⚾️New Chapter 11 Bankruptcy Filing - Modell's Sporting Goods Inc.

Modell's Sporting Goods Inc.

March 11, 2020

There’s nothing particularly new or interesting about another liquidating retailer — especially when it’s just another in a long line of companies in its business segment to file for chapter 11 bankruptcy. Sorry to be callous: we get that Modell’s Sporting Goods Inc. is a family-owned establishment with 134 stores and thousands of employees. We get that people aren’t shopping at brick-and-mortar locations, that Walmart Inc. ($WMT), Target Inc. ($TGT), Amazon Inc. ($AMZN), and, in this category, Dick’s Sporting Goods Inc. ($DKS) are crushing the competition, and that there’s a “decline in sports team participation among youth and teens.” Here’s the number of tackle football participants over the age of six years old in the United States:

This trend in football, however, is not pervasive. Participation in high school baseball, for instance, is on the rise. Most other major high school sports are pretty static, soccer being an exception as that, too, is increasing in popularity. So, sure, okay. We’ll just take the company’s word for it.

But the company doesn’t just blame the youths for its demise; it blames global warming (“warm winter weather in the Northeastern states, which negatively affected the sales of cold-weather goods and items and overall store traffic…”), the crappy-a$$ New York Knicks and disappointing Philadelphia Eagles (“lower than anticipated sales of licensed goods in the fourth quarter of 2019 based on local professional team performance”), and inventory disruption from creditors who’ve gotten sick and tired of getting regularly screwed over by administratively insolvent retailers.

It doesn’t really blame its model. For instance, it doesn’t have any private label apparel. Nor does it own any of its real estate. It is completely beholden to its vendors and foot traffic at strip malls and shopping malls. It leases everything. Apparel merchandise expenses were roughly $225mm/year and rental expenses totaled approximately $95mm/year, constituting approximately 46% and 19% of gross sales ($490mm), respectively. In addition, it has unionized employees. The company is on the hook (jointly with a non-debtor entity) for a pension plan underfunded by $25.8mm.

Of course the company also has debt. It has a unitranche revolving credit facility and term loan with JPMorgan Chase Bank NA and Wells Fargo Bank NA, respectively. As of the petition date, the company owes approximately $39mm under the facility. But as operating performance deteriorated, JPM and WFC became skittish and increased discretionary reserves by $18mm — the nail in the coffin as the company no longer had sufficient liquidity to continue to operate (PETITION Note: Wells Fargo has been particularly savage when it comes to aggressively increasing reserves on its retail clients. We’ve seen this movie before with Pier 1 Imports Inc. and Destination Maternity Inc.). This, despite the company started stretching its vendors and landlords. Rent for February and March went unpaid. The company projects $100mm in general unsecured claims, ex-lease breakage claims.

While the business suffered, multiple attempts to achieve an out-of-court restructuring and/or a sale to a strategic buyer failed. The company will now undertake a coordinated wind down to maximize recoveries for stakeholders. Absent some White Knight swooping in here at the 13th hour, pour one out for Modell’s Sporting Goods Inc.

• Jurisdiction: D. of New Jersey (Judge Papalia)

• Capital Structure: $29.5mm RCF (JPMorgan Chase Bank NA), $9.225mm Term Loan (Wells Fargo Bank NA)

• Professionals:

  • Legal: Cole Schotz PC (Michael Sirota, David Bass, Felice Yudkin)

  • Financial Advisor: Berkeley Research Group LLC (Robert Duffy)

  • Investment Banker: RBC Capital Markets

  • Real Estate Advisor: A&G Realty Partners LLC

  • Liquidation Consultant: Tiger Capital Group LLC

  • Claims Agent: Prime Clerk LLC (*click on the link above for free docket access)

• Other Parties in Interest:

  • JPMorgan Chase Bank NA

    • Legal: Otterbourg PC (Daniel Fiorillo, Chad Simon) & Norris McLaughlin PA (Morris Bauer, Allison Arotsky)

  • Wells Fargo Bank NA

    • Legal: Riemer & Braunstein LLP (Steven Fox)

  • Local 1102 RWDSU UFCW, Local 1102 Retirement Trust, and Local 1102 Health and Benefit Fund

    • Legal: Rothman Rocco Laruffa LLP (Matt Rocco) & Lowenstein Sandler LLP (Kenneth Rosen)
      

New Chapter 11 Filing - Hollister Construction Services LLC

Hollister Construction Services LLC

September 11, 2019

Sometimes it really pays to be a middleman. If you’re a middleman that can razzle dazzle potential claimants by saying you leverage a lot of cloud-based software, data integration apps and drones, you may even plow your way to $292mm in gross revenue. It’s all about tech these days.

