😷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 - Fairway Energy LP⛽️

Fairway Energy LP

November 26, 2018

Belligerent week for companies attached to the oil and gas space (see also Waypoint Leasing). Here, Houston-based Fairway Energy LP, which, interestingly (and somewhat oddly), is 28%-owned by the President and Fellows of Harvard College (🤔), is a storage provider for third-party companies engaged in the production, distribution and marketing of crude oil; it is also now in bankruptcy down in the District of Delaware.

Specifically, the company provides undersurface salt cavern storage, storage that has been utilized since the 40s because of its “extremely low risk of leakage through self-sealing under cavern operating pressures.” The company began construction on its 10-million barrel underground storage facility (the “Facility”) in 2015 (rough timing); yet, it has exclusive rights to store in the facility and has otherwise secured the necessary leases to operate in its geographic location. It is also connected to customers via owned and third-party pipeline systems, which enable to the company to take inbound capacity from the (hot) Permian Basin, the Eagle Ford Shale Basin, and Canada/Midcontinent. The pipelines also connect to hubs that connect to “downstream” infrastructure, i.e., refiners, etc.

To get off the ground, the company had a $390mm equity infusion and $80mm in term loans from Riverstone Credit Partners LP. The company has been operating off of credit agreement amendments now for months, however, given operational and market issues that impeded their use of the Facility and hampered liquidity. Per the company:

For the nine (9) months ended September 30, 2018, Fairway had an operating loss of $38,600,000 (before interest, expense, and other income). Fairway’s financial performance has been negatively affected by (i) reduced and delayed demand for its services, (ii) cost overruns on the Facility, (iii) commercial restrictions on accessing the Facility by existing pipeline connections, and (iv) general market conditions that undermine the demand for crude oil storage.

In other words, a perfect storm posing all sorts of headwinds. These winds, it seems, chilled any potential buyer interest in the Facility: pre-petition efforts to find a buyer, including a stalking horse buyer, proved futile. It seems all of the hopeful and flowery language deployed by the company’s professionals in the First Day Declaration about the usefulness of the Facility isn’t a sentiment shared by any prospective purchasers. Was this whole project a solution in search of a problem? Via the bankruptcy sale process, we’ll soon find out. So, will Riverstone (which is also providing a $20mm DIP credit facility) and the writers of the $390mm of equity checks (read: Harvard).

  • Jurisdiction: D. of Delaware

  • Capital Structure: $94mm debt     

  • Company Professionals:

    • Legal: Haynes and Boone LLP (Patrick Hughes, Martha Wyrick, Kelsey Zottnick) & (local) Young Conaway Stargatt & Taylor LLP (Edmon Morton, Kenneth Enos, Elizabeth Justison)

    • Financial Advisor: Alvarez & Marsal North America LLC (Gary Barton, Kevin Larin)

    • Investment Banker: Piper Jaffray & Co./Simmons & Company International

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

  • Other Parties in Interest:

    • Administrative Agent under Secured Term Loan Credit Agreement & DIP Lender/Agent: Riverstone Credit Partners LP

      • Legal: White & Case LLP (David Turetsky, Andrew Zatz) & (local) Fox Rothschild LLP (Jeffrey Schlerf)

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 Filing - Gibson Brands Inc.

Gibson Brands Inc.

5/1/18

After months of speculation (which we have covered here and elsewhere), the famed Nashville-based guitar manufacturer has finally filed for Chapter 11. We're old enough to remember this:

Late Tuesday, GIbson Brands CEO Henry Juszkiewicz denied all of the reports and indicated via press release that a plan was underway to salvage the brand.

What Mr. Juszkiewicz didn't say was that "a plan" actually meant a "plan of reorganization." Which is okay: nobody believed him anyway. 

And here's why: in the company's First Day Declaration, the company proudly boasts,

The Debtors' strength, rooted in their iconic Gibson, Epiphone, KRK, and other brands that have shaped the music industry for over 100 years, have been the brands of choice for countless musicians and recording artists, including some of the most legendary guitarists in history such as Muddy Waters, BB King, Elvis Presley, Pete Townsend, Keith Richards, Duane Allman, Elvis Costello, Lenny Kravitz, Slash, Dave Grohl, Joe Bonamassa, and Brad Paisley, among others. 

