New Chapter 11 Filing - Videology Inc.

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Videology Inc. 

5/10/18

In what could amount to a solid case study in #BustedTech and the up/down nature of entrepreneurship, Videology Inc., a Baltimore based software ad-tech company that generated $143.2 million in revenue in fiscal 2017 has filed for bankruptcy.

The company has two principal business lines: (i) legacy media sales, a demand side (advertisers) platform that Videology would leverage to procure ad inventory to sell to advertising agencies (the supply side); and (ii) its long-tail "core use case," which included "long term planning, management, and execution of a company's entire portfolio of advertising campaigns or advertising inventory with complex, overlapping targets, objections...across multiple delivery channels." We're going to pretend we understand what that means; we think it has something to do with assisting ad agencies target ads effectively. What we do understand is that revenue generation for the more lucrative "core use case" segment involved a long sales pipeline that didn't support timely enough revenues to offset the liquidity draining legacy segment. Ruh roh.

But let's take a step back. This company was founded in February 2007. It raised its $15.1 million Series A round of funding in July 2008, securing Valhalla Partners II as a lead investor. It then secured its $16.4 million Series B round in Q4 2009. Comcast Ventures LP was the lead investor. Thereafter it nailed down its $30.4 million Series C round in May 2011 with New Enterprise Associates 12. Finally, in June of 2013, the company closed its $68.2 million Series D round with Catalyst Investors QP III as lead. Lots of funding. No down rounds. Everything seems to be on the right track.

Except it wasn't. The legacy segment was bleeding cash as early as 2012. The company had to tap the venture debt market in July 2017 to refi-out its bank line of credit. It obtained a $40-45 million 8.5% asset-backed credit facility (secured against virtually everything, including IP) with Fast Pay Partners LLC as agent and Tennenbaum Capital Partners LLC ("TCP"), as documentation agent and investment manager. It also obtained a second $20 million 10% asset-backed "UK" credit facility with FPP Sandbox LLC and TCP, which was secured by the same collateral. Both loans came with exit fees, charge 3% default interest and the larger facility has a 3% end-of-term premium attached to it.

At the same time the company took out the venture debt, it issued $17.1 million of convertible notes from board members and existing major investors (elevating them in the cap table) AND raised an additional $4.7 million in a subsequent rights offering to smaller legacy investors. What do you think will happen to that money? We'll come back to that.

In Q3 2017, the company also sought to find a strategic buyer. It didn't. It then started doing what every distressed company does: it stretched payables while it tried to formulate an out-of-court solution -- in the form of a restructuring or a refinancing. Certain vendors became skittish and withheld payments to the company. The resultant cash squeeze precipitated the prepetition lenders issuance of a notice of default. Thanks to a cash control agreement, they then seized control of the main operating accounts and paid down amounts owing with the company's cash and accounts receivable. And, yes, they applied the default interest rate. This is why they say what they say about possession. Savage. Consequently nothing is due under the larger facility; over $11.2 million remains due on the UK facility. 

The company now has a potential buyer, Amobee Inc., and has filed for bankruptcy to effectuate a sale. The company hasn't yet filed papers indicating the sale price but The Wall Street Journal reports that the purchase price may be $45 million -- or 1/3 of '17 revenues. The WSJ also reports that the company has nailed down a $25 million DIP credit facility which will be used to pay down the UK facility and fund the cases. Presumably the sale price will pay off the DIP and the $20 million that remains will be left for unsecured creditor recoveries. Back of the envelope, that will be about a 25% recovery. 

As for the equity holders? In the absence of bumping up by way of the convertible note, they'll be wiped out. That's venture capital for you. The venture debt providers, however, did well. 

  • Jurisdiction: D. of Delaware (Judge Shannon)

  • Capital Structure: $11.2mm UK Loan Facility (FPP Sandbox LLC and Tennenbaum Capital Partners LLC), $17.1 million convertible promissory note.

