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 Filing - Commonwealth of Puerto Rico

Commonwealth of Puerto Rico & Puerto Rico Sales Tax Financing Corporation ("COFINA")

  • 5/3/17 Recap: The Commonwealth of Puerto Rico filed a petition for relief under Title III of the the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"). Much has been written on this situation and so we're going to keep this brief. We're also going to shed the snark. Why? Well, because this is truly a sad story. GNP in Puerto Rico has declined over 14% in the last decade. The unemployment rate is 12.1% as of 10/16. The labor participation rate plummeted to 40%. The population has declined by 10% over the last decade. 46.1% of PR's residents live below the federal poverty level: the national average is 14.7% and Detroit's poverty level at the time of filing for Chapter 9 was 36%. Brutal. All in, the Commonwealth has $74 billion of bond debt and $48 billion of unfunded pension liabilities. A total dumpster fire.
  • Jurisdiction: United States District Court for the District of Puerto Rico
  • Capital Structure:

 

  • Professionals:
    • Counsel to the Oversight Board: Proskauer Rose LLP (Martin Bienenstock, Scott Rutsky, Philip Abelson, Ehud Barak, Maja Zerjal, Timothy Mungovan, Steven Ratner, Paul Possinger) & O'Neill & Borges LLC (Hermann Bauer)
    • Strategic Consultant to the Oversight Board: McKinsey & Co.
    • Municipal Investment Banker to the Oversight Board: Citigroup Global Markets
    • Financial Advisor to the Oversight Board: Ernst & Young LLP
    • Counsel to the Puerto Rico Tax Agency and Financial Advisory Authority: O'Melveny & Myers LLP (John Rapisardi, Suzzanne Uhland, Peter Friedman)
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Ad Hoc Retiree Committee
      • Legal: Bennazar Garcia & Milian CSP (A.J. Bennazar-Zequeira) & Clark Hill PLC (Robert Gordon, Shannon Deeby, Jennifer Green)
    • National Public Finance Guarantee Corporation
      • Legal: Weil (Marcia Goldstein, Kelly DiBlasi, Gabriel Morgan)
    • Ambac Assurance Corporation
      • Legal: Milbank Tweed & McCloy LLP (Dennis Dunne, Andrew Leblanc, Atara Miller)
    • UBS Family of Funds
      • Legal: White & Case LLP (John Cunningham)
    • Oppenheimer Funds
      • Legal: Kramer Levin Naftalis & Frankel LLP (Thomas Mayer, Amy Caton, Douglas Buckley, David Blabey Jr., Phillip Bentley)
    • American Federation of State, County and Municipal Employees
      • Legal: Saul Ewing LLP (Dipesh Patel, Sharon Levine)
    • The Employees Retirement System of the Government of the Commonwealth of Puerto Rico
      • Legal: DLA Piper LLP (Richard Chesley, Rachel Albanese)
    • Goldman Sachs Asset Management LP
      • Legal: McDermott Will & Emery LLP (James Kapp, Megan Thibert-Ind, William Smith)
    • Trustee: Bank of New York Mellon 
      • Legal: Reed Smith LLP (Luke Sizemore, Eric Schaffer, Kurt Gwynne)

Updated 5/11/17

From the Commonwealth's petition.

From the Commonwealth's petition.

New Chapter 11 Filing - Westinghouse Electric Company LLC

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Westinghouse Electric Company LLC