Anyone else see an issue with this lineup? Legends, sure, but not exactly a group of artists you see listed on Coachella posters. Even in a publicly-available document, this company doesn't know how to market itself to the masses. Case and point, after Guitar Center got its out-of-court deal done last week, we wrote the following:

Gibson may want to embrace the present. But we digress. 

Unbeknownst to many, however, Gibson is more than just its legendary guitars. No doubt, guitars are a big part of its business. According to the company's First Day Declaration (which, for the record, is one of the more jumbled incoherent narratives we've seen in a First Day Declaration in some time), 

Gibson has the top market share in premium electric guitars, selling over 170,000 guitars annually in over eighty (80) countries worldwide and selling over 40% of all electric guitars priced above $2,000.

But the company also expanded to include a "Professional Audio" segment, its musical instrument and pro-audio segment ("MI," which is positive cash flow), and a "Gibson Innovations" business ("GI"), which stems from a 2014 leveraged transaction. The latter business has been a drag on the overall enterprise ever since the transaction eventually leading to breaches of certain financial covenants under the company's senior secured bank debt financing agreements. The company was forced to pay down the debt to the tune of $60 million since the Fall of 2017, a cash drain which severely accentuated liquidity issues within that business. It came to this brutal reality: 

...the GI Business became trapped in a vicious cycle in which it lacked the liquidity to buy inventory and drive sales while at the same time it lacked the liquidity to rationalize its workforce to match its diminished operations.

That's rough. Even rougher is that on April 30, 2018, the GI business initiated formal liquidation proceedings under the laws of at least 8 different countries. Looks like Mr. Juszkiewicz' previous expansion "plan" was an utter disaster. 

⚡️Warning: Geeky stuff to follow ⚡️:

Now, the company is left with restructuring around the EBITDA- positive MI business with the hope of maximizing recovery for stakeholders. The holders of 69% of the principal amount of notes (PETITION NOTE: for the uninitiated, this satisfies the 2/3 in amount requirement of the bankruptcy code; unknown whether they satisfy the second prong of 1/2 in number) have entered into a Restructuring Support Agreement which would effectively equitize the notes and transfer ownership of MI to the noteholders. The company has also entered into a $135 DIP credit facility backstopped by an ad hoc group of noteholders to finance the company's trip through bankruptcy (the mechanic of which effectively rolls up some of the prepetition debt into the postpetition facility, giving the noteholders higher distribution priority). 

The RSA envisions a transaction whereby the company will exit bankruptcy with an untapped asset-backed lending facility and enough exit financing to pay off the DIP facility. So, the noteholders will collect some nice fees for about 9 months. The lenders under the DIP facility will have the option to cover the DIP monies into equity in the reorganized company at a 20% discount to the plan's valuation. 

⚡️Geeky Stuff Over. Now Back to Regularly Scheduled Snark ⚡️:

Naturally, current management has somehow convinced the new owners, i.e., the funds converting their notes into equity, that they're so invaluable that they should receive millions in "transition"-based compensation and warrants for upside preservation. Makes total sense. David Berryman, who runs Epiphone, will get a one year employment agreement paying $3.35 million, 5 year-warrants, and health benefits; Mr. Juszciewicz will get a one year "consulting agreement" paying $2.1 million, 5 year-warrants and health benefits (plus other profit-sharing incentives). It sure pays to run a company into bankruptcy these days. Naturally, they'll also get releases from any liability. Because, you know, bankruptcy!!

One final note: Thomas Lauria and White & Case LLP are listed as the 22nd highest creditor. Popping popcorn. 