  • Company Professionals:
    • Legal: Cole Schotz PC (Irving Walker, Patrick Reilley)
    • Financial Advisor: Berkeley Research Group LLC
    • Claims Agent: Omni Management Group (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Prospective Buyer: Amobee Inc.
      • Legal: Goodwin Proctor LLP (Gregory Fox, Alessandra Simons) & (local) Womble Bond Dickinson (US) LLP (Matthew Ward, Morgan Patterson)
    • Secured Lenders: FastPay Partners LLC & FPP Sandbox LLC
      • Legal: Buchalter (William Brody, Ariel Berrios) & (local) Richards Layton & Finger PA (John Knight, Christopher De Lillo)
    • DIP Lender: Draper Lending LLC
      • Legal: Arent Fox LLP (Robert Hirsh, Jordana Renert) & (local) Bayard PA (Justin Alberto, Daniel Brogan)

New Chapter 11 Filing - Claire's Stores Inc.

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Claire's Stores Inc. 

3/19/18

Claire’s® Stores Inc. is the latest in a string of specialty "treasure hunt"-styled retailers to find its way into bankruptcy court. In this case, the debtors, together with their 33 non-debtor affiliates, sell jewelry, accessories, and beauty products to young women/teen/tweens/kids; it has a presence in 45 nations spread throughout 7,500 company-owned stores, concession stands, and franchises. The company proudly states that "[a] Claire's store is located in approximately 99% of major shopping malls through the United States." Moreover, "[e]ach of the Debtors' store locations are leased, and are typically located in traditional shopping malls with, on average, 1,000 square foot of selling space." PETITION NOTE: this explains a lot. Hashtag, retail apocalypse.

First Day Declarations are interesting in that they are the first opportunity for a debtor-company to tell its story to the public, to parties in interest, and, significantly, to the bankruptcy judge. And this declaration is particularly interesting because, unlike many of its bankrupt specialty retail predecessors, Claire’s® makes a concerted effort to delineate why its physical presence is so critical. So what is that critical piece? Apparently, it is ear piercing. Yup, you read that right. Ok, well that and the "treasure hunt" shopping atmosphere which "simply cannot be replicated online." The company boasts about solid operating margins. and notes that, at the time of filing, it only intends to shed 95 leases. 

The company notes that it has established trust with parents and the number of pierced ears is indicative of that; it estimates that it has pierced over 100 million ears worldwide (since 1978) and 3.5 million in fiscal year 2017. While that is gimmicky and cute, the company doesn't not note how much of the reported $212 million of EBITDA (on $1.3 billion of revenue) is related to this phenomenon. Moreover, all of the trust in the world cannot overcome a capital structure with $1.9 billion of funded debt (ex-$245 million more at the non-debtor affiliate level) and $162 million in cash interest expense (see chart below) - especially when $1.4 billion of that funded debt matures in Q1 '19. And particularly when fewer and fewer people tend to frequent the malls that Claire’s® dominate. Notably, the company says ONLY the following about e-commerce: "Finally, the Claire's Group operates a digital sales platform through which new and existing customers can purchase products directly through the Claire’s® and Icing® websites and mobile application." So, as the malls go, Claire’s® goes. Notably, the company makes a point that it "is growing, not shrinking, its business. The Company expects its concessions business to grow by more than 4,000 stores in 2018." Landlords take note: the company highlights its CONCESSIONS BUSINESS, which is essentially a "mini-footpring" utilizing the store-within-a-store model. In other words, this growth won't help the landlords much. 

In addition to its debt, the company notes - as a primary cause for its bankruptcy filing - that the "Debtors operate in a highly competitive market." PETITION NOTE: No effing sh*t. Mall traffic has declined 8% year-over-year and the debtors - ear-piercing demand notwithstanding - aren't impervious to this. Accordingly, revenue is down $200mm since 2014. 

To counteract these trends, the company engaged in exchange transactions back in 2016 that had the effect of stripping out intellectual property collateral, swapping out debt, and deleveraging the company by $400 million. Clearly that was a band-aid rather than a solution. 

Now the company purports to have a restructuring support agreement with the Ad Hoc First Lien Group which, in addition to 72% of the first lien debt, holds 8% of the second lien notes and 83% of the unsecured notes. The members of the Ad Hoc Group of First Lien Creditors have agreed to provide the Company with approximately $575 million of new capital, including financing commitments for a new $75 million asset-based lending facility, a new $250 million first lien term loan, and $250 million as a preferred equity investment. In addition, the company has lined up a Citibank-provided DIP credit facility of $75 million ABL (supported, seemingly, by the consenting ad hoc first lien group) and a $60 million "last out" term loan. Consequently, Claire's expects to complete the chapter 11 process in September 2018, emerge with over $150 million of liquidity, and reduce its overall indebtedness by approximately $1.9 billion. We'll believe it when we see it. 

