New Chapter 11 Filing - GST AutoLeather Inc.

GST AutoLeather Inc.

• 10/3/17 Recap: Disruption, illustrated. The automobile industry is at the beginning of a downturn marked by auto price reductions and a drop in new vehicle production. Automobile output is down 4% over the past year as automobile dealers are placing fewer manufacturing orders and dealing with excess supply. Moreover, auto OEMs are decreasing the leather content in certain new vehicles. Finally, automobiles are lasting longer and "the climbing popularity of ride-sharing services, such as Uber and Lyft...diminish consumers' needs for their own cars." Put simply, there is a demand side decline. Consequently, here, the Southfield Michigan-based supplier of leather interiors filed a freefall bankruptcy with the hope of consummating an expedited (approximately 2-month timeframe) 363 asset sale. The company has secured a $40mm DIP credit facility to fund its bankruptcy; it continues talks with its senior lenders about a stalking horse bid to purchase the company. In addition to the aforementioned macro factors, the company blames its deteriorated financial performance on (i) issues associated with certain new customer launches in Europe, (ii) supply chain issues with a critical Chinese supplier who is using leverage to extract out-of-contract economics from the company and (iii) constraints imposed by significant working capital investments to mitigate supply chain disruption to its customers (which include the likes of major auto OEMs, e.g., Audi, BMW/Mini, Daimler, Fiat Chrysler, Ford, General Motors, Hyundai, Honda, Porsche, PSA, Nissan, Kia, Toyota and Volkswagen).
• Jurisdiction: D. of Delaware (Judge Silverstein)
• Capital Structure: $24mm '19 RCF, $140mm '20 TL-B (Royal Bank of Canada), $32mm mezz debt (Triangle Capital Corp./Alcentra Capital Corp.)
• Company Professionals:
  • Legal: Kirkland & Ellis LLP (James Sprayragen, Ryan Blaine Bennett, Michael Slade, Alexandra Schwarzman, Timothy Bow, Benjamin Rhode, Luke Ruse) & (local) Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, Timothy Cairns, Joseph Mulvihill)
  • Financial Advisor/CRO: Alvarez & Marsal North America LLC (Jonathan Hickman, Jay Herriman)
  • Investment Banker: Lazard Middle Market (Jason A. Cohen)
  • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name above for free docket access)
• Other Parties in Interest:
  • Sponsor: Advantage Partners
  • Lender Group (Royal Bank of Canada, as DIP Admin Agent)
    • Legal: Paul Hastings LLP (Andrew Tenzer, Michael Comerford, Shlomo Maza) & Young Conaway Stargatt & Taylor LLP (Pauline Morgan, M. Blake Cleary, Justin Rucki)
    • Financial Advisors: FTI Consulting
  • Mezzanine Lenders:
    • Legal: McGuireWoods LLP (Anne Croteau, Douglas Foley) & (local) Benesch Friedlander Coplan & Aronoff LLP (Jennifer Hoover, William Alleman Jr.)
  • Official Committee of Unsecured Creditors
    • Legal: Foley & Lardner LLP (Erika Morabito, Brittany Nelson, John Simon, Richard Bernard, Leah Eisenberg) & (local) Whiteford Taylor & Preston LLC (Christopher Samis, L. Katherine Good, Kevin Shaw, Christopher Jones, David Gaffey)
    • Financial Advisor: Berkeley Research Group LLC (Christopher Kearns, Peter Chadwick, Michelle Tran, Kevin Beard, Jay Wu)
    • Investment Banker: Configure Partners LLC (Jay Jacquin)

Updated 11/15/17 7:55 am CT

New Chapter 11 Bankruptcy - Appvion Inc.

Appvion Inc.