  • Jurisdiction: D. of Delaware 
  • Capital Structure: $17.5 million ABL (Bank of America NA)/ $77.4 million Term Loan (GSO Capital Solutions Fund II AIV-I LP), $375 million '18 8.875% senior secured notes (Wilmington Trust NA), $60 million ITLA loan (GI Business only)
  • Company Professionals:
    • Legal: Goodwin Proctor LLP (Michael H. Goldstein, Gregory W. Fox, Barry Z. Bazian) & (local) Pepper Hamilton LLP (David Stratton, David Fournier, Michael Custer, Marcy McLaughlin)
    • Financial Advisor/CRO: Alvarez & Marsal North America LLC (Brian Fox) 
    • Investment Banker: Jefferies LLC (Jeffrey Finger)
    • Independent Directors: Alan Carr & Sol Picciotto
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Agent: Cortland Capital Market Services LLC
      • Legal: Arnold & Porter Kaye Scholer (D. Tyler Nurnberg, Steven Fruchter, Sarah Gryll) & (local) Young Conaway (same four names as below)
    • Prepetition ABL Agent: Bank of America NA
      • Legal: Winston & Strawn LLP (Jason Bennett, Christina Wheaton)
    • Indenture Trustee: Wilmington Trust NA
      • Legal: Shipman & Goodwin LLP (Marie Hofsdal, Patrick Sibley, Seth Lieberman, Eric Monzo)
    • Ad Hoc Group of Noteholders
      • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Brian Hermann, Robert Britton, Adam Denhoff, Kellie Cairns) & (local) Young Conaway Stargatt & Taylor LLP (Pauline Morgan, Sean Greecher, Andrew Magaziner, Betsy Feldman)
    • Ad Hoc Minority Noteholders Committee (Lord Abbett & Co. LLC, Wilks Brothers LLC)
      • Legal: Brown Rudnick LLP (Robert Stark, Steven Levine, Brian Rice) & (local) Ashby & Geddes PA (William Bowden)
    • Equity Holder: GSO Capital Partners LP
      • Legal: White & Case LLP (J. Christopher Shore, Andrew Zatz, Richard Kebrdle) & (local) Fox Rothschild LLP (Jeffrey Schlerf, Carl Neff, Margaret Manning)

Updated 5/2 5:12 pm CT

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 - iHeartMedia Inc.

iHeartMedia Inc.

3/14/18

iHeartMedia Inc., a leading global media company specializing in radio, outdoor, mobile, social, live media, on-demand entertainment and more, has filed for bankruptcy -- finally succumbing to its $20 billion of debt ($16 billion funded) and $1.4 billion of cash interest in 2017. WOWSERS. The company purports to have "an agreement in principle with the majority of [its] creditors and [its] financial sponsors that reflects widespread support across the capital structure for a comprehensive plan to restructure...$10 billion..." of debt.

The company notes $3.6 billion of revenue and unparalleled monthly reach ((we'll have more to say about this in this Sunday's Members-only newsletter (3/18/18) - this claim deserves an asterisk)). 

Still, as it also notes, the company faces significant headwinds. It states in its First Day Declaration,

"Among other factors, the global economic downturn that began in 2008 resulted in a decline in advertising and marketing spending by the Debtors’ customers, which resulted in a corresponding decline in advertising revenues across the Debtors’ business. Then, as the economy recovered, the Debtors’ industry faced new and intense competition from the rapidly-growing internet and digital advertising industry and the entry of on-demand streaming services, both of which siphoned off the share of advertiser revenues allocated by agencies and brands to broadcast radio. The Debtors have taken various operational steps to stem the negative effect of these trends; among other initiatives, the Debtors have successfully developed emerging platforms including its industry-leading iHeartRadio digital platform and nationally-recognized iHeartRadio-branded live events that are audio and video streamed and televised nationwide."

The company ought to expect these trends to continue.

Large creditors include Cumulus Media Inc. (~$5.6 million...yikes) and Spotify (~$2 million).  

  • Jurisdiction: S.D. of Texas
  • Capital Structure:    
Screen Shot 2018-03-15 at 2.28.26 PM.png

 

