🔥 New Chapter 11 Bankruptcy Filing - IMH Financial Corporation 🔥

IMH Financial Corporation

July 23, 2020

So this is a smaller one but it’s not retail and it’s not oil and gas and so, f*ck it, we’re digging in purely for the sake of diversification. So, what is it? IMH Financial Corporation is a real estate investment holding company with assets consisting of (i) the MacArthur Place Hotel & Spa in Sonoma California (which looks “lit” by the way…intentional word choice, read below), (ii) thousands of undeveloped acreage and related water rights outside of Albuquerque New Mexico (sounds super practical for, like, an apocalyptic scenario like, say, a global pandemic that kills tens of thousands of people), (iii) other real estate assets (discussed below) and (iv) a boat load of tax attributes due to years of money losing endeavors ($475mm and $280mm federal and state NOLs, respectively). The company has no funded secured or unsecured debt (outside of a small PPP loan that it believes qualifies for forgiveness). Other unsecured debt consists of mostly professional service providers (e.g., law firms). This case is primarily about …

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• Jurisdiction: D. of Delaware (Judge Sontchi)

• Capital Structure: No secured debt.

• Professionals:

  • Legal: Snell & Wilmer LLP (Christopher Bayley, Steven Jerome, Benjamin Reeves, Jill Perella, James Florentine, Molly Kjartanson) & Ashby & Geddes PA (William Bowden, Gregory Taylor, Benjamin Keenan, Stacy Newman, Katharina Earle)

  • Special Committee Legal: Holland & Knight LLP (Lori Wittman, W. Keith Fendrick)

  • Investment Banker: Miller Buckfire (James Doak)

  • Claims Agent: Donlin Recano & Co., Inc. (*click on the link above for free docket access)

• Other Parties in Interest:

  • Preferred Equity Holder, DIP Lender, Exit Lender & Post-Reorg EquityHolder: JPMorgan Chase Funding Inc.

    • Legal: Hahn & Hessen LLP (Jeffrey Schwartz, Joshua Divack) & Landis Rath & Cobb LLP (Adam Landis, Richard Cobb, Matthew Pierce)

  • Preferred Equity Holder: Juniper Realty Partners LLC

    • Legal: Munger Tolles & Olson LLP (David Lee)

🚗 New Chapter 11 Bankruptcy Filing - Techniplas LLC 🚗

Techniplas LLC

May 6, 2020

Wisconsin-based Techniplas LLC and seven affiliates (the “debtors”), producers and manufacturers of plastic components used primarily in the automotive and transportation industries, filed for bankruptcy in the District of Delaware. “The Company produces, among other things, automotive products, such as fluid and air management components, decorative and personalization products, and structural components, as well as nonautomotive products, such as power utility and electrical components and water filtration products.” After cobbling together acquisitions over the course of the decade, the debtors’ business is now global in scale and its main customers are the leading OEMs in the US, Europe and Asia; it had net sales of $475mm and a net loss of $21mm in fiscal ‘19.

A bit more about the business. The debtors’ primary operating unit, “Techniplas Core,” acts “…as a manufacturer of technically complex, niche products across a wide range of applications and end markets, including the automotive and truck, industrial, and commercial markets.” This is roughly 83% of the business. In addition, the debtors have “Techniplas Prime,” which, aside from sounding like a Transformer that may or may not have it out for the human race, acts as a matchmaker between excess manufacturing capacity and customers in need of manufacturing. Per the debtors:

Serving as a nexus between customers, including OEMs, and other manufacturing companies, Techniplas Prime acts as an extension of Techniplas Core by delivering to customers the manufacturing capabilities of its Prime Partners. This makes Techniplas Prime asset-light and creates a “win-win” scenario for customers and Prime Partners.

Interestingly, this business segment was once dubbed “The Airbnb of Auto Manufacturing,” a moniker that makes almost zero sense and completely misunderstands the Airbnb model but, yeah sure, cheap “by-association” points, homies! Per Forbes:

[Founder George] Votis saw Techniplas Prime as an e-manufacturing platform from which customers could order parts electronically according to their own specifications, and have them built by local factories with unused capacity.

Except it’s not a platform. Like, at all. Airbnb is a digital two-sided platform that brings hosts and travelers together and seemlessly connects them. Techniplas Prime…well…

…well…page not found. Airbnb may be struggling in this COVID environment but we can assure you that you’re not EVER getting a 404 when going to their site. Platform…pssssfft. The Forbes article later contradicts itself saying:

…they focused on 3-D printing and advanced manufacturing technology companies that had spare capacity available for contract operations, for which Techniplas Prime is essentially the broker.

Right. Being a broker is different than being a platform y’all. But we digress.

The debtors have a simple capital structure consisting of a $17.59mm ABL, $175mm in 10% ‘20 notes, and a $6.77mm interim financing agreement for total funded debt around $200mm. The debtors, primarily due to this capital structure, began pursuing strategic alternatives in early 2017. Both an attempted sale process and debt refinancing failed. Thereafter, the debtors explored in 2018 a term loan refinancing of the preptition notes and/or a public equity listing in London. Those, too, failed. For this, the debtors blame a downturn in the automotive market and uncertainty from Brexit (PETITION Note: we’ve been foreshadowing that declining production capacity by the major OEMs was going to rattle through the supply chain so nobody should be surprised by this revelation).

In mid-’19, an attempted sale to a strategic buyer, private equity firm The Jordan Company, kicked off but that, despite some forward-moving progress involving a note purchase agreement and an unexercised call option for 100% of the membership interests in the debtors, ultimately fell through due to the inability to refi out the pre-petition notes. Subsequent attempts — now involving ad hoc group of noteholders and Jordan — also came close but ultimately failed due to deteriorating operating performance that pre-dated OOVID. COVID merely exacerbated things. Per the debtors:

Many customers suspended or drastically reduced production, resulting in a swift drop in demand for the Debtors’ products. Additionally, many of the locations where the Company had offices and manufacturing plants worldwide issued lockdown orders and permitted only essential business to remain open in an effort to control the outbreak and protect the health and safety of the public.

All of this was too much to handle: Jordan peaced out. Liquidity increasingly became an issue and so the debtors obtained a $6.7mm super senior priority bridge financing from the ad hoc group. Indeed, the ad hoc group is stepping up big here: in addition to providing the liquidity the debtors needed to get in chapter 11, they’ve agreed to provide a DIP ($20-25mm new money with a $100mm roll-up) and serve as stalking horse bidder — offering $105mm to purchase the debtors’ international operations and three remaining US-based manufacturing facilities. The debtors hope to close the sale within 44 days of the petition date.

• Jurisdiction: D. of Delaware (Judge Silverstein)

• Capital Structure: See above.

