New Chapter 11 Filing - Cornerstone Apparel Inc. (d/b/a Papaya Clothing)

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Cornerstone Apparel, Inc. (d/b/a Papaya Clothing)

  • 6/15/17 Recap: California-based apparel retailer targeted to the 16-25 year-old demographic and with 80 stores located in malls and shopping centers throughout the US filed for bankruptcy to take advantage of the Bankruptcy Code's "automatic stay" and have time to evaluate and rationalize its retail store footprint. Sadly, the company opted to expand at PRECISELY the wrong time as it opened approximately 50 stores in the last 6 years, incurring significant setup/startup costs in the process. Now it will need to engage in extensive negotiations with landlords to determine what, if anything, it can reorganize around. As part of the filing, the company has already identified 30 locations that it intends to exit from, if it hasn't already.
  • Jurisdiction: C.D. of California (Judge Zurzolo)
  • Capital Structure: No secured debt.   
  • Company Professionals:
    • Legal: Levene Neale Bender Yoo & Brill LLP (Timothy Yoo, Eve Karasik, Juliet Oh)
    • Claims Agent: Rust Consulting/Omni Bankruptcy (*click on link above for free docket)
    • Other Parties in Interest:
      • Official Committee of Unsecured Creditors
        • Legal: Lewis Brisbois Bisgaard & Smith LLP (Scott Lee, Lovee Sarenas)

Updated 8/10/17

New Chapter 11 Filing - The Original Soupman Inc.

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The Original Soupman, Inc.

  • 6/13/17 Recap: Bankruptcy for you! Company that licensed the name and recipes of the chef who inspired the "Soup Nazi" on Seinfeld has filed for bankruptcy with a $2mm DIP credit facility to fund the case. The CFO had been indicted for tax evasion. We wonder whether the prison he goes to will have soup that lives up to the Soupman standard. Anyway, we digress. The company sells soups to and through grocery chains (6500 of them) and club stores throughout the United States; it also provides soup to the New York City School System and has six franchised restaurants, the largest of which resides on the Upper West Side. So a Nazi serves the school system. Awesome. 
  • Jurisdiction: D. of Delaware (Silverstein).
  • Capital Structure: $3.66mm secured debt (Hillair Capital Investments LP), $3.3mm unsecured notes.
  • Company Professionals:
    • Legal: Polsinelli PC (Christopher Ward, Jarrett Vine, Jeremy Johnson)
    • Financial Advisor/CRO: Wyse Advisors LLC (Michael Wyse) 
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Lender: Soupman Lending LLC
      • Legal: Arent Fox LLP (Robert Hirsh, Beth Brownstein) & (local) Bayard PA (Justin Alberto, Erin Fay)

Updated 6/17/17

New Chapter 11 Filing - CGG Holding (US) Inc.

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CGG Holding (US) Inc.

  • 6/14/17 Recap: Global geophysical and geoscience company servicing customers primarily in oil and gas E&P is the latest victim of the oil and gas downturn of the past two-or-so years. The company's success is tied heavily to the E&P space and those clients were reluctant to invest in data acquisition projects to identify areas for future production or increased current production; therefore, you can imagine what happened to revenues and what that means when you're looking at a debt-stack as aggressive as this one. Indeed revenues and earnings were cut by 67% from 2012 to 2016. Ad hoc groups of secured lenders and high yield bondholders as well as as certain holders of the converts and certain shareholders of CGG SA, the foreign entity that filed in France and for Chapter 15, have entered into a Lock-up agreement delineating a balance sheet restructuring. The upshot is that the high yield bondholders and converts will own the majority of the equity in the reorganized company. 
  • Jurisdiction: S.D. of New York (Judge Glenn)
  • Capital Structure: $810mm secured debt ($300mm French Revolver of CGG SA - Wilmington Trust (London), $165mm US Revolver - Credit Suisse AG, $342mm US TL - Wilmington Trust NA), $1.6b senior unsecured high yield bonds (The Bank of New York Mellon) and $402.7mm convertible notes (issued by CGG SA).     
  • Company Professionals:
    • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Alan Kornberg, Brian Hermann, Lauren Shumejda, Christopher Hopkins) & (Chapter 15 for CGG SA) Linklaters LLP (Margot Schonholz, Robert Trust, Christopher Hunker)
    • Financial Advisor: AlixPartners LLP (Becky Roof, Susan Brown, Brad Hunter, John Creighton, Francisco Echevarria,John Somerville, David Shim)
    • Investment Banker: Morgan Stanley & Lazard (Kenneth Ziman)
      • Legal (Lazard): Sidley Austin LLP (Thomas Labuda Jr., Andrew Propps)
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Ad Hoc Secured Lender Committee (Och Ziff, Goldman Sachs International, Makuria Investment Management (UK) LLP, T. Rowe Price)
      • Legal: Kirkland & Ellis LLP (Kon Asimacopolous, Stephen Hessler, Anthony Grossi, Hannah Crawford)
    • Ad Hoc Committee of Holders of High Yield Bonds (Alden Global Capital, Attestor Capital LLP, Boussard & Gavaudan Asset Management LP, Contrarian Capital Management LLC, Aurelius Capital Management LP, Third Point LLC)
      • Legal: Wilkie Farr & Gallager LLP (John Longmire, Weston Eguchi)
    • Indenture Trustee for Senior Noteholders: Bank of New York Mellon
      • Legal: Hogan Lovells US LLP (Christopher Donoho, John Beck)

Updated 7/11/17 6:41 CT

New Chapter 11 Filing - GenOn Energy Inc.

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GenOn Energy, Inc.

