Things have been a bit slower out there for those of us focused on distressed/RX so let’s use this edition to get caught up on a trio of situations. Pour yourself a stiff one … yeah, sure, it’s 8am ET, 🤷♀️ … but no judgment.
⚡️Update: Beyond Meat Inc. ($BYND)⚡️
Literally 24 hours after we updated our coverage of Beyond Meat Inc. ($BYND) to reflect the fact that the company got its highly-dilutive exchange transaction done with (most of) the holders of its ‘27 converts (that pushed the stock down 24% on the week and well below the $1/share listing territory), the company’s stock started to … 😳 … do this 👇:
Well f*ck.
A classic short squeeze.
Per Yahoo! Finance on Monday, October 20, 2025:
“The rally is being driven not by any material corporate developments, but rather a sudden spike in trading volume amid a classic short squeeze, where a heavily shorted stock experiences a sharp rise, forcing bearish investors to buy back shares to limit losses. That buying pressure, in turn, pushes the price even higher and investors squeezing the stock make a profit.”
On Tuesday, October 21, 2025, the stock continued to rip, powered by a one-two combo. First, Roundhill Investments, which develops thematic ETFs, added this turd to its Roundhill Meme Stock ETF — ticker … naturally … $MEME, 🙄🖕.
And, second, the company announced a bona fide corporate development, i.e., an expanded distribution deal with Walmart Inc. ($WMT).* BYND will “...increase availability of select products at over 2,000 [WMT] stores nationwide,” even adding a value-pack!
LOL, “value” as in “free?” That might be the only way Johnny eats that sh*t.
Anyway let’s celebrate, per CNBC:
“It’s a remarkable turnaround for a stock that tumbled more than 67% just last week, after the company announced it has finalized a debt deal … Indeed, the stock has been under pressure for many years, posting losing returns over each of the last five years. After surging past $230 per share following its IPO in 2019, it has since become a penny stock.”
Well, it’s not a penny stock anymore. And it’s also not at risk of delisting anymore. The 🍔 still tastes like rancid a$$ though.
*Notably, WMT investors were decidedly less enthused. On a day when the Dow Jones Industrial Average (“DOW”) popped 218, WMT, which is a DOW component, closed down ~0.8%.
⚡Update 2: Stoli Group (USA), LLC⚡
It’s been six months since we checked in on Stoli Group (USA) LLC (“Stoli”) and Kentucky Owl LLC (“KO” and together with Stoli, the “debtors”), which filed chapter 11 cases all the way back in November ‘24 in the Northern District of Texas (Judge Everett), and Johnny needed wanted any excuse to go on a bender, so we signed off on him diving back into the docket, debtors’ product in hand.
He’d been hoping to be entertained; when we last visited, three-comma-club member and ultimate owner of the enterprise, Yuri Shefler, had taken time out of his busy day of “lov[ing] beautiful women” …
… to give secured lender Fifth Third Bank NA (“Fifth Third”) a one-finger salute for “exploiting” the debtors’ precarious finances and forcing a bankruptcy.
But up until recently, the docket was just like the debtors’ booze — mid, at best.
Basically a wash-rinse-repeat of what we saw half a year ago: on-again, off-again fighting with Fifth Third about cash collateral and whether a chapter 11 trustee was warranted … that invariably, after full-bore litigation, resolved itself consensually at the last possible moment.
Well, ultimately “consensual” until the debtors, at long last, got around to the September 9, 2025 confirmation hearing on their June-filed chapter 11 plan.
That one didn’t benefit from a last minute settlement and proposed to give the ~$80mm-owed Fifth Third yet another Shefler-sponsored🖕 by (i), at the election of the debtors, giving the bank already-picked-through, “aging” whiskey and Stoli finished goods or the cash generated by selling ‘em and (ii) sticking it a take-back term loan for the secured shortfall,* to be paid back monthly through December ‘27.
GUCs, however, would get paid in full over a shorter eighteen months and Mr. Shefler, through the debtors’ parent S.P.I. (Cyprus) Limited, would keep his equity stake.
To which Fifth Third had a measured reaction …
… and voted accordingly …
… and tossed in a confirmation objection based on, among other things, feasibility and the debtors’ own financial projections, the drafter of which had to be several bottles deep into their unreleased blended whiskey aged, per Judge Everett, “… in rum barrels that have unknown attributes.”
