New Chapter 11 Bankruptcy - Dextera Surgical Inc. ($DXTR)

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Dextera Surgical Inc.

  • 12/11/17 Recap: Publicly-traded ($DXTR) California based med-device company that designs and and manufactures proprietary stapling devices that enable the advancement of minimally invasive surgical procedures has filed for bankruptcy to effectuate a sale. Why bankruptcy? Per the company's pleadings, "Dextera invested in obtaining regulatory clearances and product development, evaluation, and manufacturing, but experienced interruptions in the ability to produce both staplers and staple reload cartridges to meet customer demand. It also incurred substantial operating losses that significantly impacted liquidity, ultimately leading to the need to file the Chapter 11 Case." The company has lined up a stalking horse purchaser (Aesculap Inc.) who also happens to be the provider of $1.5mm in DIP financing to effectuate the case. The purchase price is reported to be approximately $17.3mm. 
  • Jurisdiction: D. of Delaware (Judge Carey)
  • Capital Structure: $4mm 5% secured note     
  • Company Professionals:
    • Legal: Saul Ewing Arnstein & Lehr LLP (Mark Minuti, Teresa Currier, Monique DiSabatino)
    • Special Legal: Cooley LLP (Robert Eisenbach)
    • Financial Advisor: JMP Securities LLC
    • Claims Agent: Rust Consulting/Omni Bankruptcy (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Lender/Stalking Horse Bidder: Aesculap Inc.
      • Legal: Stevens & Lee PC (Joseph Huston Jr., Robert Lapowsky)

Updated 12/13/17

New Chapter 11 Bankruptcy - REAL ALLOY (Real Industry Inc.)

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REAL ALLOY - Real Industry Inc.

  • 11/17/17 Recap: This one is going to be a snorer for those of you who don't like to geek out over the technical intricacies of commodities businesses. Here, REAL ALLOY is a publicly-traded holding company ($RELY) that leverages its substantial net operating losses to improve the free cash flow position of various undervalued businesses that it acquires. The company acquired Real Industry in 2015 from Aleris Corporation (formerly bankrupt) for $554.5mm, substantially leveraging its balance sheet in the process. Post-acquisition, Real Alloy became one of the largest aluminum recyclers in North America and Europe with products and services availed to wrought alloy processers, automotive original equipment manufacturers (read: big car companies), foundries and casters. In other words, the company serves the automotive, consumer packaging, aerospace, building and construction, steel and durable goods industries by processing new scrap, old scrap, and various aluminum byproducts. All of this puts the company squarely into the aluminum recycling supply chain. The company blames the filing on weakness in the steel industry, the strong U.S. dollar creating arbitrage opportunity, operational setbacks (heightened, to some degree, by Hurricane Harvey), and a reduction in credit insurance and tightening supplier terms. The company is seeking approval of a $365mm DIP credit facility to facilitate the case wherein it hopes to preserve the value of its NOLs and pursue a transaction with a new strategic partner.  
  • Jurisdiction: D. of Delaware 
  • Capital Structure: $96mm ABL (Bank of America, NA), $305mm '19 10% senior secured notes (Wilmington Trust, NA)  
  • Company Professionals:
    • Legal: Morrison & Foerster LLP (Gary Lee, Todd Goren, Mark Lightner, Benjamin Butterfield, J. Alexander Lawrence, Geoffrey Peck) & (local) Saul Ewing Arnstein & Lehr LLP (Mark Minuti, Monique Bair DiSabatino, Sharon Levine)
    • Financial Advisor: Berkeley Research Group LLC
    • Investment Banker: Jefferies LLC
    • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Other Parties in Interest:
    • Ad Hoc Noteholder Group
      • Legal: Latham & Watkins LLP (Richard Levy, Jason Gott, Ted Dillman) & (local) Young Conaway Stargatt & Taylor LLP (MIchael Nestor, Kara Hammond Coyle)

Updated 11/17/17

New Chapter 11 Filing - Central Grocers Inc.

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Central Grocers Inc.