  • 6/14/17 Recap: NRG Energy Inc. ("$NRG") owned deregulated wholesale power generation corporation and operator of 32 power plants in 8 states (Mid-Atlantic & California) filed a bankruptcy case with a restructuring support agreement agreed to by NRG and holders of 90% of the funded debt. The plan for the restructuring is to delever the company by $1b with the holders of the unsecured senior notes obtaining equity in the reorganized entity from NRG (and the right to participation in rights offering for $900mm in exit financing). This is another in a line of recent power cases including Panda Temple Power, Homer City Generation LP, Illinois Power Generating Co., La Paloma Generating Company LLC. And it probably won't be the last. The company cited the following causes - in addition to its over-levered capital structure - for the bankruptcy filing: (i) flat demand for power over the past five years, (ii) excess capacity (in part due to insufficient power plant retirements), (iii) lower cost structure for competitors, and (iv) significantly depressed natural gas prices. "This combination has caused energy and capacity prices to fall. So has the Debtors' profitability as a result." In the mid-Atlantic, electricity cleared $100 per megawatt hour in early 2014 and now the price hovers around $30 per megawatt hour. And nat gas isn't predicted to recover to industry price highs at least until 2030. So, looks like the merger that created this combined mid-Atlantic/California entity and levered this sucker up to the sky was a bit ill-timed, hey? 
  • Jurisdiction: S.D. of Texas (Judge Jones)
  • Capital Structure: $ '18 RCF (NRG Energy Inc. & U.S. Bank NA), $691mm '17 7.875% Senior Notes & $649mm '18 9.50% Senior Notes & $490mm '20 9.875% Senior Notes (Wilmington Trust Company NA), $366mm '21 8.50% Senior Notes & $329mm '31 9.125% Senior Notes (Wilmington Savings Fund Socieity FSB)    
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (James Sprayragen, David Seligman, Steven Serajeddini, W. Benjamin Winger, Christopher Hayes, AnnElyse Scarlett Gibbons) & (local) Zack A. Clement PLLC (Zach Clement)
    • Financial Advisor: McKinsey Recovery & Transformation Services U.S., LLC (Kevin Carmody, Tanner MacDiarmid, Sam Jacobs)
    • Investment Banker: Rothschild & Co. (Todd Snyder)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Ad Hoc Committee of GenOn Note and GAG Notes
      • Legal: Ropes & Gray LLP (Keith Woffard, Stephen Moeller-Sally, Marc Roitman, Meredith Parkinson) & (local) Porter Hedges LLP (John Higgins, Joshua Wolfshohl, Rachel Thompson)
    • Ad Hoc Steering Committee of GAG Notes
      • Legal: Quinn Emanuel Urquhart & Sullivan LLP (David Gerger, Emily Smith, Benjamin Firestone, Daniel Holzman)
    • NRG Energy Inc.
      • Legal: Baker Botts LLP (Emanuel Grillo, Ian Roberts, Christopher Newcomb)
    • Wilmington Trust Company
      • Legal: Covington & Burling LLP (Ronald Hewitt, Dianne Coffino)
    • Issuing Bank: Citibank NA
      • Legal: Latham & Watkins LLP (Richard Levy, David Hammerman)

Updated 7/11/17 6:47 pm CT

New Chapter 11 Filing - FirstRain Inc.

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FirstRain, Inc.

  • 6/5/17 Recap: California-based enterprise SaaS company that services Fortune 1000 companies with its software and analytics-driven apps to discover/read/discern/summarize useful insights about other companies/markets filed a prepackaged bankruptcy. The plan contemplates $7.5mm of total consideration including a $4mm DIP credit facility and the plan is to pay the DIP Lender in full, general unsecureds in full and provide the prepetition lender a partial recovery. ESW Capital LLC will own the company on the backend of the restructuring.
  • Jurisdiction: D. of Delaware (Judge Silverstein)
  • Capital Structure: $5.5mm secured debt (Pacific Western Bank as successor to Square 1 Bank)    
  • Company Professionals:
    • Legal: The Rosner Law Group LLC (Frederick Rosner, Scott James Leonhardt)
    • Investment Banker: Atlas Technology Group LLC
    • Claims Agent: JND Legal Administration (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Lender: ESW Capital LLC
      • Legal: Haynes and Boone LLP (Trevor Hoffman, Arsalan Muhammad) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott, Matthew Talmo)
    • Prepetition Lender: Pacific Western Bank
      • Legal: Levy Small & Lallas (Leo Plotkin) & (local) Chipman Brown Cicero & Cole LLP (William Chipman Jr.) 

Updated 7/18/17

New Chapter 11 Filing - CST Industries Holdings Inc.

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CST Industries Holdings Inc.

