New Chapter 11 Bankruptcy Filing - Stein Mart Inc. ($SMRT)

Stein Mart Inc.

Man. This story sucks. Stein Mart Inc. ($SMRT), a publicly-traded specialty off-price retailer with 281 stores across the Southeast, Texas, Arizona and California is the latest retailer to file bankruptcy (along with two affiliates).

To set the stage, imagine Han and Lando taking a fun little ride on a desert skiff. Suddenly a riot breaks out and amidst the confusion Lando falls off the skiff. Luckily, Han is able to grab Lando’s hand so that Lando doesn’t plummet into the gnarley tentacles of some strange sand beast that randomly happens to be there. As Han pulls Lando up out of reach of the beast, all of the sudden some crazy space virus flows through the airspace and smacks Han straight in the lungs. As he clutches his throat struggling to breathe, he releases Lando who consequently hurls straight down towards the beast and suffers a horrific death.

Now replace (a) Han with Kingswood Capital Management LLC, (b) Lando with Stein Mart, and (c) the “crazy space virus” with COVID-19 and you’ve basically got the story of Stein Mart’s collapse into bankruptcy court. Like many other retailers in this macro climate, Stein Mart was teetering pre-COVID. Sales have been on the decline since 2016. But then in January, Kingswood — along with an entity managed by the Chairman of the company — offered a roughly 20% premium over SMRT’s then-stock price ($0.90/share) to take Stein Mart private. Stein Mart, which had been on distressed watch lists around that time, seemed to be on the receiving end of a much-needed and wildly opportune lifeline. Of course, COVID ended that. Take a look at this mind-boggling decline in YOY performance:

Ab. So. Lutely. Brutal. Just brutal.

Kingswood agreed. Per the company:

…on April 16, 2020, the Merger Agreement was terminated prior to closing because the COVID19 pandemic forced the Company to close all of its stores and the Company was unable to satisfy the minimum liquidity closing condition in the merger agreement.

Was that the definitive end of the deal? No! The parties continued to discuss new deal parameters but then we, as a country, couldn’t get our sh*t in order. With the country averaging 1000+ deaths a day and tens of thousands of new daily COVID infections, Kingswood got skittish:

The Company has subsequently engaged in discussions with Kingswood regarding sale of the Company as a going-concern in recent months pursuant to a bankruptcy sale; however, a transaction presently appears unlikely given the COVID-19 resurgence.

The resurgence is notable because the company has a significant number of stores in Florida, Texas and California. Consequently,…

The Company’s updated financial projections, following the July resurgence of COVID-19, indicated that the Company would not have sufficient liquidity to continue operating the business in the ordinary course consistent with past practice.

So now the company is liquidating. The company projects $250mm in gross recovery from the liquidation of inventory, equipment, fixtures, leases IP and other assets. As of the petition date, it owes its senior secured lender, Wells Fargo Bank NA ($WFC), $84mm; it also owed its term lender, Gordon Brothers Finance Company, $35mm. Tack on administrative expenses for the professionals administering the case and recoveries for those creditors owed a sum total of $770mm in total liabilities begins to look a bit bleak.

*****

A couple of additional notes:

First, this company appears to have been addicted to factoring. Among the companies top six general unsecured creditors are CIT Commercial Services, Wells Fargo Trade Capital Services, and White Oak Commercial Finance.

Second, you can add SMRT to the list of companies that tapped PPP funds yet couldn’t avoid a bankruptcy filing. It received $10mm from Harvest Small Business Finance LLC.

Third, we’re back to borderline collusion among the liquidation firms. The company’s financial advisor issued RFPs to five liquidation consultants. It received two bids back: one from SB360 Capital Partners LLC and one from a Hilco Merchant Resources-led joint venture that included three — that’s right, three — competitors. Per the company:

The Debtors are of the view that in the current environment, where numerous large retailers are being simultaneously liquidated, joint venture liquidation bids are common because a single liquidation firm may not have the resources to staff and manage the entire project. (emphasis added)

Said another way, the retail industry is such an utter dumpster fire right now that liquidators simply don’t have the bandwidth to manage mandates like these on their own (or so the story goes).

