New Chapter 11 Filing - Sizmek Inc.

Sizmek Inc.

March 29, 2019

New York-based Sizmek Inc., an online advertising campaign management and distribution platform for advertisers, media agencies, and publishers, filed for bankruptcy in the Southern District of New York. The company indicates that it lost access to capital when Cerberus Business Finance LLC…took control of the Company's bank accounts and sought to divert customer receivables…” and filed, in large part, to have access to its lenders’ cash collateral. Major creditors include players in the ad world, including Google Inc. ($GOOGL), Facebook Inc. ($FB) and AOL ($VZ)(yes, AOL is still, technically, a “player” in something).

The company is a portfolio company of private equity firm, Vector Capital, which took the company private — merely two years after its IPO — via a 2016 all-cash tender offer for the outstanding shares of common stock for $3.90/share, a 65% premium over the then-30-day weighted average trading price. Kirkland & Ellis LLP represented Vector in the transaction.* In 2017, the company made a $145mm acquisition of Rocket Fuel, another struggling adtech company. And then shortly thereafter, AdExchanger reported merely two years later that Vector was looking to divest the company.

We’ll have more on this once the docket is updated.

*Interestingly, after filing, Katten Muchin Rosenman LLP replaced Kirkland & Ellis LLP as debtors’ counsel in these cases.

  • Jurisdiction: S.D. of New York (Judge )

  • Capital Structure: $172mm funded debt

  • Professionals:

    • Legal: Kirkland & Ellis LLP (James Sprayragen, Stephen Hessler, Marc Kieselstein, Justin Bernbrock)

    • Replacement Legal: Katten Muchin Rosenman LLP (Steven Reisman, Cindi Giglio, Jerry Hall, Peter Siddiqui)

    • Board of Directors: Eugene Davis, Mark Grether, Tom Smith, Marc Heimowitz

    • Financial Advisor: FTI Consulting Inc.

    • Claims Agent: Stretto (*click on the link above for free docket access)

  • Other Parties in Interest:

    • Prepetition Secured Agent: Cerberus Business Finance LLC

      • Legal: Klee Tuchin Bogdanoff & Stern LLP (David Fidler, Whitman Holt, Michael Tuchin, Thomas Patterson)

Updated 4/1/19 6:08 CT (#10)

New Chapter 11 Bankruptcy Filing - Windstream Holdings Inc.

Windstream Holdings Inc.

February 25, 2019

See here for our write-up on Winstream Holdings Inc.

  • Jurisdiction: S.D. of New York (Judge Drain)

  • Capital Structure: see below.

  • Professionals:

    • Legal: Kirkland & Ellis LLP (James Sprayragen, Stephen Hessler, Ross Kwasteniet, Marc Kieselstein, Brad Weiland, Cristine Pirro Schwarzman, John Luze, Neda Davanipour)

    • Legal (Board of Directors): Norton Rose Fulbright US LLP (Louis Strubeck Jr., James Copeland, Kristian Gluck)

    • Financial Advisor: Alvarez & Marsal LLC

    • Investment Banker: PJT Partners LP

    • Claims Agent: KCC (*click on the link above for free docket access)

  • Other Parties in Interest:

    • DIP Lender ($500mm TL, $500mm RCF): Citigroup Global Markets Inc.

    • Prepetition 10.5% and 9% Notes Indenture Trustee: Wilmington Trust NA

      • Legal: Reed Smith LLP (Jason Angelo)

    • Prepetition TL and RCF Agent: JPMorgan Chase Bank NA

      • Legal: Simpson Thacher & Bartlett LLP (Sandeep Qusba, Nicholas Baker, Jamie Fell)

    • Ad Hoc Group of Second Lien Noteholders

      • Legal: Milbank LLP

      • Financial Advisor: Houlihan Lokey Capital

    • Ad Hoc Group of First Lien Term Lenders

      • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Brian Hermann, Andrew Rosenberg, Samuel Lovett, Michael Rudnick)

      • Financial Advisor: Evercore

    • Midwest Noteholders

      • Legal: Shearman & Sterling LLP

    • Uniti Group Inc.

      • Legal: Davis Polk & Wardwell LLP (Marshall Huebner, Eli Vonnegut, James Millerman)

      • Financial Advisor: Rothschild & Co.

    • Large Unsecured Creditor: AT&T Corp.

      • Legal: Arnold & Porter Kaye Scholer LLP (Brian Lohan, Ginger Clements, Peta Gordon) & AT&T (James Grudus)

    • Large Unsecured Creditor: Verizon Communications Inc.

      • Legal: Stinson Leonard Street LLP (Darrell Clark, Tracey Ohm)

    • Official Committee of Unsecured Creditors (AT&T Services Inc., Pension Benefit Guaranty Corporation, Communication Workers of America, AFL-CIO CLC, VeloCloud Networks Inc., Crown Castle Fiber, LEC Services Inc., UMB Bank)

      • Legal: Morrison & Foerster LLP (Lorenzo Marinuzzi, Brett Miller, Todd Goren, Jennifer Marines, Erica Richards)

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😷New Chapter 11 Bankruptcy Filing - Trident Holding Company LLC😷

Trident Holding Company LLC

February 10, 2019

It looks like all of those 2018 predictions about healthcare-related distress were off by a year. We’re merely in mid-February and already there has been a full slate of healthcare bankruptcy filings. Here, Trident Holding Company LLC, a Maryland-based provider of bedside diagnostic and other services (i.e., x-ray, ultrasound, cardiac monitoring) filed for bankruptcy in the Southern District of New York. What’s interesting about the filing is that it is particularly light on detail: it includes the standard description of the capital structure and recent efforts to restructure, but there is a dearth of information about the history of the company and its financial performance. There is, however, a restructuring support agreement with the company’s priority first lien lenders.

Here’s a quick look at the company’s capital structure which is a large factor driving the company into bankruptcy:

Source: First Day Declaration

Source: First Day Declaration

As you can see, the company has a considerable amount of debt. The above-reflected “Priority First Lien Facility” is a fairly recent development, having been put in place as recently as April 2018. That facility, provided by Silver Point, includes a $27.1mm prepayment fee triggered upon the filing of the bankruptcy case. That’s certain to be a point of interest to an Official Committee of Unsecured Creditors. It also contributed to an onerous amount of debt service. Per the company:

In the midst of market and competitive challenges, Trident has significant debt service obligations. Over the course of 2018, Trident paid approximately $26,185,667.75 in cash interest on the Secured Credit Facilities. On January 31, 2019, the Company missed an interest payment of $9,187,477.07 on the Secured Credit Facilities, resulting in an Event of Default on February 8, 2019 after the cure period expired.

But, wait. There’s more. The recent uptick in distressed healthcare activity is beginning to aggregate and create a trickle-down bankruptcies-creating-bankruptcies effect:

Moreover, a number of recent customer bankruptcies – including those of Senior Care Centers, LLC, 4 West Holdings, Inc., and Promise Healthcare Group, LLC – have exacerbated the Company’s liquidity shortfall by limiting the collectability of amounts owed from these entities. A number of other customers who have not yet filed bankruptcy cases are generally not paying the Debtors within contractual terms due to their own liquidity problems. As a result of these collection difficulties and challenges with the new billing system in the Sparks Glencoe billing center, the Debtors recorded $27.8 million of extraordinary bad debt expense in 2018 and $12.7 million in 2017.

Ouch. Not to state the obvious, but if the start of 2019 is any indication, this is only going to get worse. The company estimates a net operating cash loss of $9.1mm in the first 30 days of the case.

Given the company’s struggles and burdensome capital structure, the company has been engaging its lenders for well over a year. In the end, however, it couldn’t work out an out-of-court resolution. Instead, the company filed its bankruptcy with a “restructuring support agreement” with Silver Point which, on account of its priority first lien holdings, is positioned well to drive this bus. And by “drive this bus,” we mean jam the junior creditors. Per the RSA, Silver Point will provide a $50mm DIP and drive the company hard towards a business plan and plan of reorganization. Indeed, the business plan is due within 36 days and a disclosure statement is due within a week thereafter. Meanwhile, the RSA as currently contemplated, gives Silver Point $105mm of take-back term loan paper and 100% of the equity of the company (subject to dilution). The first lien holders have a nice blank in the RSA next to their recovery amount and that recovery is predicated upon…wait for it…

…a “death trap.” That is, if they accept the plan they’ll currently get “ [●]%” but if they reject the plan they’ll get a big fat donut. Likewise, the second lien holders. General unsecured claimants would get a pro rata interest in a whopping $100k. Or the equivalent of what Skadden will bill in roughly, call it, 3 days of work??

