New Chapter 11 Filing - Nighthawk Royalties LLC

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4/30/18

Colorado-based hydrocarbon exploration and production company filed for bankruptcy after "macroeconomic and industry distress and a failed waterflooding project" led it to trigger defaults under its senior secured credit facility with the Commonwealth Bank of Australia. The company has a signed letter of intent to sell its assets to a prospective purchaser under section 363 of the bankruptcy code. The company is also leveraging the Bankruptcy Code's automatic stay provision to prevent Fastighets AB Korpralen, a Swedish company affiliated with a former director of the debtor, from commencing shareholder litigation against the company. 

  • Jurisdiction: D. of Delaware (Judge Shannon)
  • Capital Structure: $21.25mm debt (Commonwealth Bank of Australia)
  • Company Professionals:
    • Legal: Greenberg Traurig LLP (Mark Bloom, Paul Keenan Jr., John Dodd, Ari Newman, Dennis Meloro)
    • Investment Banker: SSG Advisors LLC
    • Claims Agent: JND Corporate Restructuring (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Major Shareholder: Fastighets AB Korpralen
      • Legal: K&L Gates LLP (Steven Caponi)

New Chapter 11 Filing - Augustus Energy Resources LLC

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3/16/18

Augustus Energy Resources is a privately-owned natural gas E&P company based in Billings, Montana; its primary assets are operating and non-operating working interests in approximately 1575 natural gas wells in eastern Colorado, the aggregation of which arises out of various acquisitions from Berry Petroleum Company and Rosetta Resources. 

The company filed for bankruptcy because the collapse in the market price of natural gas left it in a position where it couldn't (i) devote the capital necessary to maintain and grow its business, (ii) service its balance sheet and (iii) get access to credit. Indeed, the falling natural gas price led to multiple redeterminations of the borrowing base in the company's Wells Fargo-provided senior secured credit facility. Moreover, the company became the subject of a class action lawsuit accusing it of improperly charging royalty owners of certain post-production processing and transportation costs. This complicated an attempted out-of-court sale process of the company.

The company has filed for bankruptcy, therefore, to pursue a sale to a proposed stalking horse bidder, OWN Resources Inc. 

  • Jurisdiction: D. of Delaware 
  • Capital Structure: $14.4mm debt (Wells Fargo Bank NA)    
  • Company Professionals:
    • Legal: Davis Graham & Stubbs LLP (Christopher Richardson, Thomas Bell, Kyler Burgi) & (local) Sullivan Hazeltine Allinson LLC (William Sullivan, William Hazeltine)
    • Investment Banker: TenOaks Energy Advisors LLC
    • Claims Agent: JND Corporate Restructuring (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Sponsor: Kayne Anderson Capital Advisors LP 
  • Wells Fargo Bank NA
    • Legal: Vinson & Elkins LLP (William Wallander, Matthew Pyeatt) & (local) Womble Bond Dickinson (US) LLP (Ericka Johnson, Morgan Patterson)
  • Stalking Horse Bidder: OWN Resources Inc.
    • Legal: Husch Blackwell LLP (Lynn Butler)

New Chapter 11 Filing - Apex Xpress, Inc.

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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 Filing - Hobbico Inc.

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Hobbico Inc.

1/10/18

Chicago-based designer, manufacturer and distributor of hobby products like radio-control toys filed for bankruptcy after struggling from (i) too much debt, (ii) lack of investment in product innovation and in its core ecommerce platform, (iii) a systemic shift in the drone market (wherein Asian suppliers started competing by selling direct-to-consumer), (iv) the bankruptcy of a key supplier of racing products, and (v) disruption to its Asian supply chain. The company defaulted on its secured debt and is using the chapter 11 process in order to attempt to sell its business as a going-concern. 

  • Jurisdiction: D. of Delaware
  • Capital Structure: $74.5mm revolver and term loan (Wells Fargo Bank NA), $41.2mm subordinated secured note (Cyprium Investors IV AIV I LP)     
  • Company Professionals:
    • Legal: Neal Gerber & Eisenberg LLP (Mark Berkoff, Nicholas Miller, Thomas Wolford) & (local) Morris Nichols Arsht & Tunnell LLP (Robert Dehney, Curtis Miller, Matthew Talmo, Andrew Golden)
    • Financial Advisor: CR3 Partners LLC (Tom O'Donoghue, Douglas Flannery, Chris Creger, Layne Deutscher) & Keystone Consulting Group LLC (Louis Brownstone)
    • Investment Banker: Lincoln International LLC (Alexander Stevenson)
    • Claims Agent: JND Corporate Restructuring (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Agent: Wells Fargo Bank NA
      • Legal: Goldberg Kohn Ltd. (Randall Klein, Zachary Garrett, Prisca Kim, Jacob Marshall) & (local) Burr & Forman LLP (J. Cory Falgowski)
    • Lender: Cyprium Investors IV AIV I LP
      • Legal: Cahill Gordon & Reindel LLP (Joel Levitin, Richard Stieglitz Jr.)
    • Official Committee of Unsecured Creditors
      • Legal: Cullen and Dykman LLP (S. Jason Teele, Nicole Stefanelli, Michelle McMahon, Bonnie Pollack) & (local) Whiteford Taylor & Preston LLC (Christopher Samis, L. Katherine Good, Stephen Gerald, Kevin Shaw)
      • Financial Advisor: Emerald Capital Advisors (John Madden)

