š„Buying Timeš„
Updates: Fossil Group Inc., Marelli Automotive Lighting USA LLC + Meyer Burger (Holding) Corp.
Howās your week going? Getting back into the swing of things, post-summer? Make any interesting life choices lately? Do anything ill-advised like, we donāt know, š¤, maybe get an ear pierced inside of a bankruptcy court?! Yeah, us neither.
What we are doing, though, is continuing to play a little bit of catchup. Today weāll dive into a trio of updates of situations previously discussed in our āpages.ā Strap in.
ā”Update: Fossil Group, Inc. ($FOSL)ā”
Weāve taken a look at decrepit watch seller Fossil Group, Inc ($FOSL) a lot ā¦
ā¦ not because we any sort of strange affinity for this skid mark but because the company is a news machine. Most recently the company launched its Nick Jonas collab, reported 2Qā25 results and announced a debt restructuring. Letās dig in!
On August 13, 2025, FOSL reported its 2Qā25 earnings with revenues of $220.4mm (ā¬ļø 15.2% YoY), gross profit of $126.7mm (ā¬ļø 7.4% YoY), and adjusted EBITDA of $7mm (a sequential ā¬ļø).
The declines aināt great, but there are positives: margins are trending upwards with gross margin staying at a healthy elevated 58% and operating income actually came in positive for the quarter. FOSL continued its cost reduction efforts in the quarter with the closure of an additional six stores ā the count is currently sitting at 214.
Apparently the turnaround efforts have been going so well that management actually raised guidance for full year ā25:
Said another way, net sales will suck ā¦ they just wonāt really suck! š
And the good news, š, doesnāt end there. In conjunction with the 2Qā25 earnings release, FOSL also announced a comprehensive debt restructuring expected to fully close in Q4ā25.
Step one: the least interesting part, FOSLās new revolver. Itās a new, secured $150mm asset-based revolving credit facility with Ares Management Credit that refis out FOSLās prior ~$18mm revolver and matures in August ā30 (subject to going belly up if step two š runs into hiccups or doesnāt close).
The new facility carries interest at SOFR+5% and has a 2% upfront fee on the commitments (or $3mm). Most notably, however, the borrowing base aināt even close to that headline $150mm: as of August 13, 2025, FOSL had borrowed $15mm under it, with another ā¦ $31.1mm available. But, 2% on $150mm looks a heckuva lot nicer than ~6.5%.
Okay, onto step two: the interesting piece. Recall that FOSL has $150mm of 7% unsecured notes due ā26 (the āunsecured notesā) outstanding. In our last piece, we noted:
āThe company will have to deal with a refi on the 26s in the near-term[.]ā
Now is apparently the time.
FOSL entered into a transaction support agreement (the āTSAā)* with funds managed by HG Vora Capital Management, LLC and Nantahala Capital (collectively, the āconsenting noteholdersā), which, together, own ~59% of the unsecured notes. In addition to dropping new cash into the biz, the TSA contemplates taking all (or nearly all) unsecured notes out through an exchange. Here are the deets on it:
šNew Money Financing. Every single noteholder will have the right to participate pro rata in a consenting-noteholder-backstopped new money issuance of up to $32.5mm in 9.5% first-out, senior secured notes due ā29 (the āfirst out notesā). And there are goodies for playing along: noteholders that participate for their full pro rata portion will also receive a bonus in the form of common stock equal to 5% of their respective funded portion,** and for backstopping, the consenting noteholders will receive a $1.625mm fee (i.e., another 5%) all to themselves and payable in additional first out notes.
šExchange of Unsecured Notes. FOSL will also look to get all noteholders to exchange their unsecured notes for new secured notes.
What are the terms? Here come even more incentives. The TSA-bound consenting noteholders will receive first out notes on the same terms as āļø, as will each other noteholder that funds its pro rata portion of the new money financing.
But fund even a cent less than the full allotment?
Those folks will receive 7.5%, subordinated second-out notes due ā29 (the āsecond out notesā).
Still, though, a (small) interest rate improvement ā¦ and second out is still sure as sh*t better than unsecured, so š¤·. Even cash-strapped noteholders (that havenāt already sold) have good reason to play ball.
To boot, regardless of whether a noteholder receives first out or second out notes, (i) the exchange will occur at 100% of face plus accrued and unpaid interest, and (ii) for their troubles, all participants will also receive their respective slice of 30-day warrants to purchase 3mm shares of common stock at an exercise price of $0.50.***
šUnsecured Notes Consent. No exchange is complete without giving a one-finger salute to holdouts on the way out the door, and this one isnāt any different. In connection with the exchange, FOSL will solicit a two-part consent for unsecured noteholders.
