New Chapter 11 Bankruptcy Filing - WYNIT Distribution LLC

WYNIT Distribution LLC

• 9/8/17 Recap: Minnesota-based technology wholesaler filed for bankruptcy to pursue a sale process. The company seeks approval of a $15mm DIP credit facility to finance the cases. Major customers include Best Buy, Amazon, Costco, Walmart and Target. Fitbit and Symantec are listed among the companies largest creditors. 
• Jurisdiction: D. of Minnesota
• Capital Structure: $76.7mm RCF (Wells Fargo)    
• Company Professionals:
  • Legal: Stinson Leonard Street LLP (Robert Kugler, Edwin Caldie, Phillip Ashfield, Andrew Glasnovich)
  • Financial Advisor: Conway MacKenzie Inc. (Peter A. Richichi)
  • Claims Agent: JND Corporate Restructuring (click on the case name above for free docket access)
• Other Parties in Interest:
  • Prepetition Lender/DIP Lender: Wells Fargo
    • Legal: Greenberg Traurig LLP (David Kurzweil, John Dyer, DeWitt Perkins) & (local) Lindquist & Vennum LLP (Charles Perkins)
  • Prepetition Creditor: Fitbit Inc.
    • Legal: Akin Gump Strauss Hauer & Feld LLP (Arik Preiss, Deborah Newman, Kevin Zuzolo) & (local) Maslon LLP (Clark Whitmore, Jason Reed)
  • Official Committee of Unsecured Creditors
    • Legal: Lowenstein Sandler LLP (Jeffrey Cohen) & (local) Barnes & Thornburg LLP (Connie Lahn)

Updated 9/21/17

New Chapter 11 Filing - Portrait Innovations Inc.

Portrait Innovations Inc.

• 9/1/17 Recap: Remember professional portrait studios? Yeah, we don't either. Mostly because we haven't stepped foot in a mixed-use commercial location or traditional retail park since we got linked up to the internet 20 years ago. And that is predominantly where you'd find a Portrait Innovations studio: there are 119 of them in 31 states (including 3 studios in Walmart Supercenters). You know the story by now: with a significant decline of brick-and-mortar retail visitors comes decreased revenue...blah blah blah, bankruptcy. Here, management attempted to stave off the inevitable by negotiating rent forgiveness, closing underperforming locations (63, to be exact), and pursuing the positive, i.e., more Walmart studios. In the absence of flex by the landlords, management lacked the capital, however, to accomplish these goals. The bankruptcy filing is meant to effectuate a sale of the equity to a buyer and further reconcile leases. The company has secured a stalking horse bid from prepetition creditor, CapitalSouth Partners, and a $5mm DIP credit facility to fund the cases. 
• Jurisdiction: W.D. of North Carolina (Judge Whitley)
• Capital Structure: $15mm senior secured debt (CapitalSouth Partners SBIC Fund III LP)     
• Company Professionals:
  • Legal: Rayburn Cooper & Durham PA (John Miller Jr., Paul Baynard, Benjamin Shook)
  • Investment Banker: Piper Jaffray & Co.
  • Real Estate Advisor: Hilco Real Estate LLC
  • Claims Agent: Rust Consulting/Omni Bankruptcy (*click on company name above for free docket access)
• Other Parties in Interest:
  • Secured Creditor/DIP Lender/Bidder: CapitalSouth Partners SBIC Fund III LP
    • Legal: K&L Gates LLP (Charles A. Dale III, Aaron Rothman, Margaret Westbrook)

Updated 9/18/17 5:15 pm CT

New Chapter 11 Filing - Model Reorg Acquisition LLC (aka Perfumania Inc.)

Model Reorg Acquisition LLC (Perfumania Inc.)

• 8/26/17 Recap: New York-based vertically-integrated specialty retailer (226 retail locations, mostly mall-based) and wholesale distributor of perfumes and fragrances (to the likes of Sears, Target, Walmart and Walgreens) filed for bankruptcy pursuant to a prepackaged plan of reorganization. The company is seeking approval of a $83,750,000 Wells Fargo DIP facility ("DIP") which will roll into an exit facility. What caused the filing? The overall retail bloodbath, naturally. Since 2015, the company has lost tens of millions of dollars, closed 105 retail locations, decreased the pace of brick-and-mortar openings and focused efforts - like the rest of the retail world - on e-commerce expansion. This way you could buy your one gallon bottle of CK One online rather than in a crappy mall stall. Awesome. The structure of this case is as follows: the DIP requires a completed case within 90 days to ensure that the reorganized (and newly private) company can take advantage of Q4 seasonality. The prepackaged plan leaves general unsecured creditors unimpaired and reinstates the unsecured notes. It also provides a $2/share recovery for shareholders who opt-in to a release of principals (notably, the shares were trading at $1.33/share at Friday's market close). The stockholder consideration will be paid via a $14.26mm equity infusion, which also serves as consideration for 100% of the reorganized equity. The transaction also preserves approximately $40mm of net operating losses and other tax attributes that will inure to the benefit of the owners. 
• Jurisdiction: D. of Delaware (Judge Sontchi)
• Capital Structure: $175mm senior credit facility ($18.78mm funded)(Wells Fargo Bank), $125.4mm unsecured debt +$54.8mm accrued and unpaid interest (3 different notes). Public equity ($PERF).     
• Company Professionals:
  • Legal: Skadden Arps Slate Meagher & Flom LLP (J. Gregory Milmoe, Lisa Laukitis, Raquelle Kaye, Anthony Clark)
  • Financial Advisor: Ankura Consulting Group LLC (Stephen Marotta)
  • Investment Banker: Imperial Capital LLC (Robert Warshauer)
  • Real Estate Advisor: A&G Realty Partners LLC (Andrew Graiser)
  • Liquidators: Hilco Merchant Resources LLC & Gordon Brothers Retail Partners LLC
  • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name above for free docket access)
• Other Parties in Interest:
  • Agent to Senior Credit Facility: Wells Fargo Bank
    • Legal: Otterbourg P.C. (Daniel Fiorillo)
  • CIII Holdings LLC
    • Legal: Nastasi Partners PLLC (Ancela R. Nastasi, Marshall E. Tracht, Moshie Solomon, William S. Katchen, Andrew Gottesman) & (local) Morris Nichols Arsht & Tunnell LLP (Robert Dehney, Curtis Miller)