  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (James Sprayragen, Anup Sathy, Brian Wolfe, William Guerrieri, Christopher Marcus, Stephen Hackney, Richard U.S. Howell, Benjamin Rhode, AnnElyse Gibbons) & Jackson Walker LLP (Patricia Tomasco, Matthew Cavenaugh, Jennifer Wertz)
    • Financial Advisor to the Company: Moelis & Co. 
      • Legal: Latham & Watkins LLP (Caroline Reckler, Matthew Warren)
    • Restructuring Advisor to the Company: Alvarez & Marsal LLC
    • Legal for the Independent Directors: Munger Tolles & Olson LLP (Kevin Allred, Seth Goldman, Thomas Walper, John Spiegel)
    • Financial Advisor to the Independent Directors: Perella Weinberg Partners LP
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Large Equity Holders: Bain Capital & Thomas H. Lee Partners
      • Legal: Weil Gotshal & Manges LLP (Matthew Barr, Christopher Lopez, Gabriel Morgan)
    • Potential Buyer: Liberty Media Corporation & Sirius XM Holdings Inc.
      • Legal: Weil Gotshal & Manges LLP (Stephen Karotkin, Ray Schrock, Alfredo Perez)
    • Successor Trustee for the 6.875% '18 Senior Notes and 7.25% '27 Senior Notes: Wilmington Savings Fund Society, FSB
      • Legal: White & Case LLP (Thomas Lauria, Jason Zakia, Erin Rosenberg, J. Christopher Shore, Harrison Denman, Michele Meises, Mark Franke, Michael Garza) & Pryor Cashman LLP (Seth Lieberman, Patrick Sibley, Matthew Silverman) & (local) Andrews Kurth Kenyon LLP (Robin Russell, Timothy A. Davidson II, Ashley Harper)
    • Successor Trustee for the 11.25% '21 Priority Guaranty Notes
      • Legal: Kelley Drye & Warren LLP (Eric Wilson, Benjamin Feder, Kristin Elliott)
    • Successor Trustee for the 14.00% Senior Notes due 2021
      • Legal: Norton Rose Fulbright (US) LLP (Jason Boland, Christy Rivera, Marian Baldwin Fuerst)
    • Term Loan/PGN Group
      • Legal: Jones Day (Thomas Howley, Bruce Bennett, Joshua Mester)
    • Ad Hoc Group of Term Loan Lenders
      • Legal: Arnold & Porter Kaye Scholer LLP (Michael Messersmith, Tyler Nurnberg, Sarah Gryll, Christopher Odell, Hannah Sibiski) 
    • TPG Specialty Lending Inc.
      • Legal: Schulte Roth & Zabel LLP (Adam Harris, David Hillman, James Bentley) & (local) Jones Walker LLP (Joseph Bain, Laura Ashley) 
    • Special Committees of the Board of Clear Channel Outdoor Holdings Inc.
      • Legal: Willkie Farr & Gallagher LLP (Matthew Feldman, Paul Shalhoub, Christopher Koenig, Jennifer Jay Hardy)
    • Ad Hoc Committee of 14% Senior Noteholders of iHeart Communications
      • Legal: Gibson Dunn & Crutcher LLP (Robert Klyman, Matt Williams, Keith Martorana, Matthew Porcelli) & (local) Porter Hedges LLP (John Higgins, Aaron Power, Samuel Spiers)
    • 9.00% Priority Guarantee Notes due 2019 Trustee: Wilmington Trust NA
      • Legal: Stroock & Stroock & Lavan LLP (Jayme Goldstein, Daniel Fliman, Brian Wells) & (local) Haynes and Boone, LLP (Charles Beckham Jr., Martha Wyrick, Kelsey Zottnick)
    • Citibank N.A.
      • Legal: Cahill Gordon & Reindel LLP (Joel Levitin, Richard Stieglitz Jr.) & (local) Locke Lord LLP (Berry Spears)
    • Delaware Trust Company
      • Legal: Quinn Emanuel Urquhart & Sullivan LLP (Benjamin Finestone, K. John Shaffer, Monica Tarazi, Victor Noskov)
    • Official Committee of Unsecured Creditors
      • Legal: Akin Gump Strauss Hauer & Feld LLP (Ira Dizengoff, Philip Dublin, Naomi Moss, Charles Gibbs, Marty Brimmage)

Updated 3/30/18

New Chapter 11 Filing - Rand Logistics Inc.

Rand Logistics Inc.