In any event, Fifth Third argued:
“Stoli USA’s projected depletion allowances are unreasonably low compared to historical and recent performance. Depletion allowances are the credits or offsets taken by Stoli USA’s customers before paying their accounts receivable. Most often depletion allowances relate to marketing expenses incurred by such customers. Stoli USA’s projected depletion allowances are at least 3.5% lower than what the Debtors should reasonably expect.
…
Likewise, Stoli USA’s projected cost of goods sold (COGS) in its post-confirmation projections are materially lower than what should be reasonably expected. Stoli USA’s historical and recent COGS have been at least 5.4% higher than what the Debtors project post-confirmation.”
The two of which, together, would reduce the reorg debtors’ cash balance sheet by ~$21mm and, here’s the kicker, “… almost certainly cause Stoli USA to run out of cash and fail again as a going-concern in the near future.”
Post-hearing, Judge Everett took time to reflect and enjoy KO’s finest. Quite a bit on the former (and we aren’t clear on the latter). He didn’t rule until October 3, 2025, and in the interim, Mr. Shefler, himself emboldened by his own product, felt compelled to pen another open letter to the court on September 25, 2025.
Which, hey Yuri:
Anyway, it kicked off:
“I write not only as a shareholder but as a custodian of memory and continuity of an enterprise that has resisted erosion by history, by politics, and by economic turmoil. Because facts matter. Because truth, however inconvenient, must be spoken and remembered. And because even in an age of instability and doubt, justice can still be named.”
Not a good start, but he eventually made his point …
“This moment is about direction. The Debtors do not ask for indulgence; they ask for recognition. There is a Plan. It is sound. It is fair. It has not only the overwhelming support of all constituents, there is no significant, yet alone material, creditor – other than the Bank – that has not voted in favor of the Plan. The future is not yet written, but the Debtors are prepared to write it.”
… which didn’t exactly land with us. Fifth Bank is, what, ~95% of the claims by value in that voting report☝️?
More importantly, though, it didn’t land with Judge Everett. After considering the evidence and arguments, he didn’t bury the lede when he delivered a October 3 bench ruling:
“… [T]he upshot is that I’m denying confirmation of the plan as proposed.”
On the debtors’ plan to dispose of the whiskey and finished goods in particular, the court wasn’t convinced, finding Fifth Third’s booze-focused expert witness Donald Snyder “… the most credible” of those served up:
“Mr. Snyder provided detailed testimony, more than the other witnesses, that really brought home to the Court the dismal state of the barrel market. Here are some of the highlights:
First, as a general matter, there are changing consumer preferences. In a nutshell, people are drinking less spirits…”
Man, just say Gen-Zers.
Anyway, he went on:
“In Mr. Snyder’s interviews with all four of the major brokers and investors, they all agree that the market for zero-to-three-year-old bourbon is completely frozen. Unfortunately, 17,000 barrels in the Kentucky Owl [35k barrel] inventory are under four years old. According to Mr. Snyder, it will be darn near impossible to sell that inventory in any sort of reasonable time …
An online barrel marketplace called Barrel Hub has 175,000 barrels for sale. According to Mr. Snyder, Barrel Hub’s director of sales and operations said only 2,300 have sold on 83 transactions over the last two years.”
And so on and so forth. The takeaway is, if the debtors’ barrels can be sold — a question in itself — it’d take longer and be for a lower price than necessary to make the remainder take-back loan to Fifth Third actually serviceable. Ergo, the plan did not pass go, did not collect $200.
However, that didn’t necessarily spell doom for the debtors. Apparently, Fifth Third “… is committed to reaching a consensual Chapter 11 plan.” Just one that, presumably, doesn’t put it, a senior lender, at the most risk of not getting paid.
Seems like there’s been progress on that front too. On October 8, 2025, the parties reconvened for a status conference where the Foley & Lardner LLP-repped debtors confirmed they were working on a revised term sheet for Fifth Third ahead of a meeting that was supposed to occur toward the tail end of last week.
In the interim, the debtors and Fifth Agreed agreed on an eleventh (!) cash collateral order. Another status conference will take place later today at 10:30am CT, where we ought to learn where the deal stands and what came of the meeting.
*The plan straight-up didn’t address or classify the unsecured portion of Fifth Third’s claim, which was explicitly carved out of the plan’s definition of and treatment for “GUC Claims.” Because the court found the plan wasn’t feasible, it didn’t address that argument.