Updated 9/18/17

First Day Declaration filed 8/26/17

New Chapter 11 Filing - Peekay Acquisition LLC

Peekay Acquisition LLC

• 8/10/17 Recap: The Auburn Washington-based specialty retailer of lingerie, sexual health and wellness products with 46 locations has filed for bankruptcy after failing to find an out-of-court buyer for its 5000 SKUs of lubes, $265 vibrators, sex toys and other fun stuff. This place sounds...liberated. And while the sex retail industry is allegedly gaining acceptance - at least according to the Company's own filing - it seems that Peekay was unable or incapable of capitalizing on it given its capital structure (PETITION Note: Agent Provocateur also filed for bankruptcy this year so query whether this really is a brick-and-mortar business or whether people would really rather discreetly order their sex toys on Amazon...our money is on the latter. Prior to the internet, options were a bit more limited, we gather.). Consequently, the company's Term Loan A Lenders have consented to the use of its cash collateral and are credit bidding $31mm of their debt to acquire the company after a long and failed attempt by the Company to explore other out-of-court options (which apparently included an IPO...WTF? What would the ticker be? "SEX"? "DIK"? "ASS"? We could do this all day.). 
• Jurisdiction: D. of Delaware (Judge Shannon)
• Capital Structure: $38.2mm first lien term loan ($27mm term loan A + $8.4mm interest/fees, $14.4mm term loan B + $1.98mm interest/fees), $19mm PIK seller notes    
• Company Professionals:
  • Legal: Landis Rath & Cobb LLP (Adam Landis)
  • Financial Advisor/CRO: Traverse LLC (Albert Altro)
  • Investment Banker: SSG Advisors LLC (J. Scott Victor)
  • Claims Agent: Rust Consulting/Omni Bankruptcy (*click on company name above for free docket access)
• Other Parties in Interest:
  • Term A Lenders/TLA Acquisition Corp. (Alpine Associates, Alpine Heritage LP, Alpine Heritage II LP, Alpine Heritage Offshore Fund Ltd., Chatham Capital Management IV LLC, The K2 Principal Fund LP, Tor Capital LLC, Twin Haven Special Opportunities Fund IV LP)
    • Legal: Curtis Mallet-Provost Colt & Mosle LLP (Steven Reisman, Shaya Rochester, Joshua Geller) & (local) Richards Layton & Finger PA (Mark Collins, Amanda Steele, Brendan Schlauch)
  • Official Committee of Unsecured Creditors
    • Legal: Cullen and Dykman LLP (S. Jason Teele, Nicole Stefanelli) & (local) Whiteford Taylor & Preston LLP (Christopher Samis, L. Katherine Good, Aaron Stulman, Kevin Shaw)
    • Financial Advisor: The DAK Group (Sheon Karol, Ari Fuchs, Claudia Levine)

Updated 9/5/17

New Chapter 11 Filing - The Engy Group LLC

The Engy Group LLC

• 8/8/17 Recap: Houston-based energy-focused private equity shop has filed for bankruptcy. The pleadings are limited but it's safe to assume that this bankruptcy is a tack-on effect of the prior year+ bloodbath in oil and gas.
• Jurisdiction: SD of Texas (Judge Isgur)
• Company Professionals:
  • Legal: Diamond McCarthy LLP (Kyung Lee)

