… applies to today’s edition. He wrote:

“Indeed, according to Epiq AACER (“Epiq”), there were 644 commercial chapter 11 bankruptcy filings in April ‘26, a 42% increase YOY (but a 2% decrease sequentially). Which is … uh … kind of interesting considering the cases that made their way into our universe basically involved QVC and a bunch of spitwads — no offense to spitwads.”

Well, we cover a bunch of those “spitwads” 👇 as we wait for bigger fish like Trinseo PLC ($TSEOF) to eventually drop, 🤤.

But, first, let’s revisit with our latest obsession, QVC Group Inc., and update a prior obsession, Beyond Meat Inc. ($BYND). Let’s dig in.

⚡️Update: QVC Group Inc.⚡️

Considering it’s been less than a month since their chapter 11 bankruptcy filings, we’ve already spilled heaps of ink on QVC Group Inc. (“QVCG”) and its subsidiary debtors, including QVC Inc. (all together, the “debtors”).

We covered the cases upon their filing here (1️⃣), again when there were motions filed primarily by pref shareholders of QVCG seeking an equity committee here (2️⃣), and when those motions were withdrawn and the prefs consolidated into one group with counsel here (3️⃣). In the preface to his last Links (4️⃣), Johnny highlighted how QVCG’s prefs continued to price upwards, stating:

“Notably, the prefs continue their incremental climb higher so either existing holders are emboldened and are adding to their holdings or others are hopping on board (or both).”

Well subsequently on May 8, 2026, Sona Asset Management (US) LLC (“Sona”) filed this …

… seeking to increase its 567,794 shares of preferred stock by an additional 1,000,000 shares.

So, yeah, he was right, 🎯.*

The market be loving this trade:

And the lawyers — for the prefs that is — be loving this mandate. Cue the prefs engaging in their version of RXmaxxing:

That’s right. The prefs — via undersigned counsel at Glenn Agre Bergman & Fuentes LLP, Cleary Gottlieb Steen & Hamilton LLP, and Kane Russell Coleman Logan PC — are agitating. They write:

Read more

On April 27, 2026, Dayville, CT-based Miyoshi America, Inc. (the “debtor”) filed a chapter 11 bankruptcy case in the Southern District of Texas (Judge Lopez). The debtor processes and sells ingredients — like pigments, composites, and substrates — to cosmetic manufacturers, a small percentage of which contained talc (~5% of the debtor’s historic sales).

So, yes, 😩, this is another bankruptcy brought to you by lots and lots of personal injury claimants. Per VP Edward Houlihan:

“The first such case was filed against the Debtor in 2015. Additional similar cases were filed against the Debtor continuing in 2017 and 2018, but the number of cases was small, and the costs of defending (successfully) against those cases were manageable. However, beginning in 2022, the pace of filings against the Debtor accelerated, with five cases filed in 2022, thirty-five cases filed in 2023, thirty-four cases filed in 2024, and 167 cases filed in 2025.”

All in all, the debtor had ~297 cases pending against it at the filing, and the cost of defending the suits became unsustainable (even as the debtor has “… never had a judgment entered against it in a mesothelioma case”).

Unlike most mass-lawsuit filings, however, there is something unique about this one. The debtor and its advisors — Mayer Brown LLP (“MB”), financial advisor Alvarez & Marsal North America, LLC, and banker Smith Goffman Partners — are attempting something novel.

They’re aiming to prepack this sh*t. In what would be “… the first fully prepackaged chapter 11 plan designed to resolve talc-asbestos claims through a section 524(g) trust and channeling injunction.”

Read more

On April 27, 2026, NJ-based FreshRealm Inc. and four affiliates (collectively, the “debtors”) filed chapter 11 bankruptcy cases in the District of New Jersey (Judge Hall).

The ‘13-founded debtors develop, manufacture, and fulfill food orders for “… direct-to-consumer (DTC), grocery, performance, and a rapidly growing portfolio of lifestyle and medically-focused customers,” operating out of Linden, NJ; Lancaster, TX; and Tracy, CA, with additional leased spaces in Indianapolis, IN; San Clemente, CA; Montezuma, GA; Newark, NJ; and Richmond, CA.

Today, Blue Apron, LLC (“Blue Apron”) and MMM Consumer Brands, Inc. (“Marley Spoon”) account for over 90% of the debtors’ revenues, but prior to January ‘26, Walmart Inc. ($WMT) (“Walmart”) had been in the mix and constituted a good 20% of it. To put that into perspective, as of the petition date, the debtors fulfill ~60k boxes of Blue Apron orders per week and project to collect ~$25.2mm from Blue Apron during the first five weeks of the cases.

Anyway, the story here really begins in June ‘23 when the debtors acquired Blue Apron’s ops in Linden and Richmond and entered into a production and fulfillment agreement (the “PFA”) to be its exclusive supplier of meal kits. A short while later, in January ‘24, the debtors did effectively the same thing with respect to the US operations of Marley Spoon.

But as we’ve seen time and time again here at PETITION, aggressive growth too often pairs itself with excessive cost, and in ‘24, the debtors’ liquidity be like 💀:

In March ‘25, BGC Lender Rep LLC (“BGC”)— an affiliate of Birch Grove Investments LLC — answered the call with a $75mm secured DDTL (with $45mm funded at close), and then, in October ‘25, FaraNord (US) IV Pte Ltd. (“FaraNord”) chucked in a $50mm secured DDTL of its own, upped by another $70mm in December ‘25 and of which $60mm was drawn. As of the petition date, the balances and relative collateral packages are:

But let’s revisit March ‘25 again. The debtors closed the BGC facility on March 11. Then this 👇 happened eight days later. Per CFO and Alvarez & Marsal North America, LLC senior director Bryan Fleming:

“… on March 19, 2025, the United States Department of Agriculture (‘USDA’) began collecting samples from the Debtors’ Indianapolis, Indiana facility involved in the Debtors’ production of meal products, and provided a series of presumptive positive test results to the Debtors in late March 2025. Those results subsequently were confirmed and revealed the presence of bacteria or a bacterial contaminant in select food materials prepared at the Indianapolis facility.