• Professionals:

  • Legal: White & Case LLP (David Turetsky, Andrew Zatz, Fan He, Robbie Boone Jr., John Ramirez, Sam Lawand, Thomas MacWright) & Fox Rothschild LLP (Jeffrey Schlerf, Carl Neff, Johnna Darby, Daniel Thompson)

  • Financial Advisor/CRO: FTI Consulting Inc. (Peter Smidt, Andrew Hinkelman)

  • Investment Banker: Miller Buckfire & Co. LLC (Richard Klein)

  • Claims Agent: Epiq Corporate Restructuring LLC (*click on the link above for free docket access)

• Other Parties in Interest:

  • Stalking Horse Purchaser: Techniplas Acquisition Co. LLC

  • Pre-Petition ABL & DIP ABL Agent: Bank of America NA

    • Legal: Sidley Austin LLP (Dennis Twomey, Elliot Bromagen) & Richards Layton & Finger PA (Mark Collins, Amanda Steele, David Queroli)

  • DIP Term Agent: Wilmington Savings Fund Society FSB

    • Legal: Cole Schotz PC (Daniel Geoghan, J. Kate Stickles, Patrick Reilley)

  • Indenture Trustee: US Bank NA

    • Legal: Dorsey & Whitney LLP (Eric Lopez Schnabel, Alessandra Glorioso)

  • Ad Hoc Noteholder Group ‘20 10% Senior Secured Notes

    • Legal: Arnold & Porter Kaye Scholer LLP (Jonathan Levine, Brian Lohan, Jeffrey Fuisz, Gerardo Mijares-Shafai)

🥛New Chapter 11 Filing - Southern Foods Group LLC (d/b/a Dean Foods Company)🥛

Southern Foods Group LLC (d/b/a Dean Foods Company)

November 12, 2019

In one corner: innovation. In the other corner: disruption. Dean Foods Co. $DF, the largest US supplier of milk, is struggling as a result. From back in March: https://t.co/Rk8xRVdW86 (paywall) https://t.co/TNpq1s4rzc

— 💥PETITION💥 (@petition) May 21, 2019

We’ve published these charts before here but they’re worth revisiting:

Since we’re all about the charts right now, here’s another one — perhaps the ugliest of them all:

Yup, Southern Foods Group LLC (d/b/a Dean Foods Company) has been a slow-moving train wreck for some time now. In fact, we wrote about the disruption it confronts back in March. It’s worth revisiting (we removed the paywall).

Alas, the company and a long list of subsidiaries finally filed for bankruptcy yesterday in the Texas (where things seem to be getting VERRRRRY VERRRRRY busy these days; see below ⬇️).

Once upon a time everyone had milk. Serena and Venus Williams. Dwight Howard. Mark McGuire. Tyra Banks. The Olsen twins. David Beckham. Giselle. The “Got Milk? campaign was pervasive, featuring A-listers encouraging folks to drink milk for strong bones. Things have certainly changed.

Dean Foods’ long history begins in 1925; it manufactures, markets and distributes branded and private label dairy products including milks, ice cream, creamers, etc. It distributes product to schools, QSRs like McDonald’s Inc. ($MCD), small format retailers (i.e., dollar stores and pharmacies), big box retailers like Walmart Inc. ($WMT)(which accounted for 15.3% of net sales in ‘18), and the government. Its products include, among many others, Friendly’s, Land O Lakes and Organic Valley. This company is a monster: it has 58 manufacturing facilities in 29 states, 5000 refrigerated trucks and 15,000 employees (40% of whom are covered by collective bargaining agreements). Milk, while on the decline, remains big business.

How big? Per the company:

In 2018, Dean Foods’ reported consolidated net sales of $7.755 billion, gross profit of $1.655 billion, and operating income of $(315.2) million. Through the first 6 months of 2019, Dean Foods’ reported consolidated net sales of $3.931 billion, gross profit of $753.2 million, and operating income of $(96.2) million.

Those are some serious sales. And losses. And the company also has a serious capital structure:

Milk production is a capital intensive business requiring a variety of inputs: raw milk, resin to make plastic bottles (which likely infuse all of us with dangerous chemicals, but whatevs), diesel fuel, and juice concentrates and sweeteners. Hence, high debt. So, to summarize: high costs, low(er) demand, lots of debt? No wonder this thing is in trouble.

What are the stated reasons for the company’s chapter 11 filing?

• Milk Consumption Declines. “For the past 10 years, demand has fallen approximately 2% year-over-year in North America.” This is consistent with the chart above.

• Loss of Pricing Power. Because volumes declined, economies of scale also decreased. “Delivered cost per gallon rose approximately 20.7% between 2018 and 2013 as a result of volume deleverage.” That’s vicious. Talk about a mean spiral: as volumes went down, the company couldn’t support the input volumes it had previously and therefore lost pricing power. “Dean Foods suffered a full year 2018 year-over-year decline in fluid milk volume of 5.8% following a 2017 year-over-year decline of 4.2%. Moreover, Dean Foods’ volume declines continue to outpace the overall category; while category volumes declined by approximately 4%8 year-over-year through the end of September, 2019, Dean Foods experience declines of over 11.4%.” Apparently, this impacted Dean Foods disproportionately. Any buyer looking at this has to wonder how these issues can be remedied.

• Market Share Disruption. New forms of “milk” have taken market share. “Sales of nut and plant beverages grew by 9% in 2018 and had sales of $1.6 billion, according to the Plant Based Foods Association.”

• Retail Consolidation. It doesn’t help when, say, Dollar General merges with Family Dollar. That gives the dollar stores increased leverage on price. And that’s just one example.

• “The BigBox Effect.” The biggest retailers have become increasingly private label focused and, in turn, vertically integrated. Take Walmart, for example. In 2018, the retailer opened its first U.S. food production facility in Indiana. Want to guess what kind of food? Why would we be mentioning it? This new facility amounted to a 100mm gallon loss of volume to Dean Foods.

• “The Loss Leader Effect.” We often talk about the venture-backed subsidization of commonplace lifestyle items, e.g., Uber Inc. ($UBER). Retailers have, in recent years, aggressively priced private label milk to drive foot traffic. “As retailers continue to invest in private-label milk to drive foot traffic, private label margin over milk contracted to a historic low of $1.26 in June, before falling even further to $1.24 in September.”

• Freight Costs. They’ve been up over the last few years. This is a different version of
  ”The Amazon Effect” ($AMZN).

All of these are secular issues that a balance sheet solution won’t remedy. Buyer beware. 😬🤔

So, what CAN the bankruptcy achieve? Yes, the obvious: the balance sheet. Also, there is a contingent liability of over $722.4mm that results from the company’s participation in an underfunded multi-employer pension plan. And liquidity: the bankruptcy will avail the company of a $850mm DIP credit facility. It may also allow the company to pursue a sale transaction to its long-time commercial partner and largest single raw milk vendor, Dairy Farmers of America (which is wed $172.9mm). Surely they must be aware of the secular trends and will price any offer accordingly, right? RIGHT? Either way, those ‘23 notes look like they might be about to take a bath.*

*Likewise certain trade creditors. The debtors state that that they have $555.7mm of total outstanding accounts payable and claim $257mm needs to go to critical vendors and another $189.2mm to 503(b)(9) admin claimants. That leaves a small subset of creditors due a bit more than $100mm holding the bag. This also explains the sizable DIP.