Updated 8/8/17

New Chapter 11 Filing - Knight Energy Holdings LLC

Knight Energy Holdings LLC

• 8/8/17 Recap: We were starting to sleep on the oil and gas services space. This trainwreck - which had been kicking around for quite a while - is finally in bankruptcy court. We could bore you with the usual details about services companies sucking wind ever since gas prices imploded - what was it? nearly 24 months ago? - but why waste precious space when we can amuse you with stories of drug racketeering instead? After all, "People Make the Difference." Hahaha. Anyway, we guess it's our duty to, in fact, bore you with some more of the mundane restructuring facts so we will once we have more information. For now, we understand that the filing is pursuant to a restructuring support agreement and the debtors seek a multi-draw DIP credit facility of $10mm. More to come.
• Jurisdiction: W.D. of Louisiana (Judge Summerhays)
• Capital Structure: $mm debt     
• Company Professionals:
  • Legal: Heller Draper Patrick Horn & Dabney, LLC (Douglas Draper, William Patrick III, Tristan Manthey, Cherie Nobles)
  • Financial Advisor: Opportune LLP (Gary Pittman)
  • Investment Banker: Bayshore Partners (Michael Turner)
  • Claims Agent: Donlin Recano & Company Inc. (*click on company name above for free docket access)
• Other Parties in Interest:
  • Sponsor: Clearlake Capital Group LP
  • DIP Agent: Cantor Fitzgerald Securities
  • Official Committee of Unsecured Creditors
    • Legal: Baker Donelson Bearman Caldwell & Berkowitz PC (Jan M. Hayden, Edward H. Arnold III, Lacey Rochester, Susan Matthews)

Updated 9/21/17

New Chapter 11 Filing - TerraVia Holdings Inc.

TerraVia Holdings Inc.

• 8/1/17 Recap: TerraVia, a publicly-traded (Nasdaq: $TVIA) "next-generation" algae-based food company based out of San Francisco filed for bankruptcy. The company has a stalking horse bidder lined up to buy it for $20mm plus certain assumed liabilities and seeks to jam this case through bankruptcy in about 6 weeks lest it run out liquidity in the process (even with a proposed $10mm DIP); it claims that more time is unnecessary given that it ran a robust marketing process pre-filing that included outreach to over 100 parties. We'll let the company economics do the rest of the talking (see below).
• Jurisdiction: (Judge Sontchi)
• Capital Structure: $144.2mm 5% '19 convertible senior subordinated notes (GLAS Trust Company LLC) & $33.475mm 6% '18 convertible senior subordinated notes (Wilmington Trust)   
• Company Professionals:
  • Legal: Davis Polk & Wardwell LLP (Damian Schaible, Steven Szanzer, Adam Shpeen, Benjamin Kaminetzky) & (local) Richards Layton & Finger P.A. (Mark Collins, Amanda Steele)
  • Financial Advisor: 
  • Investment Banker: Rothschild & Co. (Tero Janne)
  • Claims Agent: KCC (*click on company name above for free docket access)
• Other Parties in Interest:
  • DIP Agent: Wilmington Savings Fund Society FSB & Ad Hoc Consortium of Holders of Convertible Senior Subordinated Debt (Gilead Capital LP, Higher Ground SICAV PLC Core Wealth Fund, Lazard Asset Management LLC, Passport Capital LLC, Wolverine Asset Management LLC, Zazove Associates LLC)
    • Legal: Brown Rudnick LLP (Robert Stark, Steven Levine, Brian Rice, Kellie Fisher) & (local) Ashby & Geddes P.A. (William Bowden, Gregory Taylor, Katharina Earle)
    • Financial Advisor: GLC Advisors & Co. LLC
  • Passport Capital
    • Legal: Shearman & Sterling LLP (Joel Moss) & (local) Drinker Biddle & Reath LLP (Patrick Jackson)
  • 6% Notes Successor Trustee: Wilmington Trust NA
    • Legal: Katten Muchin Rosenman LLP (Craig Barbarosh, Karen Dine, Jerry Hall) & (local) Morris James LLP (Eric Monzo)
  • JV Partner: Bunge Global Innovation LLC
    • Legal: Jones Day (Joshua Morse)
  • Silicon Valley Bank
    • Legal: Troutman Sanders LLP (Harris Winsberg, Stephen Roach) & (local) Chipman Brown Cicero & Cole LLP (William Chipman Jr., Mark Olivere)
  • Corbion NV
    • Legal: Baker & McKenzie LLP (Debra Dandeneau, Frank Grese) & (local) Whiteford Taylor & Preston LLC (L. Katherine Good, Aaron Stulman)

Updated 8/26/17

First Day Declaration.