In April 2025, a presumptive positive environmental swab was identified on a conveyor belt at the Montezuma, Georgia facility. In May 2025, the Debtors’ main customer in Montezuma, Georgia, Walmart, withdrew all products produced at that facility as a precautionary measure. On June 17, 2025, following discussions with customers and regulators, the Debtors initiated a voluntary recall of specific Chicken Fettuccine Alfredo SKUs sold under the Marketside and Home Chef brands. The Debtors also experienced three other instances of receiving contaminated ingredients in 2025 in linguine, cauliflower, and spinach products.”

BGC be like:

Understandably, Blue Apron was none-too-pleased either; it alleged, starting in April ‘25, that the debtors breached certain obligations under the PFA, sought to terminate it, and replace the debtors with another exclusive provider of meal kits. While dealing with Blue Apron, the debtors hunted for more financing — hence the FaraNord’s role — and undertook an operational restructuring to cut costs and preserve much-needed liquidity.

None of it mattered, so the debtors, therefore, were forced to engage in … yawn …" “… extensive good-faith, arms’-length negotiations …” with BGC and FaraNord around the terms of DIP financing (including $3mm in emergency pre-DIP “protective advances”), sort out Blue Apron’s problems, including finalizing terms with its new exclusive fulfillment provider Misfits Market, Inc. (“Misfit Markets”), and deal with Walmart’s exit and related now-unneeded space. The DIP ultimately arrived at $63mm, inclusive of the protective advances plus $15mm in post-petition new money loans plus a $45mm roll-up of BGC’s and FaraNord’s prepetition debt, at SOFR + 800bps.*

In addition to the committed DIP financing, the debtors come to the table with a settlement in hand. Per Mr. Fleming:

“Subject to Court approval, the Debtors and Blue Apron, without the admission of any liability by either party, have entered into a settlement agreement and mutual release (the ‘Settlement Agreement’) whereby … the Debtors’ estates will receive approximately $47 million in cash (a portion of which will be paid in Cash on the Effective Date (as defined in the Settlement Agreement) and a portion of which will be paid in installments over a subsequent 15- month period) …”

It’s $10mm and $32mm, respectively, which for the more astute among you doesn’t sum up to $47mm. The declaration is … uh … wrong, 🤦. Anyway …

“… waivers of certain claims in excess of $8 million, and other financial accommodations from Blue Apron of approximately $7 to $10 million to terminate the PFA and related agreements, and transition Blue Apron’s exclusive fulfillment business to Misfits Market, Inc.”

For its part, Misfits Market entered into an asset purchase agreement with the debtors on April 27, under which it will purchase the Blue Apron and Marley Spoon assets for a single dollar in cash.

None of which is obviously good for the debtors’ go-forward business. As-in, there ain’t one; Blue Apron be like ✌️** and the debtors be like:

Read more

On April 26, 2026, Irvine, CA-based Impac Mortgage Holdings, Inc. ($IMPM)* and eleven affiliates (collectively, the “debtors”) filed prepackaged chapter 11 cases in the District of Delaware (Judge Goldblatt).

The debtors are a mortgage broker business that used to be a mortgage lender (exited in ‘23) that used to be a real estate investment trust (exited in ‘07). There are a few reasons for those business pivots: long-lived litigation with shareholders for one, the loss of the right to sell loans to Fannie Mae and Freddie Mac for another, but the most recent directional changes stem from COVID and then rising interest rates. The long-term effects on the business are straightforward; just look at headcount. It was 827 in ‘06, ⬇️ to 137 in’08, ⬇️ to 98 in ‘22, ⬇️ to … um … 18 as of filing.

But a failing business hasn’t deterred Hildene Re SPC, Ltd. (“Hildene”). Per CEO George Mangiaracina, Hildene purchased $2mm in secured bridge notes in January ‘26, extended a $20mm secured loan in May ‘24, the balance of which grew to ~$24mm as of the petition date, and through affiliates, owns ~$76.4mm in junior subordinated notes, which the debtors defaulted on in January ‘24 but have been under forbearance ever since.**

Obviously Hildene is the fulcrum here, so on April 22, 2026, it and the debtors entered into a restructuring support agreement (the “RSA”) that equitizes it and provides a fulsome deleveraging of the balance sheet, which entails:

📍A swap by Hildene of its debt for 100% of the equity in reorganized IMPM under a prepackaged chapter 11 plan (disclosure statement here), along with $300k for GUCs to split up pro rata (which the debtors peg at a ~24.4-100% recovery depending on the claims resolution process),***

📍A $5mm DIP to fund the bankruptcy, composed of $3mm in new money ($1.5mm interim) and a full roll-up of the $2mm of secured bridge notes on interim. The DIP bears interest at 12% and features a 4% commitment fee due on interim order,

📍A fast timeline: the RSA requires the plan to be confirmed by June 10, 2026 and go effective by June 25, 2026, which …

We mean, H-E-🏒-🏒 , ain’t nobody else coming for this “business.” Don’t believe us? Just check the DIP budget, which shows that the debtors expect to generate $162k in revenue during the first seven-weeks postpetition. Against a bleed of $884k in operating expenses.

Read more

First, ICYMI, we dove back into the QVC Group Inc. (“QVC”) drama on Wednesday:*

Notably, the prefs continue their incremental climb higher so either existing holders are emboldened and are adding to their holdings or others are hopping on board (or both):

Second, you probably saw the headline that commercial chapter 11 bankruptcies were up again:

Indeed, according to Epiq AACER (“Epiq”), there were 644 commercial chapter 11 bankruptcy filings in April ‘26, a 42% increase YOY (but a 2% decrease sequentially). Which is … uh … kind of interesting considering the cases that made their way into our universe basically involved QVC and a bunch of spitwads — no offense to spitwads.