Meanwhile, one of the largest unsecured creditors is Acosta Inc., with a contingent, disputed and unliquidated claim arising out of litigation. Acosta is unlikely to recover much on this claim which is a bit ironic considering that an Acosta bankruptcy filing is imminent. Womp womp.

• Jurisdiction: S.D. of Texas (Judge Jones)

• Capital Structure: see above

• Professionals:

  • Legal: Davis Polk & Wardwell LLP (Brian Resnick, Steven Szanzer, Daniel Meyer, Nate Sokol, Alexander Bernstein, Charlotte Savino, Cameron Adamson) & Norton Rose Fulbright LLP (William Greendyke, Jason Boland, Bob Bruner, Julie Goodrich Harrison)

  • Financial Advisor: Alvarez & Marsal LLC (Jeffrey Stegenga, Brian Fox, Tom Behnke, Taylor Atwood)

  • Investment Banker: Evercore Group LLC (Bo Yi)

  • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on the link above for free docket access)

• Other Parties in Interest:

  • Receivables Securitization Agent, RCF Agent & DIP Agent: Rabobank USA

    • Legal: White & Case LLP (Scott Greissman, Philip Abelson, Elizabeth Fuld, Rashida Adams, Andrew Zatz) & Gray Reed & McGraw LLP (Jason Brookner, Lydia Webb, Amber Carson)

  • Unsecured Bond Indenture Trustee: Bank of New York Mellon NA

    • Legal: Emmett Marvin & Martin LLP (Thomas Pitta, Edward Zujkowski, Elizabeth Taraila)

  • Ad Hoc Group of 6.5% ‘23 Unsecured Noteholders: Ascribe III Investments LLC, Broadbill Investment Partners LLC, Ensign Peak Advisors Inc., Kingsferry Capital LLC, Knighthead Capital Management LLC, MILFAM Investments LLC

    • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Andrew Rosenberg, Robert Britton, Douglas Keeton, Grace Hotz) & Pillsbury Winthrop LLP (Hugh Ray III, William Hotze, Jason Sharp)

  • Official Committee of Unsecured Creditors: Central States Southeast and Southwest Areas Pension Fund, The Bank of New York Mellon Trust Company NA, Pension Benefit Guaranty Corporation, Land O’ Lakes Inc., California Dairies Inc., Consolidated Container Company LP, Select Milk Producers Inc.

    • Legal: Akin Gump Strauss Hauer & Feld LLP (Ira Dizengoff, Philip Dublin, Meredith Lahaie, Martin Brimmage, Joanna Newdeck, Julie Thompson, Patrick Chen, Madison Gardiner)

    • Financial Advisor: Berkeley Research Group LLC (Christopher Kearns)

    • Investment Banker: Miller Buckfire & Co. LLC (Richard Klein)

Update 1/11/20

🔌New Chapter 11 Bankruptcy Filing - Agera Energy LLC🔌

Agera Energy LLC

October 4, 2019

Agera Energy LLC, a retail electricity and natural gas provider to commercial, industrial and residential customers filed for bankruptcy in the Southern District of New York. The company blames, among other things, mismanagement and poor strategy for the run-up to its financial problems: too many low margin fixed contracts in an environment that calls for variable contracts proved to be an albatross. Nevertheless, in September ‘18, sponsor Eli Global LLC agreed to pursue a turnaround plan including any and all capital infusions that might be necessary.

But then the hammer dropped. New management discovered “material balance sheet issues, which led to a restatement of the Debtors’ financials. Specifically, as of August 31, 2018, there was approximately $39 million of over stated receivables, of which $37 million related to unbilled receivables. As a result of the foregoing discovery, the Debtors suddenly found themselves in breach of the Senior Lien Supply Agreement’s $16 million Tangible Net Worth covenant.” WHOOPS.

Thereafter, the company and its lenders operated pursuant to a series of forbearance agreements while Eli Global LLC made millions of dollars of capital contributions. Until they didn’t. In May, Eli Global indicated that it was no longer in a position to inject capital into the business — and it still had $21mm in commitments from that point forward. Without the capital, the company was unable to satisfy, among other things, renewable portfolio standards it is subject to.* This dominoed into a separate liability for the company of approximately $72mm and a slate of enforcement actions from the Massachusetts Department of Energy Resources, the Rhode Island Public Utilities Commission and the New Hampshire Public Utilities Commission that threatened the debtors’ ability to sell electricity or natural gas in those states. Consequently, the debtors initiated a strategic alternatives review process which, naturally, included a marketing process for the sale of the debtors. The company now has Exelon Generation Company LLC lined up as a stalking horse purchaser (for the debtors’ contracts) for $24.75mm.

*RPS laws require a certain portion of a state’s electricity consumption to be generated from renewable sources, such as wind, solar, biomass, geothermal, or hydroelectric.

• Jurisdiction: S.D. of New York (Judge Drain)

• Capital Structure: $161.6mm Senior Lien Supply Agreement and Senior Lien ISDA Master Agreement (BP Energy), $35mm Second lien Revolving Credit Facility (Colorado Bankers Life Insurance Company)

• Professionals:

  • Legal: McDermott Will & Emery (Timothy Walsh, Darren Azman, Ravi Vohra, Debra Harrison)

  • Independent Manager: Stephen Gray

  • Financial Advisor: GlassRatner Advisory & Capital Group LLC

  • Investment Banker: Miller Buckfire & Co. LLC & Stifel Nicolaus & Co. Inc.

  • Claims Agent: Stretto (*click on the link above for free docket access)

• Other Parties in Interest:

  • DIP Lender: BP Energy Company

    • Legal: Haynes and Boone LLP (Charles Beckham Jr., Kelli Norfleet, Arsalan Muhammad, Kathryn Shurin)

  • Stalking Horse Bidder: Exelon Generation Company, LLC

    • Legal: McGuireWoods LLP (Cecil Martin III)

  • Platinum Partners

    • Legal: Otterbourg PC (Melanie Cyganowski, Eric Weinick)

10/7/19 #42

🚗New Chapter 11 Bankruptcy Filing - Total Finance Investment Inc.🚗

Total Finance Investment Inc.

February 13, 2019

We’ve been asking about distress in the automotive industry since our inception and most recently noted in “🚗The Auto Sector is Quietly Restructuring🚗 that activity is picking up in the space. Admittedly, this case isn’t exactly what we had in mind. Nevertheless, earlier this week, Total Finance Investment Inc. and Car Outlet Holding Inc. (and affiliated debtors) filed for bankruptcy in the Northern District of Illinois; the debtors are an integrated chain of buy-here pay-here used vehicle dealerships in Illinois and Wisconsin.