While liquidation sales launch, the company will also seek to sell its leases and IP. Except…

…substantial doubt exists as to whether any buyers will be found for leases given the current depressed condition of the retail real estate market.

And they…

…do not anticipate the sale of intellectual property will produce substantial value.

Right. In case you haven’t noticed, the rubber meets the road with these retailers with the IP. That’s why there was the law suit in the Neiman Marcus matter. That’s why there was the asset stripping transaction in the J.Crew matter. But Stein Mart? IP? Brand? Hahahahaha. The company’s bankers tried selling this turd for over 2.5 years. The only buyer was Kingswood, a small LA-based PE fund with a portfolio of four companies and, well, Stein himself. The IP only had value to him. Go figure. And this is after three — yes, three — separate sale and marketing processes.

Is there a chance a buyer emerges from the shadows? Sure. Miracles happen. If not, Wells and Gordon Brothers will be fine. The professionals will get paid. The unsecured creditors will get hosed. Equity will…well forget about it. At least the equity market is finally getting these right (though reasonable minds could certainly question why the stock is trading as high as it is):

The greater likelihood is that this sucker ends in structured dismissal or a conversion to chapter 7.

It’s crazy. Eight months ago the company was headed for a new chapter. Instead the book shut closed.

---

August 12, 2020

Jurisdiction: M.D. of FL (Judge Funk)

Capital Structure: see above

Company Professionals:

• Legal: Foley & Lardner LLP (Gardner Davis, John Wolfel, Neda Sharifi, Richard Guyer, Mark Wolfson, Marcus Helt)

• Financial Advisor: Clear Thinking Group (Patrick Diercks)

• Liquidators: Hilco Merchant Resources LLC, Gordon Brothers Retail Partners LLC, Great American Group LLC, Tiger Capital Group LLC, SB360 Capital Partners LLC

• Claims Agent: Stretto (Click here for free docket access)

Other Parties in Interest:

• RCF Lender: Wells Fargo Bank NA

  • Legal: Otterbourg PC (Daniel Fiorillo, Chad Simon) & Smith Hulsey & Busey (John Thomas, Stephen Busey)

🏠New Chapter 11 Bankruptcy Filing - Decor Holdings Inc.🏠

Decor Holdings Inc.

February 12, 2019

Source: https://www.robertallendesign.com

Privately-owned New York-based Decor Holdings Inc. (d/b/a The RAD Group and The Robert Allen Duralee Group) and certain affiliates companies filed for bankruptcy earlier this week in the Eastern District of New York. The debtors state that they are the second largest supplier of decorative fabrics and furniture to the design industry in the U.S., designing, manufacturing and selling decorative fabrics, wall coverings, trimmings, upholstered furniture, drapery hardware and accessories for both residential and commercial applications. All of which begs the question: do people still actually decorate with this stuff?!? In addition to private label product lines, the company represents six other furnishing companies, providing tens of thousands of sku options to design professionals and commercial customers. The company maintains a presence via showrooms in large metropolitan cities in the US and Canada as well as an agent showroom network in more than 30 countries around the world. In other words, for a company you’ve likely never heard of, they have quite the reach.

The debtors’ problems derive from a 2017 merger between the Duralee business and the Robert Allen business. Why? Well, frankly, it sounds like the merger between the two is akin to a troubled married couple that decides that having a kid will cure all of their ills. Ok, that’s a terrible analogy but in this case, both companies were already struggling when they decided that a merger between the two might be more sustainable. But, “[l]ike many industries, the textile industry has been hard hit by the significant decrease in consumer spending and was severely affected by the global economic downturn. As a result, the Debtors experienced declining sales and profitability over the last several years.” YOU MEAN THE PERCEIVED SYNERGIES AND COMBINED EFFICIENCIES DIDN’T COME TO FRUITION?!? Color us shocked.