New Chapter 11 Filing - Lombard Public Facilities Corporation

Lombard Public Facilities Corporation

• 7/28/17 Recap: Illinois-based not-for-profit corporation formed to finance the cost of acquiring, designing, constructing, and equipping a conference center, hotel (Westin), restaurant and related improvements in the Village of Lombard filed for bankruptcy with a prearranged deal with its creditors. The corporation was funded via revenue bonds (A through C, with the A-2 bonds wrapped by an ACA Financial Guaranty Corporation policy) on the basis of a 2005 market study. Much like we saw with the Chapter 9 filing of The Kennewick Public Hospital District back in June, the study proved to be off the mark and the project has underperformed from the get-go. Some of this was bad timing: the project came online in August 2007: we all know what came shortly thereafter. The convention business the Project depended upon never came, rendering revenues insufficient and debt service payments difficult. Reserves set aside for the bonds were quickly depleted and the Project defaulted on the bonds. The Project enters bankruptcy with the A bonds as the declared fulcrum and a consensual restructuring in hand with each of ACA, holders of a majority of the bonds (here, Nuveen Asset Management LLC and OppenheimerFunds Inc.), and the hotel and restaurant managers, respectively. Taking it as given that Lombard is an "affluent" suburb of Chicago, you have to wonder why people thought this financing was a good idea. Lombard sounds quaint and all - with its annual Lilac Festival and parade - but there's nothing there, far as we can tell, that screams "convention business." Query how many Mom and Pop municipal bond investors are getting burned by this (seemingly) ill-advised financing. 
• Jurisdiction: N.D. of Illinois (Judge Cox) 
• Capital Structure: $246.65mm principal and interest municipal debt (Amalgamated Bank of Chicago)   
• Company Professionals:
  • Legal: Adelman & Gettleman, Ltd. (Henry Merens, Brad Berish, Alexander Brougham)
  • Financial Advisor: EisnerAmper LLP (Thomas Buck, Deborah Friedland, Allen Wilen)
  • Claims Agent: Epiq Bankruptcy Solutions LLC (click on case name above for free docket)
• Other Parties in Interest:
  • ACA Financial Guaranty Corp.
    • Legal: Greenberg Traurig LLP (Nancy Peterman)
  • Lord, Abbett & Co. LLC
    • Legal: Shaw Fishman Glantz & Towbin LLC (Peter Roberts)
  • Indenture Trustee: Amalgamated Bank of Chicago
    • Financial Advisor: FTI Consulting Inc.

Updated 7/28/17

New Chapter 11 Filing - Rent-a-Wreck of America, Inc.

Rent-a-Wreck of America, Inc.

• 7/24/17 Recap: When we saw that this company filed for bankruptcy, we were practically drooling. We immediately thought: the narrative had to be an Uber-is-to-blame story for a company like Rent-a-Wreck filing for bankruptcy, didn't it? And so we decided to cover it, despite its relatively small size, writing the following: In Silicon Valley, "disruption" is a buzzword that wide-eyed startup founders use to drum up excitement about their new venture, raise funding, and determine product/market fit. 79-90% of the time - depending on which data you rely on - those companies flame out. But sometimes they don't. And in the even rarer case that a startup doesn't just succeed but becomes a unicorn - or maybe even a decacorn a la Uber - that success is usually to the detriment of other incumbent companies. Take Rent-a-Wreck ("RAWA"). RAWA, through its wholly-owned opco, Bundy, sells and administers franchises for the operation of vehicle rental/leasing/sharing, among other automobile business lines. There are 76 RAWA franchises in 28 US states in addition to some international operations. The company makes its money from franchise fees, servicing fees, and insurance underwriting via a non-debtor insurance subsidiary. Or, we should say, MADE its money. EXCEPT, according to the company's First Day Declaration, this isn't an innovation/disruption story. It's a more mundane cash-flow-draining-litigation story. How disappointing. The company filed for bankruptcy to rightsize its franchise network, stop the bleed from litigation/judgments, streamline ops, and try to maximize the value of its intellectual property. It seeks a $750k DIP from its prepetition lender/equityholder to do so. What a waste of a solid Silicon Valley commentary. 
• Jurisdiction: D. of Delaware 
• Capital Structure: $2.47mm secured debt     
• Company Professionals:
  • Legal: Quarles & Brady LLP (Faye Feinstein, Christopher Combest) & (local) Saul Ewing LLP (Mark Minuti, Aaron Applebaum)
  • Claims Agent: KCC (*click on company name above for free docket access)
• Other Parties in Interest (no UCC appointed):
  • 100% Equity Owner & DIP Lender: JJF Management Services Inc.

Updated 8/26/17

New Chapter 11 Filing - Prospector Offshore Drilling S.a r.l.

Prospector Offshore Drilling S.a r.l.

• 7/20/17 Recap: So that was fast. Like lightening fast. Like if you blinked you may have missed it. Just two days ago Paragon Offshore emerged from bankruptcy and one of the debtors, Paragon Offshore plc, continues down the road of administration. But now it's effectively in bankruptcy again because of feasibility. No, no, just kidding on that. That would be TOO crazy. The issue here pertains to sale leaseback agreements with third-party lessors affiliated with SinoEnergy Capital Management Ltd. and related forbearance agreements that were entered into pre-bankruptcy to keep certain subsidiary entities out of the prior proceeding. Those subsidiaries are debtors here. The debtors intend to use the "breathing spell" provided by the bankruptcy automatic stay to negotiate a resolution to the disputes under the agreements with the third-party lessors. 
• Jurisdiction: D. of Delaware
• Company Professionals:
  • Legal: Weil Gotshal & Manges LLP (Gary Holtzer, Stephen Youngman, Christopher Lopez, Jessica Liou, Alfredo Perez, Clifford Carlson, Patrick Thompson) & (local) Richards Layton & Finger PA (Mark Collins, Amanda Steele)
  • Financial Advisor: AlixPartners LLP
  • Investment Banker: Lazard Freres & Co. LLC
  • Claims Agent: KCC (*click on company name above for free docket access)