The first will strip covenants and events of default out of the unsecured notes indenture and subordinate its payment rights to the first out notes, the second out notes, and the new revolver.**** But really, thatāll only ever be relevant if 90%+ of unsecured noteholders get cozy with the deal.
Because the second consent will amend the unsecured notesā indenture to straight-up impose the restructuring on all noteholders and take out all unsecured notes under England and Walesā Companies Act 2006. And thatās the plan if out-of-court support falls below 90%ā, although the TSA leaves the exact mechanism ā a scheme of arrangement or a restructuring plan ā open.*****
šTimeline. We said the deal should close in Q4ā25. The exact timeline depends on the path taken. If it stays out of court, all should be buttoned up and closed by October 30, 2025.
But if it falls into court ā¦ a half-dozen Weil, Gotshal & Manges LLP associates outta prepare to spend the holidays in a dumpy English conference room: the TSA kicks out the deadline to December 30, 2025. Hereās a live shot of Gary Holtzer getting ahead of it and writing āem heartfelt notes.
Hahahaha, just kidding. He lives for that sh*t.
In short, FOSL should push out its debt maturity wall from ā26 to ā29 before long while also securing an additional $32.5mm in new money. Not bad, or so the market thinks:
With more time secured and fresh funding, FOSL now needs to execute even better on its turnaround. We canāt wait to see if the Jonas partnership will help with that.
The exchange offer, consent solicitation and rights offering officially kicked off yesterday, September 9, 2025, at 6pm ET and will expire at 5pm ET on October 7, 2025.
Set your watches accordingly.
*Per the TSA, FOSL is represented by Weil, Gotshal & Manges LLP (Gary Holtzer, Sunny Singh, Frank Adams, Philip DiDonato, Andrew Wilkinson, Gemma Sage) and the consenting noteholders are represented by Ropes & Gray LLP (Leonard Klingbaum, Sam Badawi, Matthew Roose, Faiza Rahman).
**The value of the common stock will be determined based on the average of the daily volume-weighted average price for the 30 prior consecutive trading days.
***As of writing, FOSL has ~53.8mm shares outstanding.
****Which really only matters if the revolver and the secured notes run out of collateral, in which case, the unsecured notes are beyond f*cked anyway.
*****Regardless of path, FOSL is gonna give a pro rata $1mm tip to folks that provide their š to the transaction. Those who fully fund will receive theirs in additional first out notes, while everyone else will receive additional second out notes.
ā”Update: Marelli Automotive Lighting USA LLCā”
With NFL season officially underway and week 1 giving us a Josh-Allen-fueled come-from-behind victory over the Ravens, the Chargers knocking the Chiefs down a peg in SĆ£o Paulo, and the Giants, um, continuing to ā¦ like always ā¦ š ā¦ look like the Giants, we thought it an ideal time to talk about what folks did over the off-season to improve (or not): practice.
But we donāt mean football. We mean the āmalā variety.
Recall that, back on June 11, 2025, Marelli Holdings Co. Ltd. (āMarelliā) and 75 affiliates (collectively, with Marelli, the ādebtorsā) skidded out into chapter 11 in the District of Delaware (Judge Goldblatt).
The debtors filed their cases with a restructuring support agreement (the āRSAā) and a ~$2.2b DIP in hand, half of new money and half a non-pro rata roll-up of the senior loan facility claims ā¦
ā¦ which are āseniorā in name only and subordinate to the emergency loan facility.
Weāre not here to talk about that. Yes, there was an objection,* but after a second interim DIP order, everyone worked it out and the court entered a consensual final DIP order on July 30, 2025.**
Instead, weāre going to focus on the debtorsā July 25, 2025 motion to lift the automatic stay.
Hang tight, youāll see.
Although heavily redacted ā āā¦ involving commercially sensitive and confidential information ā¦ā and what not ā you can glean that it stems from the debtorsā attempt to sell āā¦ an entire multi-jurisdictional line of [their] businessā (read: the aftermarkets division) to First Brands Group, LLC (āFBGā)*** in January ā23 and a subsequent December ā23 Italian-law-based arbitration in the International Chamber of Commerce (the āICCā) relating to FBGās purported breach of āā¦ several key provisions of the [sale and purchase agreement],ā which the debtors want to revisit to liquidate assets and resolve claims.
