On June 4, 2026, Trumbull, CT-based (i) SIMAD Holdings Ltd. (“SIMAD holdings”) and sixty affiliates (collectively, together with SIMAD holdings, the “SIMAD debtors”) and (ii) DAMIS Holdings LLC and eighty-nine affiliates (collectively, the “DAMIS debtors” and together with the SIMAD debtors, the “debtors”) filed separately-administered, equally-urgent chapter 11 bankruptcy cases in the District of New Jersey (Judge Gravelle for each).

The SIMAD debtors own and operator 30 summer camps around the US — eight day, 22 sleepaway — for ~20.5k kiddos per year. Each camp is separately branded and staffed and has a focus, be it sports, academics, art, tech, religion, etc. — the SIMAD debtors undoubtedly offer a camp your dude or dudette would dig, getting them out of the sweltering NYC heat (and your hair) for a couple of glorious weeks.

Meanwhile, the DAMIS debtors are in the business of multifamily properties, offices, hotels, and retail space.* Which is pretty far flung from summer campin’ but 🤷‍♀️.

So… why are we talking about the filings together?

For one, Cole Schotz PC (“Cole Schotz”) (Michael Sirota, Warren Usatine, David Bass, Felice Yudkin, Daniel Harris) filed each set. Which didn’t last. Within a week — presumably because of future conflict issues — it headed for the DAMIS debtors’ door and Faegre Drinker Biddle & Reath LLP (Michael Pompeo, Patrick Jackson, Ian Bambrick) stepped in as replacement counsel.

For two, they’re all affiliated. Both sets are 50/50 owned by brothers David and Michael Shabsels, who have also filed their own chapter 11 cases with the same court … and appear to have committed some light corporate theft.

No, it’s not express in SIMAD CRO Assaf Ravid’s first-day declaration or DAMIS CRO Perry Mandarino’s first … sh*t … he still hasn’t filed one.** Rather, Mr. Ravid provides key context clues:

“Prior to the Petition Date, SIMAD Holdings Ltd., a BVI Holding Company and the ultimate parent company of each of the SIMAD Debtors, raised bonds on the Tel Aviv Stock Exchange [‘TASE’] in December 2025 …

… The principal payments of the Debentures (Series A) were to be made annually on November 30 each year from 2026 through 2030. The interest of the Debentures (Series A) was to be paid semi-annually on May 31 and November 30 from 2026 through 2030. The SIMAD Debtors defaulted in making the first interest payment of the Debentures (Series A) due on May 31, 2026 …”

“Were to be made.” “Was to be paid.” You picking up on a theme? LOL, not a dime was ever paid, so Mr. Ravid goes on:

“As of the date hereof, the principal amount of the outstanding Debentures (Series A) is approximately $214 million using the exchange rate as of the Petition Date.”

Holly hell, that’s a nice chunk of change. The damage, however, wasn’t limited to bond debt. Two paragraphs later, Mr. Ravid tosses this in:

“In the weeks and months leading up to the Petition Date, the SIMAD Debtors became obligated on short-term loans (the ‘MCA Loans’) provided by approximately forty-two (42) merchant cash advance and short-term funders and lenders (the ‘MCA Lenders’). As of the Petition Date, the MCA Loans total in excess of $100 million in the aggregate.”

~$314mm incurred in the last seven months.***

In late May ‘26, Simad’s board disclosed to the Tel Aviv Stock Exchange that ~$34mm had disappeared into private businesses owned by the Shabsels. Obviously without authority. Apparently as the cash hit the debtors’ bank accounts, the bros be like:

So claw backs are def on the table. Probably more.

Without the cash, the SIMAD debtors couldn’t service the bonds’ May 31 interest payment, so the board did the natural thing and ordered the bros to repay it.

They agreed!

LOL, for a day!

Then they came back, said they didn’t have it and didn’t know when they would, making all campers be like …

… and giving us the chapter 11 petitions.

Per Globes, though, it seems the bros didn’t limit themselves to a one-time pilfering:

“It is not inconceivable that this is the tip of the iceberg. At the beginning of this week, Simad Holdings reported that besides the withdrawal of cash from the company the owners took on personal financial commitments ‘in significant amounts, secured on the assets and cash flows of the company’s subsidiaries.’”

That’ll take a bit, though. The debtors be wallowing in the process, and the cases have, understandably, been moving slow as sh*t as lenders/mortgage holders — and potential buyers — get up to speed. Sure, there’s been some progress — e.g., the eventually-consensual use of cash collateral and the SIMAD debtors received a $500k loan to keep one of their camps operating — but not a lot.****

Really, keeping the camps running has been the focus to date. Everyone wants it. By far most of all, Kirkland & Ellis LLP’s Joshua Sussberg, who seems to have forgotten he’s merely repping an ad hoc group of “… 20 of the camp directors/owners whose camps are part of these chapter 11 cases [] and Excelsior Camps, LLC” and showed up at a June 17 hearing with an entire first-day schtick and, 🙄, a deck(!) ready to rip.

And rip through that deck he did. For about fifteen minutes straight, where he enlightened us:

“… my life has been a function of what I learned at camp, and I put my camp resume together. It goes back a long time. I went to Camp Samoset. I started in 1988. I finished as a camper in ‘93. I was a counselor at Camp Samoset all the way through college, 1998.

I even had an opportunity to appear on a reality TV show on the Disney Channel, Bug Juice Season 3, where I was the director of a summer camp in New Mexico. And then my kids go to Camp Wayne, and I’ll explain why in a minute, and I’ve weaseled my way into coming up there each summer for four nights to referee color war.

And I say all that because, while I am not an expert in the camping business and the operations like many of my clients are, I do know how important it is and the traditions and the value, and you’ll see in that … color war picture when I had the privilege of being a general and the colors are maroon and gray and I wore a gray suit and the closest thing to a maroon tie that I could wear today, even if it doesn’t match…

Here are some pictures from my camping days with a lot of friends who still remain friends to this day. Even in those little pictures, notwithstanding that my cousin was in my bunk, I still speak to a lot of these people, and the relationships that you forge at camp last an absolute lifetime. Here’s a reference to the Bug Juice Season 3. I’m sure people can find a video out there online.”

We’re cutting him off there and sparing you the visuals, but you get the gist. Judge Gravelle said she found the spiel “… informational, ”😂. Inside, however, she was no doubt thinking this:

And here are live shots of the rest of the participants at the hearing, other than the fine folks at Cole Schotz:

Why is Cole Schotz excluded from the eyeroll extravaganza? Because they were all expending every ounce of energy to keep their eyes in place thinking, “hold it together, hold it together, we depend on this schtick-ster for business”:

The Zoom video itself may have even eyerolled … we’re not sure.

Anyway, those Bug Juice videos? Not even a challenge: Johnny found them in ~20 seconds.

Nice 💪, Josh.

Anyway, full case financing and bidding procedures will presumably make their way onto both dockets in due course — or mortgage lenders on the DAMIS side will move to foreclose. But we hope not. Notwithstanding Mr. Sussberg’s verbosity, we couldn’t agree with him more: the camps and the kids are the more important side of the endeavor.

On which, TBD. There aren’t any hearings on schedule at the moment.**** We’ll circle back to this one when it gets more interesting (aka somebody sue the Shabsels already).