  • 3/29/17 Recap: File this under the most heavily leaked/discussed bankruptcy filing of all time: the Japanese government seemed to make an announcement about the proposed filing every hour. So...Pennsylvania-based nuclear power company filed for bankruptcy (30 debtors in total) after its parent, Toshiba, took a uuuuuuuuuge $6b+ write-down due to delayed and above-budget construction of plants in Georgia and South Carolina. The company secured a $800mm commitment for a DIP facility to fund the cases after a competitive DIP process with powerhouses like Goldman Sachs, Highbridge and Silver Point duking it out with Apollo. We've already covered this company a lot in previous weeks so suffice it to say that the upshot of this filing is that it will lead many to question the viability of nuclear as an alternative power source.
  • Jurisdiction: SD of New York 
  • Company Professionals:
    • Primary Legal: Weil (Gary Holtzer, Garrett Fail, Robert Lemons, David Griffiths, Charles Persons, David Cohen)
    • Legal for Toshiba Nuclear Energy Holdings (UK) Limited: Togut Segal & Segal LLP (Albert Togut, Brian Moore, Kyle Ortiz)
    • Financial Advisor: AlixPartners LLC (Lisa Donahue)
    • Investment Banker: PJT Partners Inc. (Timothy Coleman, John Singh, Mark Buschmann, Harold Kim)
    • Claims Agent: KCC (*click on company name for docket)
  • Other Parties in Interest:
    • Toshiba Corporation
      • Legal: Skadden Arps Slate Meagher & Flom LLP (Van Durrer, Paul Leake, Annie Li) 
    • Prepetition Agent:
      • Legal: Latham & Watkins LLP (Zulfiqar Bokhari) 
    • Proposed DIP Lenders: Apollo Investment Corporation, AP WEC Debt Holdings LLC, Midcap Financial Trust, Amundi Absolute Return Apollo Fund PLC, Ivy Apollo Strategic Income Fund, Ivy Apollo Multi Asset Income Fund
      • Legal: Paul Weiss Rifkand Wharton & Garrison LLP (Jeffrey Saferstein, Claudia Tobler, Kevin O'Neill) 
    • Proposed DIP Agent: Citibank NA
      • Legal: Shearman & Sterling LLP (Fredric Sosnick, Ned Schodek) 
    • Competing (but losing) DIP Providers: Goldman Sachs Bank USA, HPS Investment Partners LLC, Silver Point Finance LLC
    • Georgia Power Company, Oglethorpe Power Corporation, Municipal Electric Authority of Georgia and City of Dalton Georgia
      • Legal: Jones Day (Gregory Gordon, Dan Prieto, Amanda Rush, Anna Kordas, Jeffrey Ellman)
    • Municipal Electric Authority of Georgia
      • Legal: Alston & Bird LLP (Dennis Connolly)
    • South Carolina Electric & Gas Company and South Carolina Public Service Authority
      • Legal: Reed Smith LLP (Paul Singer, Derek Baker, Tarek Abdalla)
    • Oglethorpe Power Corporation (An Electric Membership Corporation)
      • Legal: Dechert LLP (Michael Sage, Stephen Wolpert) & Parker Hudson Rainer & Dobbs LLP (C. Edward Dobbs)
    • Exelon Generation Company LLC
      • Legal: Ballard Spahr LLP (Matthew Summers)
    • Official Committee of Unsecured Creditors
      • Legal: Proskauer Rose LLP (Martin Bienenstock, Timothy Karcher, Vincent Indelicato)
      • Financial Advisor: Alvarez & Marsal LLC

Updated 5/31/17

New Chapter 11 Filing - Goodman Networks Inc.

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Goodman Networks Inc.

  • 3/13/17 Recap: Frisco Texas-based minority-business-enterprise (MBE) and wireless network and satellite television systems servicer filed a prepackaged chapter 11 case to de-lever its balance sheet by $212.5mm. This is a story, in many respects, about a concentrated revenue base and too much debt. 83% of the company's revenue is attributable to AT&T and "substantial completion of AT&T's 4G network build-out has diminished the associated demand for Goodman's services." Consequently, the company wasn't generating enough revenue to sustain its capital structure. Now, holders of the secured debt will receive cash, $112.5mm of new debt, PIK preferred stock and common stock. To preserve the MBE status, current equity will get PIK preferred stock and 50.1% of the common stock. Query whether that level of retained equity is a lesson to those who invested in this MBE structure. 
  • Jurisdiction: S.D. of Texas
  • Capital Structure: $25mm RCF (MidCap Financial Trust), $325mm '18 12.125 % secured notes (Wells Fargo)
  • Company Professionals: 
    • Legal: Kirkland & Ellis LLP (Patrick Nash, Joshua Sussberg, Joseph Graham, Laura Krucks, Alexander Cross) & (local) Haynes & Boone LLP (Stephen Pezanosky, Kelli Norfleet)
    • Financial Advisor: FTI Consulting (John Debus)
    • Investment Banker: June Creek Interests (Andy Jent)
    • Claims Agent: KCC (*click on company name for docket)
  • Other Parties in Interest:
    • Ad Hoc Committee of Second Lien Bondholders (Alden Global, AllianceBernstein Global LP, J.P. Morgan Investment Management Inc., J.P Morgan Chase Bank N.A., Phoenix Investment Advisor LLC, Principal Global Investors LLC, Invesco Senior Secured Management Inc., Sound Point Capital Management LP)
      • Legal: Akin Gump (Michael Stamer, Charles Gibbs, Meredith Lahaie, Sara Brauner)
      • Financial: Greenhill & Co. Inc.
  • Wells Fargo
    • Legal: Reed Smith LLP (Eric Schaffer, Lloyd Lim, Maura Nuno)
  • AT&T Corp.
    • Legal: Sidley Austin LLP (Brian Lohan)

Updated 3/28/17

New Chapter 11 Filing - Homer City Generation, L.P.