  • 5/4/17 Recap: May the Fourth be with you. Illinois-based food coop - the 7th largest in the nation - founded in, gulp, 1917, filed for bankruptcy to pursue a sale of its Strack & Wan Til stores and its distribution center (after certain creditors tried to force a bankruptcy on it). The company was initially founded with 32 supermarket owners seeking increased purchasing power through strength in numbers. Today, the coop supplies over 400 stores in the Chicago area. The coop supports its own brand, Centrella, which, being frank here, is probably value detract because nothing says "quality" like shoddy label design. That "Beef Stew" and "Chunk Pineapple" (see below) looks tasty AF, doesn't it? This makes us want to blow chunks. Seriously, though, this is another story of disruption. Disruption caused by the commodities markets, in part, with beef, chicken, eggs and dairy generally being at relatively low prices. But also disruption caused by new entrants into the grocery segment, including Walmart, Target, Costco, and dollar stores. And, of course, Amazon, which is increasingly becoming Darth Vader, even though we're pretty certain nobody we know actually uses AmazonFresh for produce and the like. But, whatever, when in doubt, blame Amazon. That's a much better excuse than 1917-style design sensibility and a classic innovator's dilemma.
  • Jurisdiction: D. of Delaware (transferred to N.D. of Illinois)
  • Capital Structure: $225mm '18 RCF (PNC Bank NA), $22.5mm TL (Bank of the West)  
  • Company Professionals:
    • Legal: Weil (Ray Schrock, Stephen Karotkin, Sunny Singh, Daniel Gwen, Danielle Donovan) & (local) Richards Layton & Finger PA (Mark Collins, Paul Heath, Brett Haywood, David Queroli) & (local) McDonald Hopkins LLC (David Agay, Rion Vaughan)
    • Financial Advisor: Conway MacKenzie Inc. (Donald Harer, Alpesh Amin, Michael Musso, John Cannon, Matthew Sedigh, Daniel Johnson, Lauren Leach, Harry Bramson, Jennifer Chaing, Joseph Wirija, Michael Kulkarni, Michael Flynn)
    • Investment Banker: Peter J. Soloman Company (Derek Pitts)
    • Claims Agent: Prime Clerk LLC (*click on company name for docket)
  • Other Parties in Interest:
    • PNC Bank NA
      • Legal: Blank Rome LLP (Regina Stango Kelbon, Victoria Guilfoyle, Mark Rabinowitz, Gregory Vizza, Michael Schaedle)
    • Bank of the West
      • Legal: Thompson Coburn LLP (Mark Bossi, Victor Des Laurier, Diona Rogers)
    • Successful Bidder
      • Legal: Duane Morris LLP (Lawrence Kotler, Rosanne Ciambrone)
    • Official Committee of Unsecured Creditors
      • Legal: Kilpatrick Townsend & Stockton LLP (Todd Meyers, David Posner, Gianfranco Finizio) & (local) Saul Ewing LLP (Mark Minuti, Lucian Murley) & (local) Arnstein & Lehr LLP (Barry Chatz, Kevin Morse, William Williams)
      • Financial Advisor: FTI Consulting Inc. (Conor Tully)

Updated 7/13/17

http://www.central-grocers.com/

http://www.central-grocers.com/

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 - Ezra Holdings Limited

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Ezra Holdings Limited

  • 3/18/17 Recap: Publicly-traded investment holding company for a group of integrated offshore solutions providers for the oil and gas industry filed for bankruptcy after its primary assets decidedly returned less than expected given the distress in oil field services. Notably, a primary asset included an investment in bankruptcy filer EMAS Chiyoda Subsea Limited.
  • Jurisdiction: S.D. of New York
  • Capital Structure: $130mm secured debt, $272mm (DBS Bank Limited), $184.5mm (Oversea-Chinese Banking Corporation Limited), $108.5mm HSBC International Trust Services (Singapore) Limited, ~$39mm additional funded debt     
  • Company Professionals:
    • Legal: Saul Ewing LLP (Sharon Levine, Jeffrey Hampton, Stephen Ravin, Dipesh Patel, Aaron Applebaum)
    • Financial Advisor: Goldin Associates LLC (Robin Chiu)
    • Claims Agent: Prime Clerk LLC (*click on company name for docket)

Updated 3/23/17

New Chapter 11 Filing - Avaya Inc.

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Avaya Inc.

