🌮New Chapter 11 Filing - RM Holdco LLC (Real Mex)🌮

In April's piece entitled "🍟Casual Dining is a Hot Mess🍟" and then in a follow-up in July creatively and originally entitled "🍟Casual Dining Continues to = a Hot Mess🍟" we noted that...well...casual dining is a hot mess. As of today…A. Spicy. Hot. Mess. Actually.

Late last night, RM Holdco LLC, the owner of a portfolio of 69 company-operated and 11 franchised restaurants and contemporary taquerías including Chevy's Fresh Mex, Siniqual, El Torito Grill, Las Brisas and Alcapulco filed for bankruptcy to effectuate a "363 sale" of substantially all of its assets to an affiliate of one of its pre-petition equityholders, Z Capital Partners LLC for $46.75mm. Interestingly, this filing also marks the third — that’s right, THIRD — chapter 22 filing in the last week following Home Heritage Group Inc. and Brookstone Inc. This is how we previously described a “Chapter 22”:

For the uninitiated, Chapter 22 in bankruptcy doesn’t actually exist. It is a somewhat snarky term to describe companies that have round-tripped back into chapter 11 after a previous stint in bankruptcy court.

Real Mex previously filed for bankruptcy in October 2011 and sold to Z Capital and Tennenbaum Capital Partners LLC in March 2012. At the time of that previous chapter 11 filing, the company operated approximately 128 restaurants.

This time, the signs of an imminent bankruptcy filing were out there shining for all to see as the company has been sending smoke signals for months. Back in May, Bloombergreported that the company hired Piper Jaffray to pursue a sale — including one that could be consummated in bankruptcy. Thereafter, in June, the company filed a WARN Notice with the Department of Labor indicating that it intends to close its Times Square location and lay off 134 employees. Perhaps the signs were in place even earlier when the company hired the former CFO of Wet Seal, a retailer that, itself, found its way into bankruptcy court twice.

The company highlights various macro factors as reasons for this chapter 11 filing:

For the past six (6) years, the Debtors have struggled with certain industry-wide and company-specific pressures that have negatively impacted their operations. Trends in the greater restaurant industry, including increases to minimum wage and commodity costs, have created substantial pressure on the entire sector, as evidenced by the numerous brands that have filed for bankruptcy in recent years, including Ignite Restaurant Group (Brick House and Joe’s Crab Shack), Macaroni Grill, Garden Fresh, Bertucci’s, Crumbs, Cosi, and Buffets.

And:

In addition, increased competition, especially in the form of available, quality Mexican fast casual options, has had a significant impact on traffic in the Debtors’ restaurants.

For anyone keeping track of the “What Caused Bankruptcy” standings, this would be Amazon Inc. ($AMZN) 282,499,209 and (now) Chipotle Inc. ($CMG) 1.

Compounding matters here is (i) the company’s $200+ million in debt, (ii) an expensive workers’ compensation program, (iii) long-term lease burden (it leases all of its locations, the majority if which are in California), (iv) an expensive-yet-unconsummated-growth-strategy (the company attempted but failed to pursue expensive M&A processes with bankrupted Garden Fresh Restaurant Intermediate Holdings, among others), and (v) poor risk management procedures. On the latter point, it seems the company was a wee bit cavalier about not-at-all-serious matters like alcohol awareness, sexual harassment and food handling safety; therefore, it “experienced higher-than-normal litigation and enforcement-related expenses.” Yikes.

Now, back in October 2016 — in the context of Garden Fresh’s chapter 11 filing — we asked “Are Progressives Bankrupting Restaurants?” Therein we highlighted the following:

…Morberg's explanation for the bankruptcy went a step farther. He noted that cash flow pressures also came from increased workers' compensation costs, annual rent increases, minimum wage increases in the markets they serve, and higher health benefit costs -- a damning assessment of popular progressive initiatives making the rounds this campaign season. And certainly not a minor statement to make in a sworn declaration.  

It's unlikely that this is the last restaurant bankruptcy in the near term. Will the next one also delineate progressive policies as a root cause? It seems likely.

Points for PETITION’s bullseye?

Notably, here, the company also underscores that employee costs were a significant contributor to its liquidity constraints. It states:

While struggling with the specific issues discussed above, the Debtors have also suffered from rising employee wage costs, which are particularly high in California, where the vast majority of the Debtors’ restaurants are located. In an attempt to minimize these costs, the Debtors have implemented a scheduling program that has reduced employee hours and has optimized both front-of-house and back-of-house staffing.

Welcome to the party, Mr. Unintended Consequences.

The company seeks to use the bankruptcy process to effectuate the afore-mentioned sale to Z Capital. While the purchase price is a mere fraction of the debt on balance sheet, Z Capital’s proposed stalking horse asset purchase agreement also provides that it will “offer employment to all Company employees at purchased restaurants who are employed at the closing, and may offer employment to other Company employees as well.” In other words, this may be one of those instances where the funds lose on their investments but the (remaining) employees come out relatively okay. Z Capital and Tennenbaum are also providing the company with a $5.5mm DIP credit facility to finance operations during course of the cases.