Updated 8/8/17

New Chapter 11 Filing - Dynamic International Airways LLC

Dynamic International Airways LLC

• 7/19/17 Recap: North Carolina based "aviation enterprise" that services transportation between, among other places, JFK International Airport and so-called secondary cities like Nanjing China, filed for bankruptcy. The company is allegedly approved to fly to more Chinese cities than any other US-based carrier. Not too shabby for an "aviation enterprise" that, when described like that, sounds like it should be piloted by Pablo Escobar. The company pegs operational challenges including rapid management turnover as one cause of bankruptcy. Another is a series of lawsuits. Aside from a $6mm security interest, the capital structure consists of "unsecured debt" which sounds suspiciously like equity held primarily among the two principals, one of whom is providing a $6mm DIP. 
• Jurisdiction: MD of North Carolina
• Capital Structure: $6mm secured debt
• Company Professionals:
  • Legal: Garman Turner Gordon LLP (Gerald Gordon) & (local) Bell Davis & Pitt (Daniel Bruton)
  • Financial Advisor: MJAC LLC d/b/a Allison Consulting

New Chapter 11 Filing - Beaulieu Group LLC

Beaulieu Group LLC

• 7/17/17 Recap: Georgia-based carpet manufacturer filed for bankruptcy as consumers increasingly prefer hardwood flooring over carpets that remind them of a convalescent center. Consequently, the $10b market has gotten increasingly competitive and price compression is the result: the company's revenues have declined nearly 50% from $1b in 2007 to approximately $525mm in 2016. Recognizing these trends, the company commenced an operational restructuring in 2016 but with sustained overhead and a bloated cost structure, the company needs to do more. Its borrowing base, however, has decreased and the company, therefore, has run out of liquidity to continue pursuing its efforts. The company has arranged a $70mm DIP facility to facilitate a restructuring - the form of which is unspecified. 
• Jurisdiction: ND of Georgia 
• Capital Structure: $51.7mm RCF (Bank of America NA), $15.8mm TL (Cygnets LLC), $6mm third lien loan (CT Lender LLC) 
• Company Professionals:
  • Legal: Scroggins & Williamson PC (Robert Williamson, Ashley Reynolds Ray, Matthew Levin)
  • Financial Advisor: Armory Strategic Partners LLC (Scott Avila)
  • Investment Banker: Coveview Advisors LLC and Advisory Group Equity Services Ltd. (Thomas Canning)
  • Claims Agent: American Legal Claim Services LLC 
• Other Parties in Interest:
  • Prepetition & DIP Agent: Bank of America NA
    • Legal: Parker Hudson Rainer & Dobbs LLP (C. Edward Dobbs, James Rankin Jr.)
  • Official Committee of Unsecured Creditors
    • Legal: Fox Rothschild LLP (Michael Menkowitz, Paul Labov, Jason Manfrey, Marie Dooley) & (local) Thompson Hine LLP (John Isbell, Garrett Nail, John Allerding, Douglas Walters)
    • Financial Advisor: Phoenix Management Services LLC (Michael Jacoby, Bayard Hollingsworth, Pat Bellot)

Updated 9/21/17

New Chapter 11 Filing - Cocoa Services LLC

Cocoa Services LLC

• 7/14/17 Recap: The company is a (i) part of a vertically-integrated group of companies that supported supply chain for cocoa products and (ii) wholly-owned subsidiary of Transmar Commodity Group Ltd. ("TCG"), which previously filed for bankruptcy and is in the process of being sold and wound down. TCG was the company's largest customer so...well, the bankruptcy of one has effectively dominoed into the bankruptcy of another. The company intends to sell itself to an entity known as JB Cocoa Inc. And since there's nothing else particularly interesting about this case, we're going to pour ourselves some bowls of cocoa puffs. Just because. 
• Jurisdiction: S.D. of New York (Judge Garrity) 
• Capital Structure: $5.3mm debt (Bank of the West), $2mm unsecured note (assumed from Transmar).      
• Company Professionals:
  • Legal: Riker Danzig Scherer Hyland & Perretti LLP (Joseph Schwartz, Tara Schellhorn, Rachel Gillen) & (local) Klestadt Winters Jureller Southard & Stevens LLP (Tracy Klestadt, Joseph Corneau)
  • Financial Advisor/CRO: Deloitte CRG (Robert Frezza)
  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)

Updated 8/8/17 

New Chapter 11 Filing - BICOM NY LLC

BICOM NY LLC

• 7/10/17 Recap: Manhattan based group of Jaguar, Maserati, Ford car dealerships filed for bankruptcy to trigger the automatic stay, prevent JPMorgan Chase from enforcing its rights as secured lender, and buy it more time to pursue a sale of the dealerships.  
• Jurisdiction: S.D. of New York (Judge Wiles)
• Capital Structure: $82mm debt (JPMorgan Chase Bank NA)    
• Company Professionals:
  • Legal: Wilk Auslander LLP (Eric Snyder, Eloy Peral)
  • Financial Advisor/CRO: Carl Marks Advisory Group LLC (Steven Agran) 
  • Claims Agent: JND Corporate Restructuring (*click on company name above for free docket access)
• Other Parties in Interest:
  • Prepetition & DIP Lender: JPMorgan Chase Bank NA
    • Legal: Sidley Austin LLP (Richard Fries, Andrew Propps, Kevin Lantry, Jeremy Rosenthal)