Ok, we’re being a little harsh. The debtors were actually able to cut $10-12mm of annual costs out of the business. They could not, however, consolidate their separate redundant showroom spaces outside of bankruptcy (we count approximately 32 leases). Somewhat comically, the showroom spaces are actually located in the same buildings. Compounding matters was the fact that the debtors had to staff these redundant spaces and failed to integrate differing software and hardware systems. In an of themselves, these were challenging problems even without a macro overhang. But there was that too: “…due to a fundamental reduction of market size in the home furnishings market, sales plummeted industry wide and the Debtors were not spared.” Sales declined by 14% in each of the two years post-merger. (Petition Note: we can’t help but to think that this may be the quintessential case of big firm corporate partners failing to — out of concern that management might balk at the mere introduction of the dreaded word ‘bankruptcy’ and the alleged stigma attached thereto — introduce their bankruptcy brethren into the strategy meetings. It just seems, on the surface, at least, that the 2017 merger might have been better accomplished via a double-prepackaged merger of the two companies. If Mattress Firm could shed leases in its prepackaged bankruptcy, why couldn’t these guys? But what do we know?).

To stop the bleeding, the debtors have been performing triage since the end of 2018, shuttering redundant showrooms, stretching payables, and reducing headcount by RIF’ing 315 people. Ultimately, however, the debtors concluded that chapter 11 was necessary to take advantage of the breathing spell afforded by the “automatic stay” and pursue a going concern sale. To finance the cases, the debtors obtained a commitment from Wells Fargo Bank NA, its prepetition lender, for a $30mm DIP revolving credit facility of which approximately $6mm is new money and the remainder is a “roll-up” or prepetition debt (PETITION Note: remember when “roll-ups” were rare and frowned upon?). The use of proceeds will be to pay operating expenses and the costs and expenses of being in chapter 11: interestingly, the debtors noted that they’re administratively insolvent on their petition. 🤔

Here’s to hoping for all involved that a deep-pocked buyer emerges out of the shadows.

• Jurisdiction: E.D. of New York (Judge Grossman)

• Capital Structure: $23.7mm senior secured loan (Wells Fargo Bank NA), $5.7mm secured junior loan (Corber Corp.)

• Professionals:

  • Legal: Hahn & Hesson LLP (Mark Power, Janine Figueiredo)

  • Conflicts Counsel: Halperin Battaglia Benzija LLP (Christopher Battaglia)

  • Financial Advisor: RAS Management Advisors LLC (Timothy Boates)

  • Investment Banker: SSG Capital Advisors LLC (J. Scott Victor)

  • Liquidator: Great American Group LLC

  • Claims Agent: Omni Management Group Inc. (*click on the link above for free docket access)

• Other Professionals:

  • DIP Agent: Wells Fargo Bank NA

    • Legal: Otterbourg P.C. (Daniel Fiorillo, Jonathan Helfat)

  • Subordinated Noteholder: Corber Corp.

    • Legal: Pachulski Stang Ziehl & Jones LLP (John Morris, John Lucas)