  • Jurisdiction: D. of Delaware (Judge Walrath)
  • Capital Structure: see below. 
  • Company Professionals:
    • Legal: Weil Gotshal & Manges LLP (Ray Schrock, Matthew Barr, Ryan Dahl) & (local) Richards Layton & Finger PA (Daniel DeFranceschi, Zachary Shapiro, Brendan Schlauch, Brett Haywood)
    • Financial Advisor: FTI Consulting Inc.
    • Investment Banker: Lazard Freres & Co. LLC 
    • Real Estate Advisor: Hilco Real Estate LLC 
    • Independent Director: Michael D'Appolonia 
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • PE Sponsor: Apollo Investment Fund VI, L.P. (owns 97.7% of Claire's Inc, the parent)
      • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Jeffrey Saferstein)
    • DIP Agent: Citibank
      • Legal: Latham & Watkins LLP
    • Prepetition ABL Facility & Revolving Credit Facility Agent: Credit Suisse AG, Cayman Islands Branch
    • Ad Hoc First Lien Group (Initial Consenting Creditors: Diameter Capital Partners LP, Elliott Management Corporation, Monarch Alternative Capital LP, The Cincinnati High Yield Desk of J.P. Morgan Investment Management Inc., The Indianapolis High Yield Desk of J.P. Morgan Investment Management Inc., and Venor Capital Management LP.)
      • Legal: Willkie Farr & Gallagher LLP (Matthew Feldman, Brian Lennon, Daniel Forman) & (local) Morris Nichols Arsht & Tunnell LLP
      • Financial Advisor: Millstein & Co. 
    • First Lien Note Agent: The Bank of New York Mellon Trust Company N.A.
    • First Lien Term Loan Agent: Wilmington Trust NA
      • Legal: Pryor Cashman LLP (Seth Lieberman, Patrick Sibley, Matthew Silverman)
    • Second Lien Note Agent: Bank of New York 
    • Unsecured Note Indenture Trustee: Bank of New York 
    • Official Committee of Unsecured Creditors
      • Legal: Cooley LLP (Cathy Hershcopf, Seth Van Aalten, Summer McKee) & (local) Bayard PA (Justin Alberto, Erin Fay, Gregory Flasser)
      • Financial Advisor: Province Inc. 
Source: First Day Declaration

Source: First Day Declaration

Updated 3/30/18

New Chapter 11 Filing - MAC Acquisition LLC (aka Romano's Macaroni Grill)

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MAC Acquisition LLC (aka Romano's Macaroni Grill)