⚡Update: ModivCare, Inc. ($MODVQ)⚡
Back in September, we dove into the filing of ModivCare Inc. ($MODVQ) (“ModivCare”) and seventy affiliates (collectively, together with ModivCare, the “debtors”) …
… which was then building toward a September 30 second-day hearing.
By the time that rolled around, there was only one domino left to fall: the debtors’ proposed $100mm DIP, to which the White & Case LLP (“W&C”)-repped official committee of unsecured creditors’ (the “UCC”) had tossed in a September 23 kitchen-sink objection. Among other beefs noted👇, it included a fight with the debtors’ proposed $1.75mm UCC fee cap because, by comparison, “[t]he total projected fees for the Debtors’ and Prepetition First Lien Lenders’ advisors are approximately $23.3 million, not including the special committee’s counsel and ordinary course professionals.”
Putting aside the fact that it just seeeeeeeeeems …
… like RX pros only care about money filling the pockets of RX pros, we actually thought that point was reasonable.* In any event, basically the entire objection — replete with all the UCC-faves (attacking backstop premiums, standing to bring claims, milestones, waivers, et cetera, et cetera) — was still open as of the hearing.
So the court convened, took testimony over the course of the day,** heard legal argument … and, uh, ran out of time. The parties therefore kicked the can to October 3, 2025 — the morning of which the debtors surfaced with list of “unresolved issues.”
It was, uh, damn near everything. Lotta good those extra days did. Here’s the wall of text on material open items:
Not that we really blame the debtors or the 1L agent for standing their ground. Other than trying to make peace with the UCC on its then-proposed $1.75mm fee cap, we’d have made the exact same offers and told W&C to pound sand too.
Apparently, Judge Perez is catching our vibes. Here he is on October 3:
“Look, as it relates to the budget on committee fees, I’ve never liked putting a cap, and obviously to the extent that everyone wants a confirmed plan, you know, the reasonable administrative expenses are going to have to be paid … I mean, you could put that in your budget, but I’m not bound by it. And, you know, the committee fees will be what the committee fees are, and if they’re reasonable, they will be awarded and, if you want to confirm a plan, they will have to be paid.”
The rest of the issues ☝️ though? Resolved in favor of the debtors,*** and the court entered the final DIP order a few days later.
Because Judge Perez mentioned the plan, we’ll turn to that next. If you recall, back in Q1’25, the debtors LME’d their capital structure by exchanging ~$271mm in unsecured notes for second lien notes, and the initial plan intended on giving those 2L notes 2% of the reorg equity and five-year warrants and providing a 🍩 to GUCs.
That’s no longer the case. Ahead of the October 6, 2025 hearing on conditional approval of their disclosure statement, and in an obvious attempt to get ahead of a looming UCC fraudulent-transfer focused objection, the debtors officially invited GUCs to the party. Per the debtors:
“Holders of General Unsecured Claims now receive the treatment that was initially afforded only to Second Lien Notes Claims, though the New Warrants will only be given to Eligible Holders. Additionally, Holders of General Unsecured Claims of less than $1,000,000 can elect to receive a cash distribution in lieu of the New Common Interests. Eligible Holders retain the right to participate in the Equity Rights Offering.”
And not that we think it was necessary, the debtors’ revised down the valuation on their $200mm equity rights offering. Instead of offering it at a value that would pay off 100% of the debtors’ ~$926mm in first lien claims plus 75% of the ~$316mm in second lien notes, the price will now drop the latter half.
All the same, though, what’re your thoughts, Johnny?
Probably a good call, because the debtors’ largest segment — non-emergency medical transportation — still be losing go-forward business.
Anyway, on October 6, 2025, the court held a hearing on conditional approval of the plan’s disclosure statement (“DS”) and because the UCC and US trustee’s objections were really previews of confirmation objections,**** Judge Perez didn’t struggle with awarding approval, so the debtors are now prepping to solicit and the UCC is prepping for litigation. The UCC will need to get its confirmation objection, to be based on these thrilling arguments …
… that we’re very eager to read …
… on file by November 25, 2025, just in time for Thanksgiving, and the confirmation hearing is scheduled for December 8, 2025 at 9am CT.
*If lenders don’t want to pay the freight of chapter 11, they ought to look to out of court options.