The SIMAD debtors are represented by the aforementioned Cole Schotz (Michael Sirota, Warren Usatine, David Bass, Felice Yudkin, Daniel Harris) as legal counsel, FTI Consulting, Inc. ($FCN) as financial advisor, and their CRO and assistant CRO are Assaf Ravid and Daniel Sasson. The DAMIS debtors are represented by Faegre Drinker Biddle & Reath LLP (Michael Pompeo, Patrick Jackson, Ian Bambrick) as legal counsel and B. Riley Securities Inc. (Perry Mandarino) as financial advisor, investment banker, and CRO. Bernard Katz and Jill Frizzley are the DAMIS debtors’ independent managers. Mishmeret Trust Company Ltd. as bond trustee is represented by Chapman & Cutler LLP (Michael Friedman, Jorge Eric Coronel Hamilton, Stephen Richard Tetro II) and Riker Danzig LLP (Joseph Schwartz, Daniel Bloom) as legal counsel. The ad hoc camp committee is represented by Kirkland & Ellis LLP (Joshua Sussberg, Joshua Feltman, Joshua Greenblatt, Jeffrey Goldfine, Ciara Foster, Ravi Shankar, Robert Jacobson) and Duane Morris LLP (Morris Bauer, Drew McGehrin) as legal counsel. Prepetition secured lender First Financial Bank is represented by Blank Rome LLP (Regina Stango Kelbon, Matthew Kaslow) and Vorys, Sater, Seymour and Pease LLP (Kari Balog Coniglio, Carrie Mae Brosius) as legal counsel, while Mitchell Black and Camping Management Corporation is represented by another Blank Rome LLP team (Michael Schaedle, Josef Mintz, Lawrence Thomas III) as legal counsel. TriState Capital Bank is represented by Cullen and Dykman LLP (Kyriaki Christodoulou) as legal counsel. Bank of New Hampshire is represented by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (Kaitlin Walsh, Donald Clarke, Megan Preusker) as legal counsel. Metropolitan Partners Group and related funds are represented by Pachulski Stang Ziehl & Jones LLP (Bradford Sandler, Robert Feinstein, Maxim Litvak), Wilentz Goldman & Spitzer PA (David Stein, Andrew Broome) and Polsinelli PC (David Karp, Brett Goodman) as legal counsel.

*It’s not a perfectly clean cut as between the debtors. For some reason, the SIMAD debtors own an office in NOLA.

**Which makes the debt stack less clear at those boxes. The petition lists $500mm-$1b in liabilities, and through resolved objections, motions to prohibit the use of cash collateral, and reservations of rights, mortgage lenders holding >$100mm in aggregate amounts have placed their gripes on the docket.

***To be clear, not all of the debt is sus. Certain of the SIMAD debtors owe ~$29mm to the Bank of New Hampshire, which they incurred in December ‘21 and July ‘23, and the SIMAD half of the sh*tshow has ~$2.7mm in general unsecured claims.

****Global also reports that Klirmark Capital is offering a $220mm DIP ($80 new money, the rest roll-up) and the hearing was supposedly going forward on Monday (June 22). As of writing, there’s nothing on the docket about any of that.

🔥On Shaky Terra: Terra Property Trust, Inc. ($TPTA)🔥

Terra Property Trust, Inc. ($TPTA)(“Terra” or the “company”) is an NYC-based REIT that invests primarily in commercial real estate; it lends into the middle market with $10-50mm checks up and down its target’s cap stacks. As of March 31, 2026, the company’s loan portfolio consisted of nine loans with a total carrying value of $133mm, split 49% into first mortgage loans, 23% into mezz, and 29% into pref equity. The real estate underpinning the loan portfolio is a mix of infill land (37%), office (33%), mixed use (20%), industrial (6%) and multifamily (5%) properties across California, Georgia, New Jersey, Arizona, New York and Massachusetts.

Terra’s equity portfolio, historically a much smaller proportion of its holdings, is now as large as its loan portfolio. As of March 31, 2026, it consisted of one industrial property in Texas and a multifamily property in California.

Before we get into what’s going on with the portfolio currently, let’s take a step back and discuss how we got here.

Bruce Batkin and Simon Mildé founded Terra Capital Partners (“TCP”), the company’s sponsor, back in ’01. Under its founders’ leadership, TCP could boast:

“In the lead up to the global financial crisis in 2007, believing that the risks associated with commercial real estate markets had grown out of proportion to the potential returns from such markets, Terra Capital Partners sold 100% of its investment management interests prior to the global financial crisis.”

The firm re-entered the lending market in July ’09, consolidated its existing funds into a REIT in ’16, and through June ’19, had not lost money on a single loan.

There was a changing of the guard in ’18, when Axar Capital Management L.P. (“Axar”) purchased TCP. Axar installed its real estate team at TCP, with Vikram Uppal taking the helm as CEO, a position he still holds. Mr. Batkin remained on the board for several years following the Axar sale, and his deputies, CFO Gregory Pinkus and Chief Origination Officer Daniel Cooperman have stayed in their roles to this day.

In ’21, Vikram Uppal via his own new firm, Mavik Capital Management, LP (“Mavik”), bought out Axar and became the sole owner of TCP. Blackstone Group Inc. ($BX) also took a 20% passive minority stake in Mavik via its secondaries group. Reporting from Bloomberg at that time noted that TCP had deployed more than $2.5b of capital since ’09 and generated a greater than 21% realized gross IRR.

But this is PETITION, so you already know that that praiseworthy performance did not hold up.

Terra’s revenues have steadily fallen since ’23, and earnings have been consistently negative. Terra’s portfolio has been shrinking over that period as well.

Terra does not disclose much more than high level stats about its portfolio and provides nowhere near enough detail to track the performance of individual investments.

We’re definitely not the first to complain about this lack of transparency either. Noteholder Arena Investors LP was alarmed by the explosion of non-performing loans in ’23 and ’24 and frustrated with Terra’s brush-offs:

The information that Terra does provide shows that the proportion of the portfolio that is non-performing skyrocketed again in ’25.

Terra assigns a risk rating to the “performing” loans in the portfolio from 1 to 5, and somehow never anticipates less than a full recovery of principal.

Even by its own marks, however, the value of the loan portfolio has been falling steadily and its allowance for credit losses has shot up.

There is back-leverage too, of course. Terra ended the year with $180mm of debt outstanding, including $38mm of 7% senior unsecured notes due March ’26 (the “March ’26 unsecureds”) and $80mm of 6% senior notes due June ’26 (the “June ’26 unsecureds”).

In February ’26, Terra launched an offer to exchange any and all of the March ’26 unsecureds and the June ’26 unsecureds for new 7% Senior Secured Notes due ’29 at 100c on the dollar. Only $2mm of March ’26 unsecureds and $24mm of the June ’26 unsecureds took the company up on its offer. The company then paid off the remaining $36mm of March ’26 notes in full at maturity.

This left the company with only $5mm of unrestricted cash on hand as of March 31, 2026 and $56mm of bonds coming due in June. The full capital stack as of March was the following.

On May 8, 2026, Terra launched a second exchange offer, proposing to exchange any and all of the outstanding June ’26 unsecureds for a combination of new 8% senior secured notes due December ’28 (later moved forward to July ’27) and cash, split 80/20 between the new notes and cash for a total of 100c on dollar.

On June 10, 2026, the Company improved its offer, raising the proposed interest rate by 300bps (to 11% for those who cannot add) and moving the maturity date up six months. It also extended the deadline of this new and improved offer to June 25, 2026.

On Monday, June 22, 2026, Terra amended the terms of its offer again, increasing the cash portion of its offer from 20% to 25%. The updated offer will now expire on June 26, 2026 (Friday!).

In its announcement, Terra noted that some $36mm (66%) of existing noteholders had provided non-binding letters of intent regarding participation in the exchange. Without broader participation, the company expects to face $52mm of cash outflows over the next two quarters vs. only $47mm of inflows. Full participation in the exchange would bring that projected outflow down to $38mm. Terra also disclosed that it has lined up, but not officially secured, a $25mm 18-month 11% term loan from an undisclosed lender to cover the cash portion of the exchange or repay any existing notes.

Either way, something will have to give before the month is out. The June ’26 unsecureds mature on June 30, just four days after the expiration of the latest exchange offer.

📚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📤

Alexander Tate (Associate) has joined SierraConstellation Partners from Anderson Growth Partners.

Eva Marquis (Senior Associate) has joined SierraConstellation Partners from Atlantic Union Bank.

James Sprayregen (Partner) is reportedly joining Paul Weiss from Hilco.

Kyle Herman (Principal and Co-Founder) rejoined his old firm Exigent Partners LLC from Hilco Corporate Finance.

Michael Schneidereit (Partner) joined Gibson Dunn & Crutcher LLP from Jones Day.

Mitch Ryan (Senior Director - Business Development) joined Tiger Capital Group LLC.