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Homer City Generation

  • 1/11/17 Recap: Pennsylvania-based GE-owned power company with three coal-fired electric power generating units files a prepackaged Chapter 11 to effectuate a deal to turnover the company's assets to its sale leaseback debtholders.  
  • Jurisdiction: D. of Delaware
  • Capital Structure: $147mm '19 8.137% senior secured notes, $466mm '26 8.734% senior secured notes (Bank of New York Mellon)
  • Company Professionals:
    • Legal: Richards Layton & Finger PA (Mark Collins, Russell Siberglied, Paul Heath, Joseph Barsalona II, Andrew Dean)
    • Financial Advisor: Zolfo Cooper (John Boken)
    • Investment Banker: PJT Partners Inc. (Mark Buschmann, John Singh)
    • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name for docket)
  • Other Parties in Interest:
    • Ad Hoc Group of First Lien Bondholders:
      • Legal: O'Melveny & Meyers LLP (George Davis, Andrew Parlen, Matthew Kremer, Joseph Zujkowski) & (local) Young Conaway (Sean Beach)
      • Financial Advisor: Charles River Associates
      • Investment Banker: Houlihan Lokey 
    • Bank of New York Mellon
      • Legal: Emmet, Marvin & Marvin LLP (Thomas Pitta)
    • General Electric
      • Legal: Weil (Robert Lemons, Sunny Singh) & (local) Reed Smith LLP (Kurt Gwynne)

Updated 1/23/17

New Filing - Caribbean Commercial Investment Bank Ltd.

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Caribbean Commercial Investment Bank Ltd.

  • 11/23/16 Recap: Confusing mess but the upshot is that the court-appointed administrator (FTI Consulting) seeks to claw back depositor funds that were transferred to a separate entity under Eastern Caribbean Central Bank regulatory supervision.
  • Jurisdiction: S.D. of New York
  • Capital Structure: ~$6mm of deposits at issue.   
  • Company Professionals:
    • Legal: Reed Smith LLP (James McCarroll, Jordan Siev, Kurt Gwynne)
    • Financial Advisor: FTI Consulting (William Tacon, Ian Morton)
  • Other Parties in Interest:

New Filing - American Gilsonite Company

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 American Gilsonite Company

  • 10/25/16 Recap: "Gilsonite" miner, processor, and oilfield services provider files prepackaged chapter 11 to effectuate debt-for-equity deal with 2nd lien noteholders and sponsor, Palladium Partners.  
  • Jurisdiction: D. of Delaware
  • Capital Structure: $20mm RCF (Key Bank), $270mm '17 11.5% 2nd lien notes (Wilmington Trust)    
  • Company Professionals:
    • Legal: Weil (Matthew Barr, Sunny Singh, Jessica Diab, Prashant Rai) & (local) Richards Layton (Mark Collins)
    • Financial Advisor: FTI (Alan Boyko)
    • Investment Banker: Evercore (Stephen Hannon)
    • Claims Agent: Epiq Bankruptcy Solutions LLP (*click on company name for docket)
  • Other Parties in Interest:
    • Ad Hoc Noteholder and DIP Lender Group: Varde Partners, Axar Capital Management, PennantPark Investment Advisers, River Birch Capital, Tinicum Incorporated
      • Legal: Stroock Stroock & Lavan (Kris Hansen, Erez Gilad, Matt Garofalo) & (local) Young Conaway (Robert Poppiti Jr., Matthew Lunn)
      • Financial Advisor: Houlihan
    • Wilmington Trust
      • Legal: Pryor Cashman LLP (Seth Lieberman, Patrick Sibley, Matthew Silverman) & (local) Reed Smith LLP (Kurt Gwynne, Emily Devan)
    • Palladium Equity Partners
      • Legal: Simpson Thatcher (Elisha Graff, Ariana Watson Evarts) & (local) Landis Rath & Cobb (Richard Cobb)

Updated 12/30/16

New Chapter 15 Filing - Tervita Corporation

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Tervita Corporation