  • 6/9/17 Recap: So this is a soap opera. Kansas City-based manufacturer of (i) industrial containers used to store architectural and agricultural products, water, dry bulk and oil and gas and (ii) domes, filed for bankruptcy due to its unsustainable capital structure and seemingly strained relationship with its senior subordinated noteholders. According to the company's first day declaration, the company sought a prepetition sale that would pay off its BNP Paribas' loan and make a "substantial payout" to its unsecured creditors. But one obstreperous unsecured creditor rejected the sale overtures and demanded that the company pay to hire advisors "that in turn charged CST substantial fees and expenses" to the tune of $8-10mm (inclusive of its own pros fees). Welcome to the party pal. These fees, coupled with downturns in the oil and gas and Middle Eastern water markets, led to a precipitous drop in EBITDA and a liquidity crisis. Now the company hopes to use Chapter 11 to sell itself (pursuant to a $15mm DIP credit facility).
  • Jurisdiction: D. of Delaware
  • Capital Structure: $57.5mm TL (funded, BNP Paribas), $114.3mm senior subordinated notes (The Northwestern Mutual Life Insurance Company & OCM Mezzanine Fund II LP).     
  • Company Professionals:
    • Legal: Hughes Hubbard & Reed LLP (Kathryn Coleman, Christopher Gartman, Jacob Gartman, Anson Frelinghuysen) & Potter Anderson & Corroon LLP (Jeremy Ryan, R. Stephen McNeill, D. Ryan Slaugh)
    • Financial Advisor/Investment Banker: CDG Group LLC (Robert Del Genio)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • TL Agent: BNP Paribas
      • Legal: Chadbourne & Parke LLP (Howard Beltzer, James Copeland, Joseph Giannini) & Norton Rose Fulbright US LLP (Louis Strubeck Jr.) & (local) Young Conaway Stargatt & Taylor LLP (Kara Hammond Coyle)
    • Official Committee of Unsecured Creditors
      • Legal: Lowenstein Sandler LLP (Jeffrey Prol, David Banker, Wojciech Jung, Bruce Nathan) & (local) Shaw Fishman Glantz & Towbin LLC (Thomas Horan, Ira Bodenstein, Christina Sanfelippo)
      • Financial Advisor: Teneo Restructuring and Teneo Capital LLC (Christopher Wu)
    • OCM Mezzanine Fund II, L.P.
      • Legal: Goldberg Kohn Ltd. (William Meyers)
    • Private Equity Sponsor: The Sterling Group

Updated 7/11/17

New Chapter 11 Filing - The Gymboree Corporation

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The Gymboree Corporation

  • 6/12/17 Recap: Yawn...another private equity owned retailer in bankruptcy. Why? Standard fare for everyone following the retail story at this point: a substantial brick-and-mortar presence (1300 stores) in need of rightsizing, higher expenses than web-based competitors, an underdeveloped wholesale operation, an underdeveloped web presence, insufficient "omnichannel" capabilities (the go-to buzzword for retailers these days), and more debt than competitors like Children's Place and the Gap. In other words, private equity, that's why (here, Bain Capital Private Equity LP). Notably, "[a]pproximately 35% of their domestic real estate space is concentrated with Simon Property Group, Inc. and GGP Inc. (previously General Growth Properties, Inc.)" ($SPG, $GGP) and, in the first instance, the company is seeking to close 450 stores. Hmmm. The Company will operate under a $105mm DIP term loan credit facility ($35mm new money) and a $273.5mm DIP revolving credit facility; it will also seek to avail itself of $80mm in new equity capital by way of a fully-backstopped rights offering. The upshot of all of this financial mumbo-jumbo is that the term lenders will own the majority of the company. 
  • Jurisdiction: E.D. of Virginia
  • Capital Structure: $81mm '17 ABL RCF (Bank of America NA), $47.5mm '17 ABL Term Loan (Pathlight Capital LLC), 788.8mm '18 TL (Credit Suisse), $171mm '18 unsecured notes (Deutsche Bank Trust Company Americas)    
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (James Sprayragen, Anup Sathy, Joshua Sussberg, Steven Serajeddini, Matthew Fagen, Laura Elizabeth Krucks, Timothy Bow, Gabor Balassa, Ben Tyson) & (local) Kutak Rock LLP (Michael Condyles, Peter Barrett, Jeremy Williams)
    • Legal (Special Committee): Munger Tolles & Olson LLP (Thomas Wolper, Seth Goldman, Kevin Allred)
    • Financial Advisor: AlixPartners LLC (James Mesterharm, Liyan Woo)
    • Investment Banker: Lazard Freres & Co. LLC (David Kurtz, Christian Tempke)
    • Real Estate Consultant: A&G Realty Partners LLC (Andrew Graiser)
    • Liquidators: Tiger Capital Group LLC and Great American Group LLC
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Consenting Term Loan Lenders & DIP Term Loan Agent: Credit Suisse AG, Cayman Islands Branch
      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Evan Fleck) & (local) McGuireWoods LLP (Dion Hayes, Sarah Boehm, K. Elizabteh Sieg)
      • Financial Advisor: Rothschild & Co.
    • DIP ABL Administrative Agent
      • Legal: Morgan Lewis & Bockius LLP (Julia Frost-Davies, Robert A.J. Barry, Amelia Clark Joiner) & (local) Hunton & Williams LLP (Tyler Brown, Justin Paget)
    • DIP ABL Term Agent
      • Legal: Choate Hall & Stewart LLP (Kevin Simard, Jennifer Fenn) & (local) Whiteford Taylor Preston LLP (Christopher Jones)
    • Sponsor: Bain Capital Private Equity LP 
      • Legal: Weil Gotshal & Manges LLP (Matthew Barr, Robert Lemons) & (local) Wolcott Rivers Gates (Cullen Speckhart)
    • Ad Hoc Group of Senior Unsecured Noteholders
      • Legal: Akin Gump Strauss Hauer & Feld LLP (Daniel Golden, Jason Rubin)
    • Pathlight Capital
      • Legal: Choate Hall & Stewart LLP (Kevin Simard, Jonathan Marshall) & (local) Whiteford Taylor & Preston LLP (Christopher Jones)
    • Indenture Trustee: Deutsche Bank Trust Company Americas
      • Legal: Moses & Singer LLP (Alan Gamza, Kent Kolbig, Jessica Boneque) & (local) Hirschler Fleischer PC (Robert Westermann, Rachel Greenleaf)
    • Official Committee of Unsecured Creditors
      • Legal: Hahn & Hessen LLP (Mark Power, Mark Indelicato, Janine Figueiredo, Alison Ladd) & (local) Tavenner & Beran PC (Lynn Tavenner, Paula Beran, David Tabakin)