New Chapter 11 Filing - The Gymboree Corporation

The Gymboree Corporation

• 6/12/17 Recap: Yawn...another private equity owned retailer in bankruptcy. Why? Standard fare for everyone following the retail story at this point: a substantial brick-and-mortar presence (1300 stores) in need of rightsizing, higher expenses than web-based competitors, an underdeveloped wholesale operation, an underdeveloped web presence, insufficient "omnichannel" capabilities (the go-to buzzword for retailers these days), and more debt than competitors like Children's Place and the Gap. In other words, private equity, that's why (here, Bain Capital Private Equity LP). Notably, "[a]pproximately 35% of their domestic real estate space is concentrated with Simon Property Group, Inc. and GGP Inc. (previously General Growth Properties, Inc.)" ($SPG, $GGP) and, in the first instance, the company is seeking to close 450 stores. Hmmm. The Company will operate under a $105mm DIP term loan credit facility ($35mm new money) and a $273.5mm DIP revolving credit facility; it will also seek to avail itself of $80mm in new equity capital by way of a fully-backstopped rights offering. The upshot of all of this financial mumbo-jumbo is that the term lenders will own the majority of the company. 
• Jurisdiction: E.D. of Virginia
• Capital Structure: $81mm '17 ABL RCF (Bank of America NA), $47.5mm '17 ABL Term Loan (Pathlight Capital LLC), 788.8mm '18 TL (Credit Suisse), $171mm '18 unsecured notes (Deutsche Bank Trust Company Americas)    
• Company Professionals:
  • Legal: Kirkland & Ellis LLP (James Sprayragen, Anup Sathy, Joshua Sussberg, Steven Serajeddini, Matthew Fagen, Laura Elizabeth Krucks, Timothy Bow, Gabor Balassa, Ben Tyson) & (local) Kutak Rock LLP (Michael Condyles, Peter Barrett, Jeremy Williams)
  • Legal (Special Committee): Munger Tolles & Olson LLP (Thomas Wolper, Seth Goldman, Kevin Allred)
  • Financial Advisor: AlixPartners LLC (James Mesterharm, Liyan Woo)
  • Investment Banker: Lazard Freres & Co. LLC (David Kurtz, Christian Tempke)
  • Real Estate Consultant: A&G Realty Partners LLC (Andrew Graiser)
  • Liquidators: Tiger Capital Group LLC and Great American Group LLC
  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
• Other Parties in Interest:
  • Consenting Term Loan Lenders & DIP Term Loan Agent: Credit Suisse AG, Cayman Islands Branch
    • Legal: Milbank Tweed Hadley & McCloy LLP (Dennis Dunne, Evan Fleck) & (local) McGuireWoods LLP (Dion Hayes, Sarah Boehm, K. Elizabteh Sieg)
    • Financial Advisor: Rothschild & Co.
  • DIP ABL Administrative Agent
    • Legal: Morgan Lewis & Bockius LLP (Julia Frost-Davies, Robert A.J. Barry, Amelia Clark Joiner) & (local) Hunton & Williams LLP (Tyler Brown, Justin Paget)
  • DIP ABL Term Agent
    • Legal: Choate Hall & Stewart LLP (Kevin Simard, Jennifer Fenn) & (local) Whiteford Taylor Preston LLP (Christopher Jones)
  • Sponsor: Bain Capital Private Equity LP 
    • Legal: Weil Gotshal & Manges LLP (Matthew Barr, Robert Lemons) & (local) Wolcott Rivers Gates (Cullen Speckhart)
  • Ad Hoc Group of Senior Unsecured Noteholders
    • Legal: Akin Gump Strauss Hauer & Feld LLP (Daniel Golden, Jason Rubin)
  • Pathlight Capital
    • Legal: Choate Hall & Stewart LLP (Kevin Simard, Jonathan Marshall) & (local) Whiteford Taylor & Preston LLP (Christopher Jones)
  • Indenture Trustee: Deutsche Bank Trust Company Americas
    • Legal: Moses & Singer LLP (Alan Gamza, Kent Kolbig, Jessica Boneque) & (local) Hirschler Fleischer PC (Robert Westermann, Rachel Greenleaf)
  • Official Committee of Unsecured Creditors
    • Legal: Hahn & Hessen LLP (Mark Power, Mark Indelicato, Janine Figueiredo, Alison Ladd) & (local) Tavenner & Beran PC (Lynn Tavenner, Paula Beran, David Tabakin)

Updated 7/11/17 at 7:25 pm CT

New Chapter 11 & CCAA Filing - Payless Shoesource Inc.

Payless Shoesource Inc.