  • 10/18/17 Recap: Back in 2015, Ignite Restaurant Group offloaded Romano's Macaroni Grill to RedRock Partners LLC in an attempt to bolster its liquidity and avoid bankruptcy. It failed: the company filed for bankruptcy earlier this year (case summary here). Perhaps that had something to do with the fact that the sale was for a measly $8mm, "a price akin to dumping your unwanted junk on Craigslist." Now, Romano's Macaroni Grill has filed for bankruptcy to restructure its balance sheet and further an operational restructuring, including dealing with lessor damage claims arising out of terminated leases (the company closed 37 company-operated locations in 2017; it has 93 company-owned restaurants remaining exclusive of non-debtor franchises). The company blames its chapter 11 filing on (i) the inability to generate sufficient cashflow, sales and margin to cover operating expenses let alone service its debt (TTM EBITDA as of 8/17 was -$12mm), and (ii) increased costs for both commodities and labor. We note that this provision in the company's bankruptcy papers is indicative of a larger trend befalling the casual dining segment: "The Debtors’ operations and financial performance have been adversely affected by a number of economic factors, but perhaps most notably by an overall downturn for the casual dining industry. The preferences of such customers have shifted to cheaper, faster alternatives. On the other end of the spectrum, there is a trend among younger customers to spend their disposable income at non-chain “experience-driven” restaurants, even if slightly more expensive." In other words, this bankruptcy is partly Evan Spiegel (Snapchat, $SNAP) and Kevin Systrom's (Instagram, $FB) fault. The company has a restructuring support agreement with its major stakeholders to pursue a dual-track bankruptcy via a plan of reorganization and a potential sale upon the hiring of an investment banker (heads up: bankers!!). The company has secured a junior $5mm DIP credit facility from Raven Capital Management LLC. P.S. Nothing to see here for the REITS: Simon Property Group has made a notice of appearance in the matter. 
  • Jurisdiction: D. of Delaware (Judge Walrath)
  • Capital Structure: $12mm RCF (Bank of Colorado), $2.5mm TL (Bank of Colorado), $3.5mm LOC (Bank of Colorado), $5mm Funding Loan 
  • Company Professionals:
    • Legal: Gibson Dunn & Crutcher LLP (Jeffrey Krause, Michael Neumeister, Emily Speak, Brittany Schmeltz) & (local) Young Conaway Stargatt & Taylor LLP (Michael Nestor, Edmon Morton, Ryan Bartley, Elizabeth Justison)
    • Financial Advisor/Chief Restructuring Officer: Mackinac Partners LLC (Nishant Machado, Pasquale Maturo)
    • Claims Agent: Donlin Recano & Company Inc. (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Lender: Raven Capital Management LLC
      • Legal: Winston & Strawn LLP (Justin Rawlins, Carey Schreiber, Eric Sagerman) & (local) Ashby & Geddes PA (Gregory Taylor, Stacy Newman)
    • Bank of Colorado
      • Legal: Shaw Fishman Glantz & Towbin LLC (Thomas Horan, Johnna Darby, Brian Shaw) & (local) Markus Williams Young & Zimmermann LLC (James Markus)
    • Official Committee of Unsecured Creditors
      • Legal: Kelley Drye & Warren LLP (Eric Wilson, Jason Adams, Lauren Schlussel) & (local) Bayard PA (Justin Alberto, Gregory Flasser)

Updated 11/8/17

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 - 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 - Sungevity Inc.

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Sungevity Inc.

  • 3/13/17 Recap: Oakland California-based designer of residential and commercial solar energy systems in the US, UK and Europe filed for bankruptcy after a failed merger and an inability to service its capital structure. Large equity holders include Apollo Investment Corporation and Lowe's Corporation. The company secured a $20mm DIP facility to pursue a sale to a stalking horse bidder. 
  • 4/17/17 Update: The company received no competitive qualified bids and, therefore, sought approval of the sale to the stalking horse bidder.
  • Jurisdiction: D. of Delaware
  • Capital Structure: $145.6mm of funded debt (Hercules Capital Inc. - $55mm, MMA Energy Capital LLC - $10mm, MHA Trust LLC - $5mm, Wilmington Savings Fund Society - $9.5mm bridge loan, Atalaya Special Opportunities Fund VI LP - $32mm, $34.1mm convertible notes     
  • Company Professionals:
    • Legal: Morrison & Foerster LLP (Jonathan Levine, Jennifer Marines, Melissa Hager, Erica Richards, Todd Goren, Rahman Connelly, Andrew Kissner, Stacy Molison) & (local) Young Conaway Stargatt & Taylor LLP (M. Blake Cleary, Jamie Lutonn Chapman, Kenneth Listak)
    • Financial Advisor: AlixPartners LLC (Randall Eisenberg, Stephen Spitzer, James Guglielmo, Raju Patel, Allen Wong)
    • Investment Banker: Ducera Securities LLC (Joshua Scherer) & Greentech Capital Advisors (Michael Horwitz)
    • Claims Agent: KCC (*click on company name for docket)
  • Other Parties in Interest:
    • DIP Lender & Stalking Horse Bidder: LSHC Solar Holdings LLC (JV between Northern Pacific Group and Hercules Capital Inc.)
      • Legal: Kirkland & Ellis LLP (Brad Weiland, Christine Pirro) & (local) Klehr Harrison Harvey Branzburg LLP (Domenic Pacitti)
    • Hercules Capital Inc.
      • Legal: Cole Schotz P.C. (Stuart Komrower, Katharina Earle)
    • Second Lien Lender: MMA Energy Capital LLC
      • Legal: Baker & McKenzie LLP (Debra Dandeneau, Jacob Kaplan) & (local) Richards Layton & Finger PA (Paul Heath, Zachary Shapiro)
    • Lowe's Corporation
      • Legal: Hunton & Williams LLP (Gregory Hesse, Nicole Collins)
    • Verengo Inc. (also in Chapter 11)
      • Legal: Bayard PA (Scott Cousins, Evan Miller)
    • Eastern Sun Capital Partners LLC 
      • Legal: Goodwin Proctor LLP (Kizzy Jarashow, David Koch) & (local) Whiteford Taylor & Preston LLP (Christopher Samis, L. Katherine Good)
    • Official Committee of Unsecured Creditors
      • Legal: Brown Rudnick LLP (Steven Pohl, Sunni Beville, Christopher Floyd, Tristan Axelrod, Fouad Kurdi) & (local) Morris James LLP (Jeffrey Waxman, Eric Monzo)
      • Financial Advisor: Goldin Associates LLC (Gary Polkowitz)