  • Jurisdiction: D. of Delaware (Judge [ ])

  • Capital Structure: $41.7mm first lien credit facility (Wells Fargo Bank NA), $195.1mm second lien credit facility (Wells Fargo Bank NA), $17.53mm in secured reimbursement obligation loans (from Letters of Credit), $53.62mm unsecured subordinated convertible debt (Z Capital = large holder)    

  • Company Professionals:

    • Legal: Sidley Austin LLP (Vijay Sekhon, Christina Craige, Ariella Thal Simonds) & (local) Young Conaway Stargatt & Taylor LLP (Robert Brady, Elizabeth Justison, Andrew Magaziner, Edmon Morton, Michael Nestor)

    • Financial Advisor: Alvarez & Marsal LLC (Jonathan Tibus)

    • Investment Banker: Piper Jaffray & Co. (Jean Hosty, Terri Stratton, Michael Sutter) 

    • Claims Agent: KCC (*click on company name above for free docket access)

  • Other Parties in Interest:

    • Stalking Horse Bidder & DIP Lender: Z Capital Group LLC (Legal: Cleary Gottlieb Steen & Hamilton LLP & (local) Morris Nichols Arsht & Tunnell LLP)

    • DIP Lender: Tennenbaum Capital Partners (Legal: Schulte Roth & Zabel LLP & (local) Landis Rath & Cobb LLP)

    • DIP Agent: Wells Fargo Bank NA (Thompson & Hine LLP)

New Chapter 11 Filing - Takata Corporation

Takata Corporation

  • 6/25/17 Recap: The long-awaited chapter 11 (and Japanese Civil Rehabilitation Act) filing of the publicly-traded ($TKJP) airbag manufacturer is finally upon us after the Company endured a massive airbag recall (affecting 124mm automobiles that were deployed with non-desiccated PSAN Inflators, worldwide) and corresponding liability. The Company intends to consummate an agreement in principle with privately-held Key Safety Systems out of Sterling Heights Michigan for a sale of substantially all of the Company's assets for $1.588b. Use of proceeds include satisfying the requirements of a plea agreement with the US Department of Justice, paying administrative costs and expenses of the restructuring (cha-ching Weil, PwC, Lazard & Prime Clerk), and funding unsecured creditor recoveries. The Company has secured a $227mm revolving credit facility from Sumitomo Mitsui Banking Corporation to fund the cases; per its press release, it has also negotiated with its Japanese original equipment manufacturers ("OEMs") for valuable accommodations and liquidity enhancements and continues to negotiate with OEMs elsewhere. Every car manufacturer under the sun is listed as an "undetermined" general unsecured creditor including the likes of Toyota, FordTesla, Fisker, Ferrari, and, of course, the majors. 
  • Jurisdiction: D. of Delaware
  • Company Professionals:
    • Legal: Weil Gotshal & Manges LLP (Marcia Goldstein, Ronit Berkovich, Matthew Goren, Jessica Diab, Lauren Tauro) & (local) Richards Layton & Finger PA (Mark Collins, Michael Merchant, Amanda Steele, Brett Haywood)
    • Financial Advisor: PriceWaterhouseCoopers LLP (Bill Fasel, Stephen Hammond)
    • Investment Banker: Lazard Freres & Co. LLC
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Daimler Trucks North America LLC 
      • Legal: White & Case LLP (Thomas Lauria, Michael Shepard, Richard Graham)
    • General Motors Holdings LLC
      • Legal: O'Melveny & Meyers LLP (George Davis, Daniel Shamah, Andrew Sorkin, Gary Svirsky)
    • General Motors LLC
      • Legal: Honigman Miller Schwartz & Cohn LLP (Joseph Sgroi, Chauncey C. Mayfield II, Scott Kitai)
    • Key Safety Systems Inc.
      • Legal: Skadden Arps Slate Meagher & Flom LLP (Ron Meisler, Felicia Gerber Perlman, Christopher Dressel, Christine Okike, Esther Adzhiashvili)
    • Honda North America Inc.
      • Legal: Sidley Austin LLP (Michael Andolina, Jessica Knowles Boelter) & (local) Cole Schotz PC (Norman Pernick, J. Kate Stickles)
    • FCA US LLC
      • Legal: Sullivan & Cromwell LLP (Brian Glueckstein, Andrew Dietderich, Alexa Kranzley)
    • Ford Motor Company
      • Legal: McGuireWoods LLP (Mark Freedlander, Frank Guadagnino, John Thompson) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott)
    • Jaguar Land Rover North America LLC
      • Legal: Mayer Brown LLP (Richard Ziegler)
    • Subaru of America Inc.
      • Legal: Kramer Levin Naftalis & Frankel LLP (Adam Rogoff, Anupama Yerramalli, Philip Bentley, David Braun)
    • Toyota Motor Corporation
      • Legal: Frost Brown Todd LLC (Robert Sartin, Patrica Kirkwood Burgess, Ronald Gold) & (local) Landis Rath & Cobb LLP (Adam Landis, Kimberly Brown, Travis Ferguson)
    • BMW Manufacturing Co LLC
      • Legal: Norton Rose Fulbright US LLP (David Rosenzweig, Michael Parker) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott)
    • Nissan Motor Corporation
      • Legal: Jones Day (Pedro Jimenez)
    • Mitsubishi Motors North America Inc.
      • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Daniel Youngblut, Kevin O'Neill)
    • Tesla Inc.
      • Legal: Irell & Manella LLP (Jeffrey Reisner, Michael Strub, Kerri Lyman) & (local) Reed Smith LLP (Kurt Gwynne, Emily Devan)
    • Volkswagen Group of America, Inc.
      • Legal: Davis Polk & Wardwell LLP (Timothy Graulich, Elliott Moskowitz, Darren Klein)
    • Volvo Group North America LLC
      • Legal: Baker Hostetler LLP (Eric Goodman) & (local) Morris Nichols
    • Official Committee of Unsecured Creditors
      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Tyson Lomazow, Abhilash Raval, Bradley Scott Friedman) & (local) Whiteford Taylor & Preston LLP (Christopher Samis, L. Katherine Good, Kevin Shaw)
    • Committee of Unsecured Tort Claimant Creditors
      • Legal: Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, James Stang)

Updated 7/11/17 6 pm (CT)

New Chapter 11 Filing - FirstRain Inc.

FirstRain, Inc.