• 4/4/17 Recap: Private equity backed Kansas-based discount footwear retailer with over 4000 stores filed for bankruptcy because, well, right, it's a private equity backed retailer. Golden Gate Capital and Blum Capital Partners are the sponsors and we've previously covered their methods, uh, we mean "value-add" proposition. We probably won't even bother to read the filing documents because we're 98.9% confident they say the same sh*t every other retail case has said, e.g., poor e-commerce...blah blah...Amazon...blah blah...mall-based retail...blah blah...bad weather...blah blah...Showtime's Billions sucks...wait, what?...whatever, it does (who cares if that's relevant?)...millennial shopping habits...blah blah...bleeding top line and depressed comp store sales...blah blah...dividend recaps...blah blah blah. Apparently the retailer is going to close nearly 400 stores while it attempts to reorganize around what remains - all in accordance to a plan support agreement that the company has entered into with 2/3 of its term loan lenders and with the support of a $385mm DIP facility (of which $80mm is new money). Meanwhile, we'll see what kind of cascading effect this will have on (a) China's manufacturing sector which, apparently, has seen significant stretching of payables (up to 100 days) - a fact evidenced by the top 50 creditors list, and (b) our lovely "A" malls (notably, Simon Property Group made a notice of appearance before the first day pleadings were even completely filed). Finally, the CEO dropped the fact that the new business plan will focus on, among other things, "omnichannel expansion" and since that is the retail buzzword/phrase of the moment, we guess there's really nothing to see here: all will be fine. 
• 4/6/17 Update: We read the documents and, generally speaking, everything we said above applies. Two other factors apparently worth mentioning as causes for the filing: inventory management issues (compounded by the West Coast port strikes) and foreign exchange issues.
• Jurisdiction: E.D. of Missouri
• Capital Structure: $300 ABL ($187mm out - Wells Fargo), $520mm '21 TL ($506mm out), $145mm '22 second lien TL (Morgan Stanley Senior Funding Inc.)    
• Company Professionals:
  • Legal: Kirkland & Ellis LLP (James Sprayragen, Nicole Greenblatt, William Guerrieri, Christine Pirro, Jessica Kuppersmith) & (local) Armstrong Teasdale LLP (Steven Cousins, Erin Edelman) & (Canadian counsel) Osler Hoskin & Harcourt LLP 
  • Legal to Independent Director: Munger Tolles & Olson LLP (Thomas Walper, Seth Goldman, Kevin Allred)
  • Financial Advisor: Alvarez & Marsal North America LLC (Robert Campagna)
  • Investment Banker: Guggenheim Securities LLC (Morgan Suckow)
  • Real Estate: RCS Real Estate Advisors (Ivan Friedman)
  • Liquidators: Great American Group LLC & Tiger Capital Group LLC
  • Claims Agent: Prime Clerk LLC (*click on company name above for free court docket)
• Other Parties in Interest:
  • Ad Hoc Committee of First Lien Term Lenders (Alden Global Opportunities Master Fund, Credit Suisse Asset Management, GSO Capital Partners, Hawkeye Capital Management, Invesco Senior Secured Management, Octagon Credit Investors LLC, AIC Finance, Axar Capital Management)
    • Legal: King & Spalding LLP (Michael Rupe, Christopher Boies, Jeffrey Pawlitz, Austin Jowers, Michael Handler)
    • Financial Advisor: Houlihan Lokey Capital Inc.
  • DIP ABL Agent: Wells Fargo Bank NA
    • Legal: Choate Hall & Stewart LLP (Kevin Simard, Douglas Gooding, Jonathan Marshall) & (local) Thompson Coburn LLP (Mark Bossi)
  • First Lien Agent & DIP TL Agent: Morgan Stanley Senior Funding Inc. & Cortland Products Corp.
    • Legal: Norton Rose Fulbright US LLP (Stephen Castro, David Rosenzweig, Danielle Ledford, Tim Walsh)
  • Official Committee of Unsecured Creditors
    • Legal: Pachulski Stang Ziehl & Jones LLP (Robert Feinstein, Jeffrey Pomerantz, Bradford Sandler) & (local) Polsinelli PC (Matthew Layfield, Christopher Ward, Shanti Katona)
    • Financial Advisor: Province Inc.

Updated 4/18/17

New Chapter 11 Filing - Gordmans Stores Inc.