From our vantage point, the most interesting statistic out of Epiq’s report was the number of chapter 12 filings. There were 62 of them in April, a 130% increase YOY and an 82% increase from March. The 62 filings amount to the highest monthly total since February ‘20. It seems the Islamic Republic’s closing of the Strait of Hormuz — which handles one-third of the global fertilizer trade — ain’t exactly credit positive for US farmers.** Who knew?

Let’s get to the Links….

*You can find previous coverage here and here.

**This is not a political statement, it’s a factual one.

🔥Link of the Week🔥

We’re big nerds and private credit is all over the news and so we enjoyed this deep dive on GE Capital:

Armchair Quarterbacking

The Most Important Financial Institution Nobody Talks About Anymore

Introduction…

Read more

13 days ago · 53 likes · 1 comment · Conor Witt

🔗What We’re Reading (9 Reads)🔗

1. Airlines (Long Bankruptcies?). We all know what happened to Spirit Airlines.

The question now is: will it be the last airline to fall? Here is Gary Leff from View From the Wing talking about JetBlue Airways Corp. ($JBLU), among others.

2. Artificial Intelligence (Long Outcomes). Some good news coming out of the world of AI.

3. Artificial Intelligence (Long “Outcomes-Based Pricing”). It seems a lot of you are trying to get your arms wrapped around what artificial intelligence means for your business model. AI companies themselves are trying to siphon off some of your revenue. Per Semafor:

“AI companies will want a direct piece of new business lines they unlock and the margins they fatten. These new pricing models will be a proxy for how the spoils of an AI-powered economy get divided.

“The arc of technology history will bend towards outcomes-based pricing,” Jake Saper, a partner at venture firm Emergence Capital, told me this week.

One of Emergence Capital’s bets is ProsperAI, a healthcare startup that verifies patient insurance before procedures. Most hospitals currently pay by the phone minute for humans to do this. Prosper does it with AI agents and is moving toward charging per successful authorization — outcomes, not inputs. “It’s teaching buyers how to buy,” Saper said.

Investment-banking startup Rogo charges the likes of Goldman Sachs and JPMorgan per user today but says it’s exploring ways to take a cut of the M&A and IPO revenues it helps generate. As AI makes it profitable to chase smaller deals that were previously uneconomic, “it’s upside for them and it’s upside for us,” Rogo President Rahul Rekhi said.

AI is even coming for the last great holdout of input-based pricing: Big Law’s billable hour. “Clients want value, they are willing to pay for value, and the way that value is measured is ripe for evolution,” said Rachel Proffitt, CEO of Cooley, the global law firm headquartered in Silicon Valley.

The legal industry’s future may look a lot like its oldest-school heavyweight, Wachtell Lipton, which famously sends clients bills that simply say “For Services Rendered” next to a large number. You hire Wachtell for an outcome — a gold-plated M&A deal — and pay accordingly.”

4. Defense (Long Drone-based Warfare). This is relevant to basically nothing in the restructuring space — it’s an article about how Ukraine is on the cutting edge of using drone technology to thwart Russia’s territorial ambitions — but we, being the degenerate creatives we are, can’t help but think it’d be pretty damn salvage if someone … cough, Tom Lauria … had a pet Droid TW 12.7 sitting in the corner of a conference room for optimal negotiating leverage.

“Jokes” aside, if you haven’t been paying attention to what Ukraine has been doing in its war, you might want to start. Conventional warfare as we know it is a thing of the past.

5. Feels (Long Vibescession). We, among others, have been commenting that things just feel like they should be busier for RX professionals. Well, counterpoint:

6. Private Equity (Short Management Services Organizations?). And we were kind of looking forward to the day when Apollo told Latham & Watkins LLP to charge another arm of Apollo more money so that Apollo 1 could make greater returns (even if its at the expense of Apollo 2, someone else’s bonus so 🤷‍♀️). It seems there are some politicians who ain’t too keen on PE shops owning law firms. Per The Wall Street Journal:

“Private equity has barely begun investing in law firms, but the backlash has already started.

Lawmakers in three states are considering bills to make it harder for buyout firms and other corporate investors to buy law practices, a burgeoning investment strategy that was long off limits for private equity.”

They continue:

“Law is a new frontier for private-equity investors. Buyout firms for decades were put off by rules against nonlawyers’ controlling legal practices and other logistical barriers to investment.

But while it remains forbidden for private equity to directly own law firms in almost all states, firms have developed workarounds to control practices without violating the rules.

Private-equity investors have realized that the same structure that allows them to invest in medical practices—the management-services organization, or MSO—can be repurposed to invest in legal practices.

The interest is on both sides, as more lawyers reconsider their commitment to professional autonomy. The prospect of artificial-intelligence tools’ reshaping the profession has convinced some firms to seek outside capital to invest in technology and operations.”

Yeah, sure. The interest is purely based on investing in tech, 🙄.

Related:

7. Restaurants (Short Listeria). Hard to get sick when you stay away from over-priced salads like the ones they be serving at Sweetgreen Inc. ($SG). This 💩 was mentioned back in Links #2 …

… and … ⚡️SHOCKER⚡️… continues to turd. The chain reported earnings yesterday that featured same-store sales ⬇️ 12.8%, including an 11.2% ⬇️ in traffic. And we thought Q4’25’s 11.2% same store sales decline was bad! But don’t worry guys. According to CFO Jamie McConnell, same-store sales will only be down 4% in Q2’26. How’s that for guidance? The stock market be like “meh”: the stock is down roughly 1% YTD as it sits mired in no man’s land, up off the $4.49/share 52-week low but down considerably off the $18.63/share 52-week high. One consolation? It’s not the only fast casual chain performing like dogsh*t:

SG also blamed weather for its travails which is weird because Johnny was in New York City during the blizzard and he had no qualms making some poor guy ride a bike in end-of-days conditions just so he could get a subpar salad.