• 10/2/17 Recap: The 100+-year old Appleton Wisconsin-based manufacturer of specialty coated paper has filed for bankruptcy. The company operates in two segments, the thermal paper segment and the carbonless paper segment. The thermal paper segment, on the surface, seems like it would be the most susceptible segment to technological disruption. It is used in four principal end markets: 1) point-of-sale for retail receipts and coupons (PETITION Note: you could understand why this would seemingly be in decline with Square and other P.O.S. stations now emailing receipts - not to mention more and more retail being done online); 2) label products for shipping, warehousing, medical and clean-room supplies (PETITION Query: perhaps the shipping labels offsets the paper receipts?); 3) tags and tickets for airline/baggage applications, events and transportation tickets, lottery and gaming applications (PETITION Note: one of us bought a baseball a scannable paperless ticket the other day from Stubhub...hmmm); and 4) printer, calculator and chart paper for engineering, industrial and medical diagnostic charts. The thermal paper segment is 60% of the company's net sales and has enjoyed annual average growth rates between 1-3%. Somewhat shockingly. PETITION Note: We would have liked to have seen those four sub-segments separated out. Meanwhile, the carbonless paper segment accounts for the other 40% of net sales; it produces coated paper products for design and print applications. The paper is used in a variety of end markets including government, retail, financial, insurance and manufacturing. This segment has been in structural decline since 1994, down approximately 7-11% annually due to the rise of new technologies in digital laser, inkjet and thermal printers. Oh, and electronic communications: the company just throws that in their bankruptcy papers like it's an afterthought. In other words, government and corporations are relying more on email than on the printed page which, duh, obviously impacts this segment. The company owns there manufacturing plants and leases three warehouses; it also has 915 union employees - owed $112.6mm in obligations - who probably ought to get ready to get bent (they are represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (the “USW”). The company blames the chapter 11 filing on negative industry trends, an unsustainable degree of balance sheet leverage, inability to adequately address near-term maturities and rapidly deteriorating liquidity. Liquidity became even more of an issue after the company issued a "going concern" warning and received an S&P credit downgrade - two things that obviously made suppliers skittish and resulted in demands for disadvantageous trade terms. Recognizing decreased liquidity, the company appears to have taken as much cost out of the business as it can which, from the looks of the company's papers, may be artificially inflating the numbers on the thermal side in the face of technological innovation. PETITION Note: the assumptions the bankers concoct for this side of the business ought to be watched very carefully. Somewhat surprisingly, despite a full slate of advisors and months of lead-up to the filing, this is a classic free-fall into bankruptcy: there doesn't appear to be any restructuring support agreement with the lenders whatsoever. There is, however, a proposed $325.2mm DIP credit facility which would include $85mm of new money and a $240.2mm rollup of pre-petition money (in other words, the full amount of pre-petition TL & RCF monies outstanding, ex-interest). Nothing like being senior in the cap stack. Final PETITION Note: anyone think this will be the last paper-related bankruptcy in, say, the next 12 months? This is starting to look like 2007 all over again...
• Jurisdiction: D. of Delaware
• Capital Structure: $335mm first lien TL & $100 RCF ($240.8mm outstanding included accrued/unpaid interest), $250mm '20 9% second lien senior notes, $24mm A/R securitization, $6mm Industrial Development Bonds, $500k TL with the State of Ohio
• Company Professionals:
  • Legal: DLA Piper (US) LLP (Richard Chesley, Stuart Brown, Jamila Willis, Kaitlin Edelman)
  • Financial Advisor/CRO: AlixPartners LLP (Alan Holtz, Pilar Tarry, Nathan Kramer)
  • Investment Banker: Guggenheim Securities LLC (Ronen Bojmel)
  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Strategic Communications Consultant: Finsbury LLC
• Other Parties in Interest:
  • DIP Admin Agent: Wilmington Trust, NA
    • Legal: Covington & Burling LLP (Ronald Hewitt) & (local) Pepper Hamilton LLP (David Fournier)
  • DIP Lenders
    • Legal: O'Melveny & Myers LLP (George Davis, Daniel Shamah, Matthew Kremer, Jennifer Taylor) & (local) Richards Layton & Finger P.A. (Mark Collins, Michael Merchant, Brett Haywood)
  • Prepetition Credit Agreement Admin Agent: Jefferies Finance LLC
    • Legal: Jones Day (Scott Greenberg, Brad Erens) & (local) Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, Timothy Cairns)
  • Key Bank National Association
    • Legal: Reed Smith LLP (Peter Clark II, Jennifer Knox, Emily Devan)
  • Fifth Third Bank
    • Legal: Vedder Price PC (Michael Eidelman, Michael Edelman) & (local) Potter Anderson & Corroon LLP (Jeremy Ryan, R. Stephen McNeill, D. Ryan Slaugh)
  • Ad Hoc Committee of Holders of the 9% '20 Second Lien Senior Secured Notes (ADK Capital LLC, ALJ Capital Management LLC, Archer Capital Management LP, Armory Advisors LLC, Barings LLC, Mackenzie Investments, MAK Capital One LLC, Nomura Corporate Research and Assset Management, Riva Ridge Master Fund Ltd., Rotation Capital Management LP, Scott's Cove Management LLC)
    • Legal: Stroock Stroock & Lavan LLP (Jayme Goldstein, Samantha Martin) & (local) Young Conaway Stargatt & Taylor LLP (Edmon Morton, Matthew Lunn)
  • Second Lien Senior Secured Notes Indenture Trustee: US Bank NA
    • Legal: Foley & Lardner LLP (Richard Bernard, Derek Wright, Mark Prager)
  • Official Committee of Unsecured Creditors
    • Legal: Lowenstein Sandler LLP (Kenneth Rosen, Jeffrey Prol, Wojciech Jung) & (local) Klehr Harrison Harvey Branzburg LLP (Michael Yurkewicz, Morton Branzburg, Sally Veghte)