Updated 5/31/17

New Filing - Violin Memory Inc.

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Violin Memory Inc.

  • 12/14/16 Recap: Marc Andreeson of A16Z once famously said that software would eat the world. Case and point: Violin Memory Inc. The publicly-traded Santa Clara California-based flash-drive hardware and (only recently) software services provider files for bankruptcy after software providers cannibalized its product, two failed attempts to sell the company, and a failed attempt to secure DIP financing. The objective of the filing is a "value-maximizing sale" of the assets: hey, its three strikes and you're out, not two. 
  • Jurisdiction: D. of Delaware
  • Capital Structure: $10mm '17 5% RCF (Silicon Valley Bank - terminated as of petition date), $120mm '19 4.25% convertible notes (Wilmington Trust)
  • Company Professionals:
    • Legal: Pillsbury & Winthrop LLP (Deryck Palmer, David Forsh, Cecily Dumas) & (local) Bayard PA (Scott Cousins, Justin Alberto, Gregory Flasser)
    • Financial Advisor & Investment Banker: Houlihan Lokey [(Andrew Turnbull, Ryan Sandahl, Randall Tatman, Angus Schaller, Brendan Wolf, Derek Kuns)
    • Claims Agent: Prime Clerk LLC (*click on company name for docket)
  • Other Parties in Interest:
    • Ad Hoc Group of Convertible Noteholders (Jefferies Group LLC, Nokota Management LP, Pine River Capital Management LP, Silverback Asset Management LLC, Soros Fund Management LLC)
      • Legal: Weil (Gary Holtzer, David Griffiths)
    • Wilmington Trust
      • Legal: Brown Rudnick LLP (Daniel Saval) & (local) Drinker Biddle & Reath LLP (Steven Kortanek)
    • Unsecured Creditors' Committee
      • Legal: Cooley LLP (Lauren Reichardt, Robert Winning, Jay Indyke, Eric Haber, Michael Klein) & (local) Elliott Greenleaf PC (Eric Sutty, Rafael Zahralddin-Aravena)
      • Financial Advisor: The DAK Group (Sheon Karol, Ari Fuchs, Claudia Levine)

Updated 3/21/17

New Filing - Xtera Communications Inc.

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Xtera Communications Inc.

  • 11/15/16 Recap: Texas-based publicly-traded provider of high-capacity optical transport systems for telecom service providers filed for bankruptcy with intent to sell the company to Neptune Bidco, as DIP Lender and stalking horse bidder (DIP = $7.4mm, Bid = $10mm inclusive of DIP amount).
  • Jurisdiction: D. of Delaware
  • Capital Structure: $8.2mm debt (Square 1 Bank), $10mm TL-A & $2mm TL-B (Horizon Technology Finance Corporation)     
  • Company Professionals:
    • Legal: DLA Piper LLP (Thomas Califano, Jamila Willis, Stuart Brown, Maris Kandestin)
    • Investment Banker: Cowen & Company (Lorie Beers)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name for docket)
  • Other Parties in Interest:
    • DIP Lender: HIG European Capital Partners
      • Legal: Allen & Overy LLP (Joseph Badtke-Berkow, Daniel Guyder)
    • Horizon Technology Finance Corporation
      • Legal: K&L Gates LLP (A. Lee Hogewood, Steven Caponi, Charles A. Dale III, Margaret Westbrook)
    • Wilmington Trust
      • Legal: Kaye Scholer LLP (Seth Kleinman, Michael Messersmith, Sarah Gryll) & (local) Morris Nichols (Andrew Roth-Moore, Curtis Miller)
    • Unsecured Creditors Committee
      • Legal: Lowenstein Sandler LLP (David Banker) & (local) Bayard PA (Justin Alberto)
      • Financial Advisor: BDO USA LLP (David Berliner)

Updated 12/1/16.