8. Tariff Claims (Short Handshakes). In Wednesday’s updated coverage of Sleep Number Corp. ($SNBR), we noted how the company intends to monetize its $4.25mm tariff refund. It had better watch out. Apparently there’s a bunch of retrading aholes out there. Here is an article about how Oaktree Capital Management is suing BJ’s Wholesale Club Holdings Inc. ($BJ) for reneging on a deal to sell its rights to ~$29mm in tariff refunds at 70c on the dollar.

9. Tights (Long GLP-1s?). It’d be pretty funny if Spanx ends up being a victim of GLP-1s as people no longer need assistance sucking in their sh*t.

🎧What We’re Listening To🎧

Speaking of Spanx, we thought this origin story was pretty interesting:

📺 What We’re Watching 📺

📚Resources📚

We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. 💥You can find it here💥.

As you know from our coverage here …

… back on April 16, 2026, QVC Group Inc. (“QVCG,” a/k/a Qurate Retail Inc.) and 73 subsidiaries including QVC Inc. and Cornerstone Brands Inc. (“Cornerstone,” collectively with QVC Inc. and the other subsidiaries, the “company”) filed long anticipated chapter 11 bankruptcy cases in the Southern District of Texas (Judge Perez). The cases, as we discussed, surprised a lot of people in that they came in prepackaged form, purporting to tackle (i) a whole bunch of (billions of) debt and (ii) inter-company complexity. They also, much to the relief of general unsecured creditors (“GUCs”) accustomed to getting a massive 🖕in retail bankruptcies, provide for GUCs to get paid in full!

Awesome work, guys, guess we can just pack it up and call it a day.

Right. Not so fast.

In Sunday’s a$$-kicking briefing (that we paywalled right in the middle of the action to troll the free-riders among you), we mentioned that there were various parties in interest at the top blue QVCG box👇 …

… you know, the box with “…no funded debt, a big pile of 💰, and a potentially valuable equity interest in Cornerstone,” who wanted to throw a wrench in the debtors’ plans. You can (maybe) read about the three different groups — two comprised solely of preferred stockholders and one a combination of common and preferred stockholders — who’d moved for the appointment of an official estate-funded committee of equityholders, much to the chagrin of debtors’ counsel, Kirkland & Ellis LLP, here 👇.

But things have moved since.

Nearly as quickly as the … count it … one … two … three … different pleadings hit the docket seeking the committee — first from Cleary Gottlieb Steen & Hamilton LLP, a joinder from Glenn Agre Bergman & Fuentes LLP, and a final one from Brown Rudnick LLP (“Brown Rudnick”) — this happened 👇.

And this 👇.

And, finally, this👇.

That last one was certainly saltier than its two predecessors:

LOL. The prefs — there’s $1.272b worth of them — apparently didn’t feel like playing piggyback with common here and be like:

Oh. And also:

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On April 16, 2026, QVC Group Inc. (“QVCG,” a/k/a Qurate Retail Inc.) and 73 subsidiaries including QVC Inc. and Cornerstone Brands Inc. (“Cornerstone,” collectively with QVC Inc. and the other subsidiaries, the “company”) filed chapter 11 bankruptcy cases in the Southern District of Texas (Judge Perez), touting a (somewhat surprising) prepackaged plan that (i) rides through general unsecured creditors, (ii) contends with all kinds of inter-company complexity, (iii) deleverages the company’s robust balance sheet by billions of dollars, and (iv) glidepaths the company toward a quick value-maximizing emergence that sets the company up to invest in its digital/mobile/largely-TikTok-reliant future. You can read our initial coverage here 👇.

You’ll recall from that coverage that, in his introductory remarks at the first day hearing, debtors’ counsel, Joshua Sussberg of Kirkland & Ellis LLP, made a somewhat passing reference to preferred and common stockholders who, according to him, were mere victims of the bankruptcy code’s absolute priority rule. $5b of senior debt, he said, is getting exchanged into new debt and equity and, therefore, it stands to reason that equity would get a big fat 🍩. You can see how common shareholders felt about that:

But then there’s the roughly $1.27b of pref.

Note the dip to the bottom. That movement occurred immediately after the filing on April 17 and continued to the bottom on April 20 before rebounding. The prefs ended Friday higher than where they were on the petition date, 🤔.

Representing then-unnamed pref holders, Cleary Gottlieb Steen & Hamilton LLP’s Josh Brody emerged later in the hearing, dispensed with the it’s-a-pretty-prepack-”kumbaya” vibes, and raised a number of concerns on behalf of his clients. Check the footnotes in that previous coverage 👆: he previewed arguments to come related to corporate separateness and valuation; he also foreshadowed a potential filing seeking the appointment of a preferred equity committee.

And, so …

… on April 27, 2026, Cleary dropped this on the docket …

… on behalf of these guys …

… which was later joined by these guys …

… represented by these guys …

… which was later followed by this …

… by these guys (who are, notably, holders of common and prefs) …

… represented by these guys:

Here’s a live shot of Mr. Sussberg upon learning of the … count it …

ok …

okkkkk …

… different law firms vying to represent an equity committee …

You’ll recall that the crux of the preferred shareholders’ beef revolves around the debtors’ corporate structure and the fact that the prefs sit at the QVCG box — that’s the blue one up top 👇 — where there is no funded debt, a big pile of 💰, and a potentially valuable equity interest in Cornerstone.