NJ-based Hollister Construction Services LLC is a general construction firm that, in the course of providing construction management services, leverages the aforementioned tech. It doesn’t construct projects itself; rather, it engages in (i) design development, (ii) pre-development services, (iii) assisting with municipal approvals (iv) pre-construction services (including the subcontractor bidding process), and (iv) construction administration. Its projects are located across NJ and NY.

Here’s the thing: lots of tech and expertise are great but you still have to have a functional operating business. The economy has been charging and cranes are everywhere. The building business is booming. This is great if you’re ready to scale with the opportunity. Hollister apparently wasn’t up to the challenge. Per the company:

…recent and rapid expansion of the Debtor’s client base, combined with the Company’s underestimation of the costs of certain projects, resulted in the Company not being able to fully service all of its Project Owners’ projects. Likewise, Hollister was not able to ensure that Subcontractors were paid on the agreed-upon schedule. Certain Subcontractors subsequently stopped performing on their contracts with Hollister.

Accordingly, certain Project Owners ceased making remittance or progress payments to the Debtor on Projects that were pending or completed, but not yet paid in full. As Project Owner payments are the Debtor’s sole source of operating revenue, non-payment led to the Company experiencing significant operational cash flow and liquidity issues.

That’s brutal to read. This is what they call, “over your skis.” 45 projects are in various stages of completion.

The bankruptcy filing is predicated upon triggering the automatic stay, initiating a “breathing spell,” and giving the company an opportunity to negotiate with the Project Owners, the subcontractors, property owners and insurers on how to proceed.

• Jurisdiction: D. of New Jersey (Judge Kaplan)

• Capital Structure: $14mm line of credit (funded, PNC Bank NA), $1.3mm Term Loan (funded, PNC Bank NA)

• Professionals:

  • Legal: Lowenstein Sandler LLP (Brian Buechler, Kenneth Rosen, Joseph DiPasquale, Jennifer Kimble, Arielle Adler)

  • Financial Advisor/CRO: 10X CEO Coaching LLC (Paul Belair)

  • Business Consultant: The Parkland Group Inc. (Larry Goddard)

  • Claims Agent: Prime Clerk LLC (*click on the link above for free docket access)

• Other Parties in Interest:

  • PNC Bank NA

    • Legal: Duane Morris LLP (James Holman, Sommer Ross)

9/13/19 #55

New Chapter 11 Bankruptcy Filing - Aceto Corporation

Aceto Corporation

February 19, 2019

In November in “🎬🎥Moviepass Falters; Market Chuckles🎬🎥,” we highlighted how Aceto Corporation ($ACET) had announced that it was pursuing strategic alternatives on the heels of obtaining a waiver of covenant non-compliance. It appears that its pursuit was (somewhat) fruitful.

Yesterday the company filed for bankruptcy in the District of New Jersey with intent to sell its chemicals business assets to New Mountain Capital for $338mm in cash, plus the assumption of certain liabilities (subject to adjustments). It also intends to sell another subsidiary, Rising Pharmaceuticals, while in bankruptcy and prior to the end of its fiscal year on June 30, 2019.

The company’s pre-petition capital structure consists of:

• an $85mm 9.5%-11.5% secured revolving loan (Wells Fargo Bank NA);

• a $120mm 11.5% secured term loan (as part of the same A/R Credit Agreement as the above); and

• $143.75mm of 2% convertible senior notes due 2020 (Citibank NA).

Carry the one, add the two: that’s a total of $348.75mm of debt. Which means that the purchase price of the chemicals business doesn’t even cover the company’s debt. Here’s to hoping the Rising Pharmaceuticals business fetches a good price. To be fair, the company did end its fiscal 2018 with $103.9mm of cash.

Pre-petition lenders led by pre-petition agent, Wells Fargo Bank NA, have committed to providing the company with a $60mm DIP credit facility.

• Jurisdiction: D. of New Jersey (Judge )

• Capital Structure: see above.