New Chapter 11 Filing - BICOM NY LLC

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  • 7/10/17 Recap: Manhattan based group of Jaguar, Maserati, Ford car dealerships filed for bankruptcy to trigger the automatic stay, prevent JPMorgan Chase from enforcing its rights as secured lender, and buy it more time to pursue a sale of the dealerships.  
  • Jurisdiction: S.D. of New York (Judge Wiles)
  • Capital Structure: $82mm debt (JPMorgan Chase Bank NA)    
  • Company Professionals:
    • Legal: Wilk Auslander LLP (Eric Snyder, Eloy Peral)
    • Financial Advisor/CRO: Carl Marks Advisory Group LLC (Steven Agran) 
    • Claims Agent: JND Corporate Restructuring (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Prepetition & DIP Lender: JPMorgan Chase Bank NA
      • Legal: Sidley Austin LLP (Richard Fries, Andrew Propps, Kevin Lantry, Jeremy Rosenthal)

New Chapter 11 Filing - FirstRain Inc.

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FirstRain, Inc.

  • 6/5/17 Recap: California-based enterprise SaaS company that services Fortune 1000 companies with its software and analytics-driven apps to discover/read/discern/summarize useful insights about other companies/markets filed a prepackaged bankruptcy. The plan contemplates $7.5mm of total consideration including a $4mm DIP credit facility and the plan is to pay the DIP Lender in full, general unsecureds in full and provide the prepetition lender a partial recovery. ESW Capital LLC will own the company on the backend of the restructuring.
  • Jurisdiction: D. of Delaware (Judge Silverstein)
  • Capital Structure: $5.5mm secured debt (Pacific Western Bank as successor to Square 1 Bank)    
  • Company Professionals:
    • Legal: The Rosner Law Group LLC (Frederick Rosner, Scott James Leonhardt)
    • Investment Banker: Atlas Technology Group LLC
    • Claims Agent: JND Legal Administration (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Lender: ESW Capital LLC
      • Legal: Haynes and Boone LLP (Trevor Hoffman, Arsalan Muhammad) & (local) Morris Nichols Arsht & Tunnell LLP (Derek Abbott, Matthew Talmo)
    • Prepetition Lender: Pacific Western Bank
      • Legal: Levy Small & Lallas (Leo Plotkin) & (local) Chipman Brown Cicero & Cole LLP (William Chipman Jr.) 

Updated 7/18/17

New Chapter 11 Filing - Katy Industries Inc.

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Katy Industries Inc.

  • 5/14/17 Recap: St. Louis-based manufacturer, importer and distributor of commercial cleaning (brooms, brushes and mops) and consumer storage products filed for bankruptcy to effectuate a 363 sale to an affiliate of private equity sponsor Victory Park Capital Management. The company has been around forever, it seems, but recent acquisitions, failed integration, unrealized synergies, and operational pitfalls appear to have hit the company hard and strained liquidity. Hence, bankruptcy.
  • Jurisdiction: D. of Delaware
  • Capital Structure: $31.5mm debt (Encina Business Credit SPV LLC)    
  • Company Professionals:
    • Legal: DLA Piper LLP (John Lyons, Daniel Simon, Stuart Brown, Oksana Koltko Rosaluk)
    • Financial Advisor/CRO: SierraConstellation Partners LLC (Lawrence Perkins)
    • Investment Banker: Lincoln International Inc. (Alexander Stevenson)
    • Claims Agent: JND Legal Administration (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Buyer: Jansan Acquisition LLC (Highview Capital LLC & VPCM)
      • Legal: Skadden Arps Meagher & Flom LLP (Lisa Laukitis)
    • Sponsor: Victory Park Capital Management
    • Encina Business Credit SPV LLC
      • Legal: Goldberg Kohn Ltd. (Jeremy Downs, Zachary Garrett) & (local) Reed Smith LLP (J. Cory Falgowski)
    • Successor Trustee: Wells Fargo Bank NA
      • Legal: Morgan Lewis & Bockius LLP (Rachel Jaffe Mauceri)
    • Official Committee of Unsecured Creditors
      • Legal: Drinker Biddle & Reath LLP (Steven Kortanek, Andrew Flame, Patrick Jackson, Robert Malone)
      • Financial Advisor: Emerald Capital Advisors (John Madden)

Updated 7/12/17 

New Chapter 11 Filing - Searchmetrics Inc.

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Searchmetrics Inc.

  • 5/8/17 Recap: This is a story about possible theft and patent litigation among search engine optimization players - the other being BrightEdge Technologies Inc. This sums it up nicely.
  • Jurisdiction: D. of Delaware (Judge Sontchi)
  • Company Professionals:
    • Legal: Chipman Brown Cicero & Cole LLP (William Chipman, Mark Olivere, Adam Cole)
    • Financial Advisor/CRO: EisnerAmper LLP (Wayne Weitz) 
    • Financial Advisor/Valuation Expert: SSG Advisors LLC (J. Scott Victor)
    • Claims Agent: JND Legal Administration (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Searchmetrics GmbH
      • Legal: DLA Piper LLP (US) (Stuart Brown, Maris Kandestin)
    • BrightEdge Technologies Inc.
      • Legal: Baker Botts LLP (Omar Alaniz, Emanuel Grillo, G. Hopkins Guy III, Jon Swenson)

Updated 7/12/17