🔥Johnny's Battling Robots (#9)🔥
Artificial Intelligence, Brightline Trains, Opt-Out Releases, Thoma Bravo & More.
🔗What We’re Reading (12 Reads)🔗
1. Artificial Intelligence (Long … Optimism?). There’s a lot of doom and gloom out there about AI these days so we were encouraged to read this optimistic take from Michael Parekh on the effect AI will have on jobs. Do we buy it? No, not really. But you be your own judge.
Meanwhile, it sure sounds like a lot of y’all are using Harvey these days to complement your own analysis. You’re not alone. AI adoption on an enterprise level is apparently happening very quickly. If you’re a junior associate at a biglaw firm, you’re pretty much f*cked. If you’re currently in law school, you’re especially f*cked.
So that 👆 was the good AI news btw.
This 👇 is the bad AI news. And it’s outright terrifying.
The piece is worth a read because it demonstrates (i) how quickly AI is evolving, (ii) how, in the wrong hands, it can have devastating consequences, and (iii) if it’s not quite existential for humans, it sure as shit may be for certain SaaS companies. Pressed for time? Just skim these 👇 headlines — the Business Insider one was particularly WTF?-inducing.
As was this tweet … go ahead and click-through, we’ll wait:
But don’t worry, y’all, a16z’s Marc Andreessen says there’s nothing to see here:
Color us unconsoled.
And it looks like our boy, US Treasury Secretary Scott Bessent …
“US Treasury secretary Scott Bessent summoned the leaders of some of the largest US banks earlier this week to discuss the cyber risk posed by the latest AI model from Anthropic, according to people familiar with the matter. The meeting was attended by the leaders of Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo, the people said, who were already in Washington for a meeting of the banking lobby group … The summons from the Treasury secretary underscores the concerns inside the Trump administration over the capabilities of Anthropic’s latest model because of its advanced ability to detect cyber security vulnerabilities that could be exploited by bad actors. Executives have been warning for years of the cyber risks facing the financial system. In his annual letter published this week, Dimon wrote that it ‘remains one of our biggest risks’ and that ‘AI will almost surely make this risk worse’ and would require significant investment for defence.”
We’re sure China, Russia and the IRGC are completely uninterested in this news.
2. Brightline Trains Florida LLC (Short Sub Muni Bonds II). We mentioned this “disaster” in an earlier “Links” and the situation continues to be fluid. The Fortress Investment Group-backed railroad is, per Bloomberg, “…facing a liquidity crisis after falling far short of ridership and revenue goals made to holders when they issued $5.7 billion of debt back in 2024.” How short is “far short”? Apparently ridership in ‘25 hit 3.1mm people, less than half of estimates used to entice bond investors like Nuveen and First Eagle Investments who seem poised to take a write-down. Brightline’s senior secured bonds due in ‘30 were pricing at 29.5c on the dollar as of March 30, 2026. The company and its lenders are in various grace periods as the company attempts to drum up some financing with the help of Perella Weinberg Partners ($PWP) and Skadden Arps Slate Meagher & Flom LLP. There is some good news: the company’s February performance improved YOY.
3. Diamonds (Short Engagement Rings). There’s a link here for more background, but just this chart alone is insane:
4. Inflation (Long Elevated CPI). The US Bureau of Labor Statistics’ Consumer Price Index report for March comes out this morning not long after this publication (Friday, April 10, 2026), and it may not be pretty. At least not based on this:
5. Media (Long Things a Long Time Coming). Spanish Broadcasting System announced it will be a filing a chapter 11 bankruptcy case in the District of Delaware sometime very soon after 72% of its major noteholders (Brigade Capital Management, Man Group, Bayside Capital) agreed to swap $310mm of debt for equity. This marks the second radio-oriented prepack of the year, following tightly on the heals of Cumulus Media which filed early last month.
6. Oil & Gas (Long Disruption). Here is a different-than-usual explainer (with lots of charts) on what was happening in oil & gas world due to the war. And here is an opportunistic piece of attorney advertising by Sidley Austin LLP’s Stephen Hessler, William Curtin, Patrick Venter and Andrew Klauber outlining a number of things corporates ought to be considering in the face of continued war-caused second order effects.
7. Opt-In/Opt-Out (Short Consent). The opt-in/opt-out construct isn’t just at issue in restructuring circles. Here, venture investor Brad Feld takes exception to Microsoft Inc.’s ($MSFT) proposed use of GitHub data for purposes of training AI, arguing that “opt-out is not consent.”