Gordmans Stores Inc.

• 3/13/17 Recap: Clearly Warren Buffett doesn't own this dog. The Omaha, NE-based publicly-traded (GMAN) specialty retailer (apparel and home fashions) with 72 stores in 16 states (according to PE sponsor Sun Capital Partners) or 106 stores in 22 states (according to the company) filed bankruptcy to continue the 5-month long evisceration of Sun Capital Partners' retail portfolio. Oh, and liquidate. Choice quote: "It is likely that other retailers may commence chapter 11 cases in the near term, as retail is set to replace the troubled oil and gas industry as the most distressed sector this year." Just in case anyone is scratching their heads as to how this liquidation could possibly be happening, note that e-commerce made up less than 1-percent of the Company's sales. This REALLY begs the question: what value was Sun Capital Partners bringing to the table? Do they not have operating partners? Sheesh.
• Jurisdiction: D. of Nebraska
• Capital Structure: $68.75mm RCF (Wells Fargo) + $31.25mm RCF (PNC Bank NA) of which $29mm in total outstanding, $30mm TL (Wells Fargo - $15mm, Pathlight - $7.5mm & Gordon Brothers Finance - $7.5mm)($27.9mm outstanding). 
• Company Professionals:
  • Legal: Kirkland & Ellis LLP (Jayme Sprayragen, Patrick Nash, Brad Weiland, Jamie Netznik, Alexandra Schwarzman) & Kutak Rock LLP (Lisa Peters, Jeffrey Wegner)
  • Financial Advisor: Clear Thinking Group LLC (Joseph Marchese)
  • Investment Banker: Duff & Phelps Securities LLC (Joshua Benn)
  • Proposed Stalking Horse Liquidators: Tiger Capital Group LLC & Great American Group LLC
  • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name for docket)
• Other Parties in Interest:
  • Wells Fargo Bank, NA
    • Legal: Riemer & Braunstein LLP (Donald Rothman, Steven Fox) & Greenberg Traurig LLP (Jeff Wolf) & (local) Croker Huck Kasher DeWitt Anderson & Gonderinger LLP (Robert, Gonderinger, David Skalka)
  • Sponsor: Sun Capital Partners
    • Legal: Morgan Lewis & Bockius LLP (Neil Herman)
  • Potential Bidder: Hilco Merchant Resources LLC & Gordon Brothers Retail Partners LLC
    • Legal: Paul Hastings LLP (Chris Dickerson, Matthew Murphy, Marc Carmel) & (local) Telpner Peterson Law Firm LLP (Charles Smith, Nicole Hughes)
  • Official Committee of Unsecured Creditors
    • Legal: Frost Brown Todd LLC (Ronald Gold, Douglas Lutz, Adam J. (A.J.) Webb) & (local) Koley Jessen PC (Brian Koenig)
    • Financial Advisor: Province Inc. (Paul Huygens)