🍾Congratulations to…🍾

Derek Pitts for joining Ensis Partners as a Senior Advisor.

Lowenstein Sandler LLP (Jeffrey Cohen, Gianfranco Finizio, Christopher Ward, Michael DiPietro) for securing the legal mandate on behalf of the official committee of unsecured creditors in the SiFi Networks America, LLC chapter 11 bankruptcy cases.

Lowenstein Sandler LLP (Jeffrey Cohen, Gianfranco Finizio, Eric Seltzer, Shanti Katona, Michael DiPietro) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Simply Interior Homes, LLC chapter 11 bankruptcy cases.

Province LLC (Michael Atkinson) for securing the financial advisory mandate on behalf of the official committee of unsecured creditors in the CHS FL, LLC chapter 11 bankruptcy cases.

Province LLC (Paul Navid) for securing the financial advisory mandate on behalf of the official committee of unsecured creditors in the FreshRealm Inc. chapter 11 bankruptcy cases.

Womble Bond Dickinson LLP (Wojciech Jung, Edward Schnitzer, Todd Atkinson) for securing the legal mandate on behalf of the official committee of unsecured creditors in the GoldenPeaks Poland Holding Limited chapter 11 bankruptcy cases.

It’s Father’s Day, (many of) you should be out with your kids, not reading about a handful of sh*tty RX situations (and we really do mean sh*tty). Well, if you don’t have kids or you hate your kids or they hate you or whatever may be going on with you, we’re here for your reading enjoyment. Johnny even threw in a f…

Read more

On June 16, 2026, Dallas-based Hallmark Financial Services, Inc. (the “debtor”) filed a prepackaged chapter 11 bankruptcy case in the Northern District of Texas (Judge Larson). The debtor is a property and casualty insurance holdco whose non-debtor operating subs are insurance carriers and managing agents in 48 states … which go ahead and let it out.

Read more

On June 10, 2026, Danskammer Energy, LLC (“Danskammer Energy”) and three holdco affiliates (collectively, together with Danskammer Energy, the “debtors”) filed chapter 11 bankruptcy cases in the District of Delaware (Judge Owens). The debtors own a 532 MW natural gas generating facility in Newburgh, NY.

If this sounds vaguely familiar, congrats. You’re old. The same facility was previously owned by Dynegy Inc. (“Dynegy”), which filed its own chapter 11 case back in November ‘11. Helios Power Capital, LLC bought it from Dynegy during those cases, then partnered with Mercuria Investments US, Inc. (“MEI”) to repair damage caused to the facility by Hurricane Sandy. In June ‘17, MEI became the sole owner, and ~13.5 years later, we’re back where we started. Per Thomas Gray, president and CFO of Danskammer Energy:

“The Debtors intend to pursue a [363] Sale Process in Chapter 11 in order to avoid deterioration of their business and obtain maximum value for their assets for the benefit of all of their stakeholders and creditors.”

Holy hell, time to dig this bad boy back up:

Seriously though, Johnny been looking for an artist to tattoo that sh*t on him.

Anyway, now you know the plan, but why are the debtors stepping into Judge Owens’ courtroom? Government.

Specifically, New York’s attempt to prevent climate change, but also ordinary bureaucratic BS.

Read more

Y’all, if you’ve ever wanted to own a mining co. in the Mojave Desert, now is the time.

Running out of coin, on June 15, 2026, the Overland Park, KS-HQ’d Searles Valley Minerals Inc. (“SVM”) and two of its subs (collectively, the “debtors”) filed chapter 11 sale cases — without a stalking horse — in the District of Delaware (Judge Shannon).

In the California desert, the company produces borates, sulfates, salt, and historically soda ash at Searles Lake, and if you hop into a time machine, the earning potential was respectable. In FY17, FY18, and FY19,* the debtors posted the following EBITDA:

But we mentioned California already, right? There’s a particular natural phenomena associated with the state:

That happened to the debtors. On July 4 and July 5, 2019, two earthquakes royally f*cked Independence Day plans and caused, per Ankura Consulting Group, LLC’s Adrian Frankum, “… significant above-ground and subsurface damage to SVM’s operations and the lake.” Earnings were never the same.** Um … which is to say they no longer exist:

Of course, the debtors chime in with other woes. There’s a toot of the “China” horn for a global oversupply of soda ash — oh no, prices are too low!!! — which precipitated a shutdown of those ops in February ‘26 and the related culling of ~240 employees (~46% of the workforce). However, they’re still in the biz; now they just source the soda ash (from China??) and sell it on to their end-customers.

Read more

Yo, pop some molly and get ready for an epic dance party.

On June 9, 2026, Tennessee-based Systematic Audio LLC (the “debtor”) filed a chapter 11 bankruptcy case in the Western District of North Carolina (Judge Beyer) — something we became aware of because it appeared on claims agent Epiq’s website shortly after filing:

With a logo like that, we — really Johnny — were intrigued. We clicked through to the website and saw this:

We literally have no clue what any of that means but it sounded like a good a$$ time, so Johnny was all set to sign up!

Except abort, Johnny, abort — this is one bad motherf*cking trip! That 👆 doesn’t even appear to be the right company, the right logo or the right website!! Someone at Epiq must be tripping balls!!!

Indeed, six days after the filing, the docket started filling out. What did we learn? Well aside from that 👆, we learned that this situation is an absolute dumpster fire.

Let’s start with the debtor’s first day declarant, Ryan Strubeck of Ankura Consulting Group LLC (“Ankura”), who … lol … got retained on June 9, 2026.* You know … like … the day of the filing, lol. He basically couldn’t declare sheeeeeeeyit. The declaration is a whopping seven pages long and does no more than outline the debtor’s capital structure. Which looks like this:

• $6.3mm Adjusted Daily SOFR+2.75% August 6, 2030 Term Loan (Key Bank NA);

• $12.7mm Adjusted Daily SOFR+2.5% August 5, 2028 LOC (Key Bank NA); and

• $6mm 14-15% fixed subordinated notes (Medallion Capital).

A staggering $25mm, 🙄, not counting $2.5mm in general unsecured obligations and a potential judgment claim of $21.4mm (more on this 👇).

Against $55k of cash on hand.

LOL.

Seriously, anyone got that molly — these cases suck.

Of course we were dying to learn more (narrator: actually, we weren’t). Enter not another declaration; rather, debtor’s counsel — some firm from North Carolina — filed a “statement in support of the chapter 11 case” to set forth more detail. You don’t see that everyday but sh*t be different down south, we ‘spose. What did we learn?

📍The Company. It is not, despite what was and, as of the date of this writing, continues to be reflected on Epiq’s website, some kind of psychedelic trance DJ duo. Instead it is “…a leading designer, manufacturer, and distributor of high performance audio systems for automobiles, including subwoofers, amplifiers, and speakers” that operates under the “Sundown Audio” brand.** It has over 98k followers on Insta.

📍The Filing. The biz is allegedly fine: the company’s got positive EBITDA and had been growing.

📍But, Litigation. The debtor lost a jury trial relating to claims of tortious interference, fraud, and unfair and deceptive trade practices in mid-May. “On June 4, 2026, the Soleymani Litigation Plaintiffs submitted a proposed judgment to the state court asserting damages against the Debtor in the amount of approximately $21.5 million, exclusive of interest and fees.” It turns out that in North Carolina, where the suit was pending and where the debtor owns a 180k square foot commercial property, entry of a judgment triggers an automatic springing lien on real estate!

📍Lender Action Too. After the jury returned the verdict, both the debtor’s lenders declared various defaults (on June 3rd in the case of Key Bank and June 9th in the case of Medallion Capital).

Cue the bankruptcy. Per the “statement”:

“Facing no access to its purportedly overdrawn line of credit, default notices from two separate secured lenders holding asserted claims of approximately $25 million, and imminent enforcement actions from an unsecured litigation claimant holding asserted claims of not less than approximately $21.5 million—i.e., nearly double the quantum of liabilities the Debtor faced immediately before the jury verdicts—the Debtor made the difficult choice to commence this chapter 11 case and use the “breathing space” afforded thereby to stabilize the business, ensure sufficient access to liquidity to fund mission critical disbursements like payroll, customs, and shippers, and ultimately pursue one or more value-maximizing restructuring transactions inside chapter 11.”