What does “buy-here pay-here” mean? The debtors sold used vehicles, provided financing, AND operated an insurance broker to assist customers with procurement of automobile insurance coverage from third-party insurance providers. They “specifically catered to the fast-growing and underserved population of “unbanked” and “underbanked” Hispanic consumers in Northern Illinois and Milwaukee, which historically made up approximately 70% of the Debtors’ customer base.” There’s just one problem with all of this? Competition is BRUTAL. Per the company:

In recent years, BHPH dealerships have been subject to increasing industry-wide pressures that have negatively impacted their operating results, driving a number of the Debtors’ BHPH competitors out of business. The used vehicle dealership market is highly fragmented and fiercely competitive—with approximately 1,800 used car dealerships in Illinois alone—and the Debtors historically competed with other large used car dealerships like CarMax and DriveTime, as well as other BHPH operations. The fragmented nature of the industry and relatively low barriers to entry have led to steep competition between dealerships, putting significant downward pressure on the margins BHPH dealerships earn on vehicle sales. Further, as a result of a protracted period of increased capital availability, indirect auto lenders such as banks, credit unions, and finance companies have in recent years moved to originate subprime auto loans and offer attractive financing terms to customers with lower than average credit scores, putting pressure on BHPH operators’ market share among their traditional customer base.

Because, like, why not? Nothing has ever gone wrong when there has been excessive competition fiercely pursuing the subprime market. 🙈Ironically, the day before this filing, The Washington Post reported that 7mm Americans have, to the surprise of economists, stopped paying their auto loans. Whooooops. Per the WP:

The data show that most of the borrowers whose auto loans have recently moved into delinquency are people younger than 30 years old and people with low credit scores. Eight percent of borrowers with credit scores below 620 — otherwise known as subprime — went from good standing to delinquent on their auto loans in the fourth quarter of 2018.

No. Bueno. Anyway, back to the debtors. Read this part and tell us you don’t suffer PTSD circa-2008:

…capital markets became increasingly accessible for indirect auto lenders, many of which began to originate subprime loans and offer attractive financing terms to borrowers that historically had been overwhelmingly BHPH customers. The Debtors’ prior management team responded to the change in market conditions by providing larger loans with longer terms, accepting smaller down payments, and accepting transactions with increasingly negative equity in order to increase sales volume. The shift to offering riskier loans to subprime customers ultimately led to the Debtors experiencing historically high delinquency rates and losses beginning in the second half of 2015.

But wait. There’s more:

In addition to increased competition in the auto lending industry, the Debtors have also incurred significant expenses to ensure compliance with new regulations enacted by the Consumer Financial Protection Bureau. Furthermore, the political climate following the 2016 presidential election has had a negative impact on the spending habits of the Debtors’ traditional customer base in a manner that negatively impacted the Debtors’ operating results.

The debtors, therefore, suffered a consolidated pre-tax loss of approximately $29.9mm. MAGA!!!

The company has been trying to improve cash flows and operating results for years. One major initiative included, as far back as 2016, tightening underwriting standards to reduce consumer finance portfolio losses. We sure hope that there are others who took similar steps given the Washington Post report. But we digress.

Back in 2017, the debtors also received an $84mm equity infusion from Marubeni Corporation. Nevertheless, the debtors continued to hemorrhage to the point of compromising compliance with certain financial covenants under their senior secured debt facility with BMO Harris Bank NA. Thereafter, the company entered into a series of forbearance agreements with BMO as it attempted to figure out either a refinancing or an asset sale. In the end, the debtors obtained a restructuring support agreement and filed for bankruptcy to liquidate the used auto business and transfer its auto loan servicing business to a third-party servicer (PETITION Note: earlier this week, The Wall Street Journal reported that the mortgage servicing business is en fuego — notwithstanding the Ditech Holding Corporation bankruptcy (see here). We wonder: what sort of demand is there for subprime auto loan servicing businesses?). BMO Harris will fund the estates with a $4mm DIP credit facility.

So we’re left with this question: is this chapter 11 filing the canary in the coal mine for subprime auto lenders?

• Jurisdiction: N.D. of Illinois (Judge Doyle)

• Capital Structure: see below.

• Professionals:

  • Legal: Sidley Austin LLP (Bojan Guzina, William Evanoff, Jackson Garvey)

  • Conflicts Legal: Togut Segal & Segal LLP

  • Financial Advisor: Portage Point Partners LLC

  • Interim Management: Development Specialists Inc.

  • Investment Banker: Keefe Bruyette & Woods and Miller Buckfire & Co. LLC

  • Claims Agent: KCC (*click on the link above for free docket access)

• Other Professionals:

  • Prepetition Lender: BMO Harris Bank NA

    • Legal: Chapman and Cutler LLP (David Audley, Mia D’Andrea)
      

Source: First Day Declaration

New Chapter 11 Bankruptcy Filing - Things Remembered Inc.

Things Remembered Inc.

2/6/19

This has been a rough week for "out-of-court" restructurings in the retail space. On the heals of Charlotte Russe's collapse into bankruptcy after an attempted out-of-court solution, Things Remembered Inc. filed for bankruptcy in the District of Delaware on February 6, 2019. We recently wrote about Things Remembered here. Let's dig in a bit more. 

The 53-year old retailer filed with a stalking horse purchaser, Ensco Properties LLC, in line to purchase, subject to a tight 30-day timeframe, a subset of the company's store footprint and direct-sales business. The company writes in the most Trumpian-fashion imaginable:

"Although stores not acquired will need to close, the going-concern sale wills save hundreds of jobs and potentially many more and provide an improved, and significantly less risky, recovery to stakeholders." What does "potentially many more" mean? Don't they know how many people are employed at the locations being sold as well as corporate support? Seems like a Trumpian ad lib of corresponding inexactitude. But, whatever. 

What caused the need for bankruptcy?

"Like many other retailers, the Company has suffered from adverse macro-trends, as well as certain microeconomic operational challenges. Faced with these challenges, the Company initiated multiple go-forward operational initiatives to increase brick-and-mortar profitability, such as store modernization through elimination of paper forms and the addition of iPads to streamline the personalization and sale process, and by shuttering a number of underperforming locations. The Company also sought to bolster the Debtors’ online-direct sale business, including aggressive marketing to loyal customers to facilitate sales through online channels, attracting new customers via an expanded partnership with Amazon, and increasing service capabilities for the business-to-business customer segment."