Updated 7/11/17 at 7:25 pm CT

New Chapter 11 Filing - Ignite Restaurant Group

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Ignite Restaurant Group

  • 6/6/17 Recap: Publicly-traded ($IRG) Houston-based owner of 112 Joe's Crab Shack locations and 25 Brick House Tavern + Tap locations filed for bankruptcy because people can't tear their eyes off of whatever mobile device they're towing around long enough to sit at a casual dining spot. "The market for casual dining has been deteriorating for some time." No kidding, dudes. That said, someone clearly still believes in the space as the company has lined up a stalking horse bidder to purchase the company in bankruptcy for $50mm and some assumed liabilities (subject to deductions/increases). That "someone" is KRG Acquisitions Co LLC, an affiliate of Kelly Investment Group. Maybe it's the "'I'm relaxed' restaurant experience" that the buyer finds compelling...? (Serious question: is weed legal in Texas yet?). Anyway, good luck with that. 
  • Jurisdiction: S.D. of Texas
  • Capital Structure: $30mm RCF & $165mm TL (Credit Suisse AG)     
  • Company Professionals:
    • Legal: King & Spalding LLP (Sarah Borders, Jeffrey Dutson, Edward Ripley, Elizabeth Dechant)
    • Financial Advisor: Alvarez & Marsal LLC (John Tibus)
    • Investment Banker: Piper Jaffray & Co. (Richard Shinder, Teri Stratton)
    • Real Estate Advisor: Hilco Real Estate LLC 
    • Claims Agent: Garden City Group LLC (*click on company name above for the free docket)
    • Other Parties in Interest:
      • Credit Suisse AG
        • Legal: Latham & Watkins LLP (Keith Simon, David Hammerman, Hugh Murtagh) & (local) Porter Hedges LLP (John Higgins)
      • KRG Acquisition Co LLC 
        • Legal: Goldberg Kohn Ltd. (Randall Klein, Prisca Kim) & (local) Okin Adams LLP (Matthew Okin, Ryan O'Connor)
      • Official Committee of Unsecured Creditors
        • Legal: Pachulski Stang Ziehl & Jones LLP (Jeffrey Pomerantz, Bradford Sandler) & (local) Cole Schotz PC (Michael Warner)
      • Potential Buyer: Landry's Inc.
        • Legal: Haynes and Boone LLP (Patrick Hughes, Arsalan Muhammad, Jonathan Pressment, Sarah Jacobson)

Updated 7/17/17 11:23 am CT

Chapter 11 Filing - Rooster Energy Ltd.

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Rooster Energy Ltd.

  • 6/2/17 Recap: Integrated oil and gas offshore exploration and production company with properties located in the outer continental shelf of Gulf of Mexico filed for bankruptcy because it was an offshore exploration and production company operating in the Gulf of Mexico. 
  • Jurisdiction: W.D. of Louisiana
  • Capital Structure: $53.1mm '18 debt (Angelo Gordon Energy Servicer LLC), $24mm subordinate secured debt (K2 Principal Fund LP)    
  • Company Professionals:
    • Legal: Baker Donelson Bearman Caldwell & Berkowitz PC (Jan Hayden, Edward Arnold III, Lacey Rochester, Susan Mathews, Daniel Ferretti)
    • Financial Advisor: Opportune LLP (Sean Clements)
    • Investment Banker:
    • Claims Agent: Donlin Recano & Company Inc. (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Official Committee of Unsecured Creditors (Cochun Properties)
      • Legal: Heller Draper Patrick Horn & Dabney LLC (William Patrick III, Tristan Manthey)
    • Official Committee of Unsecured Creditors (Rooster)
      • Legal: Arent Fox LLP (George Angelich)

New Chapter 11 Filing - 21st Century Oncology Holdings Inc.

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21st Century Oncology Holdings Inc.

  • 5/21/17 Recap: People have been talking about an uptick in healthcare-related bankruptcies. Is this the start? Here, Florida-based cancer care provider founded in the early 80s with 179 locations (including some in South America and Latin America) finds itself in bankruptcy court after years of acquisitions (including once-bankrupt Oncure Holdings Inc.) and a perfect storm of causes - most notably, an over-levered balance sheet. Other contributing factors to the company's chapter 11 filing include (i) decreased reimbursements under current insurance programs, (ii) Medicare changes, (iii) a shift from higher revenue per treatment PPO insurance plans to HMO plans, and (iv) government regulations, penalties and settlements. Some government inquiries remain outstanding. The company has a restructuring support agreement in place, a proposed $75mm DIP credit facility, and the plan is to delever the balance sheet by up to $500mm.
  • Jurisdiction: S.D. of New York
  • Capital Structure: $599mm TL & $121mm RCF (Morgan Stanley Senior Funding), $35mm MDL Facility (Wilmington Savings Fund Society), $368mm 11% '23 senior unsecured notes (Wilmington Trust National Association), $19mm PIK notes    
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (James Sprayragen, Christopher Marcus, William Guerrieri, John Weber, Alexandra Schwarzman, Mark McKane, Michael Esser)
    • Financial Advisor: Alvarez & Marsal LLC (Paul Rundell)
    • Investment Banker: Millco Advisors LP (Brendan Hayes)
    • Claims Agent: KCC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Prepetition MDL Agent: Wilmington Savings Fund Society FSB
      • Legal: Pryor Cashman LLP (Seth Lieberman, Patrick Sibley, Matthew Silverman)
    • First Lien Ad Hoc Committee and DIP Lenders (Apex Credit Partners LLC, Black Diamond Capital Management LLC, BlueMountain CLO Management LLC, Carlson Capital LP, Deutsche Bank AG New York Branch, GMO Credit Opportunities Fund LP, Goldman Sachs Asset Management LP, HPS Investment Partners LLC, IA Clarington Investments Inc., Intermarket Corporation, Key Bank National Association, MJX Asset Management LLC, Morgan Stanley Senior Funding Inc., Och-Ziff Capital Investments LLC, Q Investments LP, Silver Rock Financial LP, Wazee Street Capital Management LLC, Wells Fargo NA)
      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Evan Fleck, Matthew Brod)
      • Financial Advisor: PJT Partners LP
    • Ad Hoc Group of Crossholder Lenders
      • Legal: Stroock Stroock & Lavan LLP  (Frank Merola, Jayme Goldstein, Matthew Schwartz, Samantha Martin)
      • Financial Advisor: Houlihan Lokey Capital Inc.
    • Major Equity Holders (Canada Pension Plan Investment Board, Vestar Capital Partners V LP)
      • Legal for CPPIB: Debevoise & Plimpton LLP (Mi Chi To)
    • DIP Administrative Agent: Morgan Stanley Senior Funding
      • Legal: Cahill Gordon & Reindel LLP (Joel Levitin, Richard Stieglitz Jr.)
    • Patient Care Ombudsman
      • Legal: Otterbourg PC (Melanie Cyganowski, Keith Costa, Jennifer Feeney)
    • Backstop Parties: Beach Point Capital Management LP, Governors Lane LP, JPMorgan Investment Management Inc., Oaktree Capital Management LP, Roystone Capital Management LP, HPS Investment Partners LLC
    • Official Committee of Unsecured Creditors
      • Legal: Morrison & Foerster LLP (Lorenzo Marinuzzi, Jonathan Levine, Daniel Harris, Benjamin Butterfield)

