EP 15 | Kawhi Leonard in Bankruptcy Court, Spirit on the Brink, and Disqualified Counsel Provisions

Jason Sanjana and Kevin Eckhardt open in Los Angeles with the biggest sports bankruptcy crossover in years (02:58). NBA star Kawhi Leonard faces scrutiny over a $28 million endorsement deal with now bankrupt tree planting company Aspiration Partners (CTN Holdings). What began as a standard corporate restructuring has turned into a potential salary cap circumvention scandal involving the LA Clippers. The NBA has reopened its investigation and a Chapter 7 trustee now controls potential fraudulent transfer claims worth millions.

From there (29:00) the conversation shifts to Spirit Airlines’ second bankruptcy filing in less than a year. Once considered a restructuring success story the discount carrier faces the same operational problems that plagued its first case including grounded aircraft, credit card processor demands, and revenue per passenger declining 9% year over year. Management’s bold Friday filing before Labor Day weekend signals desperation rather than strategy.

Julian Bulaon, Head of Liability Management, joins (48:00) to discuss the rise of disqualified counsel provisions in credit agreements. These sponsor friendly clauses allow borrowers to veto lender counsel selections after deal closing, a concerning evolution in the ongoing battle between creditors and sponsors over liability management exercises.

The culture close begins (57:00) with Netflix’s The Hunting Wives, a suburban Texas drama of lake houses, politics, and scandal.

The episode wraps (01:06:00) with cannabis foreclosures as marijuana companies increasingly turn to Article 9 processes in the absence of bankruptcy protection.

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Hosted by Jason Sanjana and Kevin Eckhardt

Guest: Julian Bulaon

Produced and edited by Tanya Hubbard