• Professionals:

  • Legal: Lowenstein Sandler LLP (Kenneth Rosen, Michael Etkin, Paul Kizel, Jeffrey Cohen, Philip Gross)

  • Financial Advisor/CFO: AlixPartners LLP (Rebecca Roof)

  • Investment Banker: PJT Partners LP

  • Claims Agent: Prime Clerk LLC (*click on the link above for free docket access)

• Other Parties in Interest:

  • DIP Agent and Pre-petition Agent: Wells Fargo Bank NA

    • Legal: McGuireWoods LLP (Kenneth Noble)

🚚New Chapter 11 Bankruptcy Filing - New England Motor Freight Inc.🚚

New England Motor Freight Inc.

February 11, 2019

New England Motor Freight Inc. (“NEMF”) and its affiliated debtors filed for bankruptcy in the District of New Jersey. NEMF provides less-than-truckload transportation services; its debtor affiliates also provide, among other things, truckload carrier services, equipment leasing, third party logistics services, transportation brokerage services, and non-vessel operation common carrier operations between the US and Puerto Rico. Collectively, the debtors employ approximately 3,450 full-time and part-time employees, of which 1,900 are members of the International Association of Machinists and Aerospace Workers, AFL-CIO and are covered by collective bargaining agreements. While the company generated gross revenues around $370mm in each of the last two fiscal years, it filed for bankruptcy to effectuate (a) an orderly liquidation of the majority of its business and (b) the sale of its truckload and third-party logistics businesses (which, together, account for approximately 9% of the company’s revenues). The company has approximately $57.1mm of vehicle financing debt exclusive of interest and fees and another $30.4mm in outstanding letters of credit.

Interestingly, the company notes:

While the company’s operations were profitable for decades since the current ownership group acquired NEMF in 1977, the Debtors have suffered a downward trend over recent years, which was exacerbated in late 2018 by the unexpected loss of key accounts, the shortage of drivers, a new Union contract with onerous retroactive terms, and the L/C Lenders’ ultimate unwillingness to restructure the Debtors’ letters of credit obligations under terms acceptable to the Debtors.

And, here, more on the union situation:

Changes and competition within the industry have had an ongoing negative impact on the Debtors’ revenues. The Debtors’ workforce is made up of approximately 3,450 full-time and part-time employees. The Union workforce consists of approximately: 1,425 truck drivers, and 475 dock workers, for a total of approximately 1,900 Union employees. The non-union workforce consists of, approximately: 145 truck drivers at Eastern, 600 part-time workers (primarily dock workers), and 805 other employees, for a total of approximately 1,550 non-union employees. Employee costs for the Debtors are, in the aggregate, substantially above industry norms. Most of the LTL companies competing with the Debtors operate under non-unionized conditions. At the same time, there has developed an industry-wide shortage of drivers, putting the Debtors, with an aging fleet of vehicles, at a severe disadvantage. (emphasis added)

Given the company’s proximity to New York, its relationship with Amazon Inc. ($AMZN), and the role of unions in the ultimate break-up between New York City and Amazon (which happened a day later), we thought this story was particularly intriguing.

• Jurisdiction: D. of New Jersey (Judge Sherwood)

• Professionals:

  • Legal: Gibbons P.C. (Karen A. Giannelli, Mark B. Conlan, Brett S. Theisen) & (local) Wasserman, Jurista & Stolz, P.C. (Donald Clarke, Daniel Stolz)

  • Financial Advisor: Phoenix Management Services LLC (Vince Colistra)

  • Claims Agent: Donlin Recano & Company (*click on the link above for free docket access)

📽New Chapter 11 Bankruptcy Filing - Frank Theatres Bayonne/South Cove LLC📽

Frank Theatres Bayonne/South Cove LLC

Just in time for a sh*tty holiday movie season with subpar fare like “Vice” and “Aquaman” hitting theaters, Frank Theatres Bayonne/South Cove LLC and 23 affiliated companies filed for bankruptcy in the District of New Jersey. Under brand names Frank Theatres, CineBowl & Grille and Revolutions, the company owns and operates 9 pure play movie theaters, 3 family entertainment complexes (i.e., bowling, arcade, etc.), and 3 combination — movie theater AND family entertainment — locations. Despite a robust year for Hollywood on the heals of highly successful-cum-intellectually-retarding movies like Avengers:Infinity War and Venom, the company’s revenues and resultant losses over the past three years paint a clear picture as to why this company is in bankruptcy court. From 2016 through 2018, revenues have declined from approximately $65mm to $56mm to $40mm, respectively. Losses, in turn, come in at $10.2mm, $11.3mm and $9.7mm. These are brutal numbers.