Updated 7/11/17

New Chapter 11 Filing - EB Holdings II Inc. (Eco-Bat)

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EB Holdings II Inc.

  • 5/18/17 Recap: When you fail to repay nearly 1.8 billion Euro on a (PIK) note, you risk getting yo' a$$ involuntaried into bankruptcy court. Which is exactly the game of chicken that EB Holdings II Inc., the parent to lead recycling behemoth Eco-Bat, played with some irritated and aggressive hedge funds like GoldenTree Asset Management and Fortress Investment Group (see list below). The company, though, is of the view that this is all just a charade to avoid discovery in a state court trial to come. Apparently, there have been a variety of lawsuits and countersuits since Summer 2016 including some sexy allegations that sound a whole lot like fraud. So, the PIK lenders filed the involuntary petition to ensure that the company acts as a fiduciary to its creditors and get the benefit of court oversight over a principal they think is shady AF. 
  • Jurisdiction: D. of Nevada
  • Capital Structure: 1.8b EUR PIK debt (GLAS USA LLC)    
  • Company Professionals:
    • Legal: Garman Turner Gordon (Gregory Garman, Talitha Kozlowski, Gabrielle Hamm)
  • Other Parties in Interest:
    • Ad Hoc PIK Lender Group (GoldenTree Asset Management LP, Alcentra Limited, Fortress Investment Group/Mount Kellett Capital Management, HIG Capital International Advisors LLP/Bayside Capital, Sound Point Capital Management LP, Varde Partners Europe LImited)
      • Legal: Kirkland & Ellis LLP (James Sprayragen, Paul Basta, David Zott, William Guerrieri) & (local) Fox Rothschild LLP (Brett Axelrod)
    • GLAS USA LLC
      • Legal: Wilmer Cutler Pickering Hale & Dorr LLP (Andrew Goldman, Michael Guipoone, Benjamin Loveland, Charles Platt)

Updated 5/19/17

New Chapter 11 Filing - Tidewater Inc.

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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 - Gulfmark Offshore Inc.

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Gulfmark Offshore Inc.

  • 5/17/17 Recap: Everyone has been waiting for the offshore action and it's finally here. Except, its fairly anticlimactic. Here, the publicly-traded Houston-based offshore oil and gas logistics services provider filed for bankruptcy to effectuate a financial restructuring pursuant to a Restructuring Support Agreement signed with holders of its unsecured senior notes. The noteholders will get approximately 36% of the equity in the newly reorganized company along with rights to purchase an additional 60% equity slug pursuant to a backstopped $125mm rights offering. Existing equity will get a small equity "kiss" and some warrants. This is so boring that EVEN WE can't really find much to make fun of. 
  • Jurisdiction: D. of Delaware
  • Capital Structure: $100mm RCF ($72mm funded)(Royal Bank of Scotland), NOK600mm Norwegian Facility ($44.3mm funded)(DNB Bank ASA), $430mm '22 6.375% unsecured senior notes (funded)(US Bank NA)    
  • Company Professionals:
    • Legal: Weil (Gary Holtzer, Ronit Berkovich, Debora Hoehne) & (local) Richards Layton & Finger PA (Mark Collins, Zachary Shapiro, Brett Haywood, Christopher De Lillo)
    • Financial Advisor: Alvarez & Marsal LLC (Brian Fox, Kevin Larin, RIchard Niemerg, Don Koetting, Lacie Melasi, Robert Country)
    • Investment Banker: Evercore Group LLC (Stephen Hannan, David Andrews, Sachin Lulla, Pranav Goel, Arth Patel)
    • Claims Agent: Prime Clerk LLC (*click on company name above for access to free docket)
  • Other Parties in Interest:
    • Indenture Trustee: US Bank NA
      • Legal: Foley & Lardner LLP (Derek Wright, Mark Prager)
    • Ad Hoc Group of Unsecured Noteholders
      • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Evan Fleck, Nelly Almeida) & (local) Morris Nichols Arsht & Tunnell LLP (Gregory Werkheiser, Robert Dehney)
        • Financial Advisor: Houlihan Lokey Capital Inc.
    • Prepetition Multicurrency RCF Lender: Royal Bank of Scotland
      • Legal: Sullivan & Cromwell LLP (Michael Torkin, Brian Glueckstein, David Zylberberg) & (local) Young Conaway Stargatt & Taylor LLP (Pauline Morgan, Joseph Barry, Ian Bambrick)
      • Financial Advisor: FTI Consulting Inc.
    • Prepetition NOK Lender: DNB Bank ASA
      • Legal: Hughes Hubbard & Reed LLP (Christopher Kiplok, Anson Frelinghuysen, Erin Diers) & (local) Bayard PA (Erin Fay)
      • Financial Advisor: Guggenheim Securities LLC
    • Gulfmark Rederi AS
      • Legal: Norton Rose Fulbright US LLP (Jason Boland, William Greendyke) & (local) Womble Carlyle Sandridge & Rice LLP (Matthew Ward)