Ok, sure.

That breathing space thing only works if there’s money and $55k sure as sh*t ain’t going to cut it, notwithstanding issues as to whose cash that is and who holds it. Luckily on June 15, 2026 — count it, six days after filing — the debtor filed a cash collateral motion. Clearly the debtor didn’t have consensual use of cash collateral as of the petition date. Now, however, it has consent through July 11, 2026.

The debtor has also filed an adversary proceeding against the Soleymani Litigation Plaintiffs to stay the state court action.

The debtor is represented by DLA Piper LLP (Benjamin Winger, Stephane Cohen, Eric Goodheart, Erik Stier, Joseph Roselius) and some North Carolina law firm. The debtor’s independent manager is Sandeep Gupta. The aforementioned Ankura parachuted in here at the eleventh hour as financial advisor. KeyBank NA is represented by Verrill Dana LLP (Roger Clement Jr., Lindsay Milne) and Stevens Martin Vaughn & Tadych PLLC (Kathleen O’Malley) as legal counsel. The Soleymani Litigation Plaintiffs are represented by James McElroy & Diehl PA (Richard Fennell, Fred Monroe, Haley Lohr). As of the time of this writing nobody has made an notice of appearance on behalf of Medallion Capital.

*Notably Epiq’s retention letter is dated June 10, 2026 so, in fairness to them, there was plenty of room for error here.

**Note to Epiq: this link has the actual company website and logo. It also happens to be the one cited in the debtor’s petition so we’re not entirely sure how y’all f*cked this up. We’ll just assume someone was rolling.

Company Professionals:

• Legal: DLA Piper LLP (Benjamin Winger, Stephane Cohen, Eric Goodheart, Erik Stier, Joseph Roselius, Jacob Clubb, Jeffrey Torosian) and Moore & Van Allen PLLC (Zachary Smith, Hillary Crabtree, Benjamin Shook, James Langdon, Matthew Taylor)

• Independent Manager: Sandeep Gupta

• Financial Advisor: Ankura Consulting LLC (Ryan Strubeck)

• Claims Agent: Epiq (Click here for free docket access)

Other Parties in Interest:

• Pre-petition senior secured lender: KeyBank National Association

  • Legal: Verrill Dana LLP (Roger Clement Jr., Lindsay Milne) and Stevens Martin Vaughn & Tadych, PLLC (Kathleen O’Malley)

• Pre-petition second lien lender: Medallion Capital Inc.

  • Legal: Robinson Bradshaw & Hinson PA (David Schilli)

• Sponsor: XS Investment Intermediate LLC

• David Soleymani, Blue Building, LLC, Krubim 26 International, Inc. d/b/a WoofersEtc, Joshua Soleymani and Daniel Soleymani

  • Legal: James McElroy & Diehl PA (Richard Fennell, Fred Monroe, Haley Lohr)

Arkansas-based America’s Car-Mart Inc. ($CRMT)(“Car-Mart” or the “company”) is a seller and financier of used cars — and by “used” we mean cars that are 5-12 years old with a LOT of miles, typically ranging from 70k-140k — to subprime borrowers in small towns and cities across the South and Midwest.

Car-Mart runs a “buy here, pay here” model; it provides financing to nearly all of its deeply subprime car buyers with little money down but steep interest rates and stringent repayment schedules.

In FY25 (ended April ’25), the Company’s average sales price for these beaters was a whopping $19k. Borrowers put an average of 5.5% down and paid a 17.6% weighted average interest rate over a 4-year term. The company seeks to align repayment schedules with the borrowers’ pay periods. As such, 78% of payments are due on a weekly or biweekly basis. Furthermore, when the company says “buy here, pay here,” it means it quite literally –– 46% of the borrowers make their payments in person.

It goes without saying that these borrowers are not particularly well off and, lately, not doing particularly well, and the company often must modify loans when borrowers hit financial bumps in the road.

Approximately half of the company’s loans are modified at some point over the life of the loan, usually to extend the term.

Car-Mart has been around since ’81 and went public in ’92, but the company only recently got into the securitization game. Car-Mart once touted its lack of reliance on securitization markets as a key differentiator that enabled it to come through the ’08 financial crisis relatively unscathed. However, it launched its first securitization, a $400mm offering, in ’22. Car-Mart subsequently paid off that first offering and has issued $1.8b more across eight securitizations, six of which remain outstanding.

In case your spidey senses are tingling, yes, it was the boom in used car markets during ’20 and ’21 that enticed the company to change course and tap credit markets to fuel growth. During the pandemic, used car prices skyrocketed as supply chain disruptions constrained the supply of new cars. At the same time, low rates and economic stimulus packages shored up the U.S. consumers’ finances. Car-Mart’s revenue exploded, growing 23% YOY in ’21 and 32% in ’22, driven primarily by higher average sales prices and secondarily by increased volume. Car-Mart’s (newly expanded) customer base was stronger than ever. The company’s net charge-offs and provisions for credit losses hit historic lows. Check this out ⬇️:

Alas, the combination of heady growth and improving credit profiles wouldn’t last.

Prices have remained high (avg. sales price of $19k in ’25 vs. $11k in ’19), but units sold has fallen and unit gross margins have gotten squeezed. Total revenue has stayed relatively flat as higher interest income, due to rising rates and higher car prices/loan sizes, have offset declining sales volumes. Borrowers’ ability to repay naturally deteriorated as cars, and everything else, became so much more expensive. Provisions for credit losses have soared beyond even their pre-pandemic levels.

With both the frequency and severity of losses mounting, the company overhauled its loan origination process. The new system went into effect in 4Q24 (ended April ’24), but it’s unclear whether it has actually improved underwriting. Provisions for credit losses and net charge-offs initially declined in ’25, but have risen again in the first 9 months of FY26.

Car-Mart’s most recent 10-K — published late in July ’25 due to deficiencies in controls and omissions in disclosures related to loan modifications — was still touting strong capitalization. The company was still tapping debt markets as late as last year.

It issued a 5-year $300mm senior secured term loan at S+750 plus warrants to Silver Point Finance LLC in October ’25 in order to repay $163mm outstanding under its $350mm ABL revolver from BMO Harris Bank, N.A., and terminate the facility, which contained more restrictive covenants. Car-Mart also issued four new securitizations in ’25, leaving it with the following capital structure as of January ’26 ⬇️:

Business has continued to deteriorate in the months since Car-Mart’s last earnings release on March 12, 2026. In an April 7, 2026 8-K, the company disclosed that it would close 42 of its 136 dealership and fire associated staff because of its inability to secure needed financing, saying:

“The Company’s capital structure strategy has centered on replacing an inefficient asset-based lending facility with a term loan, establishing a non-recourse revolving warehouse credit facility, and continuing to access the asset-backed securitization markets. While the Company successfully executed a $300 million senior secured term loan in October 2025 and completed its ninth securitization transaction through its ACM Auto Trust platform in December 2025, alignment among all parties necessary to establish a warehouse facility has taken longer than anticipated. In the weeks following the Company’s third quarter fiscal year 2026 earnings announcement, it became increasingly apparent that the path to aligning the necessary parties to secure a warehouse facility is less certain and may require an extended timeline primarily due to broader market conditions and factors largely outside the Company’s control. Therefore, the Company is undertaking these closures to align the Company’s cost structure and ability to serve customer demand with its current capital constraints, while the Company continues to pursue the establishment of a warehouse facility.”

The liquidity crunch hasn’t abated, and the company continues to desperately seek rescue financing. On May 29, 2026, Car-Mart announced that it had retained Houlihan Lokey Capital, Inc. ($HLI) and added Adam Paul as an independent director (at $45k/month for a minimum of three months plus some time-based kickers) to lead a newly formed special committee to review strategic alternatives. On June 1, 2026, Car-Mart secured a forbearance until June 12, 2026 from Silver Point, for its failure to satisfy minimum liquidity and coverage covenants as well as reporting requirements. On June 3, 2026, the Board approved an employee retention program for several key officers. On June 5, 2026, the company revealed that it had also retained FTI Consulting Inc. ($FCN) as financial advisor. The filings didn’t indicate who is providing legal counsel to the company but Mayer Brown LLP has previously served as counsel to the company in connection with prior financing activity.

