Interesting Restructuring News

• Financial Services. Ocwen Financial Corp. got pummeled this week with fresh allegations.

• Healthcare. Suddenly the space is looking increasingly distressed - and this doesn't even take into account Adeptus Health Inc. or Halt Medical Inc. (see case summaries in "Cases"). 

• Investing. Looks like Intelsat jacked up distressed debt returns. Too bad, for some, that EFH jerked em' right back down.

• Manufacturing/3D-Printing. Holy sh*t. Is there anything Amazon doesn't touch?

• Oil & Gas. Sort of telling when Saudi Arabia is making a $50b push towards renewables. And also telling that new owners are already looking to shop assets post-BK (Stone Energy). At least some are already worried about another wave of distressed E&P based on revolver drawdowns. But US-based shale-focused private equity doesn't appear to have gotten the memo.

• Pharma/Hedge Fund Hotels. We enjoyed this summary of Bill Ackman's involvement in Valeant. And this piece discussing Marc Cohodes' short-strategy vis-a-vis Concordia International.

• Private Equity. These guys are making bigger and bolder moves into tech - though there is a "mixed record" there (citing Avaya, for instance)(firewall).

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• Fast Forward. With Agent Provocateur (amusing write-up below, if we do say so ourselves) going bankrupt and L Brands (Victoria's Secret) reporting dogsh*t numbers last quarter, we figured we'd look at the lingerie space for a hot second and we found a lot of action. And it ain't good for the incumbents. It'll be interesting to see if Aerie's omnichannel strategy pays off - bold move to double down on physical stores these days - when Amazon looms right around the corner.

• Rewind I: Groupon. As we foreshadowed might happen, Groupon dropped this bomb on Good Friday while markets were closed - a banal and cynical PR trick to try and avoid a bad news cycle. 

• Rewind II: Sun Capital Partners. We have been beating up on Sun Capital Partners as its retail portfolio just gets uglier and uglier (see now Marsh Supermarkets, which has apparently hired Hilco to explore strategic options, and Vince, which got itself a recent downgrade). Perhaps CVC Capital Partners and Leonard Green & Partners have gotten the memo; the two PE firms appear to be exploring a sale of BJ's Wholesale Club which, in turn, probably means that any plans of an IPO are on hold. 

• Rewind III. We previously noted the increasing power of platforms in retail. Rue21, expected by many to file for bankruptcy in the near-term, announced a visual virtual stylist on Facebook Messenger this past week, allegedly leveraging AI in the process. 

News for the Week of 11/13/16

• Disruption - people throw this term around a lot. But Hertz's earnings report shows disruption, i.e., the Uber-effect, in quantifiable numbers. Query to what degree hotel earnings are affected by decreased (exorbitant) parking fees lost from decreased rental car bookings. 
• Retail - Add retail outlets from the likes of Kenneth Cole, Kate Spade and Coach to the list of struggling retail businesses, Nordstrom takes a staggering $197mm write-down on start-up, Trunk Club, and J.C. Penney's total and comp store sales dropped meaningfully. On the flip side, Macy's provides strong guidance (despite an otherwise horrible earnings report) and Nordstrom, Ralph Lauren and Kohl's reported stronger than expected earnings.
• Takata - the future remains subject to debate as precedent of GM looms large (includes input from Pepper Hamilton's Henry Jaffe, Goodwin Proctor's Bill Weintraub, and Brown Rudnick's Ed Weisfelner).  
• This was pre-election results:

• Fast Forward: Bonanza Creek, Forbes Energy and Nuverra Environmental all face expirations of grace/forbearance periods this week. 
• Fast Forward II: Dynergy and Illinois Power Generating Co. (Genco) launched an exchange offer for Genco with a prepackaged bankruptcy backstop; FirstEnergy bonds plummeted after acknowledging bankruptcy as an option for subsidiary, FirstEnergy Solutions.
• Rewind I: Saudi Arabia. Feeling the pain.
• Rewind II: Oklahoma. Two weeks ago we highlighted the effects of the oil and gas downturn on the educational system in Oklahoma. We acknowledged the environmental issues there too. Well, that story keeps evolving as a 5.0 earthquake roiled through Oklahoma this past week.  And this chart is interesting:

• Chart of the Week: US field production of crude oil increased in 2015 for the 7th consecutive year to 9.42mm barrels/day, the highest crude oil production level since 1972. (Source: U.S. Energy Information Administration).

News for the Week of 10/30/16

“It’s not like it was 30 years ago, but it’s a good mall”...

• Athleisure - Lululemon, Nike and Under Armour had all killed it in recent years by focusing on athletic wear but the trend is in decline. Jeans may be making a comeback -- so long as they're not uber-cheesy, e.g., True Religion. Meanwhile, J.Crew recently announced a shift towards athleisure. Are they too late to the party?

• More Under Armour. The Company reported down numbers this quarter, continuing to exhibit the effect The Sports Authority's bankruptcy has on its business. This holiday season will be make-or-break for a large number of retailers and may be watched closely by those who invest in malls...
• "Dead Malls" - This really puts the disparity between "A" malls and "dead" malls in perspective: Schuylkill Mall in Frackville Pennsylvania filed for bankruptcy this week. Anchor tenants: Bon-Ton, Dunham Sports, KMart, Hess's, and Sears. The latter three closed in the last 24 months, contributing to a "large vacancy rate."
• Fund Raising: Oak Hill Advisors raised $2.7b for its second distressed fund while Carlyle raise $1.5b for another distressed fund. Clearly folks are prepping for increased activity.

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• Last Week: To quote renowned bankruptcy expert, Keanu Reeves Esq., "Whoa". Last week we discussed the historic Saudi Arabian debt issuance in our piece about "yield." This week, a Saudi official noted that the country's continued busted budget deficit could lead to sovereign bankruptcy within a few years.
• Last Week Part II: That Ryan Kavenaugh dude has nine lives. It looks like Relativity Media will avoid a Chapter 22 filing (or liquidation) in light of its announced $250mm sale to some Singaporean sucker. Clearly its the Netflix streaming rights that proved compelling given the whopping ~$6mm intake on "Masterminds."
• "Captain Obvious" Headline of the Week: "Bankruptcies in Oil Field Services are Accelerating."
• Chart of the Week: To put this in perspective, as recently as 2010, only three states had at least a 10% wind share. Think about that in the the broader oil and gas context: this energy downturn is not just debt-related. We are looking at the broad-based beginning of a secular decline.