Updated 7/12/17 9:301 am CT

New Chapter 11 Filing - Mountain Creek Resort

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Mountain Creek Resort

  • 5/15/17 Recap: This gives whole new meaning to the term "ski bums." Owner and operator of four-season resort (including a water park and a ski resort) filed for bankruptcy after suffering through (i) seasons of warm winters, (ii) a downturn in the residential real estate market locally, and (iii) a poor litigation outcome that put the business on the hook for millions. The company has lined up $6mm in DIP financing to fund its case. Meanwhile, folks living in the Township of Vernon, New Jersey, can sh*t bricks (see comments within) and try and figure out what the hell happens now that the $27mm owed to the Sussex County Municipal Utilities Authority is in danger of not being paid. See, the prior owner of the resort entered into various agreements with the Township for the construction of sewer capacity to support the Resort. The Township issued bonds to finance the costs of construction and the resort is apparently contractually obligated to reimburse the Township for costs associated with the issuance (naturally, the geniuses in the government didn't bother with a security interest (other than a paltry/limited LOC) and, even if they did, they'd probably be SOL anyway given M&T Bank's senior status in the capital structure). 
  • Jurisdiction: D. of New Jersey
  • Capital Structure: $22.7mm senior debt (M&T Bank), $7mm junior debt (HSK-MC LLC) & various promissory notes    
  • Company Professionals:
    • Legal: Lowenstein & Sandler LLP (Kenneth Rosen, Jeffrey Prol, Nicole Fulfree, Michael Papandrea)
    • Financial Advisor: Getzler Henrich & Associates LLC (Mark Samson)
    • Investment Banker: Houlihan Lokey Capital (Jeffrey Altman)
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • M&T Bank
      • Legal: Greenberg Traurig LLP (Diane Vuocolo, Kevin Ray)
    • Township of Vernon
      • Legal: McElroy Deutsch Mulvaney & Carpenter LLP (Eric Perkins, Louis Modugno)
    • Prepetition Lender & DIP Lender: HSK Adventures Inc.
      • Legal: Tarter Krinsky & Drogin LLP (Rocco Caveliere, Scott Markowitz, Alex Spizz, Arthur Goldstein)
    • Official Committee of Unsecured Creditors
      • Legal: Trenk DiPasquale Della Fera & Sodono PC (Joseph DiPasquale, Adam Wolper, Robert Roglieri)

Updated 7/12/17

New Chapter 11 Filing - rue21 Inc.

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rue21 Inc.

