New Chapter 11 Bankruptcy Filing -- Fusion Connect Inc.

June 3, 2019

We previously wrote about Fusion Connect Inc. ($FSNN), providers of “Unified Communications-as-a-Service” and “Infrastructure-as-a-Service” in “⛈A Dark "Cloud" on the Horizon⛈.” Therein we marveled at how special Fusion must be…to fail SO SPECTACULARLY in today’s cloud here, cloud there, cloud everywhere, everyone’s gaga for cloud environment. Cloud is SO captivating that it wasn’t until the company filed a piss poor 8-K back in April that a B. Riley FBR ($RILY) analyst FINALLY had an epiphany and declared that the company’s stock ought to be downgraded from “buy” to “neutral” (huh?!?) with a price target of $0.75 — down from $9.75/share. This is despite the fact that the stock hadn’t traded anywhere in the vicinity of $9.75/share in ages — nowhere even close, actually — but whatevs. Clearly, his head was in the cloud(s). This, ladies and gentlemen, demonstrates, in a nutshell, the utter worthlessness of equity analyst reports.🖕

But this isn’t a story about shoddy analyst research. That would be wholly unoriginal. This is a story about synergies and burdensome debt. Because, like, that’s so super original that you won’t read of it again until…well…you scroll below to the next bit of content about FTD!! 🙄

Boiled down to its simplest form, this company is the product of an acquisition strategy (and reverse merger) gone wrong. Like, in a majormajor way. Per the company:

The Company pursued the Birch Merger with a vision of leveraging its existing processes and structures to create synergies between Fusion’s and Birch’s joined customer bases, combine network infrastructure assets to improve operational efficiencies, and ultimately drive material growth in Fusion’s and Birch’s combined annual revenue. In connection with the Birch Merger and MegaPath Merger, the Company incurred $680 million in secured debt(emphasis added)

That reverse merger closed at the end of Q2, 2018. Yet…

Unfortunately, due to underperformance compared to business projections, the Company found itself with limited liquidity and at risk of default under its debt documents by early 2019.

Wait, what? Limited liquidity and risk of default by “early 2019”?!? Who the f*ck diligenced and underwrote this transaction?!? This sitch is so bad, that the company literally didn’t have enough liquidity to make a recent $6.7mm amort payment under the first lien credit agreement and a $300k interest payment on its unsecured debt. This is the company’s pre-petition capital structure:

  • $20mm super senior L+10% June 2019 debt

  • $43.3mm Tranche A Term Loans L+6.0% May 2022 debt

  • $490.9mm Tranche B Term Loans L+8.5% May 2023 debt

  • $39mm Revolving Loans L+6.0% May 2022 debt

  • $85mm Second Lien L+10.5% November 2023 debt

  • $13.3mm Unsecured Debt

Back in April we summed up the situation as follows:

The company’s recent SEC reports constitute a perfect storm of bad news. On April 2, the company filed a Form 8-K indicating that (i) a recently-acquired company had material accounting deficiencies that will affect its financials and, therefore, certain of the company’s prior filings “can no longer be relied upon,” (ii) it won’t be able to file its 10-K, (iii) it failed to make a $7mm interest payment on its Tranche A and Tranche B term loan borrowings due on April 1, 2019, and (iv) due to the accounting errors, the company has tripped various covenants under the first lien credit agreement — including its fixed charge coverage ratio and its total net leverage ratio.

Again, who diligenced the reverse merger?!? 😡

So here we are. In bankruptcy. To what end?

The company is seeking a dual-path restructuring that is all the rage these days: everyone loves to promote optionality that will potentially result in greater value to the estate. In the first instance, the company proposes, as a form of “stalking horse,” a “reorganization transaction” backed by a restructuring support agreement with certain of its lenders. This transaction would slash $300mm of the company’s $665mm of debt and result in the company’s first lien lenders owning the company. That is, unless a buyer emerges out of the woodwork with a compelling purchase price. To promote this possibility, the company is filing a bid procedures motion with the bankruptcy court with the hope of an eventual auction taking place. If a buyer surfaces with mucho dinero, the company will toggle over to a sale pursuant to a plan of reorganization. This would obviously be the optimal scenario. Absent that (and maybe even with that), we’ve got a jaw-dropping example of value destruction. “Fail fast,” many in tech say. These cloud bros listened!! Nothing like deep-sixing yourself with a misguided poorly-diligenced acquisition. Bravo!!