  • 1/28/18 Recap: NJ-based publicly-traded ($RLOG) bulk freight Jones Act shipper filed for bankruptcy to effectuate a balance sheet restructuring and sale pursuant to a prepackaged plan of reorganization. Lightship Capital LLC has agreed to acquire the company by converting all of the company's second lien debt into 100% of the equity. The deal eliminates approximately $90mm of debt. The company blames currency volatility (US vs. Canadian dollar) and increased maintenance/certification costs as factors necessitating a review of the capital structure. 
  • Jurisdiction: D. of Delaware 
  • Capital Structure: $235.9mm total funded debt; $149mm first lien debt (Bank of America) & $86.9mm second lien debt (Guggenheim Corporate Funding LLC)    
  • Company Professionals:
    • Legal: Akin Gump Strauss Hauer & Feld LLP (Meredith Lahaie, Alexis Freeman, Kevin Zuzolo, Zach Lanier, Abid Qureshi) & (local) Pepper Hamilton LLP (David Stratton, David Fournier, Evelyn Fournier)
    • Financial Advisor: Conway MacKenzie Inc.
    • Investment Banker: Stifel Financial/Miller Buckfire & Co. LLC (Kevin Haggard)
    • Claims Agent: KCC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • First Lien Agent: Bank of America NA
      • Legal: Otterbourg P.C. (Daniel Fiorillo, Chad Simon) and (local) Womble Bond Dickinson (US) LLP (Matthew Ward, Nicholas Verna)
    • Second Lien Agent and Second Lien Lender: Lightship Capital LLC
      • Legal: White & Case LLP (Thomas Lauria, Andrew Zatz, Rashida Adams) & (local) Fox Rothschild LLP (Jeffrey Schlert, Carl Neff)
      • Financial Advisor: Houlihan Lokey Capital Inc.

New Chapter 11 Filing - KIKO USA Inc.

KIKO USA Inc.

  • 1/11/18 Recap: Cosmetics retailer files for bankruptcy and simultaneously busts the narrative that cosmetics are safe in the age of Amazon, Sephora and Ulta Beauty - not to mention a long list of direct-to-consumer e-commerce players. Or does it? Here, the cosmetics retailer with retail stores, an e-commerce channel, and an Amazon.com presence filed for bankruptcy because “its retail sales have not been sufficient to cover its costs, which consist primarily of rent and labor.” In other words, you might as well stop reading because you’ve read this story dozens of times in the last 12 months. Of 29 domestic locations (26 in malls), the company intends to close 24 stores in bankruptcy after failing to negotiate concessions from landlords prior to the filing. It doesn’t own any of its locations (a recurring problem). Remaining locations will be those in big cities: New York, Miami, Las Vegas, Sunrise Florida, and Los Angeles. Tiger Capital Group has been hired to dispose of assets. The go-forward plan is also, frankly, fairly unoriginal. It includes re-focusing on product assortment and targeted in-demand product, (ii) realigning distribution via a focus on the five remaining locations and, seemingly, kiosks (or the like) within third-party retailers, (iii) enhancing the customer experience with better staff/training, (iv) organizational changes, (v) targeting marketing (cha ching, Facebook!), and growing the commerce and Amazon Prime offering (cha ching Amazon). In summary, KIKO S.p.A., the corporate overlord loses its equity but for its DIP loan and Facebook and Amazon benefit. What else is new?
  • Jurisdiction: D. of Delaware (Judge Walrath)    
  • Company Professionals:
    • Legal: Perkins Coie LLP (John Kaplan, Jeffrey Vanacore, Deborah Kennedy) & (local) Saul Ewing Arnstein & Lehr (Mark Minuti, Monique Bair DiSabatino, Sharon Levine)
    • Financial Advisor: Getzler Henrich & Associates LLC (Mark Samson)
    • Claims Agent: BMC Group (*click on company name above for free docket access)
  • Other Parties in Interest:
    • KIKO S.p.A.
      • Legal: White & Case LLP (John Cunningham, Fan He, Robbie Boone Jr.) & (local) Fox Rothschild LLP (Jeffrey Schlerf, Carl Neff)

New Chapter 11 Filing - Pacific Drilling S.A.

Pacific Drilling S.A.