The business plan, meanwhile, ought to be interesting. By all appearances, the company is in the midst of a massive strategic pivot. In addition to undertaking a barrage of operational fixes “…such as optimized pricing, measures to improve revenue cycle management by increasing collection rates, rationalizing certain services, reducing labor costs, better managing vendor spend, and reducing insurance costs,” the company intends to focus on its core business and exit unprofitable markets. While it retreats in certain respects, it also intends to expand in others: for instance, the company intends to “expand home health services to respond to the shifting of patients from [skilled nursing facilities] into home care.” Per the company:

Toward this end, Trident conducted successful home health care pilot programs in 2018 in two markets to optimize its Care at Home business model with radiology technicians dedicated to servicing home health patients. Trident hopes to expand this business model to an additional seven markets in 2019.

Like we said, a pivot. Which begs the question “why?” In addition to the debt, the company noted several other factors that drove it into bankruptcy. Chief among them? The rise of home health care. More from the company:

Trident has suffered ripple effects from the distress faced by skilled nursing facilities (“SNF”), which are its primary direct customers. SNF occupancy rates have declined to a multi-year low as a result of structural and reimbursement changes not yet offset by demographic trends. These structural changes include, among other things, patient migration to home health care. The decline in SNF occupancy rates has led to reduced demand for Trident’s services. At the same time, Trident has only had limited success reducing costs in response to lower volumes, as volume declines are driven by lower utilization per facility rather than a reduction in the number of facilities served.

This is a trend worth continued watching. Who else — like Trident — will be affected by this?

Large general unsecured creditors of the business include Grosvenor Capital Management, Jones Day (to the tune of $2.3mm…yikes), Konica Minolta Healthcare Americas Inc., McKesson ($MCK)(again!!…rough couple of weeks at McKesson), Quest Diagnostics Inc. ($DGX), Cardinal Health Inc. ($CAH) and others. They must be really jacked up about that pro rata $100k!!

  • Jurisdiction: S.D. of New York (Judge Lane)

  • Capital Structure: see above.

  • Professionals:

    • Legal: Skadden Arps Slate Meagher & Flom LLP (Paul Leake, Jason Kestecher, James Mazza Jr., Justin Winerman)

    • Independent Director: Alexander D. Greene

    • Financial Advisor: Ankura Consulting (Russell Perry, Ben Jones)

    • Investment Banker: PJT Partners LP (Mark Buschmann, Josh Abramson, Willie Evarts, Meera Satiani, Elsa Zhang)

    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on the link above for free docket access)

  • Other Professionals:

    • Priority First Lien Admin Agent: SPCP Group LLC/Silver Point Finance LLC

      • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Alan Kornberg, Robert Britton, Lewis Clayton, Aidan Synnott, Christman Rice, Michael Turkel)

      • Financial Advisor: Houlihan Lokey LP

    • First Lien Agent: Cortland Capital Market Services LLC

      • Legal: White & Case LLP (Thomas Lauria, Erin Rosenberg, Jason Zakia, Harrison Denman, John Ramirez)

    • Ad Hoc Group of First Lien Lenders

      • Legal: Kirkland & Ellis LLP (Patrick Nash)

      • Financial Advisor: Greenhill & Co. Inc.

    • Second Lien Agent: Ares Capital Corporation

    • Ad Hoc Group of Second Lien Lenders

      • Legal: Latham & Watkins (Richard Levy, James Ktsanes)

    • Large Creditor: McKesson Medical-Surgical Inc.

      • Legal: Buchalter P.C. (Jeffrey Garfinkle)

    • Large Creditor: Quest Diagnostics

      • Legal: Morris James LLP (Brett Fallon)

    • Equity Sponsor: Revelstoke Capital Partners

      • Legal: Winston & Strawn LLP (Carey Schreiber, Carrie Hardman)

    • Equity Sponsor: Welltower Inc.

      • Legal: Sidley Austin LLP (Andrew Propps, Bojan Guzina)

    • Official Committee of Unsecured Creditors

      • Legal: Kilpatrick Townsend & Stockton LLP (David Posner, Gianfranco Finizio, Kelly Moynihan)

      • Financial Advisor: AlixPartners LLP (David MacGreevey)



New Chapter 11 Bankruptcy Filing - Arpeni Pratama Ocean Line Investment B.V.

Arpeni Pratama Ocean Line Investment B.V.

February 1, 2019

Dutch-based non-operating single-purpose-entity, Arpeni Pratama Ocean Line Investment B.V., filed a prepackaged bankruptcy case in the Southern District of New York to effectuate a restructuring of its $141mm Floating Rate Guaranteed Secured Notes due 2021 (HSBC Bank USA NA, as agent), the issuance of which is the legal entity's sole reason to exist. The Debtor's plan sponsor, PT Arpeni Pratama Ocean Line Tbk, is the owner and operator of a fleet of Indonesian flagged dry bulk vessels and a guarantor of the debt. It operates 14 wholly-owned and 2 chartered vessles, the use of which is to provide coal transportation and jetty management services to one of Indonesia's largest power plants. 

Why is this company in bankruptcy? Per the Company:

"...the Debtor is a single purpose entity created for the purpose of issuing the Senior Secured Notes. Accordingly, the Debtor is wholly dependent on its parent company, the Plan Sponsor, to generate sufficient revenues so as to permit for the repayment of the Senior Secured Notes. The Plan Sponsor, who derives substantially all of its revenues its drybulk shipping operations, has operated in an increasingly challenging market since the financial crisis of 2008 where operational costs have continued to increase and revenues for drybulk shipping have remained at historic lows. These factors, coupled with increasing competition from smaller and less leveraged drybulk shippers, has made it more difficult for the Plan Sponsor to service its existing indebtedness, including the Senior Secured Notes."

Accordingly, the Debtor and the Plan Sponsor have agreed to equitize substantially all of the Debtor's and the Plan Sponsor's indebtedness "to permit the Plan Sponsor to position itself on a more level landscape to its competitors to better prepare itself to weather the continuing uncertainty in the shipping industry." Pursuant to the Plan, holders of the notes will receive common shares in the Plan Sponsor, warrants, and a small cash payment. 

  • Jurisdiction: S.D.N.Y. (Judge Bernstein)

  • Company Professionals:

    • Legal: Paul Hastings LLP (Pedro Jimenez)

    • Financial Advisor: Fulcrum Partners Asia

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

  • Other Parties in Interest:

💄New Chapter 11 Bankruptcy Filing - Glansaol Holdings Inc.💄

December 19, 2018

A week after Glossier CEO Emily Weiss revealed that the direct-to-consumer beauty brand hit $100mm in sales, Glansaol, a platform company that acquires, integrates and cultivates a portfolio of prestige beauty brands — including a direct-to-consumer brand — filed for bankruptcy in the Southern District of New York. The company owns a trio of three main brands: (a) Laura Geller, a distributor of female beauty and personal care products sold primarily on QVC and wholesale, (b) Julep, a wholesale distributor of high-end nail polish, skincare and cosmetic products with a direct-to-consumer and “subscription box” model, and (c) Clark’s Botanicals, a skincare retailer, which sells primarily via e-commerce (including Amazon) and QVC.

The company indicated that “a general shift away from brick-and-mortar shopping, evolving consumer demographics, and changing trends” precipitated its bankruptcy filing. More specifically, profit drivers, historically, have been broadcast shopping networks and wholesale distribution. But both QVC and large retailers have cut back orders significantly amidst a broader industry shakeout. Compounding matters is the fact that the company’s top two customers account for over 60% of total receivables. As we always say, customer concentration is NEVER a good thing.