  • 5/15/17 Recap: Pennsylvania-based specialty fashion retailer (owned by private equity shop Apax Partners LP) with 1184 brick-and-mortar locations (pre recent closing initiative) in various strip centers, regional malls and outlet centers filed for bankruptcy to (i) further revamp its e-commerce strategy, (ii) improve the in-store experience, (iii) right-size the store footprint and lease portfolio, (iv) de-lever its capital structure, and (v) effectuate a long-term business plan under its relatively new management. The numbers here are interesting: the company had a negative EBITDA swing of approximately $51mm from 2015 to 2016 - despite rising sales. The company's girls' division got decimated due to "an evolution of customer tastes." Wow! Who knew that teenage girls have fickle fashion tastes? These merchandising issues combined with (a) supply chain issues (heightened - in a self-fulfilling kind of way - by all of the rumors surrounding the company's bankruptcy), (b) "the shift away from brick-and-mortar retail sales to online channels," AND (c) a "not as robust" e-commerce presence relative to competitors, to put the company in a tough spot. A digression: we have previously noted David Simon's comments on the Simon Properties Group (SPG) earnings call from 4/27/17 that SPG is NOT experiencing a decline in traffic - though he offered absolutely ZERO data to back that up. According to SPG's own website, there are currently 90 rue21 locations in SPG properties (which translates to nearly 8%): we're curious to see whether any of these 90 locations will be featured in store closing motions coming soon to a bankruptcy court near you; indeed, in the first instance, it appears that some already are). The company is proposing a deal whereby the Term Lenders will effectively own the majority of the company post-bankruptcy after rolling-up a $100 DIP credit facility (applied in addition to $50mm of new money to be rolled into an exit facility). They've been so kind so as to give general unsecured creditors (read: the little guys) a 4% equity kiss - but only if they vote to accept the plan. Otherwise, the "death trap" door opens and general unsecured creditors end up with nada. We're sure a creditors' committee will have something to say about that. 
  • Jurisdiction: W.D. of Pennsylvania
  • Capital Structure: $150mm RCF ($78mm funded)(Bank of America), $521mm '20 TLB (Wilmington Savings Fund Society as successor to JPMorgan Chase Bank NA), $239mm '21 9% unsecured bonds (Wells Fargo Bank NA).    
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (Jonathan Henes, Nicole Greenblatt, Robert Britton, George Klidonas) & (local counsel) Reed Smith LLP (Eric Schaffer, Jared Roach)
    • Financial Advisor: Berkeley Research Group LLC (Stephen Coulombe, Kyle Richter, Patrick Farley)
    • Investment Banker: Rothschild Inc. (Neil Augustine, Jonathan Brownstein)
    • Real Estate Advisor: A&G Realty Partners LLC
    • Liquidator: Gordon Brothers Retail Partners LLC
      • Legal: Greenberg Traurig LLP (Nancy Peterman)
    • Claims Agent: KCC (*click on company name for access to the free docket)
  • Other Parties in Interest:
    • ABL Agent and DIP ABL Agent: Bank of America
      • Legal: Morgan Lewis & Bockius LLP (Matthew Furlong, Marc Ledue, Julia Frost-Davis) & (local) Buchanan Ingersoll & Rooney PC (James Newell, Timothy Palmer, Kelly Neal)
    • TL Agent and DIP TL Agent: Wilmington Savings Fund Society FSB and Term Lender Group (Bayside Capital LLC, Benefit Street Partners LLC, Bennett Management Corporation, Citadel Advisors LLC, Eaton Vance Management, JPMorgan Chase Bank NA, Octagon Credit Investors LLC, Southpaw Credit Opportunity Master Fund LP, Stonehill Capital Management LLC, Voya Investment Management)
      • Legal: Jones Day LLP (Scott Greenberg, Michael J. Cohen, Jeffrey Bresch, Genna Ghaul)
      • Financial Advisor: PJT Partners
    • Indenture Trustee: Wells Fargo Bank NA
      • Legal: Milbank Tweed Hadley & McCloy LLP (Gerard Uzzi, Robert Nussbaum, Eric Stodola)
    • Sponsor: Apax Partners LP
      • Legal: Simpson Thacher & Bartlett LLP (Elisha Graff, Nicholas Baker, Jonathan Endean) & Duane Morris LLP (Joel Walker, Kenneth Argentieri)
    • Official Committee of Unsecured Creditors
      • Legal: Cooley LLP (Jay Indyke, Cathy Hershcopf, Seth Van Aalten, Michael Klein, Lauren Reichardt) & Fox Rothschild LLP (John Gotaskie Jr.)
      • Financial Advisor: FTI Consulting Inc. (Samuel Star)

Updated 7/12/17

New Chapter 11 Filing - Katy Industries Inc.

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Katy Industries Inc.

  • 5/14/17 Recap: St. Louis-based manufacturer, importer and distributor of commercial cleaning (brooms, brushes and mops) and consumer storage products filed for bankruptcy to effectuate a 363 sale to an affiliate of private equity sponsor Victory Park Capital Management. The company has been around forever, it seems, but recent acquisitions, failed integration, unrealized synergies, and operational pitfalls appear to have hit the company hard and strained liquidity. Hence, bankruptcy.
  • Jurisdiction: D. of Delaware
  • Capital Structure: $31.5mm debt (Encina Business Credit SPV LLC)    
  • Company Professionals:
    • Legal: DLA Piper LLP (John Lyons, Daniel Simon, Stuart Brown, Oksana Koltko Rosaluk)
    • Financial Advisor/CRO: SierraConstellation Partners LLC (Lawrence Perkins)
    • Investment Banker: Lincoln International Inc. (Alexander Stevenson)
    • Claims Agent: JND Legal Administration (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Buyer: Jansan Acquisition LLC (Highview Capital LLC & VPCM)
      • Legal: Skadden Arps Meagher & Flom LLP (Lisa Laukitis)
    • Sponsor: Victory Park Capital Management
    • Encina Business Credit SPV LLC
      • Legal: Goldberg Kohn Ltd. (Jeremy Downs, Zachary Garrett) & (local) Reed Smith LLP (J. Cory Falgowski)
    • Successor Trustee: Wells Fargo Bank NA
      • Legal: Morgan Lewis & Bockius LLP (Rachel Jaffe Mauceri)
    • Official Committee of Unsecured Creditors
      • Legal: Drinker Biddle & Reath LLP (Steven Kortanek, Andrew Flame, Patrick Jackson, Robert Malone)
      • Financial Advisor: Emerald Capital Advisors (John Madden)

Updated 7/12/17 

New Chapter 11 Filing - Marsh Supermarkets Holding LLC

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Marsh Supermarkets Holding LLC