Read that paragraph and then tell us that retail management teams (and their expensive advisors) have any real clue how to combat the ails confronting retail. Elimination of paper forms? Ipads? Seriously? Sure, the rest sounds sensible and comes right out of today's standard retail playbook, i.e., shutter stores, bolster online capabilities, leverage Amazon's distribution, tapping into "loyal customers," etc. We're surprised they didn't mention AR/VR, Blockchain, "experiential retail," pop-ups, advertising on scooters, loyalty programs, and all of the other trite retail-isms we've heard ad nauseum (despite no one actually proving whether any or all of those things actually drive revenue). 

The rest of the story is crazy familiar by this point. The "challenging operating environment" confronting brick-and-mortar and mall-based retail, specifically, led to missed sales targets and depressed profitability. Naturally there were operational issues that compounded matters and, attention Lenore Estrada (INSERT LINK), "…vendors have begun to place pressure on the supply chain cost structure by delaying or cancelling shipments until receiving payment." Insert cash on delivery terms here. Because that's what they should do when a customer is mid-flush. 

Anyway, shocker: negative cash flows persisted. Consequently, the company and its professionals commenced a marketing process that landed Enesco as stalking horse bidder. Enesco has committed to acquiring the direct-sales business (which constitutes 26% of all sales in 2018 and includes the e-commerce website, hq, fulfillment and distribution center in Ohio and related assets) and approximately 128 stores (subject to addition or subtraction, but a floor set at 50 store minimum). Store closings of approximately 220 stores and 30 kiosks commenced pre-petition. A joint venture between Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC is leading that effort (which again begs the question as to how Gymboree is the only recent retailer that required the services of four "liquidators"). The purchase price is $17.5mm (subject to post-closing adjustments). $17.5mm is hardly memorable. That said, the company did have negative $4mm EBITDA so, uh, yeeeeeaaaaah. 

$18.7mm '19 revolving credit facility (Cortland Capital Markets Services LLC); $124.9mm 12% '20 TL. 

The capital structure represents the result of an August 30, 2016 out-of-court exchange that, let's be honest here, didn't do much other than incrementally lessen the debt burden, kick the can down the road and get some professionals paid. If this sounds familiar, it's because it's not all that different than Charlotte Russe in those respects. 

• Jurisdiction: D. of Delaware (Judge Gross)

• Capital Structure: $mm debt     

• Company Professionals:

  • Legal: Kirkland & Ellis LLP (Christopher Greco, Derek Hunger, Angela Snell, Spencer Winters, Catherine Jun, Scott Vail, Mark McKane) & (local) Landis Rath & Cobb LLP (Adam Landis, Matthew McGuire, Kimberly Brown, Matthew Pierce)

  • Legal (Canada): Davies Ward Phillips & Vineberg LLP

  • Financial Advisor/CRO: Berkeley Research Group LLC (Robert Duffy, Brett Witherell)

  • Investment Bank: Stifel Nicolaus & Co. Inc. and Miller Buckfire & Co. LLC (James Doak)

  • Liquidators: Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC

    • Legal: Pepper Hamilton LLP (Douglas Herman, Marcy McLaughlin)

  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)

• Other Parties in Interest:

  • Stalking Horse Purchaser: Enesco Properties LLC  (Balmoral Funds LLC)

    • Legal: Pachulski Stang Ziehl & Jones LLP (Jeffrey Pomerantz, Maxim Litvak, Joseph Mulvihill)

  • Lender: Cortland Capital Market Services LLC

    • Legal: Weil Gotshal & Manges LLP (David Griffiths, Lisa Lansio) & (local) Richards Layton & Finger PA (Daniel DeFranceschi, Zachary Shapiro)

  • Sponsor: KKR & Co.

  • Official Committee of Unsecured Creditors (Jewelry Concepts Inc., Gravotech Inc., Chu Kwun Kee Metal Manufactory, Brookfield Property REIT, Inc., Simon Property Group LP)

    • Legal: Kelley Drye & Warren LLP (Eric Wilson, Jason Adams, Kristin Elliott, Lauren Schlussel) & (local) Connolly Gallagher (N. Christopher Griffiths, Shaun Michael Kelly)

    • Financial Advisor: Province Inc. (Carol Cabello, Sanjuro Kietlinski, Jorge Gonzalez, Michael Martini)

New Chapter 11 Filing - Rand Logistics Inc.

Rand Logistics Inc.

• 1/28/18 Recap: NJ-based publicly-traded ($RLOG) bulk freight Jones Act shipper filed for bankruptcy to effectuate a balance sheet restructuring and sale pursuant to a prepackaged plan of reorganization. Lightship Capital LLC has agreed to acquire the company by converting all of the company's second lien debt into 100% of the equity. The deal eliminates approximately $90mm of debt. The company blames currency volatility (US vs. Canadian dollar) and increased maintenance/certification costs as factors necessitating a review of the capital structure. 
• Jurisdiction: D. of Delaware 
• Capital Structure: $235.9mm total funded debt; $149mm first lien debt (Bank of America) & $86.9mm second lien debt (Guggenheim Corporate Funding LLC)    
• Company Professionals:
  • Legal: Akin Gump Strauss Hauer & Feld LLP (Meredith Lahaie, Alexis Freeman, Kevin Zuzolo, Zach Lanier, Abid Qureshi) & (local) Pepper Hamilton LLP (David Stratton, David Fournier, Evelyn Fournier)
  • Financial Advisor: Conway MacKenzie Inc.
  • Investment Banker: Stifel Financial/Miller Buckfire & Co. LLC (Kevin Haggard)
  • Claims Agent: KCC (*click on company name above for free docket access)
• Other Parties in Interest:
  • First Lien Agent: Bank of America NA
    • Legal: Otterbourg P.C. (Daniel Fiorillo, Chad Simon) and (local) Womble Bond Dickinson (US) LLP (Matthew Ward, Nicholas Verna)
  • Second Lien Agent and Second Lien Lender: Lightship Capital LLC
    • Legal: White & Case LLP (Thomas Lauria, Andrew Zatz, Rashida Adams) & (local) Fox Rothschild LLP (Jeffrey Schlert, Carl Neff)
    • Financial Advisor: Houlihan Lokey Capital Inc.

New Chapter 11 Filing - Tidewater Inc.

Tidewater Inc.