Moreover, the company added:

…the Debtors have been unable to replace key revenue generators due to: (a) the increasingly competitive industry landscape coinciding with the downturn in the brick and mortar retail sector; (b) the decline in broadcast shopping network sales; and (c) the downturn of the Company’s single-brand subscription business, which faces competition from new entrants that offer subscriptions covering a variety of brands.

Hmmm. Insert Birchbox here? Perhaps Glansaol ought to have entered into a partnership with Walgreens! 🤔

What happens when you can’t move product? You build up inventory. Which, for a variety of reasons, is no bueno. Per the company:

…the decline in sales has saddled the Debtors with a significant oversupply of inventory, which has forced the Debtors to sell goods at steep markdowns and destroy certain products, further tightening margins and draining liquidity. Oversupply of inventory, coupled with higher returns and chargebacks described below, has also significantly increased the Debtors’ costs for warehouses and other third-party logistics providers.

Interestingly, the company aggregated the three brands in the first place because of perceived supply chain synergies. Per the company:

The strategy was put into practice in late 2016 and early 2017 when the Debtors acquired a trio of rising prestige beauty companies ― Laura Geller, Julep, and Clark’s Botanicals. The combination was designed to realize the benefit of natural synergies without any cannibalization. The brands share relatively similar supply chains where it was thought efficiencies could be realized, but they featured different price points and consumer profiles. For example, while Laura Geller appeals to consumers over the age of 35 and is primarily sold through wholesale retailers and broadcast shopping networks, Julep caters to a younger generation through its online business and experience-driven nail salons.

We love synergies. They always seem to be good in theory and nonexistent in practice. To point:

the Debtors were never able to achieve significant cost savings related to shared services among their brands. Upon the Debtors’ acquisitions of Laura Geller, Julep and Clark’s in 2016, the plan was to ultimately consolidate shared services, including supply chain, senior management, administrative support, human resources, information technology support, accounting, finance and legal services. The brands, however, were never fully integrated. Instead, the Company is saddled with a substantial legacy investment in a new ERP system, which was put into place ahead of cross-organizational efficiency initiatives and right-sizing functionality. Accordingly, the costs savings attributed to synergies, which had been a pillar of the Debtors’ original business model, were never realized.

Which is why we generally tend to be skeptical whenever we hear about cost savings and synergies as a basis for M&A (cough, Refinitiv).

Given all of the above, the company has been engaged in a marketing process since roughly February 2018 running, in the interim, based on its credit facility and equity infusions. Now, though, the company has a stalking horse bidder in tow in the form of AS Beauty LLC, which has agreed to purchase the company’s brands and related capital assets for approximately $16.2mm. The company’s prepetition lender, SunTrust Bank, has agreed to provide a $15mm DIP credit facility which, along with cash collateral, will fund the cases.

  • Jurisdiction: S.D. of New York (Judge Wiles)

  • Capital Structure: $7.2mm RCF (SunTrust Bank)

  • Company Professionals:

    • Legal: Willkie Farr & Gallagher LLP (Brian Lennon, Daniel Forman, Andrew Mordkoff)

    • Financial Advisor: Emerald Capital Advisors (John Madden)

    • Claims Agent: Omni Management Group Inc. (click on the case name above for free docket access)

  • Other Parties in Interest:

    • Prepetition Secured & DIP Lender: SunTrust Bank (Legal: Parker Hudson Rainer & Dobbs LLP — Rufus Dorsey, Eric Anderson, James Gadsden

    • Stalking Horse Purchaser: AS Beauty LLC (Legal: Sills Cummis & Gross PC — Michael Goldsmith, George Hirsch)

    • Private Equity Sponsor: Warburg Pincus Private Equity XII Funds

New Chapter 11 Bankruptcy Filing - Synergy Pharmaceuticals Inc.

December 12, 2018

On November 11 and then, in a more fulsome manner in November 18’s “😬Biopharma is in Pain😬,” we noted that Synergy Pharmaceuticals Inc. ($SGYP) “appears to be on the brink of bankruptcy.” Looks like we were right on. This morning (12/12/18) at 4:37am (PETITION Note: remember that if you think that being a biglaw attorney is glamorous), the company and an affiliate filed for bankruptcy in the Southern District of New York.

Synergy is a biopharmaceutical company that develops and commercializes gastrointestinal therapies; its primary speciality revolves around uroguanylin, “a naturally occurring and ednogenous human GI peptide, for the treatment of GI diseases and disorders” Geez…bankers and lawyers have nothing on scientists when it comes to the vernacular. The company has one commercial product (TRULANCE) and one product in development. The company owns 33 patents.

We previously noted:

The company has a $200mm 9.5% ‘25 secured term loan with CRG (~$100mm funded plus PIK interest) that has been amended a bazillion times to account for the fact that its revenues suck, its market cap sucks, and that its on the verge of tripping, or has tripped, numerous covenants including, a “minimum market capitalization” covenant and a “minimum revenue covenant.” In its most recent 10-Q, the company noted:

To date the Company has been unable to further amend the agreement with respect to the financial and revenue covenants. The Company is continuing discussions with CRG and has received a temporary waiver on the minimum market cap covenant through November 12, 2018. The Company is currently pursuing alternatives that better align with its business, but there is no assurance that Synergy can secure CRG’s consent or otherwise achieve a transaction to refinance or otherwise repay CRG on commercially reasonable terms, in which case we could default under the term loan agreement. If CRG does not grant a further waiver beyond November 12, 2018 the Company will likely be in default of the minimum market cap covenant.

In its bankruptcy filing, however, the company takes a decidedly less aggressive posture vis-a-vis CRG (which makes sense…CRG is, after all, its proposed DIP lender) when explaining the factors leading to the commencement of its chapter 11 cases. While the company does highlight lack of access to capital markets (which, at least as far as we read it, is an implicit jab at CRG), the company primarily blames TRULANCE’s slow sales growth, market access, competitive landscape and a smaller-than-anticipated total addressable market for its travails.

For its part, Centerview Partners has been engaged in a less than ideal sellside process here. According to the company’s papers, Centerview has been trying to sell the company since 2015. Now, unless there is some crazy element to this engagement, most bankers are compensated on the basis of success fees. They want to a large purchase price and a short marketing process to get the best of both worlds: a huge payday without huge utilization. That does not appear to be the case here. 3 years!

Still, they located a buyer. Bausch Health Companies (“BHC”) has agreed to be the stalking horse purchaser of the company’s assets. BHC would get substantially all of the company’s assets — including its IP, certain customer and vendor contracts, A/R, and goodwill. In exchange, they would pay approximately $185mm in cash (minus certain deductions and adjustments) and $15mm in severance obligations.

CRG is the company’s proposed DIP lender with a $155mm facility, of which $45mm represents new money.

  • Jurisdiction: S.D. of New York (Judge Garrity)

  • Capital Structure: $110mm 9.5% ‘25 secured term loan, $19mm 7.5% ‘19 senior convertible notes (Wells Fargo NA)

  • Company Professionals:

    • Legal: Skadden Arps Slate Meagher & Flom LLP (Ron Meisler, Lisa Laukitis, Christopher Dressel, Jennifer Madden, Christine Okike) & (special counsel) Sheppard Mullin Richter & Hampton LLP

    • Legal Conflicts Counsel: Togut Segal & Segal LLP (Albert Togut, Neil Berger, Kyle Ortiz)

    • Board of Directors

      • Legal: Davis Polk & Wardwell LLP

    • Independent Director: Joseph Farnan

      • Legal: Kirkland & Ellis LLP

    • Financial Advisor: FTI Consulting Inc. (Michael Katzenstein, Sean Gumbs, Heath Gray, Om Dhavalikar, Tom Sledjeski, John Hayes, Andrew Kopfensteiner)

    • Investment Banker: Centerview Partners Holdings LP (Samuel Greene, Josh Thornton, Ercument Tokat)

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

  • Other Parties in Interest:

    • Prepetition Agent & DIP Lender: CRG Servicing LLC

      • Legal: Venable LLP (Jeffrey Sabin, Lawrence Cooke)

    • Stalking Horse Bidder: Bausch Health Companies Inc.