  • 5/11/17 Recap: After weeks of rumors and run-up, another Sun Capital Partners portfolio company has filed for bankruptcy with the hope of selling its remaining 44 locations to a buyer. A buyer is not currently lined up. The company cited the usual reasons for the filing: (a) the increasingly competitive grocery space with mega-retailers and specialty chains crowding the market, and (b) falling produce and retail food prices. We're frankly surprised that they didn't bother to mention Amazon like everyone else. When it doubt, "Amazon Effect" it. But we digress. Anyway, it also noted that capital investment (particularly relating to technological advances) trailed big players like Kroger ($KR) and Meijer. While those players reaped the benefits of their heavy investments, Marsh could not keep up, foot traffic declined, revenue suffered, and liquidity constraints increased. This is pretty basic sh*t. 
  • Jurisdiction: D. of Delaware
  • Capital Structure: $60mm RCF debt ($5.2mm funded + $2.5mm LOC)(Wells Fargo Bank NA), $25.7mm June 2016 junior note, $6.3mm October 2016 junior note    
  • Company Professionals:
    • Legal: Young Conaway Stargatt & Taylor LLP (Robert Brady, Michael Nestor, Robert Poppiti Jr., Ashley Jacobs, Shane Reil)
    • Financial Advisor/CRO: Clear Thinking Group LLC (Lee Diercks, Anthony Gehringer, A.R. Williams, Thomas Burke)
    • Investment Banker: Peter J. Soloman Company (Scott Moses, Derek Pitts, Greg Grambling, Brandon Yoshimura, Dan Stolar)
    • Liquidator: Hilco Merchant Resources
      • Legal: Pepper Hamilton LLP (Douglas Hermann, Michael Custer)
    • Real Estate Advisor: Hilco Real Estate LLC (Ryan Lawlor)
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Senior Lien Agent: Wells Fargo Bank NA
      • Legal: Otterbourg PC (Jonathan Helfat, Daniel Fiorillo)
    • Junior Noteholder: Marsh Group Finance LLC
      • Legal: Kirkland & Ellis LLP (James Stempel) & (local) Morris Nichols Arsht & Tunnell LLP (Curtis Miller)
    • Official Committee of Unsecured Creditors
      • Legal: Cooley LLP (Cathy Hershcopf, Seth Van Aalten, Robert Winning, Max Schlan, Sarah Carnes) & (local) Bayard PA (Justin Alberto, Erin Fay, Gregory Flasser)
      • Financial Advisor: FTI Consulting Inc. (Conor Tully)

Updated 7/12/17

New Chapter 11 Filing - Oconee Regional Health Systems Inc.

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Oconee Regional Health Systems Inc.

  • 5/11/17 Recap: Georgia-based not-for-profit healthcare system filed for bankruptcy to pursue a sale to Prime Healthcare Foundation Inc., armed with a $5mm DIP credit facility to fund operations during the case. The company notes the following as factors leading up to its bankruptcy: (1) an older Medicare-based population, revenue from which is subject to discounts and write-offs; (2) a large Medicaid-dependent population, reimbursements for which result in financial losses on many patients; (3) The State of Georgia's election NOT to partake in the Medicaid expansion program which left a pool of patients with modest means uncovered and uncompensated-for upon treatment; (4) hospital consolidation providing newer larger options (PETITION note: this seems dubious considering there were no other hospitals within a 30-mile radius but what do we know?); (5) lack of doctors in in-demand specialty areas; (6) inability to finance large capital intensive projects; and (7) service to "self-pay" (read: uninsured) patients as part of its non-profit charitable function - despite efforts by the ACA to cover everyone. Sadly, the company's filings paint a picture of a dire healthcare situation in and around the Georgia with healthcare operators all around the state failing for many of the same reasons above.
  • Jurisdiction: M.D. of Georgia
  • Capital Structure: $22mm principal and interest Series 1998 Bonds, $7.3mm principal and interest Series 2016 Bonds     
  • Company Professionals:
    • Legal: Bryan Cave LLP (Mark Duedall, Leah Fiorenza McNeill)
    • Financial Advisor: Grant Thornton LLP
    • Investment Banker: Houlihan Lokey Capital Inc.
  • Other Parties in Interest:
    • Buyer: Prime Healthcare Foundation Inc.
      • Legal: King & Spalding LLP (Paul Ferdinands)

New Chapter 11 Filing - Searchmetrics Inc.

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Searchmetrics Inc.

  • 5/8/17 Recap: This is a story about possible theft and patent litigation among search engine optimization players - the other being BrightEdge Technologies Inc. This sums it up nicely.
  • Jurisdiction: D. of Delaware (Judge Sontchi)
  • Company Professionals:
    • Legal: Chipman Brown Cicero & Cole LLP (William Chipman, Mark Olivere, Adam Cole)
    • Financial Advisor/CRO: EisnerAmper LLP (Wayne Weitz) 
    • Financial Advisor/Valuation Expert: SSG Advisors LLC (J. Scott Victor)
    • Claims Agent: JND Legal Administration (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Searchmetrics GmbH
      • Legal: DLA Piper LLP (US) (Stuart Brown, Maris Kandestin)
    • BrightEdge Technologies Inc.
      • Legal: Baker Botts LLP (Omar Alaniz, Emanuel Grillo, G. Hopkins Guy III, Jon Swenson)

Updated 7/12/17

New Chapter 11 Filing - Chellino Crane Inc.

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Chellino Crane Inc.

  • 5/5/17 Recap: Illinois-based heavy crane operating company that services refineries, power and chemical plants filed for bankruptcy under the weight of its outstanding debt on equipment and union obligations. The downturn in the oil and gas industry, unfortunately, led to projected revenue misses and a liquidity crisis. The filing is meant to address the capital structure and equipment footprint.
  • Jurisdiction: N.D. of Illinois
  • Capital Structure: $51.6mm secured debt (First Midwest)    
  • Company Professionals:
    • Legal: Sugar Felsenthal Grals & Hammer LLP (Jonathan Friedland, Elizabeth Vandesteeg, Jack O'Connor, Nicole Stefanelli, Leland Chait)
    • Financial Advisor: Conway MacKenzie Inc. (Jeffrey Zappone, J. Kotas, J. Marek)
    • Investment Banker: FocalPoint Securities LLC (Michael Fixler, Bryant Yu, Clinton Miyazono, Patrick Shin)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Prepetition Lender & DIP Lender: First Midwest
      • Legal: Foley & Lardner LLP (Mark Prager)
    • Official Committee of Unsecured Creditors
      • Legal: Brown Rudnick LLP (Gerard Cicero, Bennett Silverberg) & (local) Freeborn & Peters LLP (Shelly DeRousse, Devon Eggert, Elizabeth Janczak)
      • Financial Advisor: Emerald Capital Advisors (John Madden, Christopher Saitta)

Updated 8/26/17