The company has secured a commitment for a fully-backstopped $59.5mm DIP that subsumes the $20mm in super senior pre-petition bridge financing recently provided by the first lien lenders. Is this DIP commitment good for general unsecured creditors? Is any of this generally good for unsecured creditors? Probably not.

Major creditors include a who’s who of telecommunications companies, including AT&T Inc. ($T) (first Donald Trump and now THIS…rough week for AT&T), Verizon Communications Inc. ($VZ)XO Communications (owned by VZ), Frontier Communications Corp. ($FTR)(which has its own issues to contend with as it sells assets to sure up its own balance sheet), CenturyLink Inc. ($CTL)Level 3 Communications ($LVLT)Time Warner Inc. ($TWX), and….wait for it…bankrupt Windstream Communications ($WINMQ). Because the hits just keep on coming for Windstream….

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

  • Capital Structure: see above.

  • Professionals:

    • Legal: Weil Gotshal & Manges LLP (Gary Holtzer, Sunny Singh, Natasha Hwangpo)

    • Board of Directors: Matthew Rosen, Holcombe Green Jr., Marvin Rosen, Holcombe Green III, Michael Del Guidice, Lewis Dickey Jr., Rafe de la Gueronniere, Neil Goldman)

    • Financial Advisor: FTI Consulting Inc. (Mark Katzenstein)

    • Investment Banker: PJT Partners (Brent Herlihy, John Singh)

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

  • Other Parties in Interest:

    • Ad Hoc First Lien Lender Group

      • Legal: Davis Polk & Wardwell LLP (Damian Schaible, Adam Shpeen)

      • Financial Advisor: Greenhill & Co. Inc.

    • DIP Lender: Credit Suisse Loan Funding LLC

    • DIP Agent, Prepetition Super Senior Agent & Prepetition First Lien Agent: Wilmington Trust NA

      • Legal: Arnold & Porter Kaye Scholer (Michael Messersmith, Sarah Grylll, Alan Glantz)

    • Prepetition Second Lien Successor Agent: GLAS America LLC & GLAS USA LLC

    • Ad Hoc Group of Tranche A Term Loan/Revolving Lenders

      • Legal: Simpson Thacher & Bartlett LLP (Sandeep Qusba, Soogy Lee, Edward Linden)

    • Second Lien Lenders

      • Legal: Proskauer Rose LLP (Charles Dale, Jon English)

    • Large Unsecured Creditor: AT&T

      • Legal: Norton Rose Fulbright US LLP (David Rosenzweig, Francisco Vazquez)

Updated 6/4/19 at 5:42am


🖥New Chapter 11 Bankruptcy Filing - Collective Inc. (Visto)🖥

Collective Inc. (Visto)

November 29, 2018

Adtech isn’t exactly known for its sexiness. SaaS (software-as-a-service), on the other hand, has been on fire lately. “Recurring revenue” is everyone’s jam these days (yes, even ours) and SaaS products are the key drivers of recurring revenue. This would explain some of the REDONKULOUS multiples that we’ve been seeing of late in the SaaS space. Just last week SAP purchased Qualtrics, a Utah-based provider of experience management software, for $8b, or 23x TTM revenue. That’s no typo: 23x!

Source:  tomtunguz.com

Of course, none of these companies, to our knowledge, was an adtech company. So, what is the market for a SaaS adtech company? Collective Inc. a/k/a Visto is about to find out.

Collective Inc. is a SaaS company that…

“…allows brands, advertising agencies, and advertisers to purchase and place advertising and monitor and evaluate data with respect thereto. Collective also offers managed services to media and publisher clients, where Collective employees provide proposals to clients, and then implement and monitor advertising campaigns for those clients.

It was once a high-flying startup that grew to $174mm in revenues in 2013 and was on the verge of an IPO. But…

within the next twelve months and before any IPO went to market, Collective began experiencing a downturn in its traditional managed service business due to a significant decrease in buys from large advertising agency holding companies who were beginning to build their own internal advertising trading desks to buy digital ads themselves instead of using companies like Collective to buy it for them. As a result, the IPO was pulled.

Consequently, Collective pivoted to SaaS; it is now finding that transition to be costly and ineffective; its net loss in 2017 was $15.7mm; and, so, it needs a lifeline. Collective is lucky that the secured lender and agent on its $26mm credit facility ($17.285mm funded), National Electric Benefit Fund (“NEBF”) and RCP Advisors 2 LLC, respectively, are patient. They have been largely forgiving as Collective runs a sale process that has largely been a failure.