  • 6/5/17 Recap: California-based enterprise SaaS company that services Fortune 1000 companies with its software and analytics-driven apps to discover/read/discern/summarize useful insights about other companies/markets filed a prepackaged bankruptcy. The plan contemplates $7.5mm of total consideration including a $4mm DIP credit facility and the plan is to pay the DIP Lender in full, general unsecureds in full and provide the prepetition lender a partial recovery. ESW Capital LLC will own the company on the backend of the restructuring.
  • Jurisdiction: D. of Delaware (Judge Silverstein)
  • Capital Structure: $5.5mm secured debt (Pacific Western Bank as successor to Square 1 Bank)    
  • Company Professionals:
    • Legal: The Rosner Law Group LLC (Frederick Rosner, Scott James Leonhardt)
    • Investment Banker: Atlas Technology Group LLC
    • Claims Agent: JND Legal Administration (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Lender: ESW Capital LLC
      • Legal: Haynes and Boone LLP (Trevor Hoffman, Arsalan Muhammad) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott, Matthew Talmo)
    • Prepetition Lender: Pacific Western Bank
      • Legal: Levy Small & Lallas (Leo Plotkin) & (local) Chipman Brown Cicero & Cole LLP (William Chipman Jr.) 

Updated 7/18/17

New Chapter 11 Filing - Tidewater Inc.

Tidewater Inc.

  • 5/17/17 Recap: First Gulfmark Offshore Inc., now Tidewater: the offshore shakeout is finally upon us. The New Orleans-based publicly-traded offshore operator filed for bankruptcy to effectuate an expedited 6-week prepackaged financial restructuring of the company. This story is so cliche at this point: leverage is high, oil prices are low, E&P activity is down, natural gas is up, liquidity is constrained. Cue Weil and a slew of other restructuring professionals. File bankruptcy. 
  • Jurisdiction: D. of Delaware (Shannon)
  • Capital Structure: $1.95b funded debt. $300mm TL (DNB Bank ASA) & $600mm RCF (BofA), $1.15b unsecured notes, tons of of guarantees and nonsense.    
  • Company Professionals:
    • Legal: Weil (Ray Schrock, Jill Frizzley, Alfredo Perez, Christopher Lopez, Yvanna Custodio, Andriana Georgallas) & (local) Richards Layton & Finger PA (Daniel DeFranceschi, Zachary Shapiro, Christopher De Lillo)
    • Financial Advisor: AlixPartners LLC (David Johnston, Richard Robbins, Jim Trankina, Bruce Smathers)
    • Investment Banker: Lazard (Timothy Pohl)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name for free docket)
  • Other Parties in Interest:
    • Independent Directors of the Board
      • Legal: Andrews Kurth Kenyon LLP (Robin Russell, Timothy Davidson)
    • Term Loan Agent: DNB Bank
      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Tyson Lomazow) & (local) Klehr Harrison Harvey Branzburg LLP (Domenic Pacitti)
    • Credit Agreement Agent: Bank of America
      • Legal: Morgan Lewis & Bockius LLP (Amy Kyle, Edwin Smith, Joshua Dorchak, Matthew Ziegler) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott)
    • Unofficial Noteholder Committee
      • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Alan Kornberg, Brian Hermann, Sean Mitchell, Kellie Cairns) & (local) Blank Rome LLP (Stanley Tarr, Rick Antonoff, Barry Seidel)
    • Official Committee of Unsecured Creditors
      • Legal: Whiteford Taylor & Preston LLC
      • Financial Advisor: Berkeley Research Group LLC (Christopher Kearns, Mark Shankweiler, Rick Wright, Jeffrey Dunn, Carolyn Passaro)
    • Official Committee of Equity Holders
      • Legal: Brown Rudnick LLP (Howard Steel, Brandon Burkart, Jeffrey Jonas, Steven Pohl) & (local) Saul Ewing LLP (Mark Minuti, Sharon Levine)
      • Financial Advisor: Miller Buckfire & Co. LLC (Matthew Rodrigue) & Stifel Nicolaus & Co. Inc.
    • Post Reorg Board of Directors (Dick Fagerstal, Steven Newman, Larry Rigdon, Randee Day, Alan Carr, Thomas Robert Bates Jr.)

Updated 7/12/17 9:07 am CT

New Chapter 11 Filing - Gulfmark Offshore Inc.

Gulfmark Offshore Inc.