  • 1/19/17 Recap: Late in its transition from a hardware-based business model to a software model, Santa Clara California based communications services provider filed a freefall bankruptcy to address its $6b+ balance sheet and ~$1.45b of pension/OPEB liabilities with the help of a proposed $725mm DIP Facility. 
  • Jurisdiction: S.D. of New York
  • Capital Structure: $55mm domestic ABL credit facility (Citigroup USA Inc.), $3.235b prepetition cash flow credit facility (Citigroup USA Inc.), $1b 7% '19 first priority note, $290mm 9% '19 second priority note, $1.384b 10.5% '21 second priority notes (Bank of New York Mellon Trust Company N.A.).   
  • Company Professionals:
    • Legal: Kirkland & Ellis LLP (Jayme Sprayragen, Jonathan Henes, Patrick Nash, Ryan Preston Dahl, Bradley Giordano, Justin Bernbrock, Kan Asimacopoulos, Bern Meyer-Loewy, Carl Pickerill, Asif Attarwala, Ameneh Bordi, Robert Britton, Jeremy Evans, Natasha Hwangpo, Stephen Iacovo, George Klidonas, Christopher Kochman, Justin Mercurio)
    • Financial Advisor: Zolfo Cooper LLC (Eric Koza, Charlie Carnaval, Jesse DelConte, Denise Lorenzo, Conor McShane, Fred Jelks, Andrew Ralph, Adam Searles, Jeff Wooding, Howard Gou, Eugene Lavrov, Rohan Joseph, Chris Baydar)
    • Investment Banker: Centerview Partners (John Bosacco)
    • Claims Agent: Prime Clerk (*click on company name for docket)
  • Other Parties in Interest:
    • DIP Agent: Citigroup Global Markets Inc.
      • Legal: Davis Polk & Wardwell LLP (Damian Schaible, Natasha Tsiouris, Aryeh Falk)
    • Ad Hoc First Lien Noteholders' Group (400 Capital Management LLC, Aegon USA Investment Management LLC, Alta Fundamental Advisors LLC, Anchorage Capital Group LLC, Apollo Management LP, Auburn Mesa LLC, Bain Capital Credit LP, Bank of America NA, Barclays Capital Inc., Benefit Street Partners LLC, Bennett Restructuring Fund Inc., Blackrock Financing Management Inc., Blackrock Advisors LLC, Blackrock Institutional Trust Company NA, BlueCrest Capital Management, Candlewood Group Investment Group LP, Canyon Capital Advisors LLC, Carlson Capital LP, Centerbridge Capital LP, Cetus Capital LLC, Columbia Management Investment Advisors LLC, Continental Casualty Company, CQS (US) LLC, Crescent Capital Group LP, CRG Financial LLC, Cyrus Capital Partners LP, Deutsche Bank AG Cayman Islands Branch, Driehaus Capital Management LLC, DW Catalyst Master Fund Ltd., Empyrean Investments LLC, Farallon Capital Partners LP, Farallon Capital Institutional Partners LP, Farallon Capital Institutional Partners V LP, Farallon Capital Institutional Partners II LP, Farallon Capital Offshore Investors II LP, Farallon Capital F5 Master I LP, Farallon Capital (AM) Investors LP, Farallon Capital Institutional Partners III LP, Noonday Offshore Inc., GLG LLC, Graham Capital Management, GSO Capital Partners LP, HG Vora Capital Management LLC, HPS Investment Partners LLC, Investcorp Credit Management US LLC, ISL Loan Trust, ISL Loan Trust II, J.H. Lane Partners LP, JPMorgan Chase Bank NA, JP Morgan Investment Management LLC, Lord Abbett & Co. LLC, Mariner Glen Oaks LP, Medtronic Holding Switzerland GMBH, Merced Capital LP, Merrill Lynch Pierce Fenner & Smith Inc., Midtown Acquisitions LP, MJX Asset Management LLC, Monarch Alternative Capital LP, Napier Park Global Capital, Newfleet Asset Management LLC, New Mexico State Investment Council, Nut Tree Capital Management LP, NYL Investors LLC, OZ Management LP, OZ Management II LP, OFI Global Asset Management Inc., Onex Credit Partners LLC, OSK V LLC, Par-Four Investment Management LLC, P. Schoenfeld Asset Management LP, Putnam Investments, Redwood Capital Management LLC, Sentinel Dome Partners LLC, Shenkman Capital Management Inc., Silver Point Capital LP, Standard General LP, Taconic Capital Advisors LP, Talamod Asset Management LLC, Telos Asset Management LLC, THL Credit, Voya CLO, Wayzata Opportunities Fund III, Wayzata Opportunities Fund Offshore III LP, Wells Fargo Bank NA, Whitebox Advisors LLC, Wolverine Flagship Fund Trading Limited, Z Capital Credit Partners)
      • Legal: Akin Gump Straus Hauer & Feld LLP (Ira Dizengoff, Philip Dublin)
      • Financial Advisor: PJT Partners LP 
    • Ad Hoc Crossover Noteholders' Group (Alden Global Capital LLC, AllianceBernstein LP, Avenue Capital Management II LLP, Benefit Street Partners, Susquehanna Advisors Group Inc., Franklin Mutual Advisors LLC, Greenlight Capital Inc., Highland Capital Management LP, PGIM Inc., Symphony Asset Management LLC)
    • Updated Ad Hoc Crossover Noteholders' Group (Less: Benefit Street Partners)
      • Legal: Stroock Stroock & Lavan LLP (Kris Hansen, Sayan Bhattacharyya, Gabriel Sasson)
      • Financial Advisor: Rothschild
    • Communications Workers of America
      • Legal: Saul Ewing LLP (Sharon Levine)
    • Successor Indenture Trustee: Wilmington Savings Fund Society FSB
      • Legal: Wilmer Cutler Pickering Hale & Doerr LLP (Andrew Goldman, Nancy Manzer)
    • First Lien Notes Trustee: Bank of New York Mellon Trust Company
      • Legal: Morgan Lewis & Bockius LLP (Glenn Siegel, Joshua Dorchak, Rachel Jaffe Mauceri)
    • Official Committee of Unsecured Creditors
      • Legal: Morrison & Foerster LLP (Lorenzo Marinuzzi, Todd Goren, Erica Richards, Benjamin Butterfield, Rahman Connelly, Andrew Kissner, James Newton)
      • Financial Advisor: Alvarez & Marsal LLC (David Miller, Byron Smyl, Marc Alms, Laureen Ryan, Rich Newman, Andrea Gonzalez, Hamish Allanson, Leslie Lambert, Vance Yudell, Jeff Gunsel, Steve Coverick)
      • Investment Banker: Jefferies LLC (Leon Szlezinger)