      • Legal: Wachtell Lipton Rosen & Katz (Richard Mason, Michael Benn)

    • Ad Hoc Committee of Equity Holders

      • Legal: Cole Schotz PC (Ryan Jareck, Irving Walker, Norman Pernick, Mark Tsukerman)

    • Official Committee of Equity Security Holders

      • Legal: Gibson Dunn & Crutcher LLP (David Feldman, Matthew Kelsey, Alan Moskowitz, J. Eric Wise)

      • Financial Advisor: Houlihan Lokey Capital, Inc. (Christopher Di Mauro, Geoffrey Coutts)

    • Official Committee of Unsecured Creditors (Highbridge Capital Management, 1992 MSF International Ltd., 1992 Tactical Credit Master Fund LP)

      • Legal: Latham & Watkins LLP (Richard Levy, Jeffrey Mispagel, Matthew Warren, Blake Denton, Christopher Harris)

      • Financial Advisor: Alvarez & Marsal LLP (Mark Greenberg, Richard Newman, Jason Ivy, Martin McGahan, Allison Hoeinghaus, Seth Waschitz, Sean Skinner, Michael Sullivan)

      • Investment Bank: Jefferies LLC (Leon Szlezinger, Jeffrey Finger)

Copy of New Chapter 11 Filing - Waypoint Leasing Holdings Ltd.

Waypoint Leasing Holdings Ltd.

November 25, 2018

“Get to the Choppa!” - Arnold Schwarzenegger

It has been a tough couple of years for companies in the helicopter business (see, e.g., Erickson Aircrane and CHG Group, not to mention PHI Inc. and Bristow Group, both of which restructuring professionals continue to watch and salivate over). So tough, in fact, that even Thanksgiving weekend wasn’t sacrosanct and even some big name sponsors couldn’t keep this thing out of court. Over the weekend, helicopter leasing company, Waypoint Leasing Holdings Ltd., “facing imminent liquidity constraints and potential defaults under their secured loan facilities,” filed for bankruptcy with a goal of…

…TO READ THE REST OF THIS SUMMARY — WHICH INCLUDES DISCUSSION OF THE COMPANY’S CAPITAL STRUCTURE AND A ROSTER OF THE PLAYERS AND PROFESSIONALS INVOLVED IN THE MATTER — YOU MUST BE A MEMBER. BECOME ONE HERE.

New Chapter 11 Bankruptcy Filing - Aegean Marine Petroleum Network Inc.

Aegean Marine Petroleum Network Inc.

November 6, 2018

On Sunday, November 4, 2018, we wrote the following in our “Fast Forward” segment:

Aegean Marine Petroleum Network Inc. ($ANW) is now subject to a fraud probe by international auditors. This thing will be in a bankruptcy court near you before too long.

We didn’t expect that prediction to come to fruition so quickly!

Admittedly, Aegean, one of the world’s largest independent marine fuel logistics companies with 57 owned and chartered vessels, has been a slow moving train towards bankruptcy for some time. The recent revelation of fraud — yes, fraud — is just the cherry on top. (PETITION Note: in frothy times come desperate shenanigans. This won’t be the last bankruptcy filed in the near-term that, in part, will have an element of fraud in the story.) And, alas, earlier, Aegean Marine Petroleum Network Inc. and 74 affiliated debtors filed for bankruptcy in the Southern District of New York. The more immediate trigger? The maturity of its 4% convertible unsecured notes.

Aegean blames an over-saturated market, limitations imposed by its lenders under the credit facilities, and…wait for it…the fraud…as reasons for its bankruptcy filing. Wait. Why are we describing the debtors’ ails in words when they’ve provided us with some crafty graphics to illustrate, in part, the “perfect storm of circumstances” that have plagued them:

Source: First Day Declaration

Source: First Day Declaration

Aegean intends to use the bankruptcy process to address its capital structure (namely the maturity), stabilize operations and sell to Mercuria Energy Group Limited, a private company that, back in August, became the sole lender under both the debtors’ US and Global credit facilities. Mercuria also provided a DIP proposal that consists of a $160mm US credit facility, a $300mm global credit facility, and a $72mm term loan that the debtors deemed better than a proposed facility from an ad hoc group of unsecured convertible noteholders. The question will be to what degree a more robust and competitive sale process emerges now that this thing is finally in bankruptcy court.

  • Jurisdiction: S.D.N.Y. (Judge Wiles)

  • Capital Structure: $131.7mm US credit facility (ABN AMRO Bank NV), $249.6mm global credit facility (ABN AMRO Bank NV), $206.6mm aggregated across ten secured term loans, $172.5mm 4.25% convertible unsecured notes due 2021 (U.S. Bank NA), $94.55mm 4.00% convertible unsecured notes due 2018 (Deutsche Bank Trust Company Americas)  

  • Company Professionals:

    • Legal: Kirkland & Ellis LLP (James Sprayragen, Jonathan Henes, Marc Kieselstein, Ross Kwasteniet, Cristine Pirro Schwarzman, Adam Paul, Benjamin Winger, Christopher Hayes, Bryan Uelk)

    • Independent Directors: Donald Moore, Raymond Bartoszek, Tyler Baron)

    • Audit Committee of the Board of Directors

      • Legal: Arnold & Porter Kaye Scholer LLP (Tyler Nurnberg)

    • Financial Advisor: EY Turnaround Management Services LLC (Andrew Hede)

    • Investment Banker: Moelis & Company LLC (Zul Jamal)

    • Claims Agent: Epiq Corporate Restructuring LLC (*click on company name above for free docket access)

  • Other Parties in Interest:

    • Prepetition Agent: ABN AMRO Capital USA LLC

      • Legal: Willkie Farr & Gallagher LLP (Ana Alfonso)

    • Prepetition Agent: Aegean Baltic Bank SA

      • Legal: White & Case LLP (Scott Greissman, Elizabeth Feld, Mark Franke)

    • Indenture Trustee for the 4% ‘18 Convertible Senior Notes

      • Legal: Ropes & Gray LLP (Mark Somerstein, Patricia Chen)

    • Largest Equity Holder/Stalking Horse Buyer: Mercuria Energy Group Limited

      • Legal: Norton Rose Fulbright US LLP (Marc Ashley, Robert Kirby)

    • Official Committee of Unsecured Creditors (Deutsche Bank Trust Company Americas, U.S. Bank National Association, American Express Travel Related Services Company Inc.)

      • Legal: Akin Gump Strauss Hauer & Feld LLP (Ira Dizengoff, Philip Dublin, Kevin Zuzolo)

      • Financial Advisor: AlixPartners LLP

Source: First Day Declaration

Source: First Day Declaration

Updated 11/17/18

New Chapter 11 Bankruptcy Filing - Republic Metals Refining Corporation

Source: Pexels.com

Source: Pexels.com

November 2, 2018

Republic Metals Refining Corporation (and affiliates), a Miami-based family-owned refiner of gold and silver, filed for bankruptcy to run an orderly sale process of their assets and operations. Last spring, the debtors discovered “a significant discrepancy” in their inventory accounting that, ultimately, led to summer-time default notices from their various senior lenders. The lenders, however, were mostly kept at bay until the filing because the debtors appeared, on multiple occasions, to be close to a going concern sale.

Close. But no cigar.

In the absence of a pre-petition buyer and/or stalking horse bidder, the debtors will now continue their potential sale process or, alternatively, engage in a process to liquidate. The debtors have an agreement with their senior lenders for the consensual use of cash collateral for a short period to attempt a sale, liquidate, and implement a plan for the wind down of the debtors’ estates.

  • Jurisdiction: S.D. of New York

  • Capital Structure: $177mm senior debt

  • Company Professionals:

    • Legal: Akerman LLP (Susan Balaschak, Andrea Hartley, Katherine Fackler, John Mitchell, Esther McKean)

    • Financial Advisor: Paladin Management Group LLC (Scott Avila)

    • Investment Banker: SSG Capital Advisors LLC

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

  • Other Parties in Interest:

    • Senior Lender: ICBC Standard Bank Plc

      • Legal: Haynes and Boone LLP (J. Frasher Murphy, Eli Columbus, Geoffrey Raicht)

    • Senior Lenders: Coöperatieve Rabobank U.A., New York Branch, Brown Brothers Harriman & Co., Bank Hapoalim B.M., Mitsubishi International Corporation, Techemet Metal Trading LLC, Woodforest National Bank, and Bank Leumi USA.