Of course, part of the issue here is that, in certain cases, this chain knew nothing of first run screenings of the aforementioned hits. Per the company, the expansion beyond the core theater business into the broader entertainment space proved disastrous, marked by poor locations, unprofitable leases, cost overruns, delayed openings, and ineffective management. Consequently, the company started deploying theater revenue like an ATM to service the flailing entertainment business. Except, there was one giant problem with all of this:

While operating cash and third-party loans were being used to support the liquidity need caused by the over-budget, past-deadline, and unprofitable new locations, the remainder of the existing locations also steadily declined in general admissions and total revenues as preventative maintenance, standard course refreshes, and local marketing initiatives were reduced or abandoned altogether. In addition, landlords and critical vendors were not paid or were materially aged beyond their standard payment terms. These poor management decisions were made in most cases without the knowledge or consent of the Debtors’ capital providers.

Whoops.

In some instances, the Company was evicted, locked out of its theater locations, and/or box office studios refused to allow the theaters to exhibit key first run movies which further exacerbated the decline in financial performance.

Like we said: they knew nothing of first run screenings. Not that you’d want to see them at these theaters anyway:

Under Debtors’ prior management (pre-September 2017), the physical state of many locations was severely neglected. Much needed capital improvements were not made into maintenance or upgrades of many locations. As a result, over time, the locations became dirty and in disrepair, which ultimately deterred business and resulted in a decrease in revenue.

Now if that doesn’t sound like an oh-so-lovely-holiday-moviegoing experience we don’t know what does. Usually a rabies shot isn’t a prerequisite to seeing a new flick.

Given all of this (and alleged mismanagement which is now the subject of ongoing litigation), the company was ill-suited to compete (deep voice) in a world where the industry shifted to the “premium” movie-going experience. After all, why go to the movies at all if you can just sit at home and watch Sandra Bullock evade zombies on Netflix. The only reason is, thanks to 4DX and the like, to feel that punch to the face from Dwayne Johnson or the wind in your hair when Tom Cruise races down the streets of London on a motorcycle. Except, this company didn’t have any of that new razzle dazzle. They did have the prices though:

While the condition of the Company’s locations deteriorated, the movie theater industry in general trended toward an enhanced movie going experience, including luxury recliners and a more “premium” experience. At the same time, the Debtors’ ticket and concession prices continued to rise in line with, or over, the industry average (which further discouraged customers).

And so now bankruptcy. The company has a restructuring support agreement that includes participation from both its first lien and second lien lenders. The former, Elm Park Capital Management LLC, will have $20mm of their debt reinstated (which may included up to $5mm in DIP financing). The latter, Seacoast Capital Partners III LP, will reinstate $2.5mm to be paid with 25% of net cash proceeds from the sale/monetization of the reorganized assets (once Elm Park has received $20mm on account of their claims). The balance of secured debt will convert into equity. General unsecured creditors are likely to donut.

The company intends to emerge from bankruptcy with only the most profitable locations intact.

• Jurisdiction: D. of New Jersey (Judge Meisel)

• Capital Structure: $31mm first lien debt (Elm Park Capital Management LLC), $8mm second lien debt (Seacoast Capital Partners III LP)

• Company Professionals:

  • Legal: Lowenstein Sandler LLP (Kenneth Rosen, Joseph DiPasquale, Michael Papandrea, Eric Chafetz)

  • Financial Advisor: Moss Adams LLP & Paragon Entertainment Holdings LLC

  • Claims Agent: Prime Clerk LLC

• Other Parties in Interest:

  • First Lien & DIP Lender: Elm Park Capital Management

    • Legal: Neligan LLP — Patrick Neligan Jr., John Gaither

  • Second Lien Lender: Seacost Capital Partners III LP

    • Legal: Dorsey & Whitney LLP — Larry Makel, Eric Lopez Schnabel

  • Benefit Street Partners LLC

    • Legal: Moore & VanAllen — Alan Pope

New Chapter 11 Filing - Duro Dyne National Corp.

Duro Dyne National Corp. 

9/7/18

Duro Dyne National Corp., a manufacturer of sheet metal accessories and equipment for the heating, ventilating and air conditioning industry has filed for bankruptcy in the District of New Jersey. It constitutes one of those rare instances where an otherwise healthy business requires bankruptcy protection to ward off potential liability. 