Updated 5/31/17

New Filing - Limitless Mobile LLC

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Limitless Mobile LLC

  • 12/5/16 Recap: Pennsylvania-based 3G/4G LTE network provider of mobile phone and home internet services to retail customers in rural areas filed chapter 11 to restructure its debt, winddown its retail operations and attempt to continue its wholesale business pursuant to a $4mm Tower Bridge DIP loan. Basically this thing is an investment cesspool: after a $9+mm loan and $25.2mm grant from the US government and a $30mm equity (and spectrum) infusion from Tower Bridge, the company determined that it had an "extended runway to profitability." Who modeled this for the US Government before doling out the grant?
  • Jurisdiction: D. of Delaware
  • Capital Structure: $9.2mm debt (Rural Utilities Service - United States) & $9mm (Tower Bridge LLM Partners LLC)    
  • Company Professionals:
    • Legal: Dilworth Paxson LLP (Catherine Pappas, Martin Weis, Jesse Silverman, Lawrence McMichael, Erik Coccia)
    • Claims Agent: Rust Omni (*click on company name for docket)
  • Other Parties in Interest:
    • Tower Bridge LLM Partners LLC
      • Legal: Gellert Scali Busenkill & Brown LLC (Ronald Gellert, Evan Rassman)
    • Unsecured Creditors Committee
      • Legal: Saul Ewing LLC (Lucian Murley, Sharon Levine)
      • Financial Advisor: Gavin/Solmonese LLC (Edward Gavin)

Updated 12/29/16

New Filing - DirectBuy Holdings Inc.

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DirectBuy Holdings Inc.

  • 11/1/16 Recap: E-commerce provider of concierge-based virtual shopping experiences files for bankruptcy to achieve a balance sheet restructuring via sale of the business to proposed stalking horse bidder, Derby SPV Inc. 
  • Jurisdiction: D. of Delaware
  • Capital Structure: $145mm 12% PIK Toggle Notes, $10mm pre-exchange holdover notes.    
  • Company Professionals:
    • Legal: Cole Schotz (Michael Sirota, Norman Pernick, Felice Yudkin, Ilana Volkov, Marion Quirk, Nicholas Brannick)
    • Investment Banker: Carl Marks Advisory Group LLC (Charles Boguslaski, C. Scott Chabina, Jonathan Ladner, Parker Condie)
    • Claims Agent: Prime Clerk (*click on company name for docket)
  • Other Parties in Interest:
    • Unsecured Creditors' Committee
      • Legal: Saul Ewing LLP (Sharon Levine, Lucian Murley, Aaron Applebaum, Dipesh Patel, Monique DiSabatino)
      • Financial Advisor: Emerald Capital Advisors (John Madden)
    • Equityholders: Bayside Capital & PennantPark Investment Corporation
      • Legal: Weil (Brian Rosen, Debora Hoehne) & (local) Pepper Hamilton (David Stratton)

Updated 12/30/16.

New Filing - IMX Acquisition Corp. (Implant Services Corp.)

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IMX Acquisition Corp. (Implant Services Corp.)

  • 10/10/16 Recap: L-3 Communications is stalking horse bidder in $117.5mm sale (plus assumed debt) of previously publicly-traded explosives trace detection business.  
  • Jurisdiction: D. of Delaware
  • Capital Structure: $84mm funded secured debt b/t Term Notes ($61.6mm) & Revolver Note ($22.5m)    
  • Company Professionals:
  • Other Parties in Interest:

Updated 12/30/16