  • 5/17/17 Recap: Everyone has been waiting for the offshore action and it's finally here. Except, its fairly anticlimactic. Here, the publicly-traded Houston-based offshore oil and gas logistics services provider filed for bankruptcy to effectuate a financial restructuring pursuant to a Restructuring Support Agreement signed with holders of its unsecured senior notes. The noteholders will get approximately 36% of the equity in the newly reorganized company along with rights to purchase an additional 60% equity slug pursuant to a backstopped $125mm rights offering. Existing equity will get a small equity "kiss" and some warrants. This is so boring that EVEN WE can't really find much to make fun of. 
  • Jurisdiction: D. of Delaware
  • Capital Structure: $100mm RCF ($72mm funded)(Royal Bank of Scotland), NOK600mm Norwegian Facility ($44.3mm funded)(DNB Bank ASA), $430mm '22 6.375% unsecured senior notes (funded)(US Bank NA)    
  • Company Professionals:
    • Legal: Weil (Gary Holtzer, Ronit Berkovich, Debora Hoehne) & (local) Richards Layton & Finger PA (Mark Collins, Zachary Shapiro, Brett Haywood, Christopher De Lillo)
    • Financial Advisor: Alvarez & Marsal LLC (Brian Fox, Kevin Larin, RIchard Niemerg, Don Koetting, Lacie Melasi, Robert Country)
    • Investment Banker: Evercore Group LLC (Stephen Hannan, David Andrews, Sachin Lulla, Pranav Goel, Arth Patel)
    • Claims Agent: Prime Clerk LLC (*click on company name above for access to free docket)
  • Other Parties in Interest:
    • Indenture Trustee: US Bank NA
      • Legal: Foley & Lardner LLP (Derek Wright, Mark Prager)
    • Ad Hoc Group of Unsecured Noteholders
      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Evan Fleck, Nelly Almeida) & (local) Morris Nichols Arsht & Tunnell LLP (Gregory Werkheiser, Robert Dehney)
        • Financial Advisor: Houlihan Lokey Capital Inc.
    • Prepetition Multicurrency RCF Lender: Royal Bank of Scotland
      • Legal: Sullivan & Cromwell LLP (Michael Torkin, Brian Glueckstein, David Zylberberg) & (local) Young Conaway Stargatt & Taylor LLP (Pauline Morgan, Joseph Barry, Ian Bambrick)
      • Financial Advisor: FTI Consulting Inc.
    • Prepetition NOK Lender: DNB Bank ASA
      • Legal: Hughes Hubbard & Reed LLP (Christopher Kiplok, Anson Frelinghuysen, Erin Diers) & (local) Bayard PA (Erin Fay)
      • Financial Advisor: Guggenheim Securities LLC
    • Gulfmark Rederi AS
      • Legal: Norton Rose Fulbright US LLP (Jason Boland, William Greendyke) & (local) Womble Carlyle Sandridge & Rice LLP (Matthew Ward)

Updated 7/12/17 9:301 am CT

New Chapter 11 Filing - Marsh Supermarkets Holding LLC

Marsh Supermarkets Holding LLC

  • 5/11/17 Recap: After weeks of rumors and run-up, another Sun Capital Partners portfolio company has filed for bankruptcy with the hope of selling its remaining 44 locations to a buyer. A buyer is not currently lined up. The company cited the usual reasons for the filing: (a) the increasingly competitive grocery space with mega-retailers and specialty chains crowding the market, and (b) falling produce and retail food prices. We're frankly surprised that they didn't bother to mention Amazon like everyone else. When it doubt, "Amazon Effect" it. But we digress. Anyway, it also noted that capital investment (particularly relating to technological advances) trailed big players like Kroger ($KR) and Meijer. While those players reaped the benefits of their heavy investments, Marsh could not keep up, foot traffic declined, revenue suffered, and liquidity constraints increased. This is pretty basic sh*t. 
  • Jurisdiction: D. of Delaware
  • Capital Structure: $60mm RCF debt ($5.2mm funded + $2.5mm LOC)(Wells Fargo Bank NA), $25.7mm June 2016 junior note, $6.3mm October 2016 junior note    
  • Company Professionals:
    • Legal: Young Conaway Stargatt & Taylor LLP (Robert Brady, Michael Nestor, Robert Poppiti Jr., Ashley Jacobs, Shane Reil)
    • Financial Advisor/CRO: Clear Thinking Group LLC (Lee Diercks, Anthony Gehringer, A.R. Williams, Thomas Burke)
    • Investment Banker: Peter J. Soloman Company (Scott Moses, Derek Pitts, Greg Grambling, Brandon Yoshimura, Dan Stolar)
    • Liquidator: Hilco Merchant Resources
      • Legal: Pepper Hamilton LLP (Douglas Hermann, Michael Custer)
    • Real Estate Advisor: Hilco Real Estate LLC (Ryan Lawlor)
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Senior Lien Agent: Wells Fargo Bank NA
      • Legal: Otterbourg PC (Jonathan Helfat, Daniel Fiorillo)
    • Junior Noteholder: Marsh Group Finance LLC
      • Legal: Kirkland & Ellis LLP (James Stempel) & (local) Morris Nichols Arsht & Tunnell LLP (Curtis Miller)
    • Official Committee of Unsecured Creditors
      • Legal: Cooley LLP (Cathy Hershcopf, Seth Van Aalten, Robert Winning, Max Schlan, Sarah Carnes) & (local) Bayard PA (Justin Alberto, Erin Fay, Gregory Flasser)
      • Financial Advisor: FTI Consulting Inc. (Conor Tully)

Updated 7/12/17

New Chapter 11 Filing - Suniva Inc.

Suniva Inc.

  • 4/17/17 Recap: Large US manufacturer of photovoltaic solar cells used in residential, commercial and government solar applications filed for bankruptcy because of (cue ominous music) CHINA. Shocker! China's well-documented cheap solar capacity and flooding of the US market has pressured the US market for years (and resulted in the imposition of 30% tariffs on the Chinese - tariffs that were easily circumvented through creative delivery through other parts of Asia). Luckily, management didn't get ahead of their skis and expand by (i) tripling the company's manufacturing capacity and (ii) spending nearly $100mm on larger facilities (while incurring new debt). Oh wait, strike that: that's precisely what management did. Oops. (More to come.)
  • Jurisdiction: D. of Delaware 
  • Capital Structure: $50.9mm (SQN Asset Servicing LLC), $15mm LOC (Wanxiang America Corporation - now first in priority as successor to Wells Fargo's rights)    
  • Company Professionals:
    • Legal: Kilpatrick Townsend & Stockton LLP (Todd Meyers, Colin Bernardino, Gianfranco Finizio) & (local) Potter Anderson & Corroon LLP (Jeremy Ryan, R. Stephen McNeill, D. Ryan Slaugh)
    • Financial Advisor/CRO: Aurora Management Partners Inc. (David Baker, Steve Smerjac, Matt McEnerney)
    • Claims Agent: The Garden City Group Inc. (*click on the company name above for free docket)
  • Other Parties in Interest:
    • SunEdison Products Singapore Pte. Ltd.
      • Legal: Togut Segal & Segal LLP (Frank Oswald, Brian Moore)
    • Wells Fargo NA
      • Legal: Morgan Lewis & Bockius LLP (Richard Esterkin, Kelly Costello)
    • Alternative DIP Lender: Lion Point Capital LP
      • Legal: Cleary Gottlieb Steen & Hamilton LLP (Sean O'Neal, Jane VanLare, Thomas Kessler) & Ashby & Geddes PA (Ricardo Palacio, Karen Skomorucha Owens)
    • Official Committee of Unsecured Creditors
      • Legal: Seward & Kissel LLP (John Ashmead, Robert Gayda, Catherine LoTempio) & (local) Morris Nichols Arsht & Tunnell LLP (Robert Dehney, Eric Schwartz, Tamara Minott)
      • Financial Advisor: Emerald Capital Advisors (John Madden, Jack Allen, Christopher Saitta, Daniel Pace, Ryan Feulner)