New Chapter 11 Filing - Morehead Memorial Hospital

Morehead Memorial Hospital

• 7/10/17 Recap: North Carolina non-profit 108-bed general acute care community hospital and owner of a 121-bed skilled nursing facility filed for bankruptcy. The healthcare provider noted the following reasons for the bankruptcy filing: (i) decreased patient volume, net revenue and free cash flow due, in large part, to the delivery of medical services occurring increasingly in ambulatory and emergency room settings; (ii) low reimbursement rates for medical services; (iii) expensive and only partially-reimbursed service in fulfillment of its non-profit mission; (iv) rising costs and increased competition (including competition for physicians given the hospital's rural nature); and (v) debt and legacy pension liability. The hospital will use the bankruptcy period to undertake both an operational and balance sheet restructuring while contemporaneously seeking a potential strategic healthcare provider partner. 
• Jurisdiction: M.D. of North Carolina (Judge Kahn)
• Capital Structure: $34mm debt     
• Company Professionals:
  • Legal: Waldrep LLP (Thomas Waldrep Jr., Jennifer Lyday, Francisco Morales)
  • Financial Advisor: Grant Thornton LLP (Scott B. Davis)
  • Investment Banker: Hanlon Hammond Camp LLC (Michael Lane)
  • Claims Agent: Donlin Recano & Company Inc. (*click on company name above for free docket access)

Updated 7/13/17 6:36pm CT

First Day Declaration

New Chapter 11 Filing - Foundation Healthcare Inc.

Foundation Healthcare Inc.

• 6/22/17 Recap: Once publicly-traded owner ($FDNH) and manager of surgical facilities that, at its peak, owned and/or managed 5 surgical hospitals, 9 ambulatory surgical centers and 3 outpatient departments in the Southeastern United States filed for bankruptcy to liquidate. Boom, done. 
• Jurisdiction: N.D. of Texas (Nelms)
• Company Professionals:
  • Legal: Husch Blackwell LLP (Vickie Driver, Christina Stephenson)
  • Financial Advisor/CRO: Ankura Consulting Group LLC (Michael Miller)
  • Claims Agent: Donlin Recano & Company Inc. (*click on company name above for free docket access)

Updated 7/11/17

New Chapter 11 Filing - Wordsworth Academy

Wordsworth Academy

• 6/30/17 Recap: Loyal PETITION readers know that we love lending snarky editorial color to chapter 11 filings. But sometimes things go beyond the pale and just aren't funny. This is one of them. This entity is a Pennsylvania non-profit corporation that provides education, behavioral health and welfare services to nearly 5,000 children who have emotional, behavioral and academic challenges. Why did it file? The company claims it needs an operational restructuring but there is a critical overhang here: a resident of one of the facilities died while being restrained. On top of that, there were other "allegations of other serious problems" at the same facility where the death occurred. There is an ongoing wrongful death suit against the company. Litigation appears to have pushed this company into bankruptcy, plain and simple. Tragic, sad, and definitely not amusing.
• Jurisdiction: E.D. of Pennsylvania
• Capital Structure: $4.7mm debt (M&T Bank)    
• Company Professionals:
  • Legal: Dilworth Paxson LLP (Lawrence McMichael, Peter Hughes, Anne Aaronson)
  • Financial Advisor: Getzler Henrich & Associates LLC (William H. Henrich)
  • Claims Agent: Donlin Recano & Company Inc. (*click on company name above for free docket access)
• Other Parties in Interest:
  • Secured Lender: M&T Bank 
    • Legal: Reed Smith LLP (Peter Clark II, Jennifer Knox)

Updated 7/11/17

New Chapter 11 Filing - True Religion Apparel Inc.

True Religion Apparel Inc.