New (Chapter 22) Filing - American Apparel Inc.

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American Apparel Inc.

  • 11/14/16 Recap: Large US-based apparel manufacturer and retailer with 193 total stores files for bankruptcy - months, uh, after emerging from bankruptcy. Company filed with a $30mm DIP proposal from Encina Business Credit LLC. Plan is to sell (for parts) expeditiously to Gilden Activewear SRL for $66mm (IP, remaining wholesale inventory and wholesale POs during restructuring).  
  • Jurisdiction: D. of Delaware
  • Capital Structure: $215mm of funded debt ($90mm DIP-rolled-into-TL-exit + $82mm of additional financing) & $15mm unsecured UK facility (Standard General)    
  • Company Professionals:
    • Legal: Jones Day LLP (Carl Black, Scott Greenberg, Michael J. Cohen, Erin Brady, Stacey Corr-Irvine, Genna Ghaul, Christpher Lovrien) & (local) Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, James O'Neill, Joseph Mulvihill)
    • Financial Advisor: Berkeley Research Group LLC (Mark Weinsten, Joseph D'Ascoli) & FTI Consulting (Andrew Hinkelman, Chuck Goad, Adam Saltzman, Frank Marshall, William Breashears, Zach Contreras)
    • Claims Consultants: Resources Global Professionals (Thora Thoroddsen, Evelyne Anglade, Scott Ashcraft, Luis Barreda, Sharon Dannewitz, Yolanda Hoelscher, Rodney Teruya)
    • Investment Banker: Houlihan Lokey (Saul Burian, Devin Shanahan, Sanaz Memarsadeghi, Ethan Kopp, Alexander Stolarz, Varun Desai)
    • Claims Agent: Prime Clerk (*click on company name for docket)
  • Other Parties in Interest:
    • DIP Lender: Encina Business Credit LLC
      • Legal: Riemer & Braunstein LLP (Steven Fox, Donald Rothman, Lon Singer, Alexander Rheaume) & (local) Ashby & Geddes PA (Gregory Taylor)
    • Agent to Prepetition Secured Lenders: Wilmington Trust
      • Legal: Covington & Burling LLP (R. Alexander Clark, Dianne Coffino) & Pepper Hamilton LLP (David Fournier)
    • Buyer: Gilden Activewear SRL
      • Legal: Sullivan & Cromwell LLP (Michael Torkin, Brian Hamilton, Miaoting Wu) & (local) Womble Carlyle (Matthew Ward)
    • Lead Lenders & Equityholders: Monarch Alternative Capital LP, Coliseum Capital Management LLC, Goldman Sachs Asset Management LP, Pentwater Capital Management LP, Standard General. 
      • Legal (except Standard General): Milbank Tweed (Gerard Uzzi, Eric Stodola) & (local) Fox Rothschild (Jeffrey Schlerf, L. John Bird)
      • Legal (Standard General): Debevoise & Plimpton LLP (Natasha Labovitz, Shannon Rose Selden, Craig Bruens, Erica Weisgerber) & (local) Young Conaway (Edmon Morton, Joseph Barry)
    • Largest Unsecured Creditors: Standard General, FTI Consulting, Moelis, Garden City Group
    • Unsecured Creditors' Committee:
      • Legal: Cooley LLP (Cathy Hershcopf, Seth Van Aalten, Robert Winning, Sarah Carnes, Michael Klein, Max Schlan) & (local) Bayard PA (Justin Alberto, Evan Miller, Gregory Flasser)
      • Financial Advisor: Emerald Capital Advisors (John Madden, Ryan O'Sullivan, Lawrence Jacobs, Christopher Moffatt, Jack Allen, Christopher Saitta, Daniel Pace, Ryan Feulner)

Updated 3/30/17