In support of the proposed committee, Cleary writes:

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On April 21, 2026, TRM NRE Holding LLC and TRM NRE Acquisition LLC (together, the “debtors”) filed chapter 11 bankruptcy cases in the District of Delaware (Judge Owens). The debtors are providers of locomotive, marine, and engine services, specializing in remanufacturing, rebuilds, repair, modernization and maintenance; they were acquired by TRM Equity Fund II LP in May ‘23 and funded by GRC SPV Investments LLC, acting through its agent, Great Rock Capital Partners Management LLC (“Great Rock”), pursuant to a loan and security agreement entered into in March ‘25 (the “loan agreement”). According to the debtors, it’s solely due to that last part involving the loan agreement — under which the debtors owe approximately $20.2mm (ex-interest)* — that they’ve landed in chapter 11. Per CEO Shaun Karn:

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Back on March 26, 2026, Aachen, Germany-based and Dutch-organized Ultinon Motion Holding B.V. and two affiliates (collectively, the "debtors" and together with their operating subsidiaries, the “company”) filed chapter 11 bankruptcy cases in the Southern District of Texas (Judge Lopez). The debtors are down-the-chain subsidiaries of First Brands Group, LLC (“FBG”)* and specialize in automotive lighting, producing parts for OEMs and the aftermarket, of which they have a ~20% global market share.

Read more

Lenders need to stop doing this sh*t. Lawyers need to stop doing this sh*t. How in hell are we all supposed to afford this Spring’s charity shakedown circuit if we don’t have chapter 11 filings filling coffers with cold hard administrative expense cash?!?

😔

As regular PETITION readers know, we’ve been keenly tracking the performance of, and news surrounding, Sleep Number Corp. ($SNBR)(the “company”) for quite some time now.

Because, mostly, it’s all been bad. We won’t bore you with repetition: you can go back and read the prior coverage 👆.

And so it surely comes as a great relief to the company that it was able to get a (short-term) deal done by way of a forbearance agreement and (thirteenth) credit agreement amendment with its lenders,* buying itself time to “…rollout … its new product portfolio and marketing campaign,” which, we have to assume, will heavily involve this absolute studmuffin:

So what are the details? The amendment:

📍Adds a $25mm term loan facility (the “2026 Term Loan”) that accrues interest at a rate per annum equal to the one-month term SOFR rate plus 8% and matures on June 30, 2026, with a $5mm amortization payment due on June 1, 2026. Note that the 1-month SOFR is ~3.65% as of the time of this writing, making for 11.65% interest.**

📍Gets lenders to back the eff off of exercising any rights in remedies relating to specified events of default (subject to certain forbearance termination events) — which, here, relate to breaches of, among other things, net leverage ratio, interest coverage ratio, and minimum consolidated adjusted EBITDA requirements.

📍Requires “at least monthly” cash interest payments on all loans outstanding under the credit agreement.

📍Allows the company to sell its claim for certain tariff refunds (🤔) and, related, requires mandatory prepayments of the loans outstanding under the credit agreement with any proceeds received from certain asset sales, equity issuances, debt incurrences, insurance claims or condemnation or similar payments. The company appears eligible for $4,250,000 in refunds.

📍Requires more financial reporting to lenders.

📍Pushes any application of the minimum liquidity financial covenant “…until the last Business Day of the first week ending after July 1, 2026,” and thereafter the company must maintain $30mm from July 1, 2026 through and including October 3, 2026 and, beyond that, maintain $40mm. If you’re wondering how the company arrived at the headline $55mm figure in its press release 👆, this is it: it seems that, in addition to the new $25mm 2026 Term Loan, the company is counting the $30mm minimum liquidity adjustment.

📍Places limitations on new draws under the revolving credit facility outstanding under the credit agreement.

📍Imposes milestones for the company to consummate a strategic transaction that maximizes enterprise value and provides for payment in full of obligations due under the credit agreement.

The stock market reacted very favorably to the news — at one point reaching as high as $4.16/share before coming back down to earth a bit.

Look closely and you may even realize that, at this price, the stock has merely clawed back to slightly below where it was — $3.31/share — when we last wrote about it in March. So 🤷‍♀️.

Does all of this mean that the company is out of the woods? No, we wouldn’t quite say that. Not to state the obvious but it has to execute on its business plan; it has to make sure consumers turn out for its products over the next several months. That means the company must take advantage of critical mattress-buying holidays, e.g., Memorial Day and July 4th. In other words, a lot of high-end customers benefitting from the K-shaped economy — these beds ain’t cheap — will need to free themselves from the tyranny of insomnia for this company to continue staving off a chapter 11 bankruptcy filing. Otherwise, absent some “strategic transaction,” we’re ultimately looking at an equitization of the growing amount of debt issued under the credit agreement (or a sale in chapter).

The goods news is that we’ll get some indication of how management is converting soon. Q1’26 earnings come out on May 12, 2026.

Management says performance remains “on track” with (its previously lowered) expectations.

We. Shall. See.

*Lenders include U.S. Bank NA, Keybank NA, BMO Bank NA, Bank of America NA, PNC Bank NA, Associated Bank NA, Capital One NA, Huntington National Bank, Citizens Bank NA.

**In addition to the $25mm 2026 Term Loan, the company drew down $2.7mm of revolving loans such that the revolver now has $447.2mm outstanding.

⚡Update 2: Multi-Color Corporation⚡

What a wild a$$ ride the not-prepackaged “prepackaged” chapter 11 cases of Multi-Color Corporation (“MCC”), MCC-Norwood, LLC (“MCC Norwood”), and their fifty-four affiliates (collectively, together with MCC and MCC Norwood, the “debtors” and together with their non-debtor subsidiaries, the “company”) have been. The cases filed in January ‘26 in the District of New Jersey (Judge Kaplan), and you can read our prior coverage 👇:

The basic premise of the “prepack” among the debtors, repped by Kirkland & Ellis LLP (“K&E”), their secured ad hoc group, repped by Milbank LLP, and sponsor Clayton, Dubilier & Rice, LLC (“CD&R”), repped by Latham & Watkins LLP was to take this debt …

… and restructure it by (i) paying off ABL claims in full, (ii) paying first lien secured claims 81.6-98.4% through $200mm in cash, ~$1.6b in takeback debt, 13.3% in reorg equity, $62.1mm in pref equity, the right to subscribe to additional pref equity, and warrants, (iii) paying junior funded debt claims, including 1L deficiency claims — which were lumped into class 5 alongside unsecured note claims (PETITION Note: That’s important for below) — 2.6-2.8% through $57.5mm in cash and 5% of reorg equity, (iv) passing GUCs all the way through.