The action continued to action. On Wednesday, June 10, 2026, two days before Silver Point’s forbearance period expired, Bloomberg reported that HLI was seeking to raise the company at least $500mm to avoid a chapter 11 bankruptcy filing. Then, on June 12, 2026, the company filed another 8-K indicating that, on account of constructive negotiations, it had obtained another week of runway.

The stock is down 90% YTD.

We’re standing by to see if Car-Mart will be the next domino to fall in an auto industry already hit hard by widespread distress and scandals.

⚡Update 3: Saks Global Enterprises, LLC⚡

There’s not much to add here, so we’ll keep it super brief. We’ve written about the S.D. of Texas (Judge Perez) cases of Saks Global Enterprises, LLC (“SGE”) and its 112 affiliates (collectively, with SGE, the “debtors”) a few times. First in January ‘26, when the DIP cross-collateralized prepetition debt at a non-obligor via “roll-up” — which Johnny called and still believes was “… a public robbery” — but most recently in May …

… following the debtors’ filing of a chapter 11 plan that would effectuate the larceny and dish out ultra-luxury, creditor-sakking recoveries all around ….

Which was later tweaked on account of Axonic Coinvest II, LP (“Axonic”) going …

… and agreeing to a very determined 🍩 on its guarantee claims in exchange for mutual releases.

Understandable call, and in fairness, about the best that it could hope for.

Because the official committee of unsecured creditors had already sent a letter telling its constituency to vote in favor for, and snack on, the pile of 💩. So, nearly every class voted in favor of the plan:

Which didn’t make the confirmation decision particularly challenging for Judge Perez. After a 2.5-hour hearing on June 5, 2026 — largely addressing D&O indemnification issues, 🥱 — he threw his John Hancock on the confirmation order.

Enjoy the litigation trust interests, GUCs. We out and ain’t comin’ back until the 22.

📚Father’s Day + Resources📚

A few of you have asked us — okay, we’re lying, nobody has asked us but we don’t give a hot damn — for some Father’s Day recommendations so, after surveying the team, these are a few things we thought would make excellent Father’s Day gifts:

📍The Anker Nano 3-in-1 Portable Charger — great for travel.
📍Coravin Wine Preservation System — we imagine that, like us, a number of you like to take the edge off after a hard day or week of work and this allows us to pour a few glasses without having to open a bottle.
📍Ninja Creami Ice Cream Maker — skip the Beyond Meat protein products and make your own protein-infused ice creams like Johnny does.
📍Panasonic ARC5 Palm-sized Travel Shaver — total game changer for, say, a foreign golf boondoggle.
📍Bose QuietComfort Ultra Bluetooth Headphones — listen to your favorite RX podcasts.
📍Dave Portnoy: Cancel Me if You Can — all in for this beach read.
📍Rory: The Heartache and Triumph of Golf’s Most Human Superstar — for the golf bros among you.

And, of course, we have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption that the avid reader you love might find of interest. 💥You can find it here💥.

🎶New Chapter 11 Bankruptcy Filing - Systematic Audio LLC🎶

Yo, pop some molly and get ready for an epic dance party.

On June 9, 2026, Tennessee-based Systematic Audio LLC (the “debtor”) filed a chapter 11 bankruptcy case in the Western District of North Carolina (Judge Beyer) — something we learned of because it appeared on claims agent Epiq’s website shortly after filing:

With a logo like that, we — really Johnny — were intrigued. We clicked through to the website and saw this:

We literally have no clue what any of that means but it sounded like a good a$$ time, so Johnny was all set to sign up!

Except abort, Johnny, abort — this is one bad motherf*cking trip! That 👆 doesn’t even appear to be the right company, the right logo or the right website!! Someone at Epiq must be tripping balls!!!

Indeed, six days after the filing, the docket started filling out. What did we learn? Well aside from that 👆, we learned that this situation is an absolute dumpster fire.

Let’s start with the debtor’s first day declarant, Ryan Strubeck of Ankura Consulting Group LLC (“Ankura”), who … lol … got retained on June 9, 2026.* You know … like … the day of the filing, lol. He basically couldn’t declare sheeeeeeeyit. The declaration is a whopping seven pages long and does no more than outline the debtor’s capital structure. Which looks like this:

• $6.3mm Adjusted Daily SOFR+2.75% August 6, 2030 Term Loan (Key Bank NA);

• $12.7mm Adjusted Daily SOFR+2.5% August 5, 2028 LOC (Key Bank NA); and

• $6mm 14-15% fixed subordinated notes (Medallion Capital).

A staggering $25mm, 🙄, not counting $2.5mm in general unsecured obligations and a potential judgment claim of $21.4mm (more on this 👇).

Against $55k of cash on hand.

LOL.

Seriously, anyone got that molly? — these cases suck.

Of course we were dying to learn more (narrator: actually, we weren’t). Enter not another declaration; rather, debtor’s counsel — some firm from North Carolina — filed a “statement in support of the chapter 11 case” to set forth more detail. You don’t see that everyday but sh*t be different down south, we ‘spose. What did we learn?

📍The Company. It is not, despite what was and, as of the date of this writing, continues to be reflected on Epiq’s website, some kind of psychedelic trance DJ duo. Instead it is “…a leading designer, manufacturer, and distributor of high performance audio systems for automobiles, including subwoofers, amplifiers, and speakers” that operates under the “Sundown Audio” brand.** It has over 98k followers on Insta.

📍The Filing. The biz is allegedly fine: the company’s got positive EBITDA and had been growing.

📍But, Litigation. The debtor lost a jury trial relating to claims of tortious interference, fraud, and unfair and deceptive trade practices in mid-May. “On June 4, 2026, the Soleymani Litigation Plaintiffs submitted a proposed judgment to the state court asserting damages against the Debtor in the amount of approximately $21.5 million, exclusive of interest and fees.” It turns out that in North Carolina, where the suit was pending and where the debtor owns a 180k square foot commercial property, entry of a judgment triggers an automatic springing lien on real estate!

📍Lender Action Too. After the jury returned the verdict, both the debtor’s lenders declared various defaults (on June 3rd in the case of Key Bank and June 9th in the case of Medallion Capital).

Cue the bankruptcy. Per the “statement”:

“Facing no access to its purportedly overdrawn line of credit, default notices from two separate secured lenders holding asserted claims of approximately $25 million, and imminent enforcement actions from an unsecured litigation claimant holding asserted claims of not less than approximately $21.5 million—i.e., nearly double the quantum of liabilities the Debtor faced immediately before the jury verdicts—the Debtor made the difficult choice to commence this chapter 11 case and use the “breathing space” afforded thereby to stabilize the business, ensure sufficient access to liquidity to fund mission critical disbursements like payroll, customs, and shippers, and ultimately pursue one or more value-maximizing restructuring transactions inside chapter 11.”

Ok, sure.

That breathing space thing only works if there’s money and $55k sure as sh*t ain’t going to cut it, notwithstanding issues as to whose cash that is and who holds it. Luckily on June 15, 2026 — count it, six days after filing — the debtor filed a cash collateral motion. Clearly the debtor didn’t have consensual use of cash collateral as of the petition date. Now, however, it has consent through July 11, 2026.

The debtor has also filed an adversary proceeding against the Soleymani Litigation Plaintiffs to stay the state court action.

A first day hearing is scheduled for 9:30am later today, June 17, 2026.