• 5/17/17 Recap: First Gulfmark Offshore Inc., now Tidewater: the offshore shakeout is finally upon us. The New Orleans-based publicly-traded offshore operator filed for bankruptcy to effectuate an expedited 6-week prepackaged financial restructuring of the company. This story is so cliche at this point: leverage is high, oil prices are low, E&P activity is down, natural gas is up, liquidity is constrained. Cue Weil and a slew of other restructuring professionals. File bankruptcy. 
• Jurisdiction: D. of Delaware (Shannon)
• Capital Structure: $1.95b funded debt. $300mm TL (DNB Bank ASA) & $600mm RCF (BofA), $1.15b unsecured notes, tons of of guarantees and nonsense.    
• Company Professionals:
  • Legal: Weil (Ray Schrock, Jill Frizzley, Alfredo Perez, Christopher Lopez, Yvanna Custodio, Andriana Georgallas) & (local) Richards Layton & Finger PA (Daniel DeFranceschi, Zachary Shapiro, Christopher De Lillo)
  • Financial Advisor: AlixPartners LLC (David Johnston, Richard Robbins, Jim Trankina, Bruce Smathers)
  • Investment Banker: Lazard (Timothy Pohl)
  • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name for free docket)
• Other Parties in Interest:
  • Independent Directors of the Board
    • Legal: Andrews Kurth Kenyon LLP (Robin Russell, Timothy Davidson)
  • Term Loan Agent: DNB Bank
    • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Tyson Lomazow) & (local) Klehr Harrison Harvey Branzburg LLP (Domenic Pacitti)
  • Credit Agreement Agent: Bank of America
    • Legal: Morgan Lewis & Bockius LLP (Amy Kyle, Edwin Smith, Joshua Dorchak, Matthew Ziegler) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott)
  • Unofficial Noteholder Committee
    • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Alan Kornberg, Brian Hermann, Sean Mitchell, Kellie Cairns) & (local) Blank Rome LLP (Stanley Tarr, Rick Antonoff, Barry Seidel)
  • Official Committee of Unsecured Creditors
    • Legal: Whiteford Taylor & Preston LLC
    • Financial Advisor: Berkeley Research Group LLC (Christopher Kearns, Mark Shankweiler, Rick Wright, Jeffrey Dunn, Carolyn Passaro)
  • Official Committee of Equity Holders
    • Legal: Brown Rudnick LLP (Howard Steel, Brandon Burkart, Jeffrey Jonas, Steven Pohl) & (local) Saul Ewing LLP (Mark Minuti, Sharon Levine)
    • Financial Advisor: Miller Buckfire & Co. LLC (Matthew Rodrigue) & Stifel Nicolaus & Co. Inc.
  • Post Reorg Board of Directors (Dick Fagerstal, Steven Newman, Larry Rigdon, Randee Day, Alan Carr, Thomas Robert Bates Jr.)

Updated 7/12/17 9:07 am CT

New Chapter 11 Filing - Adeptus Health Inc.

Adeptus Health Inc.

• 4/19/17 Recap: Publicly-traded ($ADPT) Texas-based for-profit hospital operator filed for bankruptcy to effectuate a sale of the business to Deerfield Management Company. The company blames significant working capital needs, challenges with revenue cycle management, and reduced utilization and patient volume for its filing. Deerfield is providing the company a $45mm DIP credit facility. 
• Jurisdiction: N.D. of Texas
• Capital Structure: $212.75mm total debt. $61.9mm RCF (Bank of America), $132mm TL (A-1 and A-2, latter with Goldman Sachs Lending Partners), $13.09mm LOC (Bank of America), $7.5mm bridge loan (Deerfield Management Company)    
• Company Professionals:
  • Legal: Norton Rose Fulbright LLP (Louis Strubeck Jr., Kristian Gluck, John Schwartz, Liz Boydston, Timothy Springer)
  • Financial Advisor/CRO: FTI Consulting (Andrew Hinkelman)
  • Investment Banker: Houlihan Lokey Capital Inc.
  • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name for docket)
• Other Parties in Interest:
  • Deerfield Management Company LP
    • Legal: Katten Muchin Rosenman LLP (Peter Siddiqui, Paige Barr)
  • MatlinPatterson Global Opportunities Master Fund LP
    • Legal: Ropes & Gray LLP (Mark Somerstein, Keith Woffard) & (local) Porter Hedges LLP (John Higgins, Joshua Wolfshohl)
  • Wexford Spectrum Investors LLC and Debello Investors LLC
    • Legal: Winstead PC (Phillip Lamberson, Rakhee Patel, Annmarie Chiarello)
  • Healthcare Ombudsman: Daniel McMurray
    • Legal: Neubert, Pepe & Monteith PC (Mark Fishman) & (local) Quilling Selander Lownds Winslett & Moser PC (Joshua Shephard)
    • Medical Operations Advisor: Focus Management Group USA (Daniel McMurray, James Grobmyer, Angeline Bernard, Sandra Casper)
  • Official Committee of Unsecured Creditors
    • Legal: Akin Gump Strauss Hauer & Feld LLP (Sarah Link Schultz, Marty Brimmage, David Botter, Alexis Freeman)
    • Financial Advisor: CohnReznick LLP (Chad Shandler)
  • Official Committee of Equity Security Holders
    • Legal: Brown Rudnick LLP (Edward Weisfelner, Bennett Silverberg, Jeffrey Jonas) & Winstead PC (Rakhee Patel, Phil Lamberson)
    • Financial Advisor: Miller Buckfire & Co. LLC & Stifel Nicolaus & Co. (Richard Klein)

Updated 7/13/17

New Chapter 11 & CCAA Filing - SquareTwo Financial Services Corporation

SquareTwo Financial Services Corporation

• 3/19/17 Recap: Colorado-based privately held acquirer, manager, and collector of charged-off U.S. and Canadian consumer and commercial accounts-receivable filed a prepackaged plan of reorganization seeking to split the company into an acquired-co and "wind down co", with Resurgent Holdings LLC putting in approximately $264mm of new money in exchange for 100% equity in the acquired co. This is on the heels of a prior recapitalization that provided for the exchange of second lien notes for a 1.5 Lien Term Loan & preferred stock (enter Apollo and KKR here). Under the proposed plan of reorganization, the lenders holding claims under the first lien credit facilities will get paid in full; the holders of claims under the 1.5 Lien Term Loan will get a pro rata share of remaining cash; Resurgent will own the remaining business (with the rest liquidated); and the remaining creditors - including the second lien holdouts and the Pennsylvania Public School Employees' Retirement System (?!?!) - will get a big fat donut. Because who gives a sh*t about public school teachers anyway: what have they ever done for folks who work at Apollo and KKR?
• Jurisdiction: S.D. of New York
• Capital Structure: $60mm first lien RCF ($41mm out) & $105mm first lien Term Loan (Cerberus Business Finance LLC), $15mm 1.25 Lien Term Loan (plus $1.3mm interest) & $176.1 mm 1.5 Lien Term Loan (plus $15.4mm interest) (Cortland Capital Market Services LLC), $1.9 mm second lien notes (unexchanged in prior recapitalization)(U.S. Bank National Association)    
• Company Professionals:
  • Legal: Willkie Farr & Gallagher LLP (Matthew Feldman, Paul Shalhoub, Robin Spigel, Debra McElligott, Gabriel Brunswick) & (Canadian counsel) Thornton Grout Finnigan LLP (D.J. Miller, Leanne Williams, Asim Iqbal, Mitch Grossell)
  • Financial Advisor: AlixPartners LLC (Mark Thorson)
  • Investment Banker(s): Keefe Bruyette & Woods Inc. & Miller Buckfire & Co. (John McKenna)
  • Claims Agent: Prime Clerk LLC (*click on company name for docket)
• Other Parties in Interest:
  • Prepetition Agent & DIP Agent: Cerberus Business Finance LLC
    • Legal: Schulte Roth & Zabel LLP (Frederic Ragucci, Adam Harris)
  • Ad Hoc Group of 1.25 lien and 1.5 lien Lenders (Apollo Capital Management LP, KKR Credit Advisors LLC)
    • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Alan Kornberg, Elizabeth McColm, Michael Turkel)
  • Prepetition 1.25 Lien and 1.5 Lien Agent: Cortland Capital Market Services LLC
    • Legal: Holland & Knight LLP (Barbra Parlin, Joshua Spencer)
  • U.S. Bank National Association
    • Legal: Dorsey & Whitney LLP (Eric Lopez Schnabel, Alessandra Glorioso) & (local) Maslon LLP (Clark T. Whitmore)
  • Preferred Stock Holders: Apollo Investment Corporation & KKR Financial CLO 2007-1 Ltd.
  • Majority Common Stock Holders: Norwest Mezzanine Partners II LP & Pennsylvania Public School Employees' Retirement System
  • New Money Investor: Resurgent Holdings LLC
    • Legal: Foley & Lardner LLP (Patricia Lane, Michael Small, Benjamin Rikkers, Jack Haake)
  • Official Committee of Unsecured Creditors
    • Legal: Arent Fox LLP (Robert Hirsh, George Angelich, Jordana Renert)
    • Financial Advisor: Gavin/Solmonese LLC (Ted Gavin)