Updated 10/26/17

New Chapter 11 Bankruptcy - Exelco North America Inc.

Exelco North America Inc.

• 9/26/17 Recap: International diamond distributor has filed a chapter 11 bankruptcy to stay its bank lender KBC Bank's attempts to foreclose. A prior proceeding had been underway in Antwerp prior to being withdrawn.
• Jurisdiction: D. of Delaware (Judge Shannon)
• Company Professionals:
  • Legal: Hughes Hubbard & Reed LLP (Kathryn Coleman, Jeffrey Margolin, Dustin Smith) & Young Conaway Stargatt & Taylor LLP (Michael Nestor, Andrew Magaziner)
  • Claims Agent: Donlin Recano & Co. Inc. (*click on company name above for free docket access)
• Other Parties in Interest:

• Updated 11/8/17

New Chapter 11 Bankruptcy & CCAA - Toys "R" Us Inc.

Toys "R" Us Inc.

• 9/19/17 Recap: So. Much. To. Unpack. Here. We've previously discussed the run-up to this massive chapter 11 bankruptcy filing here and here. Still, suffice it to say that, unlike many of the other retailers that have predictably filed for bankruptcy thus far in 2017, this one was different. This one seemingly came out of nowhere - particularly given the proximity to the holiday shopping season. Before we note what this case is, lets briefly cover what it isn't and clear the noise that is pervasive on the likes of Twitter: this is NOT "RIP" Toys "R" Us. We don't get overly sentimental usually but the papers filed with the bankruptcy court were well-written and touching: this is a store, a brand, that means a lot to a lot of people. And it's not going anywhere (the company will have its challenges to assure people that this is the case). This is a financial restructuring not a liquidation: the company simply hasn't been able to evolve while paying $400mm in annual interest expense on over $5b of private equity infused debt. Plain and simple. Yes, there are other challenges (blah blah blah, Amazon), but with that debt overhang, it appears the company hasn't been able to confront them (PETITION side note: an ill-conceived deal with Amazon 18 years ago is mind-blowing when viewed from the perspective of Amazon's long game). With this filing, the company is signaling that the time for short term band-aids to address its capital structure is over. Now, "[t]he time for change, and reinvestment in operations, has come." Decisive. Management isn't messing around anymore. With a reduction in debt, the company will be unshackled and able to focus on "general upkeep and the condition of...stores, [its] inability to provide expedited shipping options, and [its] lack of a subscription-based delivery service." Indeed, the company intends to use a $3.1b debtor-in-possession credit facility to begin investing in modernization immediately.
• Interesting Facts:
  • Toy Manufacturers: Mattel ($MAT)(approx $136mm), Hasbro ($HAB) (approx $59mm) & Lego (approx $31.5mm) are among the top general unsecured creditors of the company. Mattel and Hasbro's stock traded down quite a bit yesterday on the rampant news of this filing. Query whether any of the $325mm of requested critical vendor money will apply to these companies.
  • The Power of the Media (read: NOT "fake news"): This CNBC piece helped push the company into bankruptcy. Bankruptcy professionals were retained in July (or earlier in the case of Lazard) to pursue capital structure solutions. In August the company engaged with some of its lenders. But then "...a news story published on September 6, 2017, reporting that the Debtors were considering a chapter 11 filing, started a dangerous game of dominos: within a week of its publication, nearly 40 percent of the Company’s domestic and international product vendors refused to ship product without cash on delivery, cash in advance, or, in some cases, payment of all outstanding obligations. Further, many of the credit insurers and factoring parties that support critical Toys “R” Us vendors withdrew support. Given the Company’s historic average of 60-day trade terms, payment of cash on delivery would require the Debtors to immediately obtain a significant amount—over $1.0 billion—of new liquidity." 
  • Revenue. The company generates 40% of its annual revenue during the holiday season.
  • Footprint. The company has approximately 1,697 stores and 257 licensed stores in 38 countries, plus additional e-commerce sites in various countries. The company has been shedding burdensome above-market leases and combining its Babies and Toys shops under one roof; it intends to continue its review of its real estate portfolio. Read: there WILL be store closures.