But, due to the aforementioned redaction, we were left to speculate about the quantum of the debtorsā asserted damages, FBGās counterclaim, and the posture of the arbitration. However, the debtors let us know the entire motion resulted from FBGās being a real d*ck:
āThe Debtors have offered repeatedly to consent to limited stay relief to allow FBG to pursue its counterclaims against Marelli Europe in the Arbitration, but FBG has taken the unfounded and bizarre position that it will only consent to stay relief if it is permitted to enforce any judgment against Marelli Europe on account of its prepetition claims that it may obtain in the Arbitration. FBG has also incorrectly argued that the automatic stay prohibits Marelli Europe from prosecuting its claims in the Arbitration and realizing on a valuable asset of the estate.[] For these reasons, the Debtors have exhausted all other options available and is now forced to further expend estate resources to bring the present motion to obtain an order from the Court that provides unremarkable limited stay relief to allow the Arbitration to proceed efficiently for the benefit of the estate and FBG.ā
FBG is going to regret that call. On August 11, 2025, it objected to the motion and tried to couch the issue as one of international comity.**** It too was heavily redacted, but we know from FBGās motion to seal that āā¦ the Objection directly responds to the Motion for Relief and similarly references and explains in detail the ICC Arbitrationā and also includes āā¦ certain commercially sensitive and confidential information ā¦.ā
And because no one objected to the motion to seal, Judge Goldblatt had no issue granting it at the outset of the August 25, 2025 hearing on all the above.
Hereās the problem: filing the objection was a colossal f*ck up.
No, not because anyone spilled the beans at the hearing a la 23andMe.
No, not because Judge Goldblatt looked like this during FBGās entire presentation:
No, not because it took him less than eighteen minutes to overrule FBGās absurd comity argument (and enter a lift stay order the same day):
āā¦ I'm being asked to lift the stay, and I haven't heard a persuasive reason at all why I shouldn't lift it ā¦ā
But because while Johnny was reviewing the docket, he realized that even though the objection looked like this ā¦
ā¦ FBGās counsel, Fox Rothschild LLP (āFox Rothschildā), botched the redactions, every single bit of text was still there, and, LOL, a simple copy-paste made all that āā¦ commercially sensitive and confidential information ā¦ā a helluva lot less confidential than intended. Peep for yourself:
Worse yet, no one noticed for over two full weeks, until August 27, 2025.***** Probably because the lawyers in the cases work exclusively like this:
Hereās a live shot of FBG:
Meanwhile the Fox Rothschild partners are talking to their GC:
![url_upload_68af3cbd76f43.gif [add-text output image]](https://substackcdn.com/image/fetch/$s_!1tib!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F97aebeaa-90c6-440d-9977-6cd2884cc9f4_480x264.gif "url_upload_68af3cbd76f43.gif [add-text output image]")
But Johnny has news for yāall ā¦
ā¦ and, whatās more, he had already snagged a copy by the time it was pulled, which is, um, right here:
So now we have a new thing to speculate on: will it come up in the arbitration, š¤?
In any event, now that the kiddos are back in school, perhaps yāall lawyers ought to attend a redaction-focused refresher course or two because we be watchinā, š.
*Mizuho Bank, Ltd. (āMizuhoā), a holder of 50% of the emergency loan claims and ~30% of the senior loan claims, filed the objection. Mizuho is party to the RSA, so it chilled out during the June 12, 2025 first-day hearing. But its support was āā¦ was premised on the term of the Restructuring Support Agreement and the DIP Motion which provided for repayment in full, from DIP funds, of the Emergency Loan Claims upon entry of the Final Order.ā On July 16, 2025, the debtors shot Mizuho an āextended DIP budgetā that reneged on that deal, and a week later, on July 22, 2025, the objection hit the docket. The debtors hashed it out by providing additional adequate protection payments to the emergency loan claims and information rights to Mizuho.
**Not much else of note has happened on the docket either. Per K&Eās Casey McGushin at the August 25, 2025 hearing, since entry of the final DIP order, āā¦ the debtors [] have been working closely with the ad hoc group, the UCC, other stakeholders, on the path forward and the restructuring ā¦ā
***One has to wonder also about wtf is going on with FBG. Back in early August the company pulled a planned refinancing of approximately $6b in debt across Europe and the US as it hunkers down and gets a āquality of earningsā analysis done from some high-priced consultants. This company might be one worth continued watch because we be catching some potential restructuring vibes.