**Not all of the audio was uploaded, but the first half of the hearing ran ~1.5 hours.
***While the court left the milestones as the debtors proposed, Judge Perez has been super transparent that he’s not going to let the debtors pump the brakes and kneecap the UCC with delay. He’ll push dates if needed, even if that means the debtors default the DIP (the lenders will do jack sh*t about a default anyway). Hopefully, though, that won’t be necessary because everyone eventually signed off on a confirmation scheduling order.
****Plus, the debtors resolved duped-shareholder Christopher Skrypski’s (the “proposed lead plaintiff”) DS and plan objection based on the plan’s third-party release being a sh*te deal for him and other dupees. Under the deal, he’s authorized to opt himself and his cohort out, provided that the opt-out will be voided if the securities litigation is dismissed, the class ain’t certified, or the defendants prevail.
*****The third bullet is kinda BS. The plan’s class recovery gives the same recovery to each non-subordinated GUC, but the UCC doesn’t like that the debtors got customary first-day relief to pay, e.g., trade vendors and the like. It’s not “markedly different” from the outcome of contract assumption – same outcome, the GUC subject to assumption is made whole while others ain’t.
📚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💥.
We’re nerds so we’re actually a bit excited about Andrew Ross Sorkin’s newest title, “1929: Inside the Greatest Crash in Wall Street History and How It Shattered a Nation,” which comes out on October 14, 2025. You can preorder it now.
Another one that is getting a lot of attention that we want to dig in to is “If Anyone Builds it, Everyone Dies: Why Superhuman AI Would Kill Us All” by Eliezer Yudkowsky and Nate Soares. It’s available now.
📤 Notice📤
Alex Rohan (Managing Director & Co-Head of Capital Structure Advisory) joined Raymond James from Stifel-Miller Buckfire.
Josh Altman (Partner) joined Neal Gerber Eisenberg from Katten Muchin & Rosenman LLP.
Kevin Haggard (Managing Director) joined Raymond James from Stifel-Miller Buckfire.
Ryan Preston Dahl, Benjamin Rhode and Natasha Hwangpo (Partners) joined Latham & Watkins LLP from Ropes & Gray LLP.
🍾Congratulations to…🍾
Andrea Amulic on her promotion to Partner at White & Case LLP.
Brown Rudnick LLP (Robert Stark, Jeff Jonas, Michael Winograd, Bennett Silverberg, Ken Aulet, Andrew Carty, Tristan Axelrod, Matthew Sawyer, Elizabeth “Lizzy” Castano, Hayden Miller) and Cole Schotz, P.C. (Seth Van Aalten, Justin Alberto, Ian Phillips) for securing the legal mandate on behalf of the official committee of unsecured creditors in the First Brands Group, LLC chapter 11 bankruptcy cases.
Gregg Galardi on his promotion to Co-Head of Ropes & Gray LLP’s restructuring group.
Herbert Smith Freehills Kramer (US) LLP (Rachael Ringer, Natan Hamerman, Jared Borriello, Kelly Porcelli) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Anthology Inc. chapter 11 bankruptcy cases.
Matt Roose on his promotion to Co-Head of Ropes & Gray LLP’s restructuring group.
M3 Advisory Partners, LP (Mohsin Meghji, Robert Winning, Brian Griffith, Matthew Manning, Martin Young, Lyle Bauck, Seth Herman, Nick Weber) for securing the financial advisor mandate on behalf of the official committee of unsecured creditors in the First Brands Group, LLC chapter 11 bankruptcy cases.
Raines Feldman Littrell LLP (Michael Roeschenthaler, Mark Lindsay, Jordan Kelly) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Corporate Air, LLC chapter 11 bankruptcy cases.
Stephen Iacovo on his promotion to Partner at Ropes & Gray LLP.
Those of you who’ve been bestowed with the honor of 40 Under 40 by the American Bankruptcy Institute:
Those of you who will be inducted as Fellows in the 37th Class of The American College of Bankruptcy in March 2026:
Your coverage of the Beyond Meat squeeze perfectly captures the absurdity of modern meme trading. The fact that a fundamentaly troubled company with a shrinking market for its product could see such volatility based purely on technical factors shows how disconnected price discovery has become from actual business performance. The addition to the MEME ETF is almost satirical - institutionalizing retail-driven irrationality. Great breakdown of the mechanics though!