Updated 5/31/17

New Chapter 11 Filing - hhgregg Inc.

hhgregg Inc.

• 3/6/17 Recap: Indianapolis-based (and formerly publicly-traded - HGGG) brick-and-mortar retailer of appliances, consumer electronics, home products (read: all things that millennials don't buy) FINALLY filed for bankruptcy after an endless barrage of negative news stories, including reports of 88 store closures. The company's distress - brought on by trends afflicting the retail space generally and repeated to death in each and every retail bankruptcy filing, e.g., declining mall traffic, onerous leases, etc., - was exacerbated by its credit card program with Synchrony Bank and the need to post letters of credit to collateralize Synchrony's acquired receivables ($3mm paid, another $14mm owed). Note: there's a commentary here about consumer lending. The filing is intended to enable the company to continue with store closing sales and potentially find a buyer for its remaining locations.
• Jurisdiction: S.D. of Indiana
• Capital Structure: $300mm '21 credit facility ($56mm out)(Wells Fargo)     
• Company Professionals:
  • Legal: Morgan Lewis & Bockius LLP (Neil Herman, Rachel Jaffe Mauceri, Benjamin Cordiano, Katherine Lindsay, Matthew Ziegler, Michaela Dragalin) & (local) Ice Miller LLP (Jeffrey Hokanson, Sarah Fowler)
  • Financial Advisor: Berkeley Research Group (Robert Duffy)
  • Investment Banker: Stifel & Miller Buckfire & Co. (James Doak)
  • Liquidators: Hilco Merchant Resources LLC (Ian Fredericks) and Gordon Brothers Retail Partners LLC (Michael Chartock) 
    • Legal: Kirkland & Ellis LLP (Patrick Nash, Bradley Weiland, Timothy Bow)
  • Real Estate Advisor: Hilco Real Estate LLC (Ryan Lawlor)
  • Asset Disposition Advisor: Malfitano Advisors LLC (Joseph Malfitano)
  • Claims Agent: Donlin Recano (*click on company name for free docket)
• Other Parties in Interest:
  • Agent for Prepetition Secured Lender & DIP Lender: Wells Fargo
    • Legal: Choate Hall & Stewart LLP (John Ventola, Sean Monahan, Jonathan Marshall) & Faegre Baker Daniels LLP (Jay Jaffe, Terry Hall)
  • Official Committee of Unsecured Creditors
    • Legal: Cooley LLP (Cathy Hershcopf, Seth Van Aalten, Richelle Kalnit, Robert Winning, Melissa Boyd) & (local) Bingham Greenebaum Doll LLP (Whitney Mosby, Thomas Scherer, James Irving)
    • Financial Advisor: Province Inc. (Stilian Morrison)

Updated 4/3/17

New Chapter 11 Filing - Ultrapetrol (Bahamas) Ltd.

Ultrapetrol (Bahamas) Ltd.

• 2/6/17 Recap: Private equity backed marine shipping company files for prepackaged chapter 11 to effectuate sale of assets, the proceeds from which will be used to pay down debt. Sparrow Capital Investments Ltd. will purchase the company's river business holding companies for $73mm in cash. Barry Ridings of Lazard will be on the reorganized company's Board of Directors (and collect an $80k paycheck).
• Jurisdiction: S.D. of New York
• Capital Structure: $566mm '21 8.875% notes & credit facilities with International Finance and OPEC Fund.     
• Company Professionals:
  • Legal: Zirinsky Law Partners PLLC (Bruce Zirinsky, Sharon Richardson) & Hughes Hubbard LLP (Christopher Kiplok, Erin Diers, Dustin Smith) & Seward & Kissel (Ronald Cohen, Lawrence Rutkowski, Anthony Tu-Sekine)
  • Financial Advisor: AlixPartners International LLP (Rebecca Roof, Stephen Spitzer, Peter Baldwin, Jon Bryant)
  • Investment Banker: Miller Buckfire & Co. LLC (Kevin Haggard)
  • Claims Agent: Prime Clerk LLC (*click on case name above for free docket)
• Other Parties in Interest:
  • Ad Hoc Group of Noteholders
    • Legal: Milbank Tweed Hadley & McCloy LLP (Tyson Lomazow)
    • Financial Advisor: PJT Partners Inc.
  • Offshore Agent: DVB Bank SE and DVB Bank Americas N.V.
    • Legal: White & Case LLP (Scott Greissman, Mark Franke)
    • Financial Advisor: Houlihan Lokey
  • IFC/OPEC Fund
    • Legal: Mayer Brown LLP (Frederick Hyman, Sean Scott,)
    • Financial Advisor: FTI Consulting Canada ULC
  • Sparrow Capital Investments Ltd.
    • Legal: Chadbourne & Parke LLP (Andrew Rosenblatt, Marc Ashley, Robert Kirby)