Oh, and letting CD&R stay in the game by ponying up $400mm in exchange for 64% of the reorg equity plus other goodies.

Enter Jones Day’s Bruce Bennett, who on behalf of a crossholder ad hoc group, chimed in:

He pitched a fit about everything.* Venue. His group’s much superior DIP. The insidery-as-f*ck plan. All but the last of which precipitated appeals because Judge Kaplan was never not going to give the debtors everything they asked for.** The last one would’ve been the subject of an appeal too buuuuutttttttt …

… that sh*t is all in the past.*** After Joseph Greenaway, Jr. tried and failed to mediate an outcome, on March 31, 2026, Judge Kaplan saw fit to take matters into his own hands and appoint himself as mediator. Here’s a live shot of the cases’ presiding judge making that call:

*Sigh* — of course not. There’s definitely no issue with moving what would’ve otherwise been public matters to behind closed doors. Definitely doesn’t undermine the integrity of the bankruptcy system, 🙄.

LOL, as if that matters. Y’all read the venue coverage, right?

Anyway, do you see any problems with a judge-mediator combo, Shumaker, Loop & Kendrick LLP’s Steven Berman? Per Bloomberg:

“If I’m going to be sharing something and really exposing problems on my side or my strategy moving forward, I would be hesitant to share that with the presiding judge.”

No sh*t, makes perfect sense. What about you, former bankruptcy judge and current law professor Bruce Markell? From the same article:

“If the mediation fails, what does the judge do with what they’ve learned that would not be admissible in court? … It’s not like Men in Black where someone can flash a device and erase the memories.”

Another good point!

Regardless of that million reasons why it shouldn’t happen … that’s what happened. Judge Kaplan shrugged off skepticism and told parties how he’d rule hammered out an outcome, which became, you know, public on April 15, 2026, aka the rescheduled date of the debtors’ confirmation hearing. Here’s K&E with a summary of the settlement at the April 15 hearing:

“Class 5 cash consideration of $57.5 million and the 5% new common equity distribution remains unchanged. Through the plan settlement, Class 5 claimants are now also receiving warrants for 5% of reorganized equity and $25 million of take-back debt. The debtors’ first lien creditors have collectively agreed to waive 50% of their first lien deficiency claims, and consenting stakeholders have agreed to cap their recovery on account of their respective unsecured notes at the pre-settlement level, essentially allocating the benefit of the deficiency claim waiver to the non-RSA unsecured note holders. The consenting stakeholders have also agreed to waive the recovery on account of the 5% Series B new warrants and the $25 million of take-back debt … I did want to highlight as part of the settlement, the debtors have agreed to pay up to $19.5 million to the crossholder group’s fees and expenses.”

That’s not all either. Recall that the crossholder ad hoc group had been powered by Canyon Capital Advisors LLC (“Canyon”). They got their own goodies. Back to K&E:

“And with respect to the Canyon parties, backstop parties have agreed to contribute $2.5 million of cash and the plan sponsor will contribute $1 million of take-back debt. Those are coming from their recoveries under the plan. And then in connection with the plan settlement, the crossholder group and the plan sponsor have entered into a separate settlement and release agreement in exchange for $17 million of cash to be paid by the plan sponsor to the crossholder group.”

A satisfying conclusion to the cases?

We had been looking forward to the reversal of the venue decision.

But we understand why the crossholder group cut a deal too.

So, after delaying the confirmation hearing one day on account of the debtors’ dropping 1k+ pages of paper on the docket overnight, on April 16, 2025, the court quickly disposed of the US trustee’s objection (to opt-out releases and the plan’s gatekeeper provisions) and entered the confirmation order.

The plan is expected to go effective in the next week or so, and therefore, we won’t be coming back to the debtors. 🫡, Mr. Bennett.

*An “excluded first lien lender” group, represented by Willkie Farr & Gallagher LLP, objected too. But let’s not kid ourselves, Mr. Bennett was the heavy hitter.

**Well, except on the final DIP. Kinda. On March 26, 2026, he ruled that he would defer ruling on its final $125mm roll-up of prepetition debt until the confirmation hearing. That didn’t work for the secured ad hoc group, so the next morning, the debtors came back and asked for $62.5mm (i.e., half) of the new money funding for a commensurate roll-up. Judge Kaplan was good with that, 🤷.

***The debtors also filed a motion to disband the official committee of unsecured creditors. The UCC and the US trustee objected (here and here), but Judge Kaplan never had to address it — it too settled in mediation.

📚Resources📚

We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. 💥You can find it here💥.

📤 Notice📤

Amanda Simone (Associate) joined Connell Foley from FBT Gibbons.

Kyle McEvilly (Associate) joined Connell Foley from FBT Gibbons.

🍾Congratulations to…🍾

Stephen Lerner, Partner and Global Chair of the Restructuring & Insolvency Practice Group at Squire Patton Boggs, on his ascension to President of the American Bankruptcy Institute.

Stinson LLP (Edwin Caldie, Andrew Glasnovich, Logan Kugler) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Catholic Diocese of El Paso chapter 11 bankruptcy case.

Today we discuss, among other things, two recent chapter 11 filings. But make no mistake: both bankruptcy activity and liability management action remain depressed, even if there are some small signs that things could pick up.

For one thing, here is Bloomberg with a report that liability management exercises, after a YOY lull, are on the verge of a relative comeback:

“A growing number of companies are trying to negotiate out-of-court deals that reshuffle repayment priorities, extend due dates and coax lenders to provide a fresh injection of cash. That allows their private equity owners to preserve money and keep their options open.

‘There is a bit of a K-shaped market for companies facing 2028/2029 maturities,’ said Damian Schaible, co-head of restructuring at Davis Polk & Wardwell. ‘Companies facing near-term maturities seem to be divided into easy refinancing stories and tougher ones.’