• 7/5/17 Recap: Another private equity backed retailer files for bankruptcy. Here, the "brand that is globally recognized for innovative, trendsetting denim jeans and apparel" has a fast-tracked prepackaged deal with its lenders and private equity sponsor to shed approximately 72% of its debt and continue its operational restructuring (read: more store closures). The Manhattan Beach California 128-store retailer (down after closing 30 stores worldwide) blamed a (i) "a macro consumer shift away from brick-and-mortar to online retail channels," (ii) a decline in the premium denim market segment in the fashion industry and corresponding rise of athleisure, (iii) fast fashion, (iv) the rise in competitive discounting to make up for lost foot traffic and sales, and (v) an over-levered balance sheet. We believe that the decline is primarily attributable to cheesy AF bedazzled and bejeweled jeans with heinous a$$-designs and stitching that no one other than the cast of the Jersey Shore would want to be caught dead in. Its initial claim-to-fame is its "iconic and trademarked" horsesh*t symbol...we mean, "iconic and trademarked horseshoe symbol." Seriously, how is True Religion ONLY #15 on this list of "50 Men's Fashion Trends That Never Should Have Happened"? We're truly asking. Anyway, the de-levered and operationally stream-lined company hopes to restructure around a business plan predicated upon a global e-commerce expansion, increased licensing, deployment of pop-up outlet stores, an expansion of its "Last Stitch" line, and other shenanigans in an attempt to keep this ugly brand from filing for Chapter 22 after the holiday season. On an aside, the pop-up strategy is interesting: the company notes that the outlet concept has been profitable, primarily because they are based on short-term 18-month-or-less leases with "little downside" for the company. Yikes, landlords. The company further noted that the conversion of True Religion locations to "Last Stitch" branded locations has been successful. Curious. Doesn't this signal that the True Religion brand is, uh, kinda worth f*ck all and the company's success is dependent upon shying away from it? Hmmm. 
• Jurisdiction: D. of Delaware (Sontchi)
• Capital Structure: $60mm ABL (Deutsche Bank AG New York Branch), $400mm first lien TL (Delaware Trust Company, as successor to Deutsche Bank AG New York Branch), $85mm second lien TL (Wilmington Trust National Association, as successor to Deutsche Bank AG New York Branch)
• Company Professionals:
  • Legal: Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, David Bertenthal, James O'Neill)
  • Financial Advisor: Maeva Group LLC (Harry Wilson)
  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
• Other Parties in Interest:
  • Sponsor: Towerbrook Capital Partners LP
    • Legal: Wachtell Lipton Rosen & Katz LLP (Joshua Feltman, Emil Kleinhaus) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott, Daniel Butz)
  • Ad Hoc Group of Lenders (Apex Credit Partners LLC, Farmstead Capital Management LLC, Goldman Sachs Asset Management LP, Investcorp Credit Management US LLP, Palmer Square Capital Management LLC, Southpaw Asset Management LP, Waddell & Reed Investment Management Company and Ivy Investment Management Company, 
    • Legal: Akin Gump Strauss Hauer & Feld LLP (Arik Preis, Allison Miller, Jason Rubin, Yochun Katie Lee) & (local) Ashby & Geddes PA (Karen Skomorucha Owens, Stacy Newman)
    • Financial Advisor: Moelis & Company LLP
    • DIP Lender: Citizens Bank NA 
      • Legal: Morgan Lewis & Bockius LLP (Robert A.J. Barry, Julia Frost-Davies, Christopher Carter) & (local) Reed Smith LLP (Kurt Gwynne, Emily Devan)
    • Official Committee of Unsecured Creditors
      • Legal: Cooley LLP (Jay Indyke, Cathy Hershcopf, Seth Van Aalten, Max Schlan, Lauren Reichardt) & (local) Klehr Harrison Harvey Branzburg LLP (Michael Yurkewicz, Sally Veghte)
      • Financial Advisor: Province Inc. (Peter Kravitz)

Updated 8/8/17

New Chapter 11 Filing - Takata Corporation

Takata Corporation

• 6/25/17 Recap: The long-awaited chapter 11 (and Japanese Civil Rehabilitation Act) filing of the publicly-traded ($TKJP) airbag manufacturer is finally upon us after the Company endured a massive airbag recall (affecting 124mm automobiles that were deployed with non-desiccated PSAN Inflators, worldwide) and corresponding liability. The Company intends to consummate an agreement in principle with privately-held Key Safety Systems out of Sterling Heights Michigan for a sale of substantially all of the Company's assets for $1.588b. Use of proceeds include satisfying the requirements of a plea agreement with the US Department of Justice, paying administrative costs and expenses of the restructuring (cha-ching Weil, PwC, Lazard & Prime Clerk), and funding unsecured creditor recoveries. The Company has secured a $227mm revolving credit facility from Sumitomo Mitsui Banking Corporation to fund the cases; per its press release, it has also negotiated with its Japanese original equipment manufacturers ("OEMs") for valuable accommodations and liquidity enhancements and continues to negotiate with OEMs elsewhere. Every car manufacturer under the sun is listed as an "undetermined" general unsecured creditor including the likes of Toyota, Ford, Tesla, Fisker, Ferrari, and, of course, the majors. 
• Jurisdiction: D. of Delaware
• Company Professionals:
  • Legal: Weil Gotshal & Manges LLP (Marcia Goldstein, Ronit Berkovich, Matthew Goren, Jessica Diab, Lauren Tauro) & (local) Richards Layton & Finger PA (Mark Collins, Michael Merchant, Amanda Steele, Brett Haywood)
  • Financial Advisor: PriceWaterhouseCoopers LLP (Bill Fasel, Stephen Hammond)
  • Investment Banker: Lazard Freres & Co. LLC
  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
• Other Parties in Interest:
  • Daimler Trucks North America LLC 
    • Legal: White & Case LLP (Thomas Lauria, Michael Shepard, Richard Graham)
  • General Motors Holdings LLC
    • Legal: O'Melveny & Meyers LLP (George Davis, Daniel Shamah, Andrew Sorkin, Gary Svirsky)
  • General Motors LLC
    • Legal: Honigman Miller Schwartz & Cohn LLP (Joseph Sgroi, Chauncey C. Mayfield II, Scott Kitai)
  • Key Safety Systems Inc.
    • Legal: Skadden Arps Slate Meagher & Flom LLP (Ron Meisler, Felicia Gerber Perlman, Christopher Dressel, Christine Okike, Esther Adzhiashvili)
  • Honda North America Inc.
    • Legal: Sidley Austin LLP (Michael Andolina, Jessica Knowles Boelter) & (local) Cole Schotz PC (Norman Pernick, J. Kate Stickles)
  • FCA US LLC
    • Legal: Sullivan & Cromwell LLP (Brian Glueckstein, Andrew Dietderich, Alexa Kranzley)
  • Ford Motor Company
    • Legal: McGuireWoods LLP (Mark Freedlander, Frank Guadagnino, John Thompson) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott)
  • Jaguar Land Rover North America LLC
    • Legal: Mayer Brown LLP (Richard Ziegler)
  • Subaru of America Inc.
    • Legal: Kramer Levin Naftalis & Frankel LLP (Adam Rogoff, Anupama Yerramalli, Philip Bentley, David Braun)
  • Toyota Motor Corporation
    • Legal: Frost Brown Todd LLC (Robert Sartin, Patrica Kirkwood Burgess, Ronald Gold) & (local) Landis Rath & Cobb LLP (Adam Landis, Kimberly Brown, Travis Ferguson)
  • BMW Manufacturing Co LLC
    • Legal: Norton Rose Fulbright US LLP (David Rosenzweig, Michael Parker) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott)
  • Nissan Motor Corporation
    • Legal: Jones Day (Pedro Jimenez)
  • Mitsubishi Motors North America Inc.
    • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Daniel Youngblut, Kevin O'Neill)
  • Tesla Inc.
    • Legal: Irell & Manella LLP (Jeffrey Reisner, Michael Strub, Kerri Lyman) & (local) Reed Smith LLP (Kurt Gwynne, Emily Devan)
  • Volkswagen Group of America, Inc.
    • Legal: Davis Polk & Wardwell LLP (Timothy Graulich, Elliott Moskowitz, Darren Klein)
  • Volvo Group North America LLC
    • Legal: Baker Hostetler LLP (Eric Goodman) & (local) Morris Nichols
  • Official Committee of Unsecured Creditors
    • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Tyson Lomazow, Abhilash Raval, Bradley Scott Friedman) & (local) Whiteford Taylor & Preston LLP (Christopher Samis, L. Katherine Good, Kevin Shaw)
  • Committee of Unsecured Tort Claimant Creditors
    • Legal: Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, James Stang)