      • Legal: Luskin Stern & Eisler LLP (Richard Stern, Alex Talesnick)

New Chapter 15 Bankruptcy Filing - Noble Group Limited

Noble Group Limited

October 17, 2018

Noble Group Limited, an over-levered global commodity trader that deals in oil, nat gas, coal and metals, filed for chapter 15 protection in order to hinder U.S.-based creditors from obstructing the company’s proposed schemes of arrangement filed in the UK last week. The schemes seek to de-lever the company and recapitalize it with a combination of new debt and equity as well as a corporate reorganization that includes a transfer of assets to a new Bermudan holdco. The company hopes to effectuate the schemes by late November and has a restructuring support agreement in place with its creditors in order to do so.

  • Jurisdiction: S.D. of New York

  • Capital Structure: $2.29b RCF, 3.625% ‘18 senior notes, 6.75% ‘20 senior notes, 8.75% ‘22 senior notes

  • Company Professionals:

    • Legal: Kirkland & Ellis LLP (James Sprayragen, Marc Kieselstein, Adam Paul, Catherine Jun, Gerardo Mijares-Shafai)

  • Other Parties in Interest:

    • Ad Hoc Group of Lenders

      • Legal: Akin Gump Strauss Hauer & Feld LLP (Philip Dublin, Kevin Zuzolo)

💥New Chapter 11 Bankruptcy: Sears Holdings Corporation💥

Sears Holdings Corporation

October 15, 2018

Finally.

Early this morning, Illinois-based Sears Holdings Corporation ($SHLD) and approximately 49 affiliated entities (including KMart) finally filed for chapter 11 bankruptcy. The company lists a staggering $11.339 billion of total debts and $6.937 billion of assets.

The well-known company has 866 full-line and specialty stores as of August 4, 2018. In its chapter 11 petition, it boasts of its legacy as an “integrated retailer with significant physical and tangible assets, as well as virtual capabilities enabled through technology.” Yes, you read that correctly: they actually say “virtual capabilities enabled through technology.” That right there may help inform EVERYONE why this storied retailer has found its way into bankruptcy court. To the last, Sears stands out for its ability to appear out of touch.

The company appears to have a commitment for a $1.875 billion debtor-in-possession (“DIP”) asset-backed credit facility, including an increase of $300mm from its existing facility as well as an agreement over the use of the company’s lenders’ cash collateral. According to a company press release, the company is also negotiating an additional $300mm commitment from ESL Investments Inc. (“ESL”), the company’s largest shareholder and the investment vehicle of Eddie Lampert. The company intends to reorganize around a smaller store platform of “EBITDA-positive stores.” To this end, the company will close 142 stores near the end of the year adding to the previously announced 46 stores set to close in November 2018 — potentially further perpetuating the hurt put on U.S.-based malls over the last several years. Meanwhile, the company continues to negotiate an asset purchase agreement with ESL for “a large portion of the Company’s store base.” This would, obviously, keep the enterprise from liquidating and potentially help maintain thousands of jobs: Sears currently employs approximately 90k people.

While Eddie Lampert will remain Chairman of the Board, he has resigned as CEO of the company. Godspeed, Eddie.

The company’s top listed creditors at the time of filing include The Pension Benefit Guaranty Corporation and various trustees under five different tranches of unsecured notes totaling over $3 billion in principal amount (BNY Midwest Trust Company, Computershare Trust Company NA, The Chase Manhattan Bank NA). Trade creditors include Whirlpool Corporation ($23.4mm), Frigidaire Company ($18.6mm), and Winia Daewoo Electronics America ($15.2mm).

We will update this post on Wednesday in our next briefing; we are particularly excited to see how the company spins the “factors” that led to its appearance in bankruptcy court. Here’s one explanation:

And here’s another — seemingly more-on-point — one:

Screen Shot 2018-10-15 at 6.33.14 AM.png
  • Jurisdiction: S.D.N.Y. (Judge Drain)

  • Capital Structure: $11.339b debt     

  • Company Professionals:

    • Legal: Weil, Gotshal & Manges LLP (Ray Schrock, Garrett Fail, Jacqueline Marcus, Sunny Singh)

    • CRO/Financial Advisor: M-III Partners, LP (Mohsin Meghji, Colin Adams, Brian Griffith, Christopher Good, Mary Korycki, Kevin Tanaka, Enrique Acevedo, Wesley Sima, Noah Zatzkin, Joseph Frantz, Nicholas Weber, Ravi Ramnani )

    • Investment Banker: Lazard Freres & Company

    • Restructuring Committee’s Independent Directors: William Transier, Alan Carr, Paul DePodesta, Ann Reese

    • Restructuring Sub-Committee (RSC): Alan Carr and William Transier

    • Legal to RSC: Paul Weiss Rifkind Wharton & Garrison LLP (Paul Basta, Kelley Cornish, Lewis Clayton, Susanna Buergel, Robert Britton, Jonathan Hurwitz, Emma Carlson, Teresa Lii)

    • Financial Advisors to RSC: Alvarez & Marsal North America LLC (Dennis Stogsdill, Nick Grossi, Brian Corio, Jonah Galaz, Andrew Gasbarra, Jonathan Bain, Jordan Kravette)

    • Investment Banker to RSC: Evercore Group LLC (Daniel Aronson, Jeremy Matican, Guy McCumber, Siddhesh Patkar, Jonathan Kamel, Ajith Sukumar)

    • Conflicts Counsel: Young Conaway Stargatt & Taylor LLP (Pauline Morgan, Rolin Bissell, Ryan Bartley, Travis Buchanan)

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

  • Other Parties in Interest:

    • Large Shareholders: ESL Investments. Legal: Cleary Gottlieb Steen & Hamilton LLP (James Bromley, Sean O’Neal, Andrew Weaver)

    • Prepetition RCF, Term Loans, FILO & DIP ABL Agent: Bank of America NA. Legal: Skadden Arps Slate Meagher & Flom LLP (Paul Leake, Shana Elberg, George Howard)

    • Citibank NA. Legal: Davis Polk & Wardwell LLP (Marshall Huebner, Eli Vonnegut)

    • Large Shareholder: Fairholme Capital Management LLC. Legal: Sullivan & Cromwell LLP (Andrew Dietderich, Brian Glueckstein, David Zylberberg)

    • PBGC. Legal: Locke Lord LLP (David Wirt)

    • Debtors’ IP/Ground Lease Term Loan Lender: SHLD Lendco LLC. Legal: Cahill Gordon & Reindel LLP (Joel Levitin, Richard Stieglitz Jr.)

    • Official Committee of Unsecured Creditors

      • Legal: Akin Gump Strauss Hauer & Feld LLP (Ira Dizengoff, Philip Dublin, Abid Quereshi, SARA Brauner)

      • Legal (Conflicts): Herrick Feinstein LLP (Sean O’Donnell, Stephen Selbst, Steven Smith)

      • Financial Advisor: FTI Consulting Inc. (Matt Diaz, Conor Tully, Michael Berkin, Marshal Eisler, Kenny O’Trakoun, Morgan McCaskey, Samuel Star)

      • Investment Banker: Houlihan Lokey (Saul Burian, Eric Siegert, Brad Geer, Surbhi Gupta, Greg Rinsky, Tom Hedus, Ross Rosenstein, Ryan Conroy, John Hartigan, Ahmed Mumtaz, Jack Foster, James Lai, Natalie Weelborg, Andrew Felman, Matthew Stadtmauer)

    • Cyrus Capital Partners LP

      • Legal: Milbank Tweed Hadley & McCloy LLP (Eric Reimer, Thomas Kreller, Craig Price)

    • Indenture Trustee to Medium Term Notes: The Bank of New York Mellon Trust Company, N.A.