Now, though, the company has filed for chapter 11 to effectuate a 363 sale that will convey its assets to a prospective buyer “free and clear” of prior liens and encumbrances. Zeta Global Holdings Corp. emerged as a stalking horse purchaser and the proposed purchase price is an all-(Zeta)-stock transaction worth approximately $15mm. NEBF will fund the case via a $4mm DIP.

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

  • Capital Structure: $26mm debt (National Electric Benefit Fund)

  • Company Professionals:

    • Legal: Wilmer Cutler Pickering Hale and Dorr LLP (Andrew Goldman, Nancy Manzer, Benjamin Loveland)

    • Investment Banker: Oaklins DeSilva & Phillips LLC

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

  • Other Parties in Interest:

    • Lender: National Electric Benefit Fund

      • Legal: Troutman Sanders LLP (Brett Goodman, W. Peter Beardsley)

    • Official Committee of Unsecured Creditors

      • Legal: Cullen and Dykman LLP (Michelle McMahon, Nicole Stefanelli)

Updated 1/11/19

New Chapter 11 Filing - TerraVia Holdings Inc.

TerraVia Holdings Inc.

  • 8/1/17 Recap: TerraVia, a publicly-traded (Nasdaq: $TVIA) "next-generation" algae-based food company based out of San Francisco filed for bankruptcy. The company has a stalking horse bidder lined up to buy it for $20mm plus certain assumed liabilities and seeks to jam this case through bankruptcy in about 6 weeks lest it run out liquidity in the process (even with a proposed $10mm DIP); it claims that more time is unnecessary given that it ran a robust marketing process pre-filing that included outreach to over 100 parties. We'll let the company economics do the rest of the talking (see below).
  • Jurisdiction: (Judge Sontchi)
  • Capital Structure: $144.2mm 5% '19 convertible senior subordinated notes (GLAS Trust Company LLC) & $33.475mm 6% '18 convertible senior subordinated notes (Wilmington Trust)   
  • Company Professionals:
    • Legal: Davis Polk & Wardwell LLP (Damian Schaible, Steven Szanzer, Adam Shpeen, Benjamin Kaminetzky) & (local) Richards Layton & Finger P.A. (Mark Collins, Amanda Steele)
    • Financial Advisor: 
    • Investment Banker: Rothschild & Co. (Tero Janne)
    • Claims Agent: KCC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Agent: Wilmington Savings Fund Society FSB & Ad Hoc Consortium of Holders of Convertible Senior Subordinated Debt (Gilead Capital LP, Higher Ground SICAV PLC Core Wealth Fund, Lazard Asset Management LLC, Passport Capital LLC, Wolverine Asset Management LLC, Zazove Associates LLC)
      • Legal: Brown Rudnick LLP (Robert Stark, Steven Levine, Brian Rice, Kellie Fisher) & (local) Ashby & Geddes P.A. (William Bowden, Gregory Taylor, Katharina Earle)
      • Financial Advisor: GLC Advisors & Co. LLC
    • Passport Capital
      • Legal: Shearman & Sterling LLP (Joel Moss) & (local) Drinker Biddle & Reath LLP (Patrick Jackson)
    • 6% Notes Successor Trustee: Wilmington Trust NA
      • Legal: Katten Muchin Rosenman LLP (Craig Barbarosh, Karen Dine, Jerry Hall) & (local) Morris James LLP (Eric Monzo)
    • JV Partner: Bunge Global Innovation LLC
      • Legal: Jones Day (Joshua Morse)
    • Silicon Valley Bank
      • Legal: Troutman Sanders LLP (Harris Winsberg, Stephen Roach) & (local) Chipman Brown Cicero & Cole LLP (William Chipman Jr., Mark Olivere)
    • Corbion NV
      • Legal: Baker & McKenzie LLP (Debra Dandeneau, Frank Grese) & (local) Whiteford Taylor & Preston LLC (L. Katherine Good, Aaron Stulman)

Updated 8/26/17

First Day Declaration.

First Day Declaration.

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 - Searchmetrics Inc.

Searchmetrics Inc.