  • 11/12/17 Recap: Another offshore driller finds its way into bankruptcy and, boy!, does its filing attempt to paint one rosy optimistic picture of its particular "competitive strength[]" in the offshore drilling space. But, first, let's take a step back: here, Pacific Drilling ($PACDF), an offshore drilling company formed in 2011 under Luxembourg law, filed bankruptcy in the Southern District of New York after over a year - and we mean YEAR - of speculation that this would end up where it now is. After all, when oil prices are where they are and you provide global ultra-deepwater drilling and complex well construction services to the oil and natural gas industry with high-specification drillships generally stationed in the Gulf of Mexico, the Federal Republic of Nigeria and the Islamic Republic of Mauritania, well, we'd venture an educated guess that the math simply ain't gonna add up. Certainly not at "day rates" averaging an estimated $155k. And so the company has three drillships contracted currently: two on short term agreements and, luckily, one at a well-above market contractual dayrate through September 2019. The others sit "smart-stacked." Choice quote, "My view in light of over 20 years in the industry is that recovery in the market for drilling contracts is a question of “when” not “if”. Pacific Drilling continues to have advantages over competitors with older fleets, as high-specification drilling units are generally better suited to meet the requirements of customers for drilling in deepwater, complex geological formations with challenging well profiles or remote locations. Furthermore, the uniformity and mobility of the Company’s fleet allow a Smart Stacking strategy that will continue to yield cost savings and flexibility if the downturn is prolonged." Clearly those advantages weren't so clear as to form consensus around the negotiating table with the various parties in interest as there is no restructuring support agreement in place here. Nothing like a good old-fashioned free fall into bankruptcy court, an increasingly-rare occurrence these days. 
  • Jurisdiction: S.D. of New York
  • Capital Structure: $3.188b total debt. Ship Group A Debt: $475mm RCF (Citibank NA), $750mm '20 5.375% Notes (Deutsche Bank Trust Company Americas), $718mm Term Loan B Credit Facility (Citibank NA). Ship Group B Debt (SSCF): $492.5mm 3.75% commercial tranche and $492.5mm (Wilmington Trust NA), combined post-amort equaliing $661.5mm outstanding. Ship Group C Debt: $438.4mm '17 7.25% senior secured notes (Deutsche Bank Trust Company Americas)
  • Company Professionals:
    • Legal: Sullivan & Cromwell LLP (Andrew Dietderich, Brian Glueckstein, John Hardiman, Noam Weiss) & Togut Segal & Segal LLP (Albert Togut, Frank Oswald, Scott Ratner)
    • Financial Advisor: Evercore Partners International LLP 
    • Investment Banker: AlixPartners LLP (James Mesterharm)
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • RCF Agent: Citibank NA
      • Legal: Shearman & Sterling LLP (Fredric Sosnick)
      • Financial Advisor: PJT Partners LP
    • Ad Hoc Group of RCF Lenders
      • Legal: White & Case LLP
    • SSCF Agent: Wilmington Trust NA
      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Tyson Lomazow, Matthew Brod)
      • Financial Advisor: Moelis & Company LLC
    • Ad Hoc Group of Ship Group C Debt, 2020 Notes and Term Loan B
      • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Andrew Rosenberg, Elizabeth McColm, Christopher Hopkins)
      • Financial Advisor: Houlihan Lokey
    • 2017 and 2020 Notes Indenture Trustee(s): Deutsche Bank Trust Company Americas
      • Legal: Moses & Singer LLP
    • Large Equityholder: Quantum Pacific (Gibraltar) Limited
      • egal: Skadden Arps Slate Meagher & Flom LLP (Jay Goffman, George Howard)

Updated 11/15/17 at 5:09 pm CT

New CBCA Proceeding - Concordia International Group

Concordia International Group

  • 10/20/17 Recap: Canadian-based pharmaceutical company filed for a stay under the Canada Business Corporations Act (CBCA) to effectuate a plan to de-lever its balance sheet. The company has a portfolio of 200+ "off-patient" skus with sales all across the world. The company blamed the need for the filing on (i) the proliferation of competitive generic products, (ii) the introduction of new products that treat the same ailments Concordia addresses, (iii) drug pricing pressures (including regulatory pressures in the UK), and its highly-levered balance sheet. The company intends to deploy its "DELIVER" strategy - not to be confused with what should be an obvious DELEVER strategy, but we digress. This acronym stands for a bunch of trite stuff like "Drive growth, "Expand," "Level-set the U.S. Business," "Increase the Product Pipeline," blah blah boring blah blah. In other words, effectively operate a pharma business - the EOPB strategy. Fine, not quite the same ring to it. 
  • Jurisdiction: Superior Court of Ontario
  • Capital Structure: $1.068b secured term loan, £485.63mm secured term loan. $350mm 9% '22 senior secured first lien notes, $135mm 9.5% '22 extended unsecured bridge loan ($100.83 funded ex-interest), $45mm 9.5% '17 equity unsecured bridge loan ($33.61mm ex-interest), $735mm 7% '23 unsecured notes (ex-interest), and $790mm 9.5% '22 unsecured notes (ex-interest)(US Bank NA). Public equity ($CXR).     
  • Company Professionals:
    • Legal: Skadden Arps Meagher & Flom LLP (Paul Leake, Shana Elberg) & (Canadian) Goodmans LLP (Robert Chadwick, Brendan O'Neil, Caroline Descours, Ryan Baulke)
    • Financial Advisor: Perella Weinberg Partners LP
  • Other Parties in Interest:
    • Secured Term Loan Agent: Goldman Sachs Bank USA
      • Legal: Davis Polk & Wardwell LLP (Damian Schaible)
    • Secured Debtholders Committee
      • Legal: White & Case LLP & (Canadian) Osler Hoskin & Harcourt LLP (Marc Wasserman, Martino Calvaruso)
    • Trustee for Secured and Unsecured Notes: US Bank NA
    • Unsecured Debtholders Committee
      • Legal: Paul Weiss Rifkind Wharton & Garrison LLP & (Canadian) Bennett Jones LLP (Kevin Zych, Sean Zweig)