      • Legal: Carter Ledyard & Milburn LLP (James Gadsden, Leonardo Trivigno)

Updated 11/30/18


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New Chapter 11 Filing - Hooper Holmes Inc. (d/b/a Provant Health)

Hooper Holmes Inc. (d/b/a Provant Health)

8/27/18

Kansas-based Hooper Holmes Inc. ($HPHW), a provider of comprehensive health and wellbeing programs, e.g., biometric screening services, flu shots, lab testing and more, filed for bankruptcy in the Southern District of New York. The company does business as Provant Health Solutions LLC ("PHS), an entity it merged with as recently as 2017. And that is part of the problem: the company incurred tens of millions in debt over the last few years in connection with the PHS merger and a prior acquisition of Accountable Health Solutions Inc., a provider of, among other things, telephonic health coaching and wellness portals. 

The company will use the bankruptcy process to effectuate a sale of substantially all of its assets to a stalking horse bidder, Summit Health Inc., for $27mm in cash and the assumption of certain liabilities. The company's prepetition secured lenders will finance the cases via a proposed $13.6mm DIP credit facility. 

  • Jurisdiction: S.D. of New York (Judge Drain)
  • Capital Structure: See below.   
  • Company Professionals:
    • Legal: Foley & Lardner LLP (Richard Bernard, Timothy Mohan, Jill Nicholson, Geoff Goodman, Michael Riordan, John Melko) & Halperin Battaglia Benzija LLP (Christopher Battaglia)
    • Financial Advisor: Phoenix Management (James Fleet, Albert Mink)
    • Investment Banker: Raymond James & Associates Inc. (Geoffrey Richards)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Term Lender: SWK Funding LLC
      • Legal: Holland & Knight LLP (Arthur Rosenberg)
    • Stalking Horse Bidder: Summit Health Inc., a subsidiary of Quest Diagnostics Inc.
      • Legal: Bass Berry & Sims PLC (Paul Jennings) & Weil Gotshal & Manges LLP (Gary Holtzer, Jessica Liou, John Conte)
Source: First Day Declaration

Source: First Day Declaration

😷New Chapter 11 & CCAA Bankruptcy Filing - Aralez Pharmaceuticals US Inc.😷

8/10/18

Publicly-traded Ontario-based Aralez Pharmaceuticals US Inc. ($ARLZ), a specialty pharma company focused on the development and commercialization of cardiovascular products, filed for bankruptcy to pursue sales of its main operating businesses in the US and Canada. The company will use the bankruptcy process to sell its TOPROL-XL franchise, a beta-blocker used to treat high blood pressure, chest pain and heart failure, to its secured lender, Deerfield Management Company LP, for approximately $140mm; it will also sell its VIMOVO royalties and Canadian operations to Nuvo Pharmaceuticals Inc. ($NRI) in a transaction valued at $110mm. The company purchased the former franchise in late 2016 for $175mm so a sale for $140mm is a bit of a slap in the face.

The company blames its chapter 11 filing on Amazon. Just kidding. These pharma deals are so technical and boring that we had to write that just to see if you were still paying attention.

The company REALLY blames its chapter 11 filing on a “highly competitive”pharmaceuticals market “characterized by rapidly changing markets and technology, emerging industry standards and frequent introduction of new products.” It notes:

The market is dominated by a small number of highly-concentrated global competitors, many of which boast substantially greater resources than the Company, and competition is based on, among other things, product safety, reliability, availability, and price.

The company seeks approval of a $15mm DIP credit facility provided by Deerfield.

  • Jurisdiction: Southern District of New York (Judge Glenn)

  • Capital Structure: $203.1mm 12.5% term loan (plus $2.7mm in PIK interest); $75.5mm 2.5% ‘22 senior convertible secured notes (plus $200k in PIK interest).

  • Company Professionals:

    • Legal: Willkie Farr & Gallagher LLP (Paul V. Shalhoub, Robin Spigel, Debra C. McElligott)

    • Financial Advisor: Alvarez & Marsal Healthcare Industry Group LLC

    • Investment Banker: Moelis & Company (Barak Klein)

    • Claims Agent: Prime Clerk LLC

  • Other Parties in Interest:

    • DIP Agent: Deerfield Management Company LP (Legal: Katten Muchin Rosenman LLP, Steven Reisman, Shaya Rochester, Peter Siddiqui, Paul Musser)

New Chapter 22 Filing - Relativity Fashion Inc.

Relativity Fashion Inc.

5/3/18

Relativity Media LLC and its affiliates are back in bankruptcy court with a proposed expedited 363 sale to UltraV Holdings LLC, an entity backed by Sound Point Capital Management and RMRM Holdings. Per Deadline Hollywood, RMRM is led by David Robbins, former chairman of Bally Technologies; Lex Miron, a veteran media industry advisor; and Larry Robbins, a seasoned media industry executive. 

More to come...

  • Jurisdiction: S.D. of New York
  • Capital Structure: $mm debt     
  • Company Professionals:
    • Legal: Winston & Strawn LLP (Carey Schreiber)
    • CRO/Financial Advisor: M-III Partners (Colin Adams)
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access (once up))
  • Other Parties in Interest:
    • Litigation Trust of Previous Chapter 11
      • Legal: Togut Segal & Segal LLP (Frank Oswald, Charles Persons)

New Chapter 11 Filing - Nine West Holdings Inc.

Nine West Holdings Inc.

April 6, 2018

Nine West Holdings Inc., the well-known footwear retailer, has finally filed for bankruptcy. The company will sell its Nine West and Bandolino brands to Authentic Brands Group and reorganize around its One Jeanswear Group, The Jewelry Group, the Kasper Group, and Anne Klein business segments. The company has a restructuring support agreement in hand to support this dual-process. 

More on the situation here

  • Jurisdiction: S.D. of New York (Judge Chapman)

  • Capital Structure: See below.

Source: First Day Declaration

Source: First Day Declaration

  • Company Professionals:

    • Legal: Kirkland & Ellis LLP (James Sprayragen, James Stempel, Joseph Graham, Angela Snell, Anna Rotman, Jamie Aycock, Justin Alphonse Mercurio, Alyssa Russell)

    • Financial Advisor: Alvarez & Marsal North America LLC (Ralph Schipani III, Julie Hertzberg, Holden Bixler, Amy Lee, Richard Niemerg, Theodore Langer, Stuart Loop, Thomas Koch, Michael Dvorak)

      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Andrew Leblanc, Alexander Lees)

    • Investment Banker: Lazard Freres & Co. LLC (David Kurtz, Ari Lefkovits, David Hales, Mike Weitz, Nikhil Angelo, Okan Kender, Abigail Gay, Drew Deaton) & Consensus Advisory Services LLC

    • Authorized Officers: Stefan Kaluzny, Peter Morrow, Harvey Tepner, Alan Miller

    • Legal to the Authorized Officers: Munger Tolles & Olson LLP (Seth Goldman, Kevin Allred, Thomas Walper)

    • Financial Advisor to the Authorized Officers: Berkeley Research Group LLC (Jay Borow)

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

  • Other Parties in Interest:

    • Stalking Horse Bidder/Buyer: Authentic Brands Group

      • Legal: DLA Piper LLP (Richard Chesley, Ann Lawrence, Rachel Ehrlich Albanese)

    • Prepetition ABL and FILO Agent: Wells Fargo NA

      • Legal: Morgan Lewis & Bockius LLP (Matthew Ziegler, Julia Frost-Davies, Amelia Joiner)

    • Administrative Agent for the prepetition secured and unsecured Term Loan Facilities: Morgan Stanley Senior Funding Inc.