  • 5/8/17 Recap: This is a story about possible theft and patent litigation among search engine optimization players - the other being BrightEdge Technologies Inc. This sums it up nicely.
  • Jurisdiction: D. of Delaware (Judge Sontchi)
  • Company Professionals:
    • Legal: Chipman Brown Cicero & Cole LLP (William Chipman, Mark Olivere, Adam Cole)
    • Financial Advisor/CRO: EisnerAmper LLP (Wayne Weitz) 
    • Financial Advisor/Valuation Expert: SSG Advisors LLC (J. Scott Victor)
    • Claims Agent: JND Legal Administration (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Searchmetrics GmbH
      • Legal: DLA Piper LLP (US) (Stuart Brown, Maris Kandestin)
    • BrightEdge Technologies Inc.
      • Legal: Baker Botts LLP (Omar Alaniz, Emanuel Grillo, G. Hopkins Guy III, Jon Swenson)

Updated 7/12/17

New Chapter 11 Filing - Ciber Inc.

Ciber Inc.

  • 4/10/17 Recap: Once publicly-traded Colorado-based IT staffing and consulting services company filed for bankruptcy to pursue a sale of its business to CapGemini S.A., as stalking horse bidder, for at least $50mm plus the assumption of certain liabilities. The sale is subject to a postpetition marketing process. Ciber lists Microsoft and Oracle as major corporate partners; it sells and supports both companies' product offerings. Ciber seems like the quintessential go-big-or-go-home kind of company. It fueled growth over the years with over 60 acquisitions at a cost of more than $1b, never fully integrating the new businesses. This failure to integrate led to some AWESOME results: like the time the company paid $14mm to European consultants for NEGATIVE PERFORMANCE. And we thought Wells Fargo had a monopoly on stupid bonus-based behavior. Speaking of Wells Fargo, it is the lender here and the straw that broke the camel's back was the company's inability to adhere to its Fixed Coverage Charge ratio, triggering a default under its asset-based loan. Now Wells Fargo is providing the DIP facility of $41mm to fund the cases which, by our simple mathematical calculations, amounts to $4.1mm per bankruptcy lawyer who has made a notice of appearance on behalf of the debtors already (see below).
  • Jurisdiction: D. of Delaware
  • Capital Structure: $60mm ABL (Wells Fargo Bank NA)     
  • Company Professionals:
    • Legal: Morrison & Foerster LLP (Brett Miller, Dennis Jenkins, Daniel Harris, Benjamin Butterfield, Steve Rappoport, Todd Goren) & (local) Polsinelli PC (Christopher Ward, Justin Edelson, Jarrett Vine)
    • Financial Advisor/CRO: Alvarez & Marsal LLC (Jonathan Goulding, Matt Covington, Glenn Gilmour)
    • Investment Banker: Houlihan Lokey Capital Inc. (Adam Dunayer, Michael Boone)
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Prepetition & DIP Lender: Wells Fargo Bank NA
      • Legal: Goldberg Kohn Ltd. (Jeremy Downs, Jacob Marshall)
    • Stalking Horse Bidder: CapGemini SA
      • Legal: Skadden Arps Slate Meagher & Flom LLP (Paul Leake, Mark McDermott, Raquelle Kaye)
    • Actual Buyer: HTC Global Ventures LLC
      • Legal: Plunkett Cooney PC (Scott Lites, David Lerner)
    • Official Committee of Unsecured Creditors
      • Legal: Perkins Coie LLP (John Penn, Schuyler Carroll, Tina Moos) & (local) Shaw Fishman Glantz & Towbin LLC (Thomas Horan)
      • Financial Advisor: BDO Consulting (David Berliner)
    • Ad Hoc Group of Non-Insider Employees
      • Legal: Blank Rome LLP (Josef Mintz, John Lucian)

Updated 5/21/17 

  

New Chapter 11 Filing - Sungevity Inc.

Sungevity Inc.