Updated 10/26/17

New Chapter 11 Filing - Seadrill Ltd.

Seadrill Ltd.

  • 9/12/17 Recap: Cash rich offshore oil and gas extraction company with global reach filed a prearranged bankruptcy to effectuate a balance sheet restructuring because...well...it was over-levered AF. The company purports to have a deal with its major creditors with secured creditors kicking the can down the road, and $2.3b worth of unsecured bondholders and other unsecured claims converting into approximately 15% of the post-reorg equity (with participation rights in the new secured notes and equity noted below). The company will get $1.06b of new capital by combination of new secured notes ($860mm) and equity ($200mm). Holders of $NADL stock will get a big fat donut.  
  • Jurisdiction: S.D. of Texas (Judge David Jones)
  • Capital Structure: A. Lot. Of. Debt. Like $5.7mm of bank debt and $2.3mm of unsecured bonds.
First Day Declaration.

First Day Declaration.

 

  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (Jayme Sprayragen, Anup Sathy, Ross Kwasteniet, Adam Paul, Brian Schartz, Anna Rotman, Jeffrey Zeiger, Anthony Grossi, Spencer Winters) & (local) Jackson Walker LLP (Patricia Tomasco, Matthew Cavenaugh, Rachel Biblo Block)
    • Restructuring Advisor: Alvarez & Marsal LLC (Jeffrey Stegenga, Ed Mosley)
    • Financial Advisor: Houlihan Lokey (David Hilty, Gavin Kagan, Dimitar Voukadinov, Drew Talarico, David Wang, Brian Keenan, Varun Desai, Daniel McManus) & Morgan Stanley
    • Claims Agent: Prime Clerk LLC (*click on company name for docket)
  • Other Parties in Interest:
    • Conflicts Committee of Board of Directors of North Atlantic Drilling Limited and to the Conflicts Committee of the Board of Directors of Sevan Drilling Limited
      • Legal: Willkie Farr & Gallagher LLP (Jennifer Hardy, Andrew Mordkoff, Derek Osei-Bonsu)
      • Financial Advisor: Baker Tilly Virchow Krause LLP (Susan Seabury)
    • Conflicts Committee of Seadrill Partners LLC
      • Legal: Orrick Herrington & Sutcliffe LLP (Katherine Treistman, Raniero D'Aversa, Laura Metzger, Debra Felder)
    • New Money: Hemen Holding Ltd., Centerbridge Partners LP
      • Legal: Cadwalader Wickersham & Taft LLP (Greg Petrick, Yushan Ng, Nicholas Vislocky) & Fried Frank Harris Shriver & Jacobson LLP (Brad Scheler, Jennifer Rodburg, Andrew Minear) & (local) Dykema Cox Smith (Deborah Williamson, Patrick Huffstickler, Aaron Kaufman)
    • Consenting Lender Group
      • Legal: White & Case LLP (Scott Greissman, Philip Abelson, Andrew Katz) & (local) Andrews Kurth Kenyon LLP (Robin Russell, Timothy A. Davidson II, Joseph Rovira)
    • Aristeia Capital L.L.C., GLG Partners LP, Saba Capital Management LP and Whitebox Advisors LLC
      • Legal: Akin Gump Strauss Hauer & Feld LLP (Philip Dublin, Ira Dizengoff, David Staber, Abid Qureshi, Sara Brauner)
    • ARCM Master Fund III, Ltd.
      • Legal: Paul, Weiss, Rifkind, Wharton & Garrison, LLP (Elizabeth McColm, Andrew Rosenberg, Catherine Goodall)
    • Indenture Trustee: Deutsche Bank Trust Company Americas
      • Legal: Morgan, Lewis & Bockius LLP (Chad Steward, Glenn Siegel, Crystal Axelrod, Rachel Jaffe Mauceri)
    • Daewoo Shipbuilding & Marine Engineering
      • Legal: Pachulski Stang Ziehl & Jones LLP (Shirley Cho, Bradford Sandler, Steven Golden)
    • Samsung Heavy Industries Co., Ltd.,
      • Legal: Hogan Lovells US LLP (Robin E. Keller, Ronald J. Silverman, Christopher R. Bryant, Michael Shane Johnson) & (local) 
    • Official Committee of Unsecured Creditors (Nordic Trustee AS, Deutsche Bank Trust Company Americas, Computershare Trust Company NA, Daewoo Shipbuilding & Marine Engineering Co. Ltd., Samsung Heavy Industries Co. Ltd., Pentagon Freight Services Inc., Louisiana Machinery Co. LLC)
      • Legal: Kramer Levin Naftalis & Frankel LLP (Thomas Moers Mayer, Douglas Mannal, Jennifer Sharret) & (local) Cole Schotz PC (Michael Warner, Benjamin Wallen)