There were almost 50 LMEs globally in 2024 before dropping to fewer than 35 last year, according to data compiled by Bloomberg. But these transactions are picking up again as lenders exploit loose credit documents and assert themselves. While only seven LMEs were completed in the first quarter, nine more could commence soon, the data shows.” (emphasis added)

The article goes on to cite (i) Medical Solutions, a healthcare staffing firm owned by Centerbridge Partners LP and Caisse de Depot et Placement du Quebec, (ii) Platinum Equity-owned Cabinetworks, (iii) L Catterton-backed RealTruck Group, (iv) publicly-traded Vivid Seats Inc. ($SEAT, see more below) and (v) Clearlake Capital and Francisco Partners-backed Perforce Software, as participants — some active, some recently completed — in the LME realm.

Not cited, but reported on elsewhere in the Bloomberg universe, was (a) CDK Global, a Brookfield Business Partners software-to-car-dealerships provider, whose creditors have signed a cooperation agreement to get out ahead of any potential debt deal and (b) West Marine Inc., a boating-supply and fishing-focused retailer owned by Oaktree Capital Management and L Catterton that finds itself teetering just a few years after an earlier liability management deal but is, more likely than not, out of out-of-court options and headed for a bankruptcy court near you.

For its part, Pitchbook noted the following:

“While the headline [leveraged loan] default rate remains relatively contained, at 1.43% as of March 31, the distress ratio — the share of loans priced below 80 cents on the dollar — climbed to 7.23% by month-end, its highest level since December 2022. And in an LCD survey of market professionals conducted in March, 92% of respondents said they expect default levels to increase at least slightly over the next six months, up sharply from 67% in December.”

The fine folks there go on to point out that the 7.23% distress ratio cited ☝️compares to 4.34% at the end of ‘25; they note further that the dual-track default rate including LMEs is 3.48%, “...more than double the payment-only rate, another reminder that liability management exercises are doing significant work to keep formal defaults suppressed.”

Tee up Marathon Asset Management’s Bruce Richards as one of those who likely agrees that default levels are on the verge of increasing. Citing this chart from M3 Partners …

… he tweeted:

And this response seems directionally on point:

But note Richards’ time horizon, 🤔. Not to sound like a broken record …

… but we (and you) could be forgiven for thinking that things should be a lot busier NOW, rather than looking out to ‘27. On that point, here are a number of things we found interesting from the past week — all of which have to deal with fallout from Iran.

First, from Yardeni Research (paywalled), "Our in-house analysis shows that the increase in income tax refunds from the One Big Beautiful Bill Act more than offsets the rise in gasoline spending since the outbreak of the war. We estimate that the refund tailwind exceeds the gasoline headwind by more than $20 billion as of early April."

But that can’t persist forever. And sooner rather than later the demand side of the equation will have to meet supply.

All of that is just the appetizer, though. This 👇 is the main course (worth clicking through for a JPMorgan research note that made the rounds late this week):

Here is a summary in case X isn’t your jam:

Dhruva’s Newsletter

The Math Isn’t Mathing: Inside JPM’s Leaked “Simple Math” Oil Memo

In my last blog post i timely stated the markets are “Drunk on Hopium” why you should go long on Trump bluff Oil correction at $87. (and timely hedge portfolio by going long nifty PE - this played out too…

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14 days ago · 3 likes · Dhruva Pandey

Which brings us back to Mr. Richards. There’s been a lot of talk about cockroaches in the private credit space serving as the canary in the coal mine — the precursor to much more distress in the market. But given the administration’s failure to truly reopen the Strait and the consequent outlook for oil, will Spirit Airlines end up being the real canary, 🤔?

⏩One to Watch: Vivid Seats Inc. ($SEAT)⏩

Read more

On April 15, 2026, Temecula, CA-based Freedom Forever LLC (the “debtor” and together with its ~115 affiliates, the “company”) filed a chapter 11 bankruptcy case in the District of Delaware (Judge Shannon). Founded in ‘11, the company does residential solar engineering, procurement, and construction across thirty+ states, working with (i) independent authorized dealers (“IADs”) to market, contract, and coordinate installs, and (ii) financiers that provide homeowners the upfront capital for the systems.

At its peak, the company generated over $1b per year. That, however, is in the rear view; the company largely freed itself of cash, filing with ~$5mm. Per CEO Brett Bouchy, the kick to the nuts was …

“… (a) the impact of federal legislation commonly referred to as the ‘One Big Beautiful Bill’ on the back-end financing markets that underpin residential solar installation economics; (b) the further compounding effect of presidential executive orders directed at eliminating subsidies for solar and renewable energy, which have created acute market uncertainty; and (c) a pattern of material payment breaches by certain of the Company’s finance company partners whose repeated failures to remit timely dealer payments to the Company cascaded into missed and delayed payments to the Company’s IAD network, causing a contraction in the number of active dealers, a sharp decline in new project originations, and an acute deterioration in the Company’s cash position.”

… which is par for the course (🥱) in solar cases.

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On April 21, 2026, Kansas City-based John Fitzgibbon Memorial Hospital Inc. (the “Hospital”) and Fitzgibbon Health Services (“FHS,” and together with the Hospital, the “debtors”) filed chapter 11 bankruptcy cases in the Western District of Missouri (Judge Norton).

The Hospital owns and operates a rural healthcare system (centered around its 60-bed acute care facility, “ACF”) that provides a slate of services you’d expect from a hospital. For its part, FHS operates a Hospital-owned 99-bed Medicare/Medicaid-certified skilled nursing and memory care facility called The Living Center (“TLC”). The Hospital’s campus also includes other facilities blah blah blah and there are two off-site rural health care clinics in some bumf*ck parts of Missouri that literally nobody has ever heard of outside of those bumf*ck parts of Missouri.