The debtor is represented by DLA Piper LLP (Benjamin Winger, Stephane Cohen, Eric Goodheart, Erik Stier, Joseph Roselius) and some North Carolina law firm. The debtor’s independent manager is Sandeep Gupta. The aforementioned Ankura parachuted in here at the eleventh hour as financial advisor. KeyBank NA is represented by Verrill Dana LLP (Roger Clement Jr., Lindsay Milne) and Stevens Martin Vaughn & Tadych PLLC (Kathleen O’Malley) as legal counsel. The Soleymani Litigation Plaintiffs are represented by James McElroy & Diehl PA (Richard Fennell, Fred Monroe, Haley Lohr). As of the time of this writing nobody has made an notice of appearance on behalf of Medallion Capital.

*Notably Epiq’s retention letter is dated June 10, 2026 so, in fairness to them, there was plenty of room for error here with such short lead time.

**Note to Epiq: this link has the actual company website and logo. It also happens to be the one cited in the debtor’s petition so we’re not entirely sure how y’all f*cked this up. We’ll just assume someone was rolling.

📤 Notice📤

Akash Bhatia (Senior Associate) has joined SierraConstellation Partners LLC from the private equity industry.

Andrew Townsell (Associate) joined Gibson Dunn & Crutcher LLP from Sidley Austin LLP.

Olivia Acuña (Associate) joined Simpson Thacher & Bartlett LLP from Kirkland & Ellis LLP.

🍾Congratulations to…🍾

Berkley Research Group, LLC (Matthew K. Babcock) for securing the financial advisory mandate on behalf of the official committee of unsecured creditors in the Catholic Diocese of El Paso chapter 11 bankruptcy case.

Dykema Gossett PLLC (William Hotze, Michael Twomey, Dominique Douglas) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Warrior Technologies, LLC chapter 11 bankruptcy case.

Willkie Farr & Gallagher LLP (Brett Miller, Paul Labov, Todd Goren, Joseph Brandt, Jennifer Hardy) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Trinseo PLC chapter 11 bankruptcy cases.

Next week marks the official start of summer but things have been fiery hot all around thus far in June. There’ve been a number of 90+-degree days; there’ve been a number of filings putting the month nearly on par with May (see below); and, of course, there’s the New York motherf*cking Knicks!

The macro environment has been 🔥 lately too. This past week inflation reaccelerated while growth remained resilient putting the Fed in a position to keep rates higher for longer. Investors had hoped that markets would offer evidence that makes new Fed chair Kevin Warsh’s life easier. Instead, we got both consumer and producer inflation data that suggests the Fed’s long-lasting battle with inflation is far from over.

Obviously we’re referring, in large part, to Wednesday’s CPI report.

U.S. consumer prices rose 0.5% month-over-month in May, following a 0.6% increase in April.

Energy remained the primary culprit, accounting for more than 60% of the monthly increase, while shelter costs continued to grind higher. Other bad signs abound too.

The inflation concerns intensified on Thursday when producer prices surprised to the upside. The Producer Price Index increased 1.1% in May and 6.5% year-over-year, representing the strongest annual producer inflation since late ‘22. Nearly 80% of the increase came from goods prices, reinforcing concerns that upstream cost pressures may eventually flow through to consumers.

Meanwhile the labor market continues to remain reasonably healthy. The most recent payroll report reflected 172k added jobs and an unemployment rate at 4.3%. Resilient economic activity + too-high inflation makes for a tough easing environment for Mr. Warsh, his natural inclinations notwithstanding.

It’s no wonder President Trump is pushing for an Iran deal that many supporters of his initial policy decision consider capitulation. He needs lower inflation and lower rates.

So do a lot of the borrowers you’re talking to, no doubt.

🛌New Chapter 11 BK Filing - Sleep Number Corp. ($SNBR)🛌

On June 12, 2026, Minnesota-based Sleep Number Corp. ($SNBR) and four affiliates (collectively, the “debtors” or the “company”) filed chapter 11 bankruptcy cases in the … 🤔 … Southern District of New York (Judge Kyu Young Paek) to effectuate a combination transaction with Sleep Country Canada (“Sleep Country”) pursuant to section 363 of the bankruptcy code — and all we have to say is “thank the lord almighty for finally putting this thing to bed!” We’ve covered the “wellness technology company” that makes “life-changing, differentiated smart beds,” extensively over the last several months (here, here, here and here) so we’ll keep this to the highlights:*

📍The Final Sign. As if the company’s piss poor performance and retention of a slate or professionals wasn’t enough of a preview of the BK to come, the final indicator came in the past week+ when, on June 10, 2026, the company announced the June 4th addition** of Colin Adams to its board of directors.

Mr. Adams is well-known in RX circles; he’s currently a Partner at advisory shop Uzzi & Lall (after stints at, among other places, Morgan Stanley, Citadel Securities and Kirkland & Ellis LLP); he also has a list of trustee and independent director gigs as part of his resume. He’ll be comped $40k/month subject to the super nebulous qualifier that he’s eligible for “…other additional fees if he is required to be involved in additional activities.” Uh, ooook. What additional activities, exactly, guys? Travis Kelce’s replacement as brand ambassador, 😜?***

Read more

On June 12, 2026, Minnesota-based Sleep Number Corp. ($SNBR) and four affiliates (collectively, the “debtors” or the “company”) filed chapter 11 bankruptcy cases in the … 🤔 … Southern District of New York (Judge Kyu Young Paek) to effectuate a combination transaction with Sleep Country Canada (“Sleep Country”) pursuant to section 363 of the bankruptcy code — and all we have to say is “thank the lord almighty for finally putting this thing to bed!” We’ve covered the “wellness technology company” that makes “life-changing, differentiated smart beds,” extensively over the last several months (here, here, here and here) so we’ll keep this to the highlights:*

📍The Final Sign. As if the company’s piss poor performance and retention of a slate or professionals wasn’t enough of a preview of the BK to come, the final indicator came in the past week+ when, on June 10, 2026, the company announced the June 4th addition** of Colin Adams to its board of directors.

Mr. Adams is well-known in RX circles; he’s currently a Partner at advisory shop Uzzi & Lall (after stints at, among other places, Morgan Stanley, Citadel Securities and Kirkland & Ellis LLP); he also has a list of trustee and independent director gigs as part of his resume. He’ll be comped $40k/month subject to the super nebulous qualifier that he’s eligible for “…other additional fees if he is required to be involved in additional activities.” Uh, ooook. What additional activities, exactly, guys? Travis Kelce’s replacement as brand ambassador, 😜?***

📍The Transaction. Subject to an expedited market test (following pre-petition marketing activity), Sleep Country will, as stalking horse purchaser, acquire substantially all of the assets of the company for $415mm in cash + the assumption of certain liabilities (subject to certain potential purchase price adjustments). The sale is supported by the debtors’ prepetition lenders and agent. Per Executive Vice President, Chief Financial Officer and first day declarant Amy O’Keefe, the sale “…will (a) ensure that Sleep Number, a prominent American brand, continues as a going concern, (b) support Sleep Number’s ongoing relationships with its employees, customers, vendors, suppliers, and business partners, and (c) position Sleep Number for long-term success.” Wait. Inquiring minds want to know: does that include Travis?!?

Read more

What in the bloody hell is going on here?

On May 29, 2026, the Malta-based, logoless GoldenPeaks Poland Holding Limited (“Polish topco”) and thirty-nine affiliates* (collectively, together with Polish topco, the “debtors” and together with their non-debtor affiliates, the “company”) filed chapter 11 bankruptcy cases in the Southern District of Texas (Judge Perez).**

Then nothing happened.

It was looking the same the next day until the debtors cast some light via a status report:

“The Debtors filed these cases urgently in the United States to avail themselves of the reorganization options available under chapter 11 …

The Debtors face imminent liquidity constraints and require the breathing space of the automatic stay to continue operations, implement outsourcing arrangements, and pursue a value-maximizing restructuring … The Debtors anticipate filing their first day motions in the coming days and scheduling a first day hearing shortly thereafter.”

Four days later, on June 3, 2026, those first days dropped.

Normal relief — vendors, taxes, DIP, and postpetition hedging, etc. — but, more importantly, we got info on the company. It owns and operates a renewable energy platform, having developed an operational portfolio of 0.7GW of solar photovoltaic (“SP”) power and a further 1.4GW of financed-and-under-construction projects. Within that enterprise, the debtors focus on Eastern Europe and are themselves the largest owner of SP assets in Poland with seven operating projects, three partially constructed projects, and another five ready to build.