  • 3/13/17 Recap: Oakland California-based designer of residential and commercial solar energy systems in the US, UK and Europe filed for bankruptcy after a failed merger and an inability to service its capital structure. Large equity holders include Apollo Investment Corporation and Lowe's Corporation. The company secured a $20mm DIP facility to pursue a sale to a stalking horse bidder. 
  • 4/17/17 Update: The company received no competitive qualified bids and, therefore, sought approval of the sale to the stalking horse bidder.
  • Jurisdiction: D. of Delaware
  • Capital Structure: $145.6mm of funded debt (Hercules Capital Inc. - $55mm, MMA Energy Capital LLC - $10mm, MHA Trust LLC - $5mm, Wilmington Savings Fund Society - $9.5mm bridge loan, Atalaya Special Opportunities Fund VI LP - $32mm, $34.1mm convertible notes     
  • Company Professionals:
    • Legal: Morrison & Foerster LLP (Jonathan Levine, Jennifer Marines, Melissa Hager, Erica Richards, Todd Goren, Rahman Connelly, Andrew Kissner, Stacy Molison) & (local) Young Conaway Stargatt & Taylor LLP (M. Blake Cleary, Jamie Lutonn Chapman, Kenneth Listak)
    • Financial Advisor: AlixPartners LLC (Randall Eisenberg, Stephen Spitzer, James Guglielmo, Raju Patel, Allen Wong)
    • Investment Banker: Ducera Securities LLC (Joshua Scherer) & Greentech Capital Advisors (Michael Horwitz)
    • Claims Agent: KCC (*click on company name for docket)
  • Other Parties in Interest:
    • DIP Lender & Stalking Horse Bidder: LSHC Solar Holdings LLC (JV between Northern Pacific Group and Hercules Capital Inc.)
      • Legal: Kirkland & Ellis LLP (Brad Weiland, Christine Pirro) & (local) Klehr Harrison Harvey Branzburg LLP (Domenic Pacitti)
    • Hercules Capital Inc.
      • Legal: Cole Schotz P.C. (Stuart Komrower, Katharina Earle)
    • Second Lien Lender: MMA Energy Capital LLC
      • Legal: Baker & McKenzie LLP (Debra Dandeneau, Jacob Kaplan) & (local) Richards Layton & Finger PA (Paul Heath, Zachary Shapiro)
    • Lowe's Corporation
      • Legal: Hunton & Williams LLP (Gregory Hesse, Nicole Collins)
    • Verengo Inc. (also in Chapter 11)
      • Legal: Bayard PA (Scott Cousins, Evan Miller)
    • Eastern Sun Capital Partners LLC 
      • Legal: Goodwin Proctor LLP (Kizzy Jarashow, David Koch) & (local) Whiteford Taylor & Preston LLP (Christopher Samis, L. Katherine Good)
    • Official Committee of Unsecured Creditors
      • Legal: Brown Rudnick LLP (Steven Pohl, Sunni Beville, Christopher Floyd, Tristan Axelrod, Fouad Kurdi) & (local) Morris James LLP (Jeffrey Waxman, Eric Monzo)
      • Financial Advisor: Goldin Associates LLC (Gary Polkowitz)

Updated 5/31/17

New Chapter 11 Filing - Aquion Energy, Inc.

Aquion Energy Inc.

  • 3/8/17 Recap: The Pittsburgh-based manufacturer of saltwater batteries used for energy storage has filed for bankruptcy after burning through tens of millions of dollars. The goal is to explore an asset sale. Prepetition efforts by Citi Global Markets Inc. to attract a buyer or raise capital for the company fell short (something tells us their engagement letter and tail payment are going to be in the rejection bin). The privately-owned company received $180mm of venture capital money from high profile investors like Bill Gates (labeled the "kiss of death in energy storage" here and conveniently omitted from mention in the filing declaration), top venture capital fund Kleiner Perkins Caufield & Byers, and corporate venture capital units of Total, Exelon Corporation and Royal Dutch Shell. This case is generally smaller than what we cover but it is representative of the fact that, despite widespread adoption of renewable energy sources, storage solutions are very expensive to deploy.  
  • Capital Structure: $20mm TL (~$5.2mm funded)(Trinity Capital Fund II LP)
  • Jurisdiction: D. of Delaware     
  • Company Professionals:
    • Legal: Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, David Bertenthal, Joseph Mulvihill, Maxim Litvak) & (special counsel) Morgan Lewis & Bockius LLP (Julia Frost-Davies)
    • Financial Advisor: Protiviti Inc. (Suzanne Roski)
    • Claims Agent: KCC (*click on company name for docket)
    • Other Parties in Interest:
      • Trinity Capital Fund II LP
        • Legal: Cooley LLP (Robert Eisenbach) & (local) Ashby & Geddes PA (William Bowden, Karen Skomorucha Owens)
      • Official Committee of Unsecured Creditors:
        • Legal: Lowenstein Sandler LLP (Jeffrey Cohen, Barry Bazian, Andrew Behlmann) & (local) Klehr Harrison Harvey Branzberg LLP (Richard Beck, Sally Veghte)

Updated 5/31/17

New Chapter 11 Filing - Answers Holdings Inc.

Answers Holdings Inc.

