James Mazza for making Partner at Skadden Arps Meagher & Flom LLP in Chicago.
James Loughlin (Principal, Managing Director) of Loughlin Managing Partners on his recognition by the Turnaround Atlas Awards. Whatever the hell that is.
Timothy Coleman (Partner) of PJT Partners Inc. on his recognition by theTurnaround Atlas Awards. Ditto.
Busted Tech. Ok, not yet. But soon. Faraday Future has cancelled its plans to build a Vallejo California assembly factory - shortly after scaling back its original Nevada facility. This Techcrunch piece says that "it's unclear where the future will lead for Faraday." Seems pretty clear to us that it will lead to bankruptcy court. And, quietly, a number of (once) high-flying startups are laying people off including, notably, Postmates and Zozi($60mm VC - Richard Branson and others). Finally, Munchery, often hailed as a top food-delivery startup, required a recap this week to survive.
Grocery & Sun Capital Partners. We SWEAR we are not picking on SCP here but c'mon already: now it looks like Marsh Supermarkets is in trouble as the company falls behind on rent and quietly - well, not so quietly anymore - shuts locations. So, let's recap: in the past 6 months, SCP has seen the following portfolio companies file for bankruptcy: Garden Fresh Restaurant Intermediate Holdings LLC, Limited Stores Company LLC, Gordman Stores Inc. Maybe this will be the next?
High Yield. Remember a few years ago when Chobani was distressed? Now you can get in on a new offering at a premium to par, it seems. Semi-related, the bidding to lend to Westinghouse in bankruptcy was reportedly pretty intense, with Apollo Investment Corporation duking it out with Goldman Sachs, Highbridge Capital, and Silver Point Finance for the privilege to finance the nuclear power company while it figures out how to restructure its business and address two incomplete installations in Georgia in South Carolina. Yield, baby, yield.
Media. A review of the proposed deleveraging transaction in iHeartMedia, which Fitch Ratings has recently identified as a near-term default candidate ("welcome to the party pal"). (Heads up: you may want to click on the link to see the 6 other non-bankrupt companies Fitch identified as well).
Private Equity. Apparently it's "news" that PE shops, e.g., Ares Management LP, Thomas H. Lee Partners, Bain Capital, and Apollo Global Management LP like to play in various parts of the capital structure to preserve optionality.
Oil&Gas. That was fast. Like super fast. Seems the new owners of Samson Resources II, LLCdon't share a very "long" view of the oil and gas space - despite "having discharged approximately $4 billion of debt and nearly $300 million of annual interest expense from Samson Resources Corporation," aka the previously bankrupt entity that filed in mid-2015. And distressed investors wonder where the term "vulture" comes from. PJT Partners LP was the previous banker for the company but with the Board being what it is, there's no surprise Houlihan Lokey has a piece of the action.
Retail. Finish Line added itself to the long line of retailers that reported dogsh*t numbers with earnings down, same store sales down, blah blah blah. Right, and approximately 40 store closures. Naturally. Also, David's Bridal was downgraded this week. The CD&R LLC owned retailer has a $520mm term loan due in 2019 and if millennials continue to flick off conventional marriage, there's no way they'll be able to sell enough gaudy wedding dresses to manage the interest expense. And, uh oh, now there appears to be a glaring hole in the "fast fashion" narrative as H&Mmissed expectations with declining net profit.
Rewind I: 3-D Printing. Not to be a broken record about this, but it is totally real. Last week we noted Adidas' plans for it and this week Under Armourfollowed suit. The implications for those in the supply chain can't be underestimated.
Rewind II: Glass Half Full. Looks like Gordmans Stores won't be a complete liquidation after all: Stage Stores stepped up and, as part of a joint venture with Tiger Capital Group and Great American Group, will acquire roughly 50 stores with an option for a handful of others. The remainder will be liquidated but this presumably means that, for now, a couple of dozen will continue to operate. At least until the inevitable Chapter 22 that occurs after next holiday season. Kidding! (Or are we?)
European Retail. It seems the bloody retail phenomenon isn't exclusive to US retailers. Jack Wolfskin, a German producer of outdoor wear and equipment, is in the midst of a restructuring of its $365mm of debt. The Blackstone Group is the company's sponsor and PJT Partners is shopping the company. Meanwhile, Jaeger, a UK-based clothier is also on the block, with an administration within the bounds of possibility. AlixPartners is advising the company.
High Yield. Valeant Pharmaceuticals, Foresight Energy and Community Health Systems all issued new high yield debt this past week and what screams of a massive yield grab. No, we're not joking: this actually happened. And demand was so strong that upsizing took place. We repeat: "demand was so strong that upsizing took place."
Oil & Gas Fallout. Like we said last week, we're crushing Ramen so it's hard to feel sorry for a man pulling in $2mm and a $50k/month consulting fee, but its interesting to see some of the effects of the energy downturn - here, relating to Energy XXI's former CEO.
Private Equity History Lesson. A review of J.Crew's take-private transaction and private equity's affinity for dividends, long-term viability be-damned.
Television. Netflix is going after unscripted reality TV. Choice quote: "The competition should be scared out of their minds. These guys are monsters — they're coming in to play and play hard."
Rewind I: Five weeks ago we reported the following: "The Finish Line Inc. announced its sale of Jack Rabbit Sports this week (66 locations) for undisclosed terms. "Undisclosed terms" = GU gels and a jock-strap." Apparently, we were too generous with our characterization of the financial consideration. Something tells us this won't stop Peter J. Soloman from dutifully and opportunistically noting the tombstone on its pitch materials for the next big retail mandate. See, also, this.
Rewind II: Looks like Avaya Inc. has a potential buyer in publicly-traded Extreme Networks Inc. for its networking business (for $100mm).
Rewind III: Store closures. Add Staples to the list (70 locations) and Signet Jewelers (165 stores). And here is one report on the failure of BCBG.
Death Traps. Katharina Earle of Cole Schotz PCdiscusses the risks of proposing death traps in a plan.
Energy. The US Energy Information Administration has released its annual energy outlook with forecasts through 2050.
Lease Rejections. Kenneth Rosen of Lowenstein Sandler LLP articulates that BC 365(d)(4) is causing retail liquidations.
Makewhole. Gregory Horowitz of Kramer Levin reviews the EFIH decision.
Privacy. Shmuel Vasser of Dechert LLP discusses internet privacy issues in the context of international bankruptcies.
Professional Fees. Michael Cook of Schulte Roth & Zabel summarizes the recent In re Relativity Fashion LLC case relating to objections to investment banking transaction fees. In this instance, attempts to revisit 328-approved fees failed. For some inexplicable reason, Cook doesn't indicate whose applications were at risk - to the point of blatantly avoiding it even though the court makes no attempt to hide it. To spare you the suspense, it was Houlihan Lokey and PJT Partners LP that were attacked.
