We have compiled a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. You can find it here. We recently added four new books on our “to-read” list: (1) “When the Wolves Bite” by Scott Wapner (about the Carl Icahn/Bill Ackman Herbalife battle), (2) “I Love Capitalism!: An American Story” by Ken Langone, (3) “Factfulness” by Hans Rosling (recommended recently by Bill Gates) and (4) “Enlightenment Now” by Steven Pinker (recommended recently by Warren Buffett). We’ve also added “Bad Blood: Secrets and Lies in a Silicon Valley Startup” by John Carreyrou. He tells the story of Theranos’ Elizabeth Holmes’ epic deception. We are definitely adding this to our list of beach reads.
To Understand Disruption, Look Left AND Right
It was clear from our survey results that people are hungry for a$$-kicking resources on the topics of restructuring, tech, finance, and disruption. We went ahead and started compiling a "reading list," of sorts for your benefit. You can find it here. This will be a growing list: if there are any resources that you think should be included, please let us know below. A number of you have already submitted recommendations and we expect this list to change weekly.
Check Yo'Self B'Fo You Wreck Y'Self. As they say, "with great power comes great responsibility." Blackrock drops the hammer and outlines what it expects to see on the corporate governance front.
Cryptocurrency. A reminder: "It Can All Go To Zero" by Brad Feld.
ICOs. Avtar Sehra write a compelling piece about the structural and dynamic economic properties of Initial Coin Offerings.
M&A. Wachtell Lipton Rosen & Katz outlines some M&A expectations for 2018. Interesting: "While for several years, both lenders and private equity firms have been concerned about the leveraged lending guidelines, the regulatory environment overall seems more friendly to highly leveraged transactions than in recent years. The percentage of leveraged transactions financed with debt in excess of 6x EBITDA was higher in 2017 than at any time since 2007, fueled in part by a perceived relaxation of U.S. bank regulatory guidance that set 6x as a targeted maximum since 2013."
Steinhoff. Reorg Research discusses the troubled South African retailer (audio - podcast).
Amazon. A technical but interesting piece by Benedict Evans.
Bitcoin. "Chaos Proxy."
Artificial Intelligence. Wall Street is effed. And, generally speaking, "There's going to be huge displacement," says Mark Cuban (video).
Investing. Stanley Drunkenmiller has some thoughts (video) about the markets today including, among other things, how "monetary radicalism" has created an environment for sh*tshows like Steinhoff International Holdings (owner of the ubiquitous Mattress Firm), Bitcoin, and the hunt for yield. And Jeffrey Gundlach thinks that junk bonds are going to be the victim of unintended consequences of the tax plan (video). Of course, this may increase the likelihood of default and spark more bankruptcy filings.
Amazon & Antitrust. This law journal piece runs through the anticompetitive aspects of Amazon's structure.
Canada and Environmental Issues. As Baker McKenzie's Michael Nowina and Glenn Gibson write here, the Supreme Court of Canada will revisit whether secured creditors ought to be paid before environmental claims stemming from abandoned oil and gas wells.
Energy. Lazard Ltd. shares its analysis of the levelized cost of (wind and solar) energy.
Makewhole/Interest Rate. While In re MPM Silicones LLC (Momentive) gives restructuring geeks subjects to opine on (here, Kramer Levin Naftalis & Frankel LLP's Greg Horowitz and Marsha Sukach; here, King & Spalding LLP's Austin Jowers; here, Latham & Watkins LLP's Mitchell Seider, David Hammerman, Keith Simon, Jeffrey Mispagel, and Annmarie Reilly), the company's owners are moving forward towards an exit. The company plans a $350mm IPO. In the fiscal year closed June 30, the company had sales of $2.3b and losses of $146mm. The largest owners are Apollo Capital Management, Oaktree Capital Management, D.E. Shaw, and Pentwater Capital Management.
Third Party Releases. A lineup of Shearman & Sterling LLP partners summarize recent Delaware caselaw.
Automotive Advancement. Foley & Lardner LLP has a thing or two to say about electric cars and autonomous vehicles. Meanwhile, the International Energy Agency issued a report on plug-in electric vehicles.
Cramdown. Baker McKenzie's Edward Wu summarizes the Second Circuit's decision in In re MPM Silicones LLC, where the court ruled that the market rate test should applied secured creditor cramdown (rather than the lower formula rate). Orrick's Evan Hollander also has a view. As does Mintz Levin's Kaitlin Walsh. Meanwhile, Bloomberg's Matt Levine looks at the case from a different perspective.
Third Party Releases. Jones Day's Corinne Ball weighs in.
Cov-Lite Loans. Lots of focus on this subject lately. Here, Mark Laber and John Yozzo of FTI Consulting Inc. discuss the recent trend.