  • Eff the Competition. Toys has some choice words for its competition embedded in its bankruptcy papers; it accuses Walmart ($WMT) and Target ($TGT)(the "big box retailers") of slashing prices on toys and using toys as a loss leader to get bodies in doors; it further notes that "retailers such as Amazon are not concerned with making a profit at this juncture, rendering their pricing model impossible to compete with..." ($AMZN). Yikes. 
  • Experiential Retail. The company intends to invest in the "shopping experience" which will include (i) interactive spaces with rooms to use for parties, (ii) live product demonstrations put on by trained employees, and (iii) the freedom for employees to remove product from boxes to let kids play with the latest toys. And...wait for it...AUGMENTED REALITY. Boom. Toysrus.ar and Toysrus.ai here we come. 
• Jurisdiction: E.D. of Virginia (Judge Phillips)
• Capital Structure: see below     
• Company Professionals:
  • Legal: Kirkland & Ellis LLP (Jamie Sprayragen, Anup Sathy, Edward Sassower, Chad Husnick, Joshua Sussberg, Robert Britton, Emily Geier) & (local) Kutak Rock LLP (Michael A. Condyles, 
    Peter J. Barrett, Jeremy S. Williams) & (Canadian counsel) Goodmans LLP
  • Legal to the Independent Board of Directors: Munger, Tolles & Olson LLP
  • Financial Advisor: Alvarez & Marsal North America LLC (Jeffrey Stegenga, Jonathan Goulding, Tom Behnke, Cari Turner, Jim Grover, Arjun Lal, Doug Lewandowski, Bobby Hoernschemeyer, Scott Safron, Kara Harmon, Nick Cherry, Adam Fialkowski)
  • Investment Banker: Lazard Freres & Co., LLC (David Kurtz)
  • Real Estate Consultant: A&G Realty Partners LLC (Andrew Graiser)
  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
  • Communications Consultant: Joele Frank Wilkinson Brimmer Katcher
• Other Parties in Interest:
• ABL/FILO DIP Admin Agent: JPMorgan Chase Bank NA
  • Legal: Davis Polk & Wardwell LLP (Marshall Heubner, Brian Resnick, Eli Vonnegut, Veerle Roovers) & (local) Hunton & Williams LLP (Tyler Brown, Henry (Toby) Long III, Justin Paget)
• DIP Admin Agent (Toys DE Inc). NexBank SSB & Ad Hoc Group of B-4 Lenders (Angelo Gordon & Co LP; Franklin Mutual Advisors LLC, HPS Investment Partners LLC, Marathon Asset Management LP, Redwood Capital Management LLC, Roystone Capital Management LP, and Solus Alternative Asset Management LP)
  • Legal: Wachtell Lipton Rosen & Katz (Joshua Feltman, Emil Kleinhaus, Neil Chatani) & (local) McGuireWoods LLP (Dion Hayes, Sarah Bohm, Douglas Foley)
• Ad Hoc Group of Taj Noteholders.
  • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Brian Hermann, Samuel Lovett, Kellie Cairns) & (local) Whiteford Taylor & Preston LLP (Christopher Jones, Jennifer Wuebker)
• Steering Committee of B-2 and B-3 Lenders (American Money Management, Columbia Threadneedle Investments, Ellington Management Group LLC, First Trust Advisors L.P., MJX Asset Management LLC, Pacific Coast Bankers Bank, Par-Four Investment Management LLC, Sound Point Capital Management, Taconic Capital Advisors LP).
  • Legal: Arnold & Porter Kaye Scholer LLP (Michael Messersmith, D. Tyler Nurnberg, Sarah Gryll, Rosa Evergreen)
• 12% ’21 Senior Secured Notes Indenture Trustee: Wilmington Trust, National Association.
  • Legal: Kilpatrick Townsend & Stockton LLP (Todd Meyers, David Posner, Gianfranco Finizio) & (local) ThompsonMcMullan PC (David Ruby, William Prince IV)
• Bank of America NA
  • • Legal: Skadden Arps Slate Meagher & Flom LLP (Paul Leake, Shana Elberg, George Howard) & (local) Troutman Sanders LLP (Jonathan Hauser)
  • Private Equity Sponsors: Bain Capital Private Equity LP, Kohlberg Kravis Roberts & Co. L.P. ($KKR), and Vornado Realty Trust ($VNO)
• Large Creditor: Mattel Inc.
  • Legal: Jones Day (Richard Wynne, Erin Brady, Aaron Gober-Sims) & (local) Michael Wilson PLC (Michael Wilson)
• Large Creditor: LEGO Systems Inc.
  • Legal: Weil Gotshal & Manges LLP (Matthew Barr, Kelly DiBlasi) & (local) Walcott Rivers Gates (Cullen Speckhart)
• Large Creditor: American Greetings Corporation.
  • Legal: Baker & Hosteler LLP (Benjamin Irwin, Eric Goodman)
• Creditor: River Birch Capital
  • Legal: Andrews Kurth & Kenyon LLP (Paul Silverstein)
• Creditor: Owl Creek Asset Management
  • Legal: Stroock Stroock & Lavan LLP (Samantha Martin)
• TRU Trust 2016-TOYS, Commercial Mortgage Pass-Through Certificates, Series 2016-TOYS acting through Wells Fargo Bank NA
  • Legal: Dechert LLP (Allan Brilliant, Brian Greer, Stephen Wolpert, Humzah Soofi) & (local) Troutman Sanders LLP (Jonathan Hauser)
• Trustee: Tru Taj DIP Notes (Wilmington Savings Fund Society FSB)
  • Legal: Porter Hedges LLP (Eric English) & (local) Spotts Fain PC (James Donaldson)
• Committee of Unsecured Creditors (Mattel Inc., Evenflo Company Inc., Simon Property Group, Euler Hermes North America Insurance Co., Veritiv Operating Company, Huffy Corporation, KIMCO Realty, The Bank of New York Mellon, LEGO Systems Inc.)