Updated 7/17/17 

New Chapter 22 Filing - Venoco LLC

Venoco LLC

  • 4/17/17 Recap: Denver-based E&P company that FILED FOR BANKRUPTCY LITERALLY 13 MONTHS AGO and emerged 9 months ago filed for bankruptcy again because of "material operational and regulatory setbacks." The prior bankruptcy eliminated nearly $1b of debt and the restructuring was predicated upon various operational objectives. First, the Plains All American Pipleine line 901 going online. Well, that didn't happen. Second, regulatory approval of "the highly anticipated lease line adjustment." Spoiler alert: that didn't happen either. Third, the extension of the lease term by the Beverly Hills Unified School District of an onshore facility beyond its 12/16 expiration date. Any guesses what happened there? Right, nada. And, fourth, an insurer required that the company post an additional $35mm in collateral to support bonds issued by it. You guessed it: the company didn't have the money for that either which, of course, would have effectively terminated operations altogether. Hence, the bankruptcy filing.
  • Jurisdiction: D. of Delaware     
  • Company Professionals:
    • Legal: Bracewell LLP (Robert Burns, Robin Miles, David Riley, Mark Dendinger, Jason Hutt) & (local) Morris Nichols Arsht & Tunnell LLP (Robert Dehney, Andrew Remming, Marcy McLaughlin)
    • Financial Advisor/CRO: Zolfo Cooper LLC (Bret Fernandes)
    • Investment Banker: Seaport Global Securities LLC
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
    • Board of Directors: Mark DePuy, Gene Davis, Daniel Vogel, Jeffrey Bartlett, Chris Bement, Bill Lockyer
  • Other Parties in Interest:
    • Significant Shareholders: Apollo Investment Corporation, MAST Capital Management LLC, Candlewood Special Situations Master Fund Ltd.
    • Exxon Mobil Corporation
      • Legal: Haynes and Boone LLP (Charles Beckham, Kelli Norfleet) & (local) Farnan LLP (Michael Farnan)

Updated 4/22/17 

New Chapter 11 Filing - Lily Robotics Inc.

Lily Robotics Inc.

  • 2/27/17 Recap: High-flying (ugh) drone startup that put together kick-a$$ production videos and crowdfunded tens of millions of dollars ($34.8mm to be exact) from tens of thousands of generous suckers (61.450 to be exact) filed for bankruptcy to implement an IP sale, a liquidating plan and avoid investigation and litigation. They'll probably throw in extensive releases for Spark Capital for good measure because, well, why the hell not? And next thing you know, the "revolutionary" and "disruptive" founders will end up fundraising for their next hair-brained scheme and convince yield-starved investors to back them again a la Fab.com's Jason Goldberg. No bubble to see here. Just the dumpster fire that is $13.8mm of Spark Capital's equity capital. 
  • Jurisdiction: D. of Delaware
  • Capital Structure: ~$4mm TL (Spark Capital, VC, successor to SVB Financial Group)   
  • Company Professionals:
    • Legal: Orrick Herrington & Sutcliffe LLP (Laura Metzger, Jennifer Asher, Douglas Mintz) & (local) Morris Nichols Arsht & Tunnell LLP (Robert Dehney, Andrew Remming, Marcy McLaughlin)
    • Financial Advisor: Goldin & Associates (Curtis Solsvig III)
    • Independent Board Member: Drivetrain Advisors (Spencer Wells) 
    • Claims Agent: Prime Clerk LLC (*click on company name for docket)
  • Other Parties in Interest:
    • Spark Capital (VC equity & successor term lender)
      • Legal: Nutter McClennen & Fish LLP (John Loughnane) & (local) Gellert Scali Busenkill & Brown LLC (Ronald Gellert)
  • Silicon Valley Bank (DIP Lender)
    • Legal: Riemer & Braunstein LLP (Alexander Rheaume) & (local) Ashby & Geddes PA (Gregory Taylor)
  • Official Committee of Unsecured Creditors
    • Legal: Lowenstein Sandler LLP (Kenneth Rosen, Bruce Buechler, Wojciech Jung, Philip Gross, Michael Papandrea) & (local) Richards Layton & Finger PA (Mark Collins, Amanda Steele, Brett Haywood)
    • Financial Advisor: The DAK Group Ltd. (Sheon Karol, Ari Fuchs, Alan Miller, Claudia Levine)

Update 5/31/17

New Chapter 11 Filing - AtopTech Inc.

AtopTech Inc.