Updated 7/11/17 6 pm (CT)

New Chapter 11 Filing - Keystone Tube Company LLC (A.M. Castle & Co.)

Keystone Tube Company LLC (A.M. Castle & Co.)

• 6/18/17 Recap: Publicly-traded ($CASL) Illinois-based specialty metals distribution company with customers in some hard hit sectors of late, e.g., oil and gas, retail, mining, defense, filed a prepackaged bankruptcy case to de-lever its balance sheet. 
• Jurisdiction: D. of Delaware 
• Capital Structure: $112mm first lien debt (Cantor Fitzgerald Securities), $177mm
• 18 12.75% second lien notes (US Bank NA), $22.3mm '19 5.25% convertible third lien notes (US Bank NA)     
• Company Professionals:
  • Legal: Pachulski Stang Ziehl & Jones LLP (Richard Pachulski, Jeffrey Pomerantz, Maxim Litvak, John Lucas, Peter Keane)
  • Financial Advisor & Investment Banker: Imperial Capital LLC (Joseph Kazanovski)
  • Claims Agent: KCC (*click on company name above for free docket access)
• Other Parties in Interest:
  • Ad Hoc Lender Committee (At Filing: Corre Partners Management LLC, Highbridge Capital Management LLC, SGF Inc., Pandora Select Partners LP, Whitebox Advisors LLC, Wolverine Asset Management Ltd.)
    • Legal (except SGF Inc.): Paul Weiss Rifkind Wharton & Garrison LLP (Andrew Rosenberg, Jacob Adlerstein, Michael Rudnick) & (local) Young Conaway Stargatt & Taylor LLP (Pauline Morgan, Joel Waite, Ian Bambrick)
    • Legal (SGF Inc): Goodwin Proctor LLP (Michael Goldstein, Gregory Fox) & (local) Pepper Hamilton LLP (David Fournier, John Schanne)
    • Financial Advisor: Ducera LLC
  • Prepetition First Lien Agent: Cantor Fitzgerald Securities
    • Legal: Shipman & Goodwin LLP
  • Prepetition Indenture Trustee: US Bank NA
    • Legal: Dorsey & Whitney LLP (Eric Lopez Schnabel, Robert Mallard, Alessandra Glorioso)
  • Administrative Agent: PNC Bank NA
    • Legal: Goldberg Kohn Ltd (Jacob Marshall, Danielle Juhle) & (local) Blank Rome LLP (Josef Mintz)
  • Bank of America NA
    • Legal: Morgan Lewis & Bockius LLP (Jody Barillare, Rachel Jaffe Mauceri)
  • Nantahala Capital Management
    • Legal: King & Spalding LLP (Arthur Steinberg) & (local) The Rosner Law Group LLC (Frederick Rosner)

Updated 7/11/17 6:22 pm

Source: First Day Declaration.