First Day Declaration

First Day Declaration

Updated 10/5/17 11:40 am

Chapter 11 Bankruptcy Filing - Aerosoles International Inc.

Aerosoles International Inc.

• 9/15/17 Recap: Remember that once-popular trope that footwear was impervious to Amazon and e-commerce? People want to go to stores to try on shoes, we've been told. Lost in that, however, is that free returns make it THAT much easier to try/err with sizing via delivery. And, so, not-so-shockingly, another private equity (Palladin Partners LP) owned specialty retailer is in bankruptcy court. The New Jersey based company has "approximately 78 stores" (PETITION Note: how does it not know the exact number?) in the United States that cater towards providing women with "feel good" footwear. The stores are located in malls, lifestyle centers, street locations and outlet centers. This 78-count footprint is down dramatically: the company has already reduced its store count by over 30 stores in the last year or so. The company also generates revenue through its (i) direct e-commerce business (which, seemingly, is fairly well built out with 1.4mm visitors a month...note, pretty good sales right now!), (ii) wholesale business, (iii) "first cost business" (which sounds like a middleman situation where the company aids other companies in the design and production of their own separately branded footwear, and (iv) international licensing. The company blames a highly competitive women's footwear market, a large sourcing disruption (to the tune of $4mm of lost EBITDA), shifting trends from bricks to clicks and other operationally-specific reasons for the chapter 11 filing. Like what? Glad you asked. First, the company had a hard time servicing its debt while also making the significant cash outlays needed to inventory-up for the critical spring and fall seasons. Second, the company - in a showing of REALLY FRIKKEN HORRIBLE TIMING - expanded its retail store footprint considerably in 2012 and 2013, subjecting itself to onerous leases in the process. Third, the company lost its Asian sourcing agent in spring 2016 and has subsequently had difficulty restoring lost customer confidence and maintaining order load. MAGA! And so now what? Ready for this shocker? The company intends to refocus its efforts towards the non-brick-and-mortar aspects of its business. Remember those "approximately 78" stores we noted above? Well, the company is saying "PEACE" to 74 of them in bankruptcy. Finally, the company intends to use the bankruptcy process to find a buyer for the company (and its new business plan). 
• Jurisdiction: D. of Delaware 
• Capital Structure: $72.3mm of total debt. $22.9mm ABL (Wells Fargo Bank NA), $19.7mm TL (THL Corporate Finance Inc.), $19.1mm senior notes, $8.9mm sub notes, and $1.7mm sub loan. 
• Company Professionals:
  • Legal: Ropes & Gray LLP (Gregg Galardi, Mark Somerstein, William Alex McGee) & Bayard PA (Scott Cousins, Erin Fay, Gregory Flasser)
  • Financial Advisor: Berkeley Research Group LLC (Mark Weinsten)
  • Investment Banker: Piper Jaffray & Co.
  • Liquidation Agent: Hilco Merchant Resources LLC 
  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
• Other Parties in Interest:
  • ABL Agent: Wells Fargo Bank NA
    • Legal: Choate Hall & Stewart LLP (Kevin Simard, Jonathan Marshall) & (local) Womble Carlyle Sandridge & Rice LLP (Mark Desgrosseilliers, Matthew Ward)
  • TL Agent: THL Corporate Finance Inc.
    • Legal: Paul Hastings LLP (Matthew Murphy) & Young Conaway Stargatt & Taylor LLP (M. Blake Cleary)
  • Prepetition Senior Noteholders & Subordinated Noteholders (ORIX Funds Corp., Palladin Partners LP)
    • Legal: Weil Gotshal & Manges LLP (Jacqueline Marcus) & (local) Richards Layton & Finger PA (Mark Collins, Paul Heath, Joseph Barsalona II)
  • Official Committee of Unsecured Creditors (ICB Asia Co. Ltd., Rival Shoe Design Ltd., Moveon Componentes E Calcado SA, Simon Property Group, GGP Limited Partnership)
    • Legal: Cooley LLP (Michael Klein, Sarah Carnes) & (local) Gellert Scali Busenkell & Brown LLC (Michael Busenkell, Ronald Gellert, Shannon Dougherty Humiston)