Which is not to say that they don’t do, like, medical stuff. They do. And it’s important medical stuff in a rural part of the country often overlooked by the coastal elites who generally don’t give a flying f*ck about that part of the country.

Well, folks, we’ve got news for you: they aren’t about to start caring now either. And so by G-d let’s fast forward because we’re bored AF with these healthcare turds cases.

Well …

… wait… wait … a split second. Maybe this, per first day declarant and CEO Angela Littrell, will get the coastal elites’ attention:

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Have you ever heard of a company called Medallia? We sure as sh*t hadn’t.

Note the past tense.

A few months ago this turd started popping up on our radar, just like it had for many others. Indeed, it seemed like the poster child of mismatched marks across the private credit universe. Note the dates on these 👇:

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“What are people doing out there?” one member of our team asked this morning. “Talking to headhunters,” Johnny cheekily responded, calling back to his own links:

He’s…

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We’re not going to argue with any of Dr. Slok’s conclusions in and of themselves but we’re not sure the relative decline in LME’s is indicative of … well … anything, really. The RX industry has been rabidly picking off companies, both private and public, with near-term maturities for several years now. While there are plenty of active LMEs in process, the volume has likely come down due to mere supply constraints more than anything else. Said another way, the maturity wall has already been pushed considerably and so there simply aren’t as many companies left to LME … for now.

Clearly, though, nobody thinks LME is going anywhere and it will remain a critical tool in the toolbox. How do we know? Hmmmm, you have to look reeeeeaaaaaal hard but the signals are there:

Meanwhile, Kirkland & Ellis LLP simply continues to put regular way chapter 11 bankruptcy filings on the board, so let’s dig in 👇.

💥New Chapter 11 Bankruptcy Filing - QVC Group Inc.💥

The demise of the QVC and HSN brands has been greatly exaggerated!

At least that’s according to Kirkland & Ellis LLP’s Joshua Sussberg, serving as lead counsel to Pennsylvania-based QVC Group Inc. (a/k/a Qurate Retail Inc.) and 73 subsidiaries including QVC Inc. and Cornerstone Brands Inc. (“Cornerstone,” collectively with QVC Inc. and the other subsidiaries, the “company”),* which, on April 16, 2026, filed chapter 11 bankruptcy cases in the Southern District of Texas (Judge Perez) with a plan — small “p” for path (forward) and large “P” for plan of reorganization — to deleverage the company’s balance sheet by several billions of dollars.

That’s right: billions of dollars.

QVC and HSN, as brands, may not be dead — CFO Bill Wafford,** in a declaration that delays the usual preface of background/qualifications and dives right into the state of things, was decidedly clear about that.*** But linear television’s ability to drive enough revenue to service the company’s billions of debt certainly is. That makes this a story of both disruption and evolution. But not death. At least not yet.

Indeed, the company’s evolution is already under way. Over to you Mr. Wafford:

“…QVC Group launched the first ever 24/7 livestream programming on TikTok in April 2025, quickly becoming a top seller on TikTok Shop in the United States, acquiring over 1 million new customers on TikTok in 2025 alone. This business is expected to double in 2026.”

Contemporaneously,

“QVC Group streaming services have approximately 1.3 million monthly average users, and television broadcast continues to have an engaged customer base, with approximately 91% of sales shipped worldwide coming from repeat customers.”

Which is to say that the company believes it is well-positioned to capitalize on new technologies; it has “…decades of experience with content creation and production expertise; deep vendor relationships; a mature distribution network; and brand recognition….” Already, the company has omni-channel infrastructure and reaches 88mm homes via five television channels, and reaches millions of other people through (i) the QVC.com and HSN.com web sites, (ii) virtual multichannel video programming distributors (including Hulu + Live TV, DirecTV Stream and YouTube TV), (iii) streaming video, and (iv) other digital platforms like Facebook Live, Apple TV, and Amazon Fire.

It also has a complex corporate structure**** …

… and a massive capital structure👇:

And servicing that cap stack is, the company says, preventing the company from leaning into its evolution and investing in its survival the future.*****

So cue more the liability management? Not so fast. It seems we’re seeing the new Kirkland & Ellis LLP playbook — $80mm “guaranteed” for three years notwithstanding — geared towards advising clients to just do what needs to be done and stop f*cking around. Per Mr. Wafford, “QVC Group’s debt burden—premised on now-declining cash flows from linear TV—has impaired its ability to invest at the level necessary to fully transition to the new digital and live social shopping age. And while various parties were interested in several different “liability management” exercises, QVC Group recognized—in the face of linear TV decline—the time had come to address its U.S. balance sheet.” Man that’s dripping with subtext, 🔥.****** So after eight months of planning and negotiating, the company is ready to put itself through the in-court part of all of this — and emerge in less than two months! Ambitious!!

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The demise of the QVC and HSN brands has been greatly exaggerated!

At least that’s according to Kirkland & Ellis LLP’s Joshua Sussberg, serving as lead counsel to Pennsylvania-based QVC Group Inc. (a/k/a Qurate Retail Inc.) and 73 subsidiaries including QVC Inc. and Cornerstone Brands Inc. (“Cornerstone,” collectively with QVC Inc. and the other subsidia…

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On March 22, 2026, Boston-based Finch Therapeutics Group, Inc. ($FNCHQ) and three affiliates (collectively, the “debtors”) filed dull, dull, dull chapter 11 sale cases in the District of Delaware (Judge Silverstein). Founded in ‘14, the debtors are yet another failed biotech venture …

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This is bananas:

“Kirkland & Ellis is set to poach the head of arch-rival Wachtell Lipton’s restructuring practice in an effort to rebuild its own distressed debt group after the departure of a star par…

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In January ‘26, Saks Global Enterprises, LLC (“SGE”) and 112 affiliates (collectively, with SGE, the “debtors” and together with their non-debtor affiliates, the “company”) filed freefall chapter 11 cases in the Southern District of Texas (Judge Perez). We covered the hotly-contested first-day hearing featuring objecting-party Amazon…

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