Structurally, Polish topco sits … at the top of that segment of the biz, and below it are “midcos” that serve as subsidiary hold cos. Then, below those are fourteen project-level opcos, which themselves own non-debtor special purpose vehicles, each of which seems to house land rights.*** Here’s one example:

All-in, the debtors have 548 individual solar projects across ~136 SPVs, with an aggregate current capacity of 664 MWp. At its peak, the company had 250+ employees.

Today though? Each and every one of them is doing something else to put pierogis on the table. Per Alvarez & Marsal Europe LLP’s (“A&M Europe”) Edward Manning, the debtors’ financial advisor:

“Over a matter of weeks, the Company’s liquidity evaporated: it missed a payroll cycle, employees walked out the door, and events of default cascaded across nearly every one of the Company’s 20-plus financing facilities.”

Okie doke.

You may be asking yourself “why” — we sure as hell were — and to answer that, we’re going to turn it back to Mr. Manning:

“A core challenge of understanding the financial position of the Debtors is the historical lack of financial governance, represented by the following non-exhaustive list:

a. Decentralized Financial Controls. Multiple Chief Financial Officers within the Company.

b. Failure to Close the Books. Accounting ledgers have not been closed since December 2025 and fiscal year 2025 accounts at the Company have not been signed.

c. Consolidated Financials. Despite decentralized financial controls, there are no standalone financial statements.

d. Lack of Budget Reporting. The Company has not historically maintained budget reports and has failed to supervise construction costs…

As a result of a lack of historical financial information and the compressed time frame in which to commence these Chapter 11 Cases, A&M has not had an opportunity to determine the true cause of the sudden and significant financial and operational distress.

However, A&M understands that the above financial and operational constraints triggered an event of default under nearly all of the 20+ financial facilities maintained by the Debtors…”

So it’s a colossal clusterf*ck. Got it.

On the aforementioned debt side, there’s ~$952mm owing, spread across the corporate structure:

Read more

Holy hell, another snooze fest.

On June 5, 2026, SiFi Networks America, LLC (the “debtor”) filed a chapter 11 sale case in the District of Delaware (Judge Shannon). Through agreements with local municipalities, the debtor develops, operates, and leases “fiber-to-the-premises” networks to internet service providers in California, the Midwest, and previously East Hartford, CT and Saratoga Springs, NY. It, uh, abandoned those. Anyway, each individual network is housed in its own SPV and funded by institutional investors that have dumped an aggregate ~$1b into ‘em since ‘13. The SPVs are the source of the debtor’s revenue — they pay the debtor development and management fees, which earns it about $10mm annually, making every Kirkland & Ellis LLP partner quip:

To supplement the debtor’s peanut-sized rev, its parent — the UK-based SiFi Networks America Ltd. (the “parent”) — historically funded its working capital.

Read more

On June 7, 2026, CHI-based GoHealth, Inc. ($GOCO) and seven affiliates (collectively, the “debtors” and together with their non-debtor affiliates, the “company”) filed prepackaged chapter 11 bankruptcy cases in the District of Delaware (Judge Horan). Founded in ‘01, the company has been a health insurance marketplace and “… Medicare-focused digital health company” since ~’12.

In ‘20, the company IPO’d on NASDAQ ($NDAQ). Per CEO Vijay Kotte, that itself is a leading reason for the BK:

“GoHealth raised over $900 million in connection with its IPO, with an initial valuation of approximately $6.6 billion, making it one of the largest healthcare IPOs of the year.

Unfortunately, GoHealth’s very success is what led to its challenges. GoHealth’s successful IPO and lucrative business model inspired a wave of new entrants into the field, escalating competitive pressure.”

You hate to see it.

Too much winning.

With an increase in competition … wellllllllllllll … the coin flipped and the losing started:

The company has, however, taken steps along the way to slow the beckoning of bankruptcy court. In ‘22, it raised ~$50mm by issuing perpetual pref equity (the “pref equity”) to its largest customers and tweaked the business model to incorporate marketing for insurance carriers to acquire new customers.

Sound like a great move? Initially it was … then it trailed off because customer acquisition costs got too high and the cost of keeping those customers covered kept pace.

Bad for business all around, but made worse by the US Department of Justice inserting itself in May ‘25. It sued insurance companies and brokers — including, lol, the company — for that aforementioned marketing, as well as administrative fees, opting to describe ‘em as a “kickback.”

And yeah, yeah, the company denies the allegations, intends to “… vigorously defend …” against them, which is 100% the expected response. Talk is cheap.

You know what ain’t? Actually defending. It led to a going concern (“GC”) qualification in 2Q’25.

That’s when, in June ‘25, Kirkland & Ellis LLP (“K&E”), Alvarez & Marsal North America, LLC (“A&M”), and Moelis & Company ($MC)(“Moelis”) — the last of which is conspicuously absent in the BK* — stepped in. Two months later, in early August ‘25, they “helped” the company LME its capital structure, adding $82mm in new cash to the balance sheet and rolling up ~$35mm of already-existing revolver debts, which was, apparently, a sufficient “… show of stability …,” 🙄, to drop the GC qualification the next quarter.

That “show of stability” lasted … um … until year end. Come 1Q’26 — ten months post-LME — the qualification reappeared, and the company filed with this petition-date capital structure 👇:

Miraculously, though, this ain’t your typical, 🍩-doling chapter 11. The debtors’ BK proposition has the support of 100% of their prepetition lenders, 61% of their class A common stock holders, and 99%+ of the holders of equity in GoHealth Holdings, LLC (“holdings”), which is a roundabout ways to say the co.’s pre-IPO equity holders, and under the debtors’ proposed chapter 11 plan and disclosure statement, the following will transpire:

Read more

Johnny needed no introduction to Krispy Kreme, Inc. ($DNUT) (the “company” or “Krispy Kreme”): his fat a$$ pops in every time he sees that nostalgia-inducing “HOT NOW” light flick on. But the health-conscious Gen Zers out there, who only eat sh*t like Beyond Meat, might, so let’s take an ov…

Read more

South Carolina-based Simply Interior Homes LLC, Simply Interior Homes AcquisitionCo LLC (“AcquisitionCo”) and five other affiliates (collectively, the “debtors” and along with three non-debtor entities, the “company”) operate a home textiles and home décor business that designs, sources and supplies fashion bedding, window treatments, bath products, dec…

Read more

We’ve been covering the catastrophe that is Sleep Number Corp. ($SNBR)(the “company”) since last year when there were clear signs that things were getting increasingly nightmarish for the company:

You’ll recall that at that time the market had already been sh*tting all over the company’s stock: it was down 55% YTD by that point, trading at $6.66/share on the heels of a piss poor Q3’25 characterized by a HUGE miss on both the top and bottom line. Still, there was a minor bright side: the company’s stock was showing signs of recovery, pricing up from the beginning of November ‘25 to the time of that publication 👆. Commenting on the upswing, we wrote:

“The company’s stock has traded up significantly over the last few weeks; it is up around 79% from the mid-November low. Was the amend-and-extend the boost? Was it that plus the company’s announcement on December 2, 2025 that it had hired Amy O’Keefe as its full time CFO, effective December 8, 2025.”

We added, pointing to this chart 👇:

“Evidently, there are people out there who have growing confidence in new management’s turnaround strategy.

After taking one look at that slide 👆, we can’t say that we do.”

Our doubts proved warranted. The company subsequently reported its FY’25 and Q4’25 earnings and they … how do we put this? … f*cking sucked. We wrote about it here ⬇️ …

… when the stock was at $3.31/share and the company’s best hope was throwing a hail mary pass to the one and only Travis Kelce of football Taylor Swift fame. Yeah, about that, we wrote:

“Still, Sleep Number has at least one hopeful equity investor: Taylor Swift’s fiancé and NFL tight end, Travis Kelce, has become one of the company’s largest shareholders after entering into a three-year strategic partnership with Sleep Number in January ‘26. Kelce will be paid in cash and restricted stock units (three-year vesting, LO-f*cking-L); he also agreed to make open market purchases of the company’s stock. Assuming he’s already made some of said purchases and given the reported quarter, we’re guessing he’s happy he’s getting those sweet new football contract dollars as a hedge against his recent piss poor investing track record.”