****Based on the debtorsā first attempt in the arbitration to proceed on its claims without letting First Brands assert its counterclaims at the same time. The ICC didnāt think that was chill, and for what itās worth, neither did Judge Goldblatt.
*****FBG filed an actually redacted version the same day, literally as we were drafting this piece.
ā”Update: Meyer Burger (Holding) Corp.ā”
Youāll recall that back in late June ā25, solar module manufacturer, Meyer Burger (Holding) Corp (along with three affiliates, the ādebtorsā), the product of Swiss-based Meyer Burger Technology AGās (SWX: $MBTN) failed venture in the US, filed chapter 11 bankruptcy cases in the District of Delaware (Judge Goldblatt). You can find our initial coverage of the cases here:
The upshot of the debtorsā filing was that, despite Herculean efforts to consummate an out of court transaction, they failed after original plans to open two solar product manufacturing facilities in Arizona and Colorado were rocked by, among other things, (i) oversupply, (ii) shifting government policy, and (iii) a possible reduction in tax credits.
The debtorsā failures compounded and consequently they were unable to satisfy a production agreement with and prepaid by a large customer, DESRI Inc. (āDESRIā). The original prepayment by DESRI was secured by a lien against certain of the debtorsā materials and inventory, meaning DESRI was in a position to actually credit bid on the debtorsā assets ā specifically a credit bid of up to $15.02mm, according to the bidding procedures order (entered on July 18, 2025).
Fast forward through the summer and, well, did they? Yes and no. Yes, DESRI kicked in a credit bid but, no, they didnāt bid the entire kitten caboodle. Instead, DESRI scooped up its collateral ā ~32.6mm photovoltaic half cells ā with just a $10.2mm credit bid. Another player called Waaree Solar Americas Inc. (āWaareeā) is purchasing the debtorsā remaining assets for $18.5mm in cash.
Math time!
Yeah no just kidding. Weāre not doing the math because the math f*cking sucks.
Suffice it to say that the combined sale proceeds are a far cry from the ~$100mm the prepetition/DIP lenders are owed on account of both pre-petition and post-petition secured debt which means thereāll be diddly squat flowing through to the general unsecured creditors.
So yeah, parties were quite sour when they convened for a sale hearing on September 4, 2025 ā none more so than the official committee of unsecured creditors (the āUCCā). Hereās language from the UCCās limited objection to the DESRI sale:
āWhile the DESRI Entities purport to hold a secured claim and allege that they are entitled to credit bid up to $15,028,013.05, the Committee believes that any security interest given by the Debtors was not in exchange for reasonably equivalent value. As such, the Committee objects to any proposed Sale Transaction with the DESRI Entities and submits that the Court should not authorize any such Sale Transaction until the Committee has had sufficient time to scrutinize the validity of the DESRI Entitiesā liens.ā
Luckily the UCCās challenge period extends until September 30, 2025 so that issue could be shelved for now until the UCC actually provides evidence for a real contention.*
BUT Fox Rothschild LLPās Jesse Harris, on behalf of the UCC, still had a bone to pick when it came to the lack of distribution to unsecured creditors. After all isnāt there a concept of āpaying the freight.ā Hereās Mr. Harris during the hearing:
āSo we have a liquidating case that is not operating that is essentially a Chapter 7 case. And similar in a Chapter 7 case, Chapter 7 trustees do not operate cases for secured lenders. There has to be a benefit for unsecured creditors.ā
And hereās Judge Goldblatt in response:
āTo me, the pay the freight principle isn't about redistributing value to someone who's otherwise out of the money. It's making sure that no one is left holding the bag for the cost of the process.ā
But itās a global process that should be for the benefit of all parties involved right? Unsecured creditors should get something?! Back to Judge Goldblatt:
āI mean, in this case, it may be that the value runs out, that the secured creditor is the fulcrum security, and it runs out before we get to unsecured creditors. Imagine you had a case in which unsecured creditors were going to get paid 50 cents on the dollar. Could equity come in and say exactly the same thing you're saying now? It's a global process. We should all be included.ā
Basically Judge Goldblatt looked at Mr. Harris and went:
You can expect how the ruling went: Judge Goldblatt overruled the UCCās objection with a swift declaration:
āIn the absence of some showing that we're harming someone, I don't really get the ā I understand you'd rather have money than not and that there was once a view that that was the cost of the bankruptcy process. There may be judges who have that view. It's not mine. You're welcome to appeal.ā
But honestly the ones that should be most disappointed by the results of the sale process are the ad hoc group of bondholders & DIP lenders (led by Whitebox Advisors LLC and Highbridge Capital Management LLC). Hereās counsel, Baker McKenzie LLPās Debra Dandeneau, driving home the point (to Mr. Harris) on their behalf:
āā¦I offer this solely to offer the perspective of the lenders when we talk about the equities here. Because all that they have done is write checks. They're owed over $100 million on a bridge loan. And they're looking at a bid that is a gross proceeds of $18.5 million. And by the way, for almost a year, when they were supporting this business, they weren't putting money into their pockets. They weren't engaging in some sophisticated lender liability management exercise. And this is not a complicated capital structure here. Instead, those proceeds were going into the pockets of employees, of landlords, of utilities, of trade vendors. All for the purpose of keeping the businesses alive.ā
To paraphrase, general unsecured creditors benefitted from a monthās-long value transfer of dollars directly out of the lendersā pockets and therefore ought to promptly ...