  •  3/3/17 Recap: Apax Partners' backed website operator has filed for bankruptcy because it never evolved from Internet 1.0, has too much debt, its main site, Answers.com, is the red-headed step-child of Quora, and, quite frankly, not a single person receiving the PETITION newsletter has visited the site(s) since 2006. Yahoo, FacebookAmazon (AWS), Amex and Silicon Valley Bank are among the top 10 creditors. The debtors solicited a prepackaged plan and so all of the above will be unimpaired - somewhat ironic given that algorithmic changes by Google and Facebook - in addition to a mountain of debt - are the real root causes of the company's decline.
  • Jurisdiction: SD of New York
  • Capital Structure: $40mm revolver, $325mm '21 first lien TL, $180mm '22 second lien TL.   
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (James Sprayragen, Jonathan Henes, Christopher Greco, Melissa Koss, John Weber, Anthony Grossi)
    • Financial Advisor: Alvarez & Marsal LLC (Justin Schmaltz, Erin McKeighan)
    • Investment Banker: Rothschild (Steven Antinelli)
    • Claims Agent: Rust Bankruptcy/Omni Consulting (*click on company name for docket)
  • Other Parties in Interest:
    • Ad Hoc Group of Consenting First Lien Lenders
      • Legal: Jones Day LLP (Scott Greenberg, Michael Cohen, Bryan Kotliar)
      • Financial Advisor: Houlihan Lokey
    • First Lien Agent: Credit Suisse AG
      • Legal: Gibson Dunn & Crutcher LLP (David Feldman, J. Eric Wise)
    • Ad Hoc Group of Consenting Second Lien Lenders (Deerpath Capital Management LP, North Haven Credit Partners LP, Summit Partners Credit Advisors LP)
      • Legal: Akin Gump Strauss Haur & Feld LLP (David Botter, David Simonds)
        • Financial Advisor: FTI Consulting Inc.
    • Second Lien Agent: Wilmington Trust NA
      • Legal: Alston & Bird LLP (Jason Solomon, David Wender)
    • Sponsor Entities: Apax Partners LP, Clarity Holdco LP, Clarity GP LLC
      • Legal: Simpson Thacher & Bartlett LLP (Elisha Graff, Edward Linden)
    • Proposed Board of Directors of the Reorganized Entity: William Ruckelshaus, Eric Ball, Peter Daffern, Eugene Davis, John Federman, Lonne Jaffe, Brian Mulligan.

Updated 4/2/17

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 Filing - Violin Memory Inc.

Violin Memory Inc.

  • 12/14/16 Recap: Marc Andreeson of A16Z once famously said that software would eat the world. Case and point: Violin Memory Inc. The publicly-traded Santa Clara California-based flash-drive hardware and (only recently) software services provider files for bankruptcy after software providers cannibalized its product, two failed attempts to sell the company, and a failed attempt to secure DIP financing. The objective of the filing is a "value-maximizing sale" of the assets: hey, its three strikes and you're out, not two. 
  • Jurisdiction: D. of Delaware
  • Capital Structure: $10mm '17 5% RCF (Silicon Valley Bank - terminated as of petition date), $120mm '19 4.25% convertible notes (Wilmington Trust)
  • Company Professionals:
    • Legal: Pillsbury & Winthrop LLP (Deryck Palmer, David Forsh, Cecily Dumas) & (local) Bayard PA (Scott Cousins, Justin Alberto, Gregory Flasser)
    • Financial Advisor & Investment Banker: Houlihan Lokey [(Andrew Turnbull, Ryan Sandahl, Randall Tatman, Angus Schaller, Brendan Wolf, Derek Kuns)
    • Claims Agent: Prime Clerk LLC (*click on company name for docket)
  • Other Parties in Interest:
    • Ad Hoc Group of Convertible Noteholders (Jefferies Group LLC, Nokota Management LP, Pine River Capital Management LP, Silverback Asset Management LLC, Soros Fund Management LLC)
      • Legal: Weil (Gary Holtzer, David Griffiths)
    • Wilmington Trust
      • Legal: Brown Rudnick LLP (Daniel Saval) & (local) Drinker Biddle & Reath LLP (Steven Kortanek)
    • Unsecured Creditors' Committee
      • Legal: Cooley LLP (Lauren Reichardt, Robert Winning, Jay Indyke, Eric Haber, Michael Klein) & (local) Elliott Greenleaf PC (Eric Sutty, Rafael Zahralddin-Aravena)
      • Financial Advisor: The DAK Group (Sheon Karol, Ari Fuchs, Claudia Levine)

Updated 3/21/17

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