Updated 10/5/17 11:17 am CT 

New Chapter 11 Filing - Seadrill Ltd.

Seadrill Ltd.

• 9/12/17 Recap: Cash rich offshore oil and gas extraction company with global reach filed a prearranged bankruptcy to effectuate a balance sheet restructuring because...well...it was over-levered AF. The company purports to have a deal with its major creditors with secured creditors kicking the can down the road, and $2.3b worth of unsecured bondholders and other unsecured claims converting into approximately 15% of the post-reorg equity (with participation rights in the new secured notes and equity noted below). The company will get $1.06b of new capital by combination of new secured notes ($860mm) and equity ($200mm). Holders of $NADL stock will get a big fat donut.  
• Jurisdiction: S.D. of Texas (Judge David Jones)
• Capital Structure: A. Lot. Of. Debt. Like $5.7mm of bank debt and $2.3mm of unsecured bonds.

First Day Declaration.

• Company Professionals:
  • Legal: Kirkland & Ellis LLP (Jayme Sprayragen, Anup Sathy, Ross Kwasteniet, Adam Paul, Brian Schartz, Anna Rotman, Jeffrey Zeiger, Anthony Grossi, Spencer Winters) & (local) Jackson Walker LLP (Patricia Tomasco, Matthew Cavenaugh, Rachel Biblo Block)
  • Restructuring Advisor: Alvarez & Marsal LLC (Jeffrey Stegenga, Ed Mosley)
  • Financial Advisor: Houlihan Lokey (David Hilty, Gavin Kagan, Dimitar Voukadinov, Drew Talarico, David Wang, Brian Keenan, Varun Desai, Daniel McManus) & Morgan Stanley
  • Claims Agent: Prime Clerk LLC (*click on company name for docket)
• Other Parties in Interest:
  • Conflicts Committee of Board of Directors of North Atlantic Drilling Limited and to the Conflicts Committee of the Board of Directors of Sevan Drilling Limited
    • Legal: Willkie Farr & Gallagher LLP (Jennifer Hardy, Andrew Mordkoff, Derek Osei-Bonsu)
    • Financial Advisor: Baker Tilly Virchow Krause LLP (Susan Seabury)
  • Conflicts Committee of Seadrill Partners LLC
    • Legal: Orrick Herrington & Sutcliffe LLP (Katherine Treistman, Raniero D'Aversa, Laura Metzger, Debra Felder)
  • New Money: Hemen Holding Ltd., Centerbridge Partners LP
    • Legal: Cadwalader Wickersham & Taft LLP (Greg Petrick, Yushan Ng, Nicholas Vislocky) & Fried Frank Harris Shriver & Jacobson LLP (Brad Scheler, Jennifer Rodburg, Andrew Minear) & (local) Dykema Cox Smith (Deborah Williamson, Patrick Huffstickler, Aaron Kaufman)
  • Consenting Lender Group
    • Legal: White & Case LLP (Scott Greissman, Philip Abelson, Andrew Katz) & (local) Andrews Kurth Kenyon LLP (Robin Russell, Timothy A. Davidson II, Joseph Rovira)
  • Aristeia Capital L.L.C., GLG Partners LP, Saba Capital Management LP and Whitebox Advisors LLC
    • Legal: Akin Gump Strauss Hauer & Feld LLP (Philip Dublin, Ira Dizengoff, David Staber, Abid Qureshi, Sara Brauner)
  • ARCM Master Fund III, Ltd.