LOL — that three-year vesting schedule gets funnier and funnier every time we read it. The comedy would compound if Tay-Tay ends up dumping his a$$ because he’s such a lousy investor, LOLOL.

Anyway, we finished that piece talking about the company’s December ‘27 maturity, indicating that the company didn’t have the luxury of that much time:

“The company has less than two years until it hits its December ‘27 maturity wall, but it likely will have to solve the liquidity issues and covenant breaches long before its debt reaches maturity. There’s no more time to snooze, 😴.”

And, indeed, nobody snoozed. The company had been huddling up with its lawyers and bankers and came back to the market with a credit agreement amendment to buy itself some time.

We wrote about it here:

The stock ripped on the news (back above $4/share before landing slightly over $3/share, 🙄, which was still below where it was at the time of our prior coverage). But, as we noted at the time, investors were clearly looking at the company’s deceptive headline number without reading the fine print. That there 👆”$55 Million of Liquidity” was a mirage. We wrote that the amendment:

“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.”

Slippery f*cks.

We continued:

“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.”

Right, so how did earnings go? Take some ambien and brace yourselves:

Read more

On June 4, 2026, Brewster Heights Packing and Orchards, LP dba Gebbers Farms and twelve affiliates (collectively, the “debtors” and together with their non-debtor affiliates, the “company”) filed chapter 11 bankruptcy cases in the Eastern District of Washington (Judge Corbit). Headquartered in Brewster, WA — a ~3.5 hour drive from Seattle — the company grows, packs, markets, and ships 🍎, 🍒, and 🍐, employing ~3.7k individuals* and selling ~17.3mm boxes of fruit, including ~13.3mm boxes of apples and ~3.4mm boxes of cherries to 540+ clients in FY’24.

Which it has been doing for a long-a$$ time. The company dates back over 100 years, initially focusing on timber and sawmill operations before transitioning into agriculture, and is in its sixth generation of Gebbers-family leadership.

A seventh generation is, however, not in the cards, 😔. That pulls on Johnny’s heartstrings, 😭.

The lack of next gen leadership is on account of business-level issues that exploded in ‘24. CFO Brook McGuire has the scoop:

Read more

On June 3, 2026, West Lafayette, Indiana-based Inotiv, Inc. ($NOTV) and eighteen affiliates (collectively, the “debtors” and together with their non-debtor subsidiaries, the “company”) filed actually-prepackaged* chapter 11 bankruptcy cases in the Southern District of Texas (Judge Lopez). The company is a contract research organization that provides drug discovery and development services to pharma companies and the medical device industry. Oh, and they sell research critters to those folks too, 😭. A lot of ‘em apparently, for the six months ending March 31, ‘26,** the company did $238.5mm in revenue — ~$118.2mm from services and ~$120.4mm from “products.” Don’t fret though, the company is dedicated to “… the highest standards of scientific integrity and animal welfare.”

So. How did this virtuous company wind up in bankruptcy? A bold, new strategy embarked upon in ‘21. Tell us about it, CFO Beth Taylor:

“… the creation of a vertically integrated, full-service contract research organization capable of supporting the entire preclinical drug development continuum from early-stage target identification and discovery through regulatory submission-ready safety studies.”

Holy hell, first day decs all read the same. On that note, how they executed on that strategy is also boilerplate: over forty-eight months — from July ‘18 to July ‘22 — the company closed on fourteen acquisitions and racked up a sh*tload of debt:

Notice that “DOJ settlement” line too? It relates to “animal welfare.”

In June ‘24, the company signed a plea agreement with the ‘ol US of A, under which it pled guilty to violations of the Animal Welfare Act and the Clean Water Act and agreed to pay (i) fines of $22mm over four years and (ii) a cumulative $6.5mm to the Virginia Animal Fighting Task Force, the Humane Society of the United States, and the National Fish and Wildlife Foundation.

Anyway, the stock was cooked by then. The market hated the bold, new strategy (maybe the animal abuse too):

Read more

We’ve previously covered this name here, here, here, here, here and here — which, admittedly is a lot in a compressed amount of time but the cases have been moving quickly.

By way of refresher, you may recall that back on April 16, 2026, QVC Group Inc. (“QVCG,” a/k/a Qurate Retail Inc.) and 73 subsidiaries i…

Read more

Which anyone who knows anything could have seen coming from a f*cking mile away.

Unclear what you’re looking at? That’s 👆Spirit Aviation Holdings Inc. counsel, Davis Polk & Wardwell LLP, lobbing in a fee application for $4.74mm for a month of work — April ‘26 — right before their client went …

Needless to say, people weren’t thrilled:

It’s a bit much to pick on the associates, though, y’all. You think poor Cameron enjoyed working 194.7 hours in April? Do you? Especially under these facts? We mean, typically these slaves justify their ungodly hours to friends and family by saying trite sh*te like “but I’m working to save jobs” or “I’m preserving tax revenue that feeds entitlement programs” or some other massive justification and rationalization. Kind of hard to do that here, though, ain’t it? So maybe cut pitiable Cameron a little bit of slack, Sujeet, yeah? It’s not like she has any control over how many hours she worked or her billable rate.

That said, Sujeet wasn’t the only one with commentary:

This 👇 was a … take. Pretty sure the commentary wasn’t so focused on the secured creditors, lol.

Anyway, someone call the Fed:

LOL.

And, now, without further ado, this week’s coverage ⬇️.

⚡Update: Fat Brands Inc. ($FAT)⚡

Recall that, in late January ‘26, the Beverly Hills-based, business-securitized FAT Brands Inc. ($FAT) (“Fat Brands”), 95% FAT-owned Twin Hospitality Group Inc. ($TWNP) (“Twin Hospitality” and together with Fat Brands, the “managers”), and 180 affiliates (collectively, together with Fat Brands and Twin Hospitality, the “debtors”) filed aimless, ~$1.45b-indebted chapter 11 freefall cases in the Southern District of Texas (Judge Perez). You can refresh yourself here …

… and for reference, here’s the corporate/capital structure:

As of the filing, the debtors — with *cough* convicted felon Andrew Wiederhorn at the helm — carried the support of … well, no one.* Least of all the ad hoc group of securitization noteholders (the “ad hoc group”), which holds ~85% of that debt ☝️, but also 3|5|2 Capital GP LLC (“352”), an owner of notes issued by FB Resident Holdings I, LLC, to whom Fat Brands had pledged all its juicy manager fees.

It all so quickly got so contentious. Like shortly after the petition date, the ad hoc group dropped these on the docket:

To its credit, 352 lobbed in an adversary complaint to validate its senior lien over Fat Brands’ fees, which the debtors had been trying to hold onto for themselves.

Mediation, therefore, followed oh so very quickly too.

Which continued (to March 3). And continued (March 9). And continued (March 17). And continued (March 24). And continued (April 10). And continued (May 8). And continued (June 1).

Around the time of the fifth mediation order, logs began to unjam.

Read more

On May 21, 2025, Midland Texas-based and bad-anamedandbad−a logo’d Warrior Technologies LLC (the “company” or “debtor”) filed a chapter 11 bankruptcy case in the Southern District of Texas (Judge Perez). The business? Some sort of terrorist incinerating tech company dropping a healthy helping of American whoop-a$$ on our enemies? Nope. Not even f*cking close. The company is an independent environmental and industrial services company that services clients in, among other things, (i) upstream, midstream, and downstream oil & gas operations, (ii) renewable energy, (iii) construction, and (iv) food processing. The company’s core business activities include (a) environmental and industrial cleaning, (b) mechanical services, (c) hydro-excavation and line finding, (d) trucking and transportation, (e) demolition, abandonment, and abatement, and (f) gas mitigation and scrubbing. All of which is decidedly and comparatively not bad-a$$.

Why is the company in BK? Do we care? We’ll pretend to.

Read more