    • Indenture Trustee for 3 series of Unsecured Notes: US Bank NA

      • Legal: White & Case LLP (J. Christopher Shore, Philip Abelson) & Seward & Kissel LLP (John Ashmead, Arlene Alves)

    • Ad Hoc Group of Secured Lenders (Farmstead Capital Management LLC, KKR Credit Advisors (US) LLC)

      • Legal: Davis Polk & Wardwell LLP (Marshall Huebner, Darren Klein, Adam Shpeen)

      • Financial Advisor: Ducera Partners LLC

    • Ad Hoc Group of Crossover Lenders (Alden Global Capital LLC, Carlson Capital LP, CVC Credit Partners LLC, Silvermine Capital Management LLC, Trimaran Advisors)

      • Legal: King & Spalding LLP (Michael Rupe, Jeffrey Pawlitz, Michael Handler, Bradley Giordano)

      • Financial Advisor: Guggenheim Securities LLC

    • Brigade Capital Management, LP

      • Legal: Kramer Levin Naftalis & Frankel LLP (Douglas Mannel, Rachael Ringer)

      • Financial Advisor: Moelis & Company

    • Ad Hoc Group of 2019 Unsecured Noteholders (Whitebox Advisors LLC, Scoggin Management LP, Old Bellows Partners LP, Wazee Street Opportunities Fund IV)

      • Legal: Willkie Farr & Gallagher LLP (Rachel Strickland)

    • Ad Hoc Group of 2034 Unsecured Noteholders

      • Legal: Jones Day

      • Financial Advisor: Houlihan Lokey

    • Administrative Agent for $247.5mm DIP ABL Facility

    • Administrative Agent for $50mm DIP TL Facility

    • Sponsor: Sycamore Partners LP

      • Legal: Proskauer Rose LLP (Mark Thomas, Peter Young, Michael Mervis, Jared Zajac, Chantel Febus, Alyse Stach)

    • KKR Asset Management

      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Andrew Leblanc)

    • Morgan Stanley & Co. LLC and Morgan Stanley Senior Funding Inc.

      • Legal: Ropes & Gray LLP (Gregg Galardi, Gregg Weiner)

    • Official Committee of Unsecured Creditors (Aurelius Capital Master Ltd., GLAS Trust Company LLC, PBGC, Simon Property Group, Stella International Trading (Macao Commercial Offshore) Ltd., Surefield Limited, U.S. Bank NA)

      • Legal: Akin Gump Strauss Hauer & Feld LLP (Daniel Golden, David Zensky, Deborah Newman, Arik Preis, Jason Rubin, Anthony Loring, Michael Byun, Patrick Chen)

      • Legal Conflicts Counsel: Kasowitz Benson Torres LLP (David Rosner, Howard Schub)

      • Financial Advisor: Protiviti Inc. (Guy Davis, Suzanne Roski, Heather Williams, John Eldred, Justin Koehler, Brian Taylor, Russell Brooks, Matthew Smith, Blake Parker, Lee Slobodien, Omkar Vale, Lok Lam, Sean Sterling) & Province Inc. (Michael Atkinson, Jason Crockett, Eunice Min, Byron Groth)

      • Investment Banker: Houlihan Lokey Capital Inc. (Saul Burian, Surbhi Gupta, Chris Khoury, Tejas Kullarwar, Matt Ender, Brendan Wu)

Updated 11/3/18 at 6:42 am CT

New Chapter 11 Filing - Firestar Diamond Inc.

2/26/18

Company of billionaire Nirav Modi has filed for bankruptcy in the United States. He is currently in the midst of India's biggest-ever bank scam. Indian state-run Punjab National Bank uncovered fraudulent transactions in one its branches and notes that the fraudulent transactions could be around $2 billion. 

  • Jurisdiction: S.D. of New York
  • Capital Structure: $mm debt     
  • Company Professionals:
    • Legal: Klestadt Winters Jureller Southard LLP (Ian Winters, Sean Southard, Stephanie Sweeney)
    • Restructuring Advisor/CRO: Getzler Henrich & Associates LLC (Mark Samson)
    • Financial Advisor: Marks Paneth LLP (Howard Hoff) 
    • Claims Agent: Rust Consulting/Omni Bankruptcy (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Creditor: Israel Discount Bank of New York
      • Legal: Troutman Sanders LLP (Brett Goodman, Harris Winsberg, Matthew Brooks)
    • Creditor: Punjab National Bank
      • Legal: Cleary Gottlieb Steen & Hamilton LLP (Sean O'Neal, James Bromley)
    • Creditor: J.C. Penney Corporation
      • Legal: Polsinelli PC (Christopher Ward, Jeremy Johnson) 

New Chapter 11 Bankruptcy - Cenveo Inc.

Cenveo Inc.

  • 2/2/18 Recap: Publicly-traded ($CVO) large envelope and label manufacturer with roots tracing back 100 years filed for bankruptcy. Interestingly, you, our treasured PETITION readers, probably interact with Cenveo's products in your day-to-day life. Cenveo prints comic books you can buy at the bookstore, produces specialized envelopes used by JPMorgan Chase Bank ($JPM) and American Express ($AMEX) to deliver credit card statements, and manufactures point of sale roll receipts used in cash registers and prescription labels found on medication at national pharmacies. Why did it file for bankruptcy? Disruption. And debt. The company notes that its filing was necessary to tame its burdensome funded debt and corresponding annual $99.4mm debt payments (inclusive of cash and "principle" payments). In light of its leverage, the company apparently also suffered from other pressures on the business, including restrictive trade terms and/or the departure of business from vendors. But, wait! There's more. And its textbook disruption. Per the company, "In addition to Cenveo’s leverage issues, macroeconomic factors, including the introduction of new e-commerce, digital substitution for products, and other technologies, are transforming the industry. Consumers increasingly use the internet and other electronic media to purchase goods and services, pay bills, and obtain electronic versions of printed materials. Moreover, advertisers increasingly use the internet and other electronic media for targeted campaigns directed at specific consumer segments rather than mail campaigns." Ouch. To put it simply, every single time you opt-in for an electronic bank statement, you're f*cking over Cenveo. More from the company, "As society has become increasingly dependent on digital technology products such as laptops, smartphones, and tablet computers, spending on advertising and magazine circulation has eroded, resulting in an overall decline in the demand for paper products, and in-turn lowering reliance on certain of Cenveo’s print marketing business. In addition, there is generally a decline in supply of paper products in the industry, such that only a handful of paper mills control the majority of the paper supply. As a result, paper mills and other vendors that sell paper products have a large amount of leverage over their customers, including Cenveo. The overall decline in the paper industry combined with the diminished supply in paper products has led to overall decline in the industry, dramatically impacting Cenveo’s revenues." Consequently, the company has spent years trying to streamline operations and cut costs: it is not entirely clear from the company's filing, but this disruption clearly led to the "downsizing [of] its workforce," a reduction in its geographic footprint, and asset dispositions. But, ultimately, earnings couldn't manage the balance sheet. The company engaged its various parties in interest and was able to secure a (shaky?) restructuring support agreement and a commitment of financing in the amount of a $190 million ABL DIP Facility provided by the Prepetition ABL Lenders and a new $100 million DIP Term Facility backstopped by more than a majority of the holders of First Lien Notes. It will need to address its underfunded pensions (approximately $92.9mm). 
  • Jurisdiction: S.D. of New York 
  • Capital Structure: see below.
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (Jayme Sprayragen, Jonathan Henes, Joshua Sussberg, Michael Slade, Gregory Pesce, Melissa Koss, George Klidonas, Natasha Hwangpo)
    • Financial Advisor: Zolfo Cooper LLC (Eric Koza)
    • Investment Banker: Rothschild Inc. (Neil Augustine, Dan Skolds, Matthew Chou, Philip Engel, Daniel Flanary, Thomas Galluccio, Trip Burke, Farhat Suvhanov)
    • Real Estate Consultants: VanRock Real Estate Consulting LLC
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
    • New Independent Director: Eugene Davis
  • Other Parties in Interest:
    • Prepetition ABL Agent; $190mm ABL DIP Facility Agent: Bank of America NA
    • $100mm DIP Term Facility Agent: Wilmington Savings Fund Society FSB
    • FILO Notes Trustee/First Lien Notes Trustee/Second Lien Notes Trustee/Unsecured Notes Trustee: Bank of New York Mellon
      • Legal: Riker Danzig Scherer Hyland & Perretti LLP (Joseph Schwartz, Curtis Plaza, Tara Schellhorn)
    • FILO Noteholder: Allianz GI US High Yield Fund
    • First Lien and Second Lien Noteholder: Brigade Capital Management, LP
      • Legal: Akin Gump Strauss Hauer & Feld LLP (Michael Stamer, David Zensky, Stephanie Lindemuth, James Savin, Kevin Eide)
    • Ad Hoc Committee of First Lien Noteholders
      • Legal: Stroock & Stroock & Lavan LLP (Brett Lawrence, Erez Gilad, Matthew Garofalo, Gabriel Sasson)
      • Financial Advisor: Ducera Partners LLC
    • Examiner: Susheel Kirplani
      • Legal: Quinn Emanuel Urquhart & Sullivan
    • Official Committee of Unsecured Creditors
      • Legal: Lowenstein Sandler LLP (Kenneth Rosen, Mary Seymour, Bruce Buechler, Bruce Nathan)
      • Financial Advisor: FTI Consulting Inc. (Samuel Star)
Source: DIP Motion

Source: DIP Motion

Updated 4/2/18

New Chapter 11 Filing - Global A&T Electronics Ltd.