    • Legal: Paul, Weiss, Rifkind, Wharton & Garrison, LLP (Elizabeth McColm, Andrew Rosenberg, Catherine Goodall)
  • Indenture Trustee: Deutsche Bank Trust Company Americas
    • Legal: Morgan, Lewis & Bockius LLP (Chad Steward, Glenn Siegel, Crystal Axelrod, Rachel Jaffe Mauceri)
  • Daewoo Shipbuilding & Marine Engineering
    • Legal: Pachulski Stang Ziehl & Jones LLP (Shirley Cho, Bradford Sandler, Steven Golden)
  • Samsung Heavy Industries Co., Ltd.,
    • Legal: Hogan Lovells US LLP (Robin E. Keller, Ronald J. Silverman, Christopher R. Bryant, Michael Shane Johnson) & (local) 
  • Official Committee of Unsecured Creditors (Nordic Trustee AS, Deutsche Bank Trust Company Americas, Computershare Trust Company NA, Daewoo Shipbuilding & Marine Engineering Co. Ltd., Samsung Heavy Industries Co. Ltd., Pentagon Freight Services Inc., Louisiana Machinery Co. LLC)
    • Legal: Kramer Levin Naftalis & Frankel LLP (Thomas Moers Mayer, Douglas Mannal, Jennifer Sharret) & (local) Cole Schotz PC (Michael Warner, Benjamin Wallen)

Updated 10/5/17 12:03 pm CT

New Chapter 11 Bankruptcy - Vitamin World Inc.

Vitamin World Inc.  

• 9/11/17 Recap: As previously foreshadowed, the Holbrook NY-based specialty retailer in the vitamins, minerals, herbs, and supplements market with 334 mall and outlet center retail locations filed for bankruptcy to disentangle itself from legacy operational ties to prior owner NBTY Inc. and terminate various leases (52 identified so far; 45 locations have already been shuttered). Some of the locations are within malls owned by REITS, Simon Property Group, General Growth Properties, and Vornado Realty Trust. The company blames the bankruptcy filing on liquidity constraints caused by supply chain and ingredient availability issues, the struggling retail market, above market rents, and underperforming retail stores. Prepetition lender, Wells Fargo Bank NA, is providing credit during the bankruptcy cases. 
• Jurisdiction: D. of Delaware 
• Capital Structure: $14.4mm debt (Wells Fargo Bank NA), $9.5mm "Seller Note" (RE Holdings)
• Company Professionals:
  • Legal: Katten Muchin Rosenman LLP (Paige Barr, Peter Siddiqui, Allison Thompson) & (local) Saul Ewing LLP (Monique DiSabatino, Mark Minuti)
  • Financial Advisor: RAS Management Advisors LLC
  • Real Estate Advisor: RCS Real Estate Advisors
  • Claims Agent: JND Corporate Restructuring (*click on company name above for free docket access)
• Other Parties in Interest:
• DIP Lender: Wells Fargo Bank NA
  • Legal: Riemer Braunstein LLP (Donald Rothman) & (local) Ashby & Geddes PA (Gregory Taylor) 
• Official Committee of Unsecured Creditors (incl. Simon Property Group, General Growth Properties):
  • Legal: Lowenstein Sandler LLP (Jeffrey Cohen, Bruce Buechler, Mary Seymour) & (local) Whiteford Taylor & Preston LLC (Christopher Samis, L. Katherine Good, Kevin Shaw)
  • Financial Advisor: Berkeley Research Group LLC

