribution Corp. lists assets valued at $1,768,195.26 and liabilities valued at $9,018,419.66–leaving a deficit in excess of $7 million. With a $7 million deficit and 292 separate movie licensor creditors, each with its own set of executory contracts for movie distribution, reorganization will require a great deal of forbearance from a large number of creditors.
It seems likely that many creditors will demand cure of these outstanding defaults before agreeing to extend existing contracts–and Jaguar Distribution Corp. simply does not seem to have the cash that may be required for $7 million in cure payments–let alone to offer adequate assurances of future performance.
The company hired James Wong of Armory Consulting Company (Irvine) as its restructuring financial advisor earlier this year in March.