Updated 10/5/17 12:03 pm CT

New Chapter 11 Filing - Takata Corporation

Takata Corporation

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

Updated 7/11/17 6 pm (CT)

New Chapter 11 Filing - Ameriforge Group Inc.

Ameriforge Group Inc. (d/b/a AFGlobal Corporation)

  • 5/1/17 Recap: Houston-based manufacturer of products for a variety of markets (oil and gas, power, aerospace and industrial) filed a prepackaged bankruptcy case to delever its balance sheet by approximately $680mm. The company's first lien lenders will get nearly all of the equity in the reorganized entity. Second lien lenders will get some option value in the form of an equity kiss and warrants/options. The company has secured $70mm in new money and seeks to be out of bankruptcy in roughly three weeks: some of these cases are getting VERY speedy.
  • Jurisdiction: S.D. of Texas
  • Capital Structure: $89.5mm '17 first lien funded RCF and $519mm '19 first lien senior secured TL-B (Deutsche Bank Trust Company Americas), $143.3mm '20 second lien secured TL (Delaware Trust Company).   
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (James Sprayragen, Edward Sassower, William Guerrieri, Christopher Hayes, Bradley Giordano, Chad Husnick) & (local) Jackson Walker LLP (Patricia Tomasco, Matthew Cavenaugh, Jennifer Wertz)
    • Financial Advisor: Alvarez & Marsal LLC (James Grady)
    • Investment Banker: Lazard Middle Markets LLC (Brandon Aebersold, Parry Sorenson)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Ad Hoc Group of First Lien Lenders (Carlyle Strategic Partners, Deutsche Bank Trust Company Americas, Eaton Vance Management, Stellex Capital Management)
      • Legal: Jones Day LLP (Scott Greenberg, Michael Cohen, Bryan Kotliar, Paul Green)
      • Financial Advisor: Houlihan Lokey Capital Inc. (Adam Dunayer)
    • Ad Hoc Group of Second Lien Lenders
      • Legal: Akin Gump Strauss Hauer & Feld LLP (Ira Dizengoff, Philip Dublin, Jason Rubin, Charles Gibbs)
      • Financial Advisor: PJT Partners LP (Jon Walters, Paul Sheaffer)
    • Sponsor: First Reserve Heavy Metal LP
      • Legal: Simpson Thacher & Bartlett LLP (Sandy Qusba, Elisha Graff)
  • Prepetition 1L Agent & DIP Agent: Deutsche Bank Trust Company
    • Legal: White & Case LLP (Scott Greissman, Adam Zatz)
  • Prepetition 2L Agent: Delaware Trust Company
    • Legal: Bryan Cave LLP (Jeremy Finkelstein, Stephanie Wickouski, Keith Miles Aurzada)

Updated 7/13/17