The company reported steadily increasing sales and profits as steel prices fell to historic lows and construction activity continued to rebound from the recession. In 2017, the company had $69mm in sales and $5.2mm in EBITDA. In 2018, steel prices have increased -- in part due to tariffs -- and so the Company also raised prices. It expects $73.6mm of sales and $5.2mm of EBITDA. So what's the issue here? 

Per the company:

Beginning in the mid to late 1980s, the Company was sued on account of Asbestos Personal Injury Claims in various jurisdictions alleging liability for bodily injury allegedly sustained as a result of exposure to products containing asbestos allegedly manufactured and/or distributed by the Company from the 1950s through the 1970s.

Consequently, due to the increasing costs of defending and resolving the asbestos personal injury claims and the decline of insurance proceeds covering them, the company filed for bankruptcy to establish a plan that institutes a "channeling" injunction that directs all present and future asbestos-related demands to a funded trust for handling and payment. 

• Jurisdiction: D. of New Jersey (Judge Kaplan)
• Capital Structure: $1.29mm funded secured debt     
• Company Professionals:
  • Legal: Lowenstein Sandler LLP (Kenneth Rosen, Jeffrey Prol)
  • Financial Advisor: Getzler Henrich & Associates LLC
  • Claims Agent: BMC Group Inc. (*click on company name above for free docket access)
• Other Parties in Interest:
  • Exit Lender: Bank of America NA
  • Ad Hoc Asbestos Claimants Committee
    • Legal: Caplin & Drysdale Chartered (James Wehner, Jeffrey Liesemer)
  • Prepetition Future Claimants Representative
    • Legal: Young Conaway Stargatt & Taylor LLP (Edwin Harron, Sara Beth Kohut)

New Chapter 11 Filing - Sarar USA Inc.

Sarar USA Inc. 

7/20/18

Sarar USA Inc., a New Jersey-based brick-and-mortar retailer of high-end men's apparel (read: custom-tailored suits) filed for bankruptcy. The company's products are manufactured by Sarar Turkey, a Turkey-based textile company that purportedly produces clothing for the likes of Hugo Boss and Ermenegildo Zegna. Sarar USA currently operates twelve locations; it, until recently, operated eighteen locations but recently closed six locations, including a store on Madison Avenue in New York City. The stores are "primarily in 'Class A' malls (prime locations)." 

The company filed for bankruptcy because "its retail sales have not been sufficient to cover its costs, which consist primarily of rent, labor and costs of products." And why is that? Well,

While the Debtor has created a unique high-end customer experience that is valued by its customers, unpredictable industry-wide market challenges in brick-and-mortar retail locations (notably, declining traffic in traditional shopping malls and the inability/lack of willingness by landlords to adjust rents to these operating realities) have led to extremely high operating costs and depressed profits in recent years.

At least they didn't note "the Amazon Effect." Whew. 

The company's equityholders were, for some time, propping the company up with liquidity infusions but apparently concluded that they were just flushing money down the toilet. Attempts to negotiate rent concessions from landlords proved futile. The company, therefore, is in Chapter 11 to review its store footprint, close underperforming stores under cover of the Bankruptcy Code, and take a second bite of its landlords to see if they'll be able to squeeze any postpetition rent forgiveness. If the company truly is in Class A malls, well...color us skeptical. 

The company, however, seems optimistic. It boasts: 

The Debtor’s products are priced from $50-$1,500, with an average retail price (after applicable discounts) of $320. Since its founding, the Debtor has been on a purposeful mission to create high-end tailored suits for the American and Canadian market. The Debtor’s suits are known throughout the world as one of the finest brands available to discriminating consumers. The Debtor offers suits that are both in-style and customer-fitted. Store locations are stocked with an average of 4,500 unique products, across a range of colors to fit any body type. The Debtor has become a leading fashion brand in the United States.

Which would explain why none of us here at PETITION have never heard of it. We've guessing nobody in the restructuring community has either, quite frankly. At least judging by the suits we've seen y'all rocking in court, anyway. 

The company also has an e-commerce platform that "currently accounts for approximately 2% of the Debtor's revenues." Expanding that platform is just one part of many in a robust strategic plan the company hopes to initiate in bankruptcy to be viable go-forward. Godspeed. 