Healthcare/Obamacare. Does anyone understand what the eff is going on? Here, courtesy of Bryan Cave LLP's Mark Duedall, Leah Fiorenza McNeill and Jacob Johnson, is a brief summary about what this week's (strange) turn of events may mean for those in the restructuring space.
Impairment. Mark Broude and Jeffrey Mispagel from Latham & Watkins LLPdiscuss the recent Ultra Petroleum Corp. decision and the resultant circuit split emanating therefrom.
Media Company Disruption. This was an interesting piece by Ben Thompson - using Harvey Weinstein as context - about how traditional media companies have been disintermediated.
Self-Driving Cars. The Brookings Institution released a report about investment in the new technology.
Amazon. FTI Consulting's Christa Hart and Khaled Haram ask whether the retail behemoth is invincible.
Canada & Oil/Gas Remediation. Michael Nowina and Glenn Gibson of Baker McKenzie write about a significant (and somewhat perplexing) decision about who bears the costs of remediation of abandoned oil and gas wells.
Distressed Banks. The Federal Reserve Bank of New York Staff weighs in on how to treat them.
Retail. In this ABI podcast (audio, obvi), Bradford Sandler of Pachulski Stang Ziehl & Jones LLP and Amir Agam of FTI Consulting discuss recent trends in the retail space.
This dude predicted that Amazon was going to buy Whole Foods. He's funny, he's smart, and he's frikken everywhere now. If he's got something to say about 4 of the 5 highest market cap companies, it's wise to listen. You can get it here.
Makewhole. Chapman & Cutler LLP's Michael Friedman, Larry Halperin and Aaron Krieger summarize the recent decision in In re: Ultra Petroleum Corp., et al.
Market. On the heels of two newsletters, Howard Marks from Oaktree Capital Management has more to say. What's he say about distress? Spoiler alert: there ain't much to do as it relates to companies with an actual future.
Retail. AlixPartners LLP's Kent Percy, Luke Ericson, Mark Barnett, and Alvaro Corletto Costa have authored a retail bankruptcy study wherein they note that "almost half of all retailers that have filed for bankruptcy have ultimately liquidated." This is clearly why reorganized retailers, e.g., True Religion earlier this week, tout with such flair the fact that they still exist. Case and point: “'We have a situation that has becoming increasingly rare in the space over the last year—a retailer that is reorganizing,' True Religion’s attorney Laura Davis Jones said in court." Hallelujah! More celebration here.
D&O Insurance. David Banker, Wojciech Jung and Eric Jesse of Lowenstein Sandler LLP provide an interesting summary of the implications of the recent Sixth Circuit case, Indian Harbor Insurance v. Zucker, 860 F.3d 272 (6th Cir. 2017). Now reconcile this case with the "Governance" blurb below.
Makewhole. Bracewell LLP's Evan Flaschen and David Lawton summarize a recent decision on the topic in In re Ultra Petroleum Corp.
Retail (A Case Study). This is a long-but-worthwhile read by Todd Zoha and Kyle Putzstuck of MorrisAnderson about an out-of-court operational restructuring of a mattress retailer. Interestingly, the piece underscores the increasing threat that BtoC mattress sellers like Leesa and Casper (surely you've seen or heard ads for them, like, everywhere) pose to the old guard.
The WARN Act. Cole Schotz's Myles MacDonald summarizes a recent Third Circuit decision on the statute.
Automatic Perfection. Bracewell LLP's William Wood III, Jason Cohen and Shannon Wolf summarize the Third Circuit's recent holding on the subject in the SemCrude LP case. Yes, the one from 2008.
Chapter 11 Alternatives. Laura Davis Jones of Pachulski Stang Ziehl & Jones LLP provides a good summary of the various alternatives to a Chapter 11 filing.
Portfolio Company Dissolution. Bayard PA's Justin Alberto and Sara Bussiere provide some options for efficiently winding down and dissolving a portfolio company in Delaware.
Retail. Some interesting thoughts on what is needed for a winning retail experience outside of the physical store.
Lease Stripping. Distressed commercial real estate is on everyone's radars these days with the retail bloodbath being what it is. A recent Ninth Circuit ruling allowed for lease-stripping through a Section 363 sale. Take note. A good summary fromBallard Spahr LLP is here.
Recharacterization. The Supreme Court granted petition for certiorari to review the Fourth Circuit Court of Appeals' recharacterization decision in PEM. Here, a brief refresher on the issue from Squire Patton Boggs.
Electric Vehicles. Choice quote: "The EV revolution is going to hit the car market even harder and faster than...predicted a year ago." The report is here.
Restructuring Outlook. Houlihan Lokey's Co-President, Captain Obvious...we mean, Scott Adelson, highlights retail (video) as the hot sector for distressed activity with the potential to top energy in terms of revenue.