  • 1/13/17 Recap: Tech company in the midst of infringement lawsuit files for bankruptcy to, among other things, effectuate a 363 sale.
  • Jurisdiction: D. of Delaware 
  • Capital Structure: $472k secured debt (Silicon Valley Bank)    
  • Company Professionals:
    • Legal: Dorsey & Whitney LLP (Eric Lopez Schnabel, Janet Weiss, Stephen O'Neill, Jessica McKinley, Alessandra Glorioso, Robert Mallard, Robert Franklin, Thomas Hwang)
    • Investment Banker: Cowan & Company (Randy Lederman, Thomas Stierwalt, Patrick Fraley, Charles Tudor, Vance Tuminelli)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name for docket)
    • Other Parties in Interest:
      • Synopsys Inc.
        • Legal: Jones Day LLP (Krista Schwartz, Richard Wynne, Patrick Michael, Joshua Morse, Stacey Corr-Irvine, Peter Saba, Monika Weiner) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott)
      • Draper Athena Management Co., Ltd.
        • Legal: Shearman & Sterling LLP (Fredric Sosnick, Foteini Teloni)

Updated 4/2/17

New Chapter 11 and CCAA Filing - Modular Space Holdings, Inc.

Modular Space Holdings Inc. 

  • 12/21/16 Recap: A "classic example of a good company with a bad balance sheet," the Virginia-based largest US-owned provider of temporary and permanent modular buildings files a prearranged bankruptcy and corresponding CCAA to restructure its balance sheet. The company struggled after the 2007 recession, with utilization levels dropping meaningfully. More recently, oil-related business in Texas and Western Canada has contracted significantly. Finally, a proposed merger with Williams Scotsman International Inc. which would have infused the company with new equity and help manage the balance sheet issues collapsed after new money equity investors grew skittish after Brexit. Subsequent equity investment proposals were rejected and a restructuring transaction pursued and ultimately agreed upon. 
  • Jurisdiction: D. of Delaware
  • Capital Structure: $984.2mm total funded debt + $37.7mm of accrued interest ($609.2 ABL (Bank of America), $375mm 10.25% '19 senior secured second lien notes (Wells Fargo))
  • Company Professionals:
    • Legal: Cleary Gottlieb Steen & Hamilton LLP (James Bromley, Jane VanLare, Kara Hailey, Samuel Hershey) & (local) Young Conaway (Pauline Morgan, Joel Waite, Ian Bambrick)
    • Financial Advisor: Zolfo Cooper (David Orlofsky)
    • Investment Banker: Lazard Freres & Co. LLC and Lazard Middle Market LLC (Jason A. Cohen)
    • Claims Agent: KCC (*click on company name for docket)
  • Other Parties in Interest:
    • Wells Fargo Capital Finance LLC
      • Legal: Otterbourg PC (Andrew Kramer)
    • ABL Lenders
      • Legal: Parker Hudson Rainer & Dobbs (C. Edward Dobbs, James Rankin, Eric Anderson) & (local) Ashby & Geddes LLP (William Bowden)
    • Ad Hoc Group of Consenting Noteholders (AllianceBernstein, Blackrock, Brookfield, Carl Marks, Corre Partners, KLS Diversified, Manulife, and Symphony
      • Legal: Dechert LLP (Michael Sage, Brian Greer, Stephen Wolpert, Michael Maloney) & (local) Richards Layton & Finger PA (Daniel DeFranceschi, Robert Stern)
      • Financial Advisor: Moelis & Co.
    • Calera Capital Advisors
      • Legal: Morris Nichols

Updated 1/6/17

New Filing - Optima Specialty Steel LLC

Optima Specialty Steel

  • 12/15/16 Recap: Miami-based independent specialty steel products manufacturer files for bankruptcy in the District of Delaware, capitulating under the weight of debt-laden acquisitions predicated on synergies and efficiencies that, shockingly, couldn't counteract various macroeconomic headwinds. The company cites low oil prices, a strong US dollar, excess capacity, slowing growth in other parts of the world (read: China), and decreased demand for specialty steel products. Unable to pay its December 15 debt maturity, the company filed to take advantage of the automatic stay - funded by cash collateral initially and seeking a DIP by January - and try to reorganize as a going concern.
  • Jurisdiction: D. of Delaware
  • Capital Structure: $171.7mm 12.5% senior secured notes (Wilmington Trust), $87.5mm 12% senior unsecured note (Wilmington Trust; privately-placed with DDJ Capital Management LLC)     
  • Company Professionals:
    • Legal: Greenberg Traurig (Dennis Meloro, Nancy Mitchell, Paul Keenan, John Dodd, Ari Newman, Maria DiConza)
    • Financial Advisor: Ernst & Young LLP (Briana Richards)
    • Investment Banker: Miller Buckfire & Co., LLC (James Doak)
    • Claims Agent: Garden City Group (*click on company name for docket)
  • Parties in Interest:
    • Ad Hoc Group of Unaffiliated Holders of Senior Secured Notes
      • Legal: Akin Gump Strauss Hauer & Feld LLP (Philip Dublin, Jason Rubin)
    • Official Committee of Unsecured Creditors
      • Legal: Squire Patton Boggs (US) LLP (Stephen Lerner, Norman Kinel, Nava Hazan, Elliot Smith) & (local) Whiteford Taylor & Preston LLP (Christopher Samis, L. Katherine Good, Chantelle McClamb)
    • Wilmington Trust
      • Legal: Morrison & Foerster LLP (Jonathan Levine, James Newton) & (local) Morris Nichols Arsht & Tunnell LLP (Eric Schwartz, Matthew Harvey)
    • DDJ Capital Management LLC
      • Legal: Latham & Watkins LLP (Richard Levy, Ted Dillman)

Updated 1/6/17

New Filing - Xtera Communications Inc.

Xtera Communications Inc.