• Jurisdiction: D. of New Jersey (Judge Sherwood)
• Capital Structure: No secured debt.      
• Company Professionals:
  • Legal: Perkins Coie LLP (Schuyler Carroll, Jeffrey Vanacore)
  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)

Updated 7/20/18, 6:44 pm CT

New Chapter 11 Filing - Apex Xpress, Inc.

Apex Xpress, Inc.

2/16/18

Provider of copy equipment installation, flatbed services, white glove delivery services, warehousing and transportation services filed for bankruptcy. The company filed for bankruptcy on account of increased competition in its various service spaces and a protracted litigation over the company's proposed withdrawal from a multiemployer pension fund. 

• Jurisdiction: D. of New Jersey (Judge Meisel)
• Capital Structure: $145,000 secured debt (Freedom Bank of New Jersey)     
• Company Professionals:
  • Legal: Saul Ewing Arnstein & Lehr (Dipesh Patel, Sharon Levine, Melissa Martinez)
  • Financial Advisor: Argus Management Corporation (Joseph Baum, Steve Norowitz)
  • Claims Agent: JND Corporate Restructuring (*click on company name above for free docket access)

New Chapter 11 Bankruptcy - B. Lane Inc. (d/b/a Fashion to Figure)

Fashion to Figure (@FTFSnaps)

• 11/13/17 Recap: Another retailer finds its way to bankruptcy. Here, the New York-based plus-size women's specialty retailer with 26-mall-and-outlet-center-based locations has filed for bankruptcy in New Jersey. The company appears to be suffocating under the weight of its brick and mortar locations but purports to have successful e-commerce and wholesale channels. It intends to pursue a sale of all of its assets "to be consummated as soon as possible given the upcoming critical holiday shopping season commencing on 'Black Friday'...." Wait, huh? The company is filing NOW to get out AHEAD of Black Friday? No wonder this company is bankrupt. Of course, the company is also considering vacating locations and "expeditiously conducting going out of business" sales. To this end, the company has filed a bid procedures motion with a joint venture of liquidators, SB Capital Group LLC and 360 Merchant Solutions LLC, lined up as stalking horse bidder for the assets; it also intends to continue to pursue a sale to "one of the largest department store chains in the United States," which apparently expressed some interest pre-petition. Meanwhile, no background on a bankrupt retailer is complete without some private equity shop getting thrown under the bus. Here, the company states (without overtly identifying the PE fund for whatever reason), "In 2012, prompted by a [$15mm] private equity investment, the Company embarked on a rapid expansion of the business. The expansion, however, proved ill-fated and ill-timed, coming at a time when traditional brick and mortar retail was on the decline. Specifically, the Company over-expanded into the shopping mall retail space at a time when market trends were shifting away from traditional brick and mortar stores and towards online retail." Ah, private equity. Speaking of private equity, a fund affiliated with Perella Weinberg Partners is listed as the primary equityholder with a 20.5% position. Curious. Otherwise, it looks like a slate of "friends and family" type investors got burned here. Speaking of getting burned, the list of top creditors reflects a who's who of landlords that the distressed world has become accustomed to seeing at the top of the "Top 30 Creditors" list: Washington Prime Group Inc. ($WPG)(listed once), Westfield Corp. ($WFD)(twice), Simon Property Group Inc. ($SPG)(six times), and Macerich Co. ($MAC)(listed twice). Nothing to see here.
• Jurisdiction: D. of New Jersey (Judge Sherwood)
• Capital Structure: $1.0mm secured debt (ACM Capital Fund I LP), $250k (Cowen Overseas Investment LP)
• Company Professionals:
  • Legal: Lowenstein Sandler LLP (Kenneth Rosen, Bruce Buechler, Philip Gross, Keara Waldron, Michael Papandrea)
  • Prepetition Investment Banker: Cowen and Company LLC
  • Claims Agent: Prime Clerk LLC (*click on the company name above for free docket access)
  • Other Parties in Interest:
    • ACM Capital Partners LLC
      • Legal: Shraiberg Landua & Page (Bradley Shraiberg)
    • Official Committee of Unsecured Creditors
      • Legal: Hahn & Hessen LLP (Mark Powers, Alison Ladd) & (local) Fox Rothschild LLP (Richard Meth, Paul Labov)
      • Financial Advisor: EisnerAmpner LLP (Edward Phillips)

Updated 5/5/18

New Chapter 11 Filing - Mountain Creek Resort

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