For those of you unfamiliar with the opt-out issue in bankruptcy, here is yet another Lowenstein Sandler LLP video where the firm’s attorneys — in this instance Eric Chafetz and Eric James Seltzer — appear to be forced to make a marketing video at gunpoint.
Finally, since we’re on this topic, here is an analysis from the Clifford Chance team on how nonconsensual releases may be treated in the chapter 15 context.
8. Private Credit (Long Opportunity?). Allegedly the current private credit environment is an opportunity for distressed investors.
Here are Strategic Value Partners’ Victor Khosla and Marblegate Asset Management’s Andrew Milgram salivating at the chance to feast on their private credit brethren like a TRex in Jurassic Park:
And here is Marathon Asset Management’s Bruce Richards getting horny AF about the opportunity for “capital solutions”:
Here is the chart he is referring to:
What is the opportunity, though? SaaS? That 29.7% 👆? Good luck determining the terminal value there. Whichever analyst is underwriting a fresh loan into those businesses ought to get airdropped straight into Tehran sans backup because he’s obviously got balls the size of watermelons. On Tuesday, the market turned its attention away from the Strait of Hormuz for a second and suddenly remembered SaaS; it be like:
Here’s another view of that projectile vomit:
Will we see a number of Saba Capital-style bidders come in and try and get software-dominated private credit portfolios at a tendered discount? If so, what will that do for pricing? To date, it still sounds like the market for private credit secondaries remains … 🤔 … more or less non-existent. But not for lack of trying.
Meanwhile, there are some people out there actually making money in the world of distressed investing, rather than just talking about making money.
Or talking about not losing money. Here is Oaktree Capital Management’s Howard Marks protesting a bit too much:
“Our exposure to software companies across our entire credit platform is extremely small on an absolute basis and relative to peers. Most of Brookfield/Oaktree’s private credit funds operate outside of direct lending and thus have only limited holdings in software. Even our direct lending portfolios generally have limited software exposure, and over the last 12-18 months we’ve maintained a particularly high bar for participating in new software transactions.
Thus, we believe our private credit investments have been defensively underwritten and conservatively structured. Our software exposure is substantially less than that of our peers, predominantly first-lien, and with very little of it payment-in-kind.”
Mr. Marks citing Claude was a nice touch, though. If even Mr. Marks is using AI these days, junior pros are ESPECIALLY F*CKED.
9. Restaurants (Long What is Dead May Never Die). Oh, FFS. Or, even better put here by Walter Hickey:
“At Red Lobster Restaurant Headquarters, one must imagine there is a button, inviting and pressable and in the exact color you would imagine. Pressing this button will make you incredibly popular, lead to a legion of reporters setting up cameras outside of your restaurants and delight your otherwise dwindling customer base. It will also cost you millions of dollars and, with some precedent, sometimes your job. This button is labeled “Endless Shrimp.” In the past, it has been responsible for both the greatest triumphs of the seafood brand as well as a 2024 bankruptcy, management clean sweep and some very irate creditors. The 2023 decision to make the ordinarily limited-time offer of Endless Shrimp available year-round caused a $11 million loss in a single quarter and sent a financially precarious company into a tailspin from which it might not ever recover. But here’s the thing: the CEO is reportedly planning this month to push the button.” (emphasis in original)
10. Retail (Long Marcus Lemonis). Homeboy Marcus Lemonis is rocking and rolling with brand M&A. Those of you who hoped for anticipated that The Container Store would need to 22 will have to set your sights elsewhere.
11. Sales (Long Taking Bigger Swings). Everyone is in some sort of sales role from biglaw attorneys to investment bankers to claims agents to … politicians, even. Be bold and shoot your shot.
12. US Postal Service (Long Forever Stamps). We’ve talked about the United States Postal Service’s dire state of affairs many times in the past so chalk this news up as some of the most predictable sh*t of all time:
“The United States Postal Service proposed raising the price of a first-class stamp by 4 cents to 82 cents, the agency said Thursday as seeks to improve its dire financial situation.
The proposed 4.8% price hike will be reviewed by the Postal Regulatory Commission, an oversight body, and if approved, will go into effect July 12. It would be the eighth stamp price hike since 2021, an increase of about 34% over that time, according to the PRC.”
🎧What We’re Listening To🎧
“So that is, when you think about liability management — which is all the rage today, and you think about what the current iterations of it are — this is a new frontier.” — Gary Holtzer, Weil Gotshal & Manges LLP
Given the news this week:
📼What We’re Watching📼
📚Resources📚
We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. 💥You can find it here💥.