Global A&T Electronics Ltd. 

  • 12/17/17 Recap: Singapore-based provider of semiconductor assembly and test services for integrated circuits for use in analog, mixed-signal and logic, and memory products across the globe filed for prepackaged bankruptcy...finally. The company had skipped its $56mm interest payment and let its 30-day grace period expire; it has also been the subject of litigation after issuing new notes back in 2014 in exchange for junior debt. The company blames the litigation, an over-levered balance sheet, underspending on capex, and liquidity constraints for its need to reorganize. The company seeks to confirm the case in FOUR DAYS which may be a new record for a bankruptcy of this size. 
  • Jurisdiction: S.D. of New York (Judge Drain)
  • Capital Structure: $1.13b 10% '19 first lien notes ($625mm Initial Nots, $502mm Additional Notes)(Citicorp International Limited)
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (Marc Kieselstein, Patrick Nash, Gregory Pesce, Michael Slade)
    • Financial Advisor: Alvarez & Marsal LLC (Robert Caruso)
    • Investment Banker: Moelis & Company LLC
    • Disinterested Director: Eugene Davis
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Ad Hoc Group of Initial Senior Secured Noteholders (GSO Capital Partners LP, IP All Seasons Asian Credit Fund, Brigade Capital Management LP, Southpaw Credit Opportunity Master Fund LP)
      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Abhilash Raval, Brian Kinney, Michael Price)
      • Financial Advisor: PJT Partners LP
    • Ad Hoc Committee of Additional Senior Secured Noteholders (Taconic Capital Advisors LP, Marble Ridge Master Fund LP, KLS Diversified Asset Management)
      • Legal: Dechert LLP (Michael Sage, Brian Greer, Janet Doherty)
    • Ad Hoc Committee of Additional Senior Secured Noteholders
      • Legal: Ropes & Gray LLP (Gregg Galardi, Stephen Moeller-Sally, Daniel Anderson)
    • TPG
      • Legal: Cleary Gottlieb Steen & Hamilton LLP (James Bromley, Benjamin Beller)

New Chapter 11 Bankruptcy - Global Brokerage Inc. ($GLBR)

Global Brokerage Inc.

  • 12/11/17 Recap: Holding company which holds, as its primary asset, an interest in a non-debtor online forex trading company filed a prepackaged bankruptcy to restructure its balance sheet. Troubles for the company began in early 2015 when "unprecedented volatility" in the euro-to-franc currency rate led the Swiss National Bank to eliminate its 1.2 france per euro floor. Instantly, the company was in breach of certain regulatory capital requirements and had to cease operations. After getting rescue financing from Leucadia National Corp. - bridging the company back into regulatory compliance - the company knew that the short term bridge would become an issue. A looming NASDAQ delisting triggered a "fundamental change" call provision on the notes which, of course, the company couldn't pay. The company's plan, solicited prior to filing, is basically an amend-and-extend. The term loan maturity is pushed one year and the converts will get (secured) take-back paper in the same nominal amount with maturity extended five years (with an interest rate uptick from 2.25% to 7%...PIK Toggle, of course). 
  • Jurisdiction: S.D. of New York (Judge Wiles)
  • Capital Structure: $300mm secured term loan (Leucadia National Corp), $172.5mm 2.25% convertible notes (Bank of New York Mellon)    
  • Company Professionals:
    • Legal: King & Spalding LLP (Arthur Steinberg, Michael Handler, Sarah Borders, Thaddeus Wilson, Elizabeth Dechant)
    • Financial Advisor: Perella Weinberg Partners
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Ad Hoc Group of Convertible Noteholders (683 Capital Partners LP, Lazard Asset Management LLC, Penderfund Capital Management Ltd., Phoenix Investment Advisor LLC, Wolverine Flagship Fund Trading Limited)
      • Legal: Vinson & Elkins LLP (Steven Abramowitz, David Meyer, Lauren Kazer, Eric Hilmo)
    • Leucadia National Corp.
      • Legal: Skadden Arps Slate Meagher & Flom LLP (Eric Ivestor, Gregory Fernicola)
    • Significant Equityholder: Franklin Resources Inc. 

New Chapter 11 Bankruptcy - Walter Investment Management Corp.

Walter Investment Management Corp. 

  • 11/30/17 Recap: Mortgage banking firm focused primarily on the servicing and origination of loans, including forward and reverse loans, has filed a much-anticipated prepackaged bankruptcy with the intention of shedding nearly $800mm of debt from its balance sheet. The company originates "conventional conforming loans eligible for securitization by government-sponsored enterprises, such as Fannie Mae and Freddie Mac, or eligible for guarantees by government agencies, such as Ginnie Mae MBSs." If that was painful reading, imagine how the lawyers felt drafting that. Even more painful is understanding that this bankruptcy is directly attributable to decisions the company made in the aftermath of the financial crisis. From 2010 through 2015, the company went on a debt-ridden acquisition spree (including once bankrupt Residential Capital LLC) which just goes to show that, while one's crisis is another's opportunity, one's crisis could be one's crisis. With this deleveraging transaction, the company hopes to be more competitive in the market going forward.

  • Jurisdiction: S.D. of New York (Judge Garrity)

  • Capital Structure: $100mm '18 RCF, $1.4b '20 TL (Credit Suisse AG), $540mm 7.875% '21 senior unsecured notes (Wilmington Savings Fund Society FSB), $242mm '19 senior subordinated convertible notes (Wells Fargo Bank NA)(public equity: $WAC)

  • Company Professionals:

    • Legal: Weil Gotshal & Manges LLP (Ray Schrock, Matthew Barr, Sunny Singh)

    • Financial Advisor: Alvarez & Marsal North America LLC (David Coles)

    • Investment Banker: Houlihan Lokey Capital Inc. (Reid Snellenbarger, Jeffrey Levine, Jeffrey Lewis, James Page, Daniel Martin, Derek Kuns)

    • Claims Agent: Prime Clerk LLC (*click on case name above for free docket access)

  • Other Parties in Interest:

    • Administrative Agent: Credit Suisse AG

      • Legal: Davis Polk & Wardwell LLP (Brian Resnick, Michelle McGreal)

    • Consenting Term Lenders (Carlson Capital LP, TAO Fund LLC, Credit Suisse Asset Management LLC, Marathon Asset Management LP, Nuveen, Symphony Asset Management LLC, Eaton Vance Management)

      • Legal: Kirkland & Ellis LLP (Patrick Nash, Gregory Pesce)

      • Financial Advisor: FTI Consulting Inc.

    • Consenting Senior Noteholders (Canyon Capital Advisors LLC, CQS UK LLP, Deer Park Road Management Company LP, Lion Point Capital LP, Oaktree Capital Management LP, Omega Advisors Inc.)

      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Gregory Bray, Haig Maghakian, Rachel Franzoia)

      • Financial Advisor: Moelis & Co.

    • Prepetition Indenture Trustee: Wilmington Savings Fund Society FSB

      • Legal: Pryor Cashman LLP (Patrick Sibley, Seth Lieverman, Matthew Silverman)

    • Prepetition Convertible Notes Indenture Trustee: Wells Fargo Bank NA

      • Legal: Thompson Hine LLP (Curtis Tuggle)

    • Administrative Agent for DIP Warehouse Facilities: Credit Suisse First Boston Mortgage Capital LLC

      • Legal: Alston & Bird LLP (Gerard Catalanello, Karen Gelernt, James Vincequerra)

    • Fannie Mae

      • Legal: O'Melveny & Myers LLP (Darren Patrick, Steve Warren, Jennifer Taylor)

    • Freddie Mac

      • Legal: McKool Smith (Paul Moak, Kyle Lonergan)

First Day Declaration

First Day Declaration

Updated 11/30/17 10:05 CT