Updated 4/14/17

New Chapter 11 Filing - Gander Mountain Company

Gander Mountain Company

• 3/10/17 Recap: Preppers alert! The Minneapolis-based outdoor retailer that specializes in guns guns and more guns has run out of "dry powder" (score!) and finds itself in chapter 11. This comes around the same time that the Cabela's/Bass merger looks to be hanging by a thread. Tough time for outdoor retail. On the brightside, folks who are so scared by the recent election can now get a break on MREs and other survival gear as they go off-grid or to Canada. So, there's that.
• 5/3/17 Update: The company has sold to Camping World Inc. and, attendant to the sale, entered into an agency agreement with a JV of liquidating firms noted below to handle the assets left out of the sale. 
• Jurisdiction: D. of Minnesota
• Capital Structure: $390mm ABL (Wells Fargo Bank NA) & $35mm TL (Pathlight Capital LLC) debt
• Company Professionals: 
  • Legal: Fredrikson & Byron PA (Ryan Murphy, Clinton Cutler, Cynthia Moyer, James Brand, Sarah Olson, Steven Kinsella)
  • Financial Advisor: Lighthouse Management Group (Timothy Becker, James Bartholomew)
  • Investment Banker: Houlihan Lokey Capital Inc. (Stephen Spencer)
  • Real Estate Advisor: Hilco Real Estate LLC (Ryan Lawlor)
  • Liquidators: Tiger Capital Group LLC (Dan Kane, Michael McGrail), Great American Group LLC (Scott Carpenter, Alan Forman), Gordon Brothers Retail Partners LLC (Mackenzie Shea), Hilco Merchant Resources LLC (Ian Fredricks)
    • Legal for Liquidators: Wachtell Lipton Rosen & Katz (Scott Charles, Neil Snyder) & Riemer & Braunstein LLP (Steven Fox)
  • Claims Agent: Donlin Recano (*click on the company above for free docket)
• Other Parties in Interest:
  • Prepetition ABL & DIP Lender: Wells Fargo Bank NA
    • Legal: Choate Hall & Stewart LLP (Sean Monahan, Kevin Simard)
  • Term Loan Agent: Pathlight Capital LLC
    • Legal: Morgan Lewis & Bockius LLP (Mark Silva, Julia Frost-Davis, Amelia Joiner)
  • Official Committee of Unsecured Creditors
    • Legal: Lowenstein Sandler LLP (Jeffrey Cohen, Keara Waldron, Barry Bazian) & (local) Barnes & Thornburg LLP (Connie Lahn, Peter Clark, Christopher Knapp, Roger Maldonado)
    • Financial Advisor: FTI Consulting LLC (Steven Simms, Dewey Imhoff, Matt Diaz, Timothy Gaines, Jessica Jedynak, Clement Chiun)
  • Buyer: Camping World Inc.
    • Legal: Latham & Watkins LLP (Zachary Judd, Caroline Reckler, Matthew Warren, Jason Gott)

Updated 5/3/17

New Chapter 11 Filing - Michigan Sporting Goods Distributors Inc.

Michigan Sporting Goods Distributors, Inc.

• 2/14/17 Recap: Happy Valentine's Day, honey, your favorite midwestern sporting goods store is going out of business and I picked up some sweet Nike kicks for you at (an alleged) 60% off. Great for you. Great for me. Not so great for the 1300 employees, Nike (who is owed $3.8mm), Under Armour (owed $2.4mm), and the company CEO who owns 86% of the equity. Berkeley Research Group is at the helm of another liquidation: never before has a single firm's use of "tombstones" been so literal. 
• Jurisdiction: W.D. of Michigan
• Capital Structure: $49.4mm funded secured ABL debt (Wells Fargo)    
• Company Professionals:
  • Legal: Warner Norcross & Judd LLP (Stephen Grow, R. Michael Azzi)
  • Financial Advisor: Berkeley Research Group LLC (Steve Coulombe)
  • Investment Banker: Stout Risius Ross Advisors LLC (Michael Krakovsky)
  • Liquidators: Tiger Capital Group LLC and Great American Group LLC
  • Intellectual Property Disposition Consultant: Hilco IP Services LLC (Gabriel Fried)
  • Real Estate Advisors: A&G Realty Partners LLC (Michael Jerbich)
    • Legal: Wachtell Lipton Rosen & Katz (Neil Snyder) & (local) Dickinson Wright PLLC (Allison Bach)
  • Claims Agent: Rust Consulting/Omni Bankruptcy (*click company name above for docket)
• Other Parties in Interest:
  • Wells Fargo NA
    • Choate Hall & Stewart LLP (Jonathan Marshall, Katherine Reynolds, Kevin Simard) & (local) Bodman PLC (Mark Bakst)
  • Official Committee of Unsecured Creditors
    • Legal: Cooley LLP (Cathy Herschkopf, Seth Van Aalten, Robert Winning, Evan Lazerowitz)
  • Phoenix Capital Management Co.
    • Legal: Sugar Felsenthal Grais & Hammer LLP (S. Jason Teele, Nicole Stefanelli)

Updated 4/2/17