Updated 3/30/17

New Chapter 11 Bankruptcy Filing - Memorial Production Partners LP

Memorial Production Partners LP

• 1/17/17 Recap: Utah-based oil and gas MLP filed bankruptcy to deleverage its balance sheet and swap out the entirety of its senior unsecured notes for equity. Shareholders set to receive a tip.
• Jurisdiction: S.D. of Texas
• Capital Structure: $700mm funded RCF (Wells Fargo), $646mm '21 7.625% senior unsecured notes, $465mm '22 6.875% senior unsecured notes (Wilmington Trust)  
• Company Professionals:
  • Legal: Weil (Gary Holtzer, Alfredo Perez, Joseph Smolinsky, Edward Soto, Gabriel Morgan, Scott Bowling)
  • Financial Advisor: AlixPartners LLC (John Castellano)
  • Investment Banker: Perella Weinberg Partners
  • Claims Agent: Rust Bankruptcy/Omni Consulting (*click on company name for docket)
• Other Parties in Interest:
  • Ad Hoc Group of Noteholders (Trust Asset Management, Brigade Capital Management, Citadel, Fir Tree Partners)
    • Legal: Davis Polk & Wardwell LLP (Brian Resnick, Angela Libby)
    • Financial Advisor: Miller Buckfire & Co., LLC
  • Wells Fargo
    • Legal: Linklaters LLP (Margot Schonholtz, Penelope Jensen, Christopher Hunker) & (local) Vinson & Elkins LLP (Paul E. Heath, Bradley Foxman)
  • Wilmington Trust
    • Legal: Stroock Stroock & Lavan LLP (Erez Gilad)

Updated 1/21/17

New Filing: Bonanza Creek Energy Inc.

Bonanza Creek Energy Inc.

• 1/4/17 Recap: The company filed a prepackaged bankruptcy to eliminate $850mm of debt from its balance sheet and infuse the company with $200mm of new equity.
• Jurisdiction: D. of Delaware
• Capital Structure: $475mm '17 1.5-2.5% RCF (Key Bank), $500mm '21 6.75% senior unsecured notes, $300mm '23 5.75% senior unsecured notes (Delaware Trust Company).      
• Company Professionals:
  • Legal: Davis Polk & Wardwell LLP (Marshall Huebner, Brian Resnick, Elliot Moskowitz, Adam Shpeen, Lara Samet Buchwald) & (local) Richards Layton & Finger PA (Mark Collins, Amanda Steele, Brendan Schlauch)
  • Financial Advisor: Alvarez & Marsal LLC (Seth Bullock)
  • Investment Banker: Perella Weinberg Partners (Kevin Cofsky, Jacob Czarnick)
  • Claims Agent: Prime Clerk LLC (*click name above for docket link)
• Other Parties in Interest:
  • RBL Agent: Key Bank
    • Legal: Bracewell LLP (Trey Wood, Jennifer Feldshur, Dewey Gonsoulin)
  • Ad Hoc Committee of Noteholders (Apollo Energy Opportunity Mgmt, Continental Casualty, Credit Suisse Asset Mgmt, DE Shaw Galvanic Portfolios, Gen IV Investment Opportunities LLC, Lord Abbett & Co., Luxor Capital Group LP, Mangrove Partners, Nomura Corporate Research & Asset Mgmt, Oaktree Capital Management LP, Paloma Partners Management Company, Par-Four Investment Management LLC, Perry Creek Capital Fund I, Socratic Fund Management LP, Whitebox Advisors). Added subsequent to the case filing (Aristeia Capital LLC, Barclays Bank PLC, Continental Casualty Company, Venor Capital Management LP, Wells Fargo Securities LLC); Subtracted subsequent to the case filing (Credit Suisse Asset Mgmt).
    • Legal: Kirkland & Ellis LLP (Edward Sassower, Steven Serajeddini, John Luze, Stephen Schwarzbach Jr.) & (local) Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, Peter Keane)
    • Investment Bank: Evercore
  • Ad Hoc Committee of Equity Security Holders (Fir Tree Inc., HHC Primary Fund, CVI Opportunities Fund I, Silver Point Capital, MatlinPatterson Global Opportunities Master Fund)
    • Legal: Brown Rudnick LLP (Edward Weisfelner, Bennett Silverberg, D. Cameron Moxley) & (local) Chipman Brown Cicero & Cole LLP (William Chipman Jr.)
    • Financial Advisor: Miller Buckfire & Co. (Richard Klein, Matthew Rodrigue)
  • Delaware Trust Company (as successor trustee to Wells Fargo)
    • Legal: Haynes and Boone LLP (Charles Beckham Jr., Keith Sambur) & (local) The Rosner Law Group LLC (Frederick Rosner, Scott Leonhardt)
  • Silo Energy LLC
    • Legal: Arent Fox LLP (George Angelich, Jackson Toof, Andrew Silfen) & (local) Polsinelli PC (Justin Edelson)
  • Senior Unsecured Noteholders: GMO Credit Opportunities Fund LP and Global Credit Advisors LLC
    • Legal: Ropes & Gray LLP (D. Ross Martin, Andrew Devore) & (local) Pepper Hamilton LLP (David Stratton)

Updated 4/2/17

New Filing - Optima Specialty Steel LLC

Optima Specialty Steel

• 12/15/16 Recap: Miami-based independent specialty steel products manufacturer files for bankruptcy in the District of Delaware, capitulating under the weight of debt-laden acquisitions predicated on synergies and efficiencies that, shockingly, couldn't counteract various macroeconomic headwinds. The company cites low oil prices, a strong US dollar, excess capacity, slowing growth in other parts of the world (read: China), and decreased demand for specialty steel products. Unable to pay its December 15 debt maturity, the company filed to take advantage of the automatic stay - funded by cash collateral initially and seeking a DIP by January - and try to reorganize as a going concern.
• Jurisdiction: D. of Delaware
• Capital Structure: $171.7mm 12.5% senior secured notes (Wilmington Trust), $87.5mm 12% senior unsecured note (Wilmington Trust; privately-placed with DDJ Capital Management LLC)     
• Company Professionals:
  • Legal: Greenberg Traurig (Dennis Meloro, Nancy Mitchell, Paul Keenan, John Dodd, Ari Newman, Maria DiConza)
  • Financial Advisor: Ernst & Young LLP (Briana Richards)
  • Investment Banker: Miller Buckfire & Co., LLC (James Doak)
  • Claims Agent: Garden City Group (*click on company name for docket)
• Parties in Interest:
  • Ad Hoc Group of Unaffiliated Holders of Senior Secured Notes
    • Legal: Akin Gump Strauss Hauer & Feld LLP (Philip Dublin, Jason Rubin)
  • Official Committee of Unsecured Creditors
    • Legal: Squire Patton Boggs (US) LLP (Stephen Lerner, Norman Kinel, Nava Hazan, Elliot Smith) & (local) Whiteford Taylor & Preston LLP (Christopher Samis, L. Katherine Good, Chantelle McClamb)
  • Wilmington Trust
    • Legal: Morrison & Foerster LLP (Jonathan Levine, James Newton) & (local) Morris Nichols Arsht & Tunnell LLP (Eric Schwartz, Matthew Harvey)
  • DDJ Capital Management LLC
    • Legal: Latham & Watkins LLP (Richard Levy, Ted Dillman)

Updated 1/6/17