Judge Goldblatt entered an order authorizing the sale to DESRI the next day on September 5, 2025.
Curiously, as of the time of this writing, no such order authorizing the proposed sale to Waaree has hit the docket, š¤. Makes one wonder whether thereās cold feet. Which means the math could ultimately āf*cking suckā even more, š¤š¤.**
*Interestingly enough, the outside closing date of the two sales is set for September 20, 2025 ā 10 days prior to the challenge period. The UCC wanted any cash proceeds to be put in an escrow account for those 10 days, but ultimately compromised to have any new money DIP paid immediately upon closing and the remainder to be escrowed.
**Yes, we just quoted ourselves, get over it.
šResourcesš
We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption.Ā š„You can find it hereš„.
š¤ Noticeš¤
Kon Asimacopoulos (Partner) joined Sullivan & Cromwell LLP from Kirkland & Ellis LLP.
Peter Amend (Partner) joined Alston & Bird LLP from Schulte Roth & Zabel LLP (or McDermott Will & Schulte)
Todd Fleisher (Senior Managing Director) joined Teneo from EY.
š¾Congratulations toā¦š¾
Berkeley Research Group, LLC for securing the financial advisor mandate on behalf of the official committee of unsecured creditors in TPI Composites Inc. bankruptcy cases
Brown Rudnick LLP (Eric Goodman, Cathrine Castaldi, Susan Sieger-Grimm, Jeffrey Jonas, David Molton, D. Cameron Moxley) and Caplin & Drysdale (Kevin Maclay, Todd Phillips, James Wehner, Serafina Concannon, Shahriar Raafi) and Raines Feldman Littrell LLP (Thomas Francella Jr.) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Valves and Controls US Inc. chapter 11 bankruptcy case.
DBS Law (Daniel Bugbee, Laurie Thornton, Aditi Paranjpye, Dominique Scalia) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Car Toys, Inc. chapter 11 bankruptcy case.
Genesis Credit Partners LLC (Edward Kim) for securing the financial advisor mandate on behalf of the official committee of unsecured creditors in The Villages Health System LLC chapter 11 bankruptcy case.
The fine folks at Hilco Global who now find themselves a part of a āā¦new operating structure through the creation of two divisionsāHilco Global Professional Services and Hilco Global Capital Solutionsā in the wake of the acquisition of the firm by ORIX Corporation USA. The new structure means new titles for a bunch of RX folks, including David Kurtz and James Sprayragen.
Dundon Advisers LLC for securing the financial advisor mandate on behalf of the official committee of unsecured creditors in Avant Gardner, LLC bankruptcy cases.
Dundon Advisers LLC (Eric Reubel) for securing the financial advisor mandate on behalf of the official committee of unsecured creditors in Wellmade Floor Coverings International, Inc. bankruptcy cases.
Norton Rose Fulbright US LLP (Kristian Gluck, Julie Goodrich Harrison, Maria Mokrzycka, Robert Hirsh) for securing the legal mandate on behalf of the official committee of unsecured creditors in the Partners Pharmacy Services LLC chapter 11 bankruptcy cases.
Pack Law (Joseph Pack, Jessey Krehl) for securing the legal mandate on behalf of the official committee of unsecured creditors in The Villages Health System LLC chapter 11 bankruptcy case.
Terrific deep dive of FOSL, been trading calls here.
Thanks