  • 11/15/16 Recap: Texas-based publicly-traded provider of high-capacity optical transport systems for telecom service providers filed for bankruptcy with intent to sell the company to Neptune Bidco, as DIP Lender and stalking horse bidder (DIP = $7.4mm, Bid = $10mm inclusive of DIP amount).
  • Jurisdiction: D. of Delaware
  • Capital Structure: $8.2mm debt (Square 1 Bank), $10mm TL-A & $2mm TL-B (Horizon Technology Finance Corporation)     
  • Company Professionals:
    • Legal: DLA Piper LLP (Thomas Califano, Jamila Willis, Stuart Brown, Maris Kandestin)
    • Investment Banker: Cowen & Company (Lorie Beers)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name for docket)
  • Other Parties in Interest:
    • DIP Lender: HIG European Capital Partners
      • Legal: Allen & Overy LLP (Joseph Badtke-Berkow, Daniel Guyder)
    • Horizon Technology Finance Corporation
      • Legal: K&L Gates LLP (A. Lee Hogewood, Steven Caponi, Charles A. Dale III, Margaret Westbrook)
    • Wilmington Trust
      • Legal: Kaye Scholer LLP (Seth Kleinman, Michael Messersmith, Sarah Gryll) & (local) Morris Nichols (Andrew Roth-Moore, Curtis Miller)
    • Unsecured Creditors Committee
      • Legal: Lowenstein Sandler LLP (David Banker) & (local) Bayard PA (Justin Alberto)
      • Financial Advisor: BDO USA LLP (David Berliner)

Updated 12/1/16.

New Filing - BPS US Holdings Inc.

BPS US Holdings Inc. (Performance Sports Group Ltd.)

  • 10/30/16 Recap: New Hampshire-based publicly-traded designer, manufacturer, and distributer of sporting equipment (including Bauer Hockey and Easton Baseball) files for Chapter 11 and CCAA to effectuate an asset sale to Sagard Capital Partnes and Fairfax Financial for $575mm.   
  • Jurisdiction: D. of Delaware
  • Capital Structure: $200mm ABL, $330mm TL, publicly-traded equity.    
  • Company Professionals:
    • Legal: Paul Weiss (Kelley Kornish, Alice Eaton, Claudia Tobler, Christopher Hopkins, Diane Meyers, Moses Silverman, Kevin) & (local) Young Conaway (Pauline Morgan, Sean Greecher, Justin Rucki, Shane Reil, Kenneth Listwak, Andrew Magaziner) & (Canadian counsel) Stikeman Elliott (Kathryn Esaw, Frank Selke, Maria Konyukhova, Peter Howard)
    • Financial Advisor: Alvarez & Marsal (Brian Fox, Jay Herriman, Brian Corio, Michael Stewart, Greg Karpel)
    • Investment Banker: Centerview Partners (Mark Puntus, Ryan Kielty, David Zubricki, Mike Klain)
    • Claims Agent: Prime Clerk (*click on company name for docket)
  • Other Parties in Interest:
    • Canadian Monitor: E&Y (Brian Denega, Jean-Daniel Breton, Marin Daigneault)
      • Legal: Allen & Overy (Ken Coleman) & (local) Buchanan Ingersoll (Kathleen Murphy, Mary Caloway) & (Canadian counsel) Thornton Grant (Robert Thornton, D.J. Miller, Rachel Bengino)
    • ABL DIP Agent: Bank of America
      • Legal: Choate Hall & Steward (John Ventola, Douglas Gooding, Jonathan Marshall) & (local) Richards Layton & Finger LLP (Mark Collins, John Knight, Brent Haywood)
    • TL DIP Agent: 9938982 Canada & Sagard Capital Partners
      • Legal: Kirkland & Ellis LLP (Christopher Marcus, George Klidonas) & (local) Klehr Harrison (Dominic Pacitti)
      • Financial Advisor: Rothschild Inc. (Neil Augustine)
    • First Lien Lenders Steering Committee:
      • Legal: Weil (Matthew Barr, Gabriel Morgan, David Cohen) & (local) Morris Nichols (Robert Dehney, Gregory Werkheiser) & (Canadian counsel) Goodmans (Joe Latham, Brendan O'Neill, Ryan Baulke)
      • Financial Advisor: FTI Consulting (Daniel Hugo)
    • Prepetition TL Agent
      • Legal: Davis Polk
    • Fairfax Financial
      • Legal: Shearman & Sterling (Fred Sosnick, Stephen Blank)
    • Unsecured Creditors' Committee
      • Legal: Blank Rome LLP (Stanley Tarr, Josef Mintz, Andrew Eckstein, Michael Schaedle) & (Canadian counsel) Cassels Brock & Blackwell LLP (Ryan Jacobs, Hillary Fender, Monique Sassi, Natalie Levine, Shayne Kukulowicz)
      • Financial Advisor: Province Inc. (Paul Huygens, Victor Delaglio, Michael Winters, Sanjuro Kietlinski, Ricky Ng, Jim Dong)
    • Ad Hoc Equity Committee (MatlinPatterson Global Advisors LLC, Scoggin Capital Management LLC)
      • Legal: Brown Rudnick LLP (Robert Stark, Stephen Levine, Bennett Silverberg, Andrew Carty, James Stoll) & (local) Montgomery McCracken (Natalie Ramsey, Mark Fink, Davis Wright) & (Canadian counsel) McMillan LLP (Andrew Kent, Jeffrey Levine, Caitlin Fell, Stephen Brown-Okruhlik)
      • Financial Advisor: Houlihan Lokey Capital Inc. (Adam Dunayer, Justin Zammit, Sam Stringer, Corbon Heizer)
    • Hungry Asset Monster Inc.
      • Legal: Burns & Levinson LLP (Tal Unrad) & (local) Womble Carlyle Sandridge & Rice LLP (Ericka Johnson, Morgan Patterson)

Updated 3/30/17

New Filing - Basic Energy Services Inc.

Basic Energy Services Inc.

  • 10/24/16 Recap: Publicly-traded E&P servicer files prepackaged chapter 11 cases to equitize $824.6mm of unsecured debt and bolster liquidity via $125mm rights offering.  
  • Jurisdiction: D. of Delaware
  • Capital Structure: $100mm '19 ABL, $165mm '21 13.5% TL, $475mm '19 7.75% senior notes, $300m '22 7.75% senior notes. 
  • Company Professionals:
    • Legal: Weil (Ray Schrock, Ronit Berkovich, Jessica Liou, Arkady Goldinstein, David Zubkis, Elizabeth Kagedan, Alexander Welch) & (local) Richards Layton (Daniel DeFranceschi, Michael Merchant, Brendan Schlauch, David Queroli, Zachary Shapiro)
    • Financial Advisor: AlixPartners (David Johnston, Charles Braley, Brian Huffman)
    • Investment Banker: Moelis & Co. (Adam Keil)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name for docket)
  • Other Parties in Interest:
    • ABL Admin Agent: Bank of America
      • Legal: Vinson & Elkins (Paul E. Heath) & (local) Morris Nichols (Robert Dehney, Eric Schwartz, Marcy McLaughlin)
    • Term & DIP Lenders (Goldman Sachs Merchant Banking, Riverstone Holdings LLC)
      • Legal: Davis Polk (Marshall Heubner, Darren Klein, Adam Shpeen) & (local) Potter Anderson LLP (Jeremy Ryan, R. Stephen McNeill)
      • Investment Banker: PJT Partners Inc.
    • Unsecured Bondholders:
      • Legal: Fried Frank (Brad Scheler, Peter Siroka, Carl Stapen) & (local) Blank Rome LLP (Michael DeBaecke)
      • Investment Banker: GLC Advisors
    • Agent to Postpetition Lenders: US Bank
      • Legal: Lowenstein Sandler LLP (Jeffrey Prol, Nicholas Vislocky, Theodore Sica)
    • Bank of America Leasing & Capital LLC
      • Legal: Norton Rose & Fulbright (Kristian Gluck, Greg Wilkes) & (local) Womble Carlyle (Kevin Mangan)
    • Creditors (Ascribe Capital, Atlas Enhanced Master Fund, Broad Street Energy Advisors, Blackgold Capital Management, Brigade Capital Management, Covalent Partners, Susquehanna Advisors Group Inc., Phoenix Investment Advisor LLC, Silver Point Capital LP, Whitebox Advisors LLC)

Updated 12/30/16

New Filing - Filip Technologies Inc.

Filip Technologies Inc.

  • 10/8/16 Recap: NYC-based maker of cloud-based location software and wearable watch hardware for kids files for chapter 11 bankruptcy to effectuate an expedited sale to potential White Knight stalking horse bidder while receiving DIP financing from AT&T.   
  • Jurisdiction: D. of Delaware
  • Capital Structure: $480k secured debt (AT&T), $125k unsecured debt, $3.1mm unsecured convertible notes      
  • Company Professionals:
    • Legal: Moore & Van Allen (Zachary Smith & Hillary Crabtree) & (local) Bielli & Klaudner LLC (David Klaudner)
    • Financial & Restructuring Advisor: Ankura Consulting LLC (Roy Messing, Michael Swetz, Margaret Brennan, John Rapisardi)
    • Investment Banker: Widebridge Group
    • Claims Agent: KCC
  • Other Parties in Interest:

Updated 12/30/16

New Filing - Garden Fresh Restaurant Intermed. Holdings LLC

Garden Fresh Restaurant Intermed. Holdings LLC

  • 10/3/16 Recap: Operator of 123 farm-sourced self-serve restaurants under the Souplantation & Sweet Tomatoes brands seeks expedited sale after suffering cash flow pressure from sector headwinds, workers' comp liability, minimum wage and health benefit pressures and rent increases.  
  • 8/8/17 Update: Perpetual Capital Partners and CR3 Capital LLC acquired the reorganized company for an undisclosed amount.
  • Jurisdiction: D. of Delaware
  • Capital Structure: ~$195mm of funded debt     
  • Company Professionals:
    • Legal: Morgan Lewis (Neil Herman, James Moore, Benjamin Cordiano, Katherine Lindsay) & (local) Young Conaway (Kenneth Enos, Michael Nestor, Ian Bambrick, Michael Neiburg, Travis Buchanan)
    • Financial Advisor: RAS Management Advisors LLC (Timothy Boates, Michael Rizzo)
    • Investment Banker: Piper Jaffrey (Teri Stratton, Peter Schwab, Jean Hosty, John Twichell, Jason Wang, Cooper Ziecik, Galen Hand)
    • Real Estate Advisor: Hilco Real Estate LLC (Ryan Lawlor)
    • Claims Agent: Epiq Bankruptcy Solutions, LLC
  • Other Parties in Interest:
    • Term Loan A Agent: Cerberus Business Finance LLC
    • Term Loan B Agent & DIP Lender: Cortlandt Capital Market Services LLC
      • Legal: Holland & Knight LLP (Barbra Parlin) & (local) Pachulski Stang (Laura Davis Jones)
    • Term Loan C and Term Loan D Agent: Apollo Investment Management
    • Other Lenders:
      • Ares Capital Corporation, Beach Point Capital, Sun Capital
    • UCC:
      • Legal: Kelley Drye & Warren LLP (Lauren Schlussel, Jason Adams, Eric Wilson, Scott Fleisher, Charlie Liu) & (local) Drinker Biddle & Reath LLP (Steven Kortanek, Joseph Argentina, Robert Malone)
      • Financial Advisor: Province Advisors (Paul Huygens, Thomas Jones, Carol Cabello, Jorge Gonzalez, Jin Dong)

Updated - Done