Updated 9/24/17

New Chapter 11 Bankruptcy Filing - WYNIT Distribution LLC

WYNIT Distribution LLC

• 9/8/17 Recap: Minnesota-based technology wholesaler filed for bankruptcy to pursue a sale process. The company seeks approval of a $15mm DIP credit facility to finance the cases. Major customers include Best Buy, Amazon, Costco, Walmart and Target. Fitbit and Symantec are listed among the companies largest creditors. 
• Jurisdiction: D. of Minnesota
• Capital Structure: $76.7mm RCF (Wells Fargo)    
• Company Professionals:
  • Legal: Stinson Leonard Street LLP (Robert Kugler, Edwin Caldie, Phillip Ashfield, Andrew Glasnovich)
  • Financial Advisor: Conway MacKenzie Inc. (Peter A. Richichi)
  • Claims Agent: JND Corporate Restructuring (click on the case name above for free docket access)
• Other Parties in Interest:
  • Prepetition Lender/DIP Lender: Wells Fargo
    • Legal: Greenberg Traurig LLP (David Kurzweil, John Dyer, DeWitt Perkins) & (local) Lindquist & Vennum LLP (Charles Perkins)
  • Prepetition Creditor: Fitbit Inc.
    • Legal: Akin Gump Strauss Hauer & Feld LLP (Arik Preiss, Deborah Newman, Kevin Zuzolo) & (local) Maslon LLP (Clark Whitmore, Jason Reed)
  • Official Committee of Unsecured Creditors
    • Legal: Lowenstein Sandler LLP (Jeffrey Cohen) & (local) Barnes & Thornburg LLP (Connie Lahn)

Updated 9/21/17

New Chapter 11 Filing - Portrait Innovations Inc.

Portrait Innovations Inc.

• 9/1/17 Recap: Remember professional portrait studios? Yeah, we don't either. Mostly because we haven't stepped foot in a mixed-use commercial location or traditional retail park since we got linked up to the internet 20 years ago. And that is predominantly where you'd find a Portrait Innovations studio: there are 119 of them in 31 states (including 3 studios in Walmart Supercenters). You know the story by now: with a significant decline of brick-and-mortar retail visitors comes decreased revenue...blah blah blah, bankruptcy. Here, management attempted to stave off the inevitable by negotiating rent forgiveness, closing underperforming locations (63, to be exact), and pursuing the positive, i.e., more Walmart studios. In the absence of flex by the landlords, management lacked the capital, however, to accomplish these goals. The bankruptcy filing is meant to effectuate a sale of the equity to a buyer and further reconcile leases. The company has secured a stalking horse bid from prepetition creditor, CapitalSouth Partners, and a $5mm DIP credit facility to fund the cases. 
• Jurisdiction: W.D. of North Carolina (Judge Whitley)
• Capital Structure: $15mm senior secured debt (CapitalSouth Partners SBIC Fund III LP)     
• Company Professionals:
  • Legal: Rayburn Cooper & Durham PA (John Miller Jr., Paul Baynard, Benjamin Shook)
  • Investment Banker: Piper Jaffray & Co.
  • Real Estate Advisor: Hilco Real Estate LLC
  • Claims Agent: Rust Consulting/Omni Bankruptcy (*click on company name above for free docket access)
• Other Parties in Interest:
  • Secured Creditor/DIP Lender/Bidder: CapitalSouth Partners SBIC Fund III LP
    • Legal: K&L Gates LLP (Charles A. Dale III, Aaron Rothman, Margaret Westbrook)

Updated 9/18/17 5:15 pm CT

New Chapter 11 Filing - Model Reorg Acquisition LLC (aka Perfumania Inc.)

Model Reorg Acquisition LLC (Perfumania Inc.)

• 8/26/17 Recap: New York-based vertically-integrated specialty retailer (226 retail locations, mostly mall-based) and wholesale distributor of perfumes and fragrances (to the likes of Sears, Target, Walmart and Walgreens) filed for bankruptcy pursuant to a prepackaged plan of reorganization. The company is seeking approval of a $83,750,000 Wells Fargo DIP facility ("DIP") which will roll into an exit facility. What caused the filing? The overall retail bloodbath, naturally. Since 2015, the company has lost tens of millions of dollars, closed 105 retail locations, decreased the pace of brick-and-mortar openings and focused efforts - like the rest of the retail world - on e-commerce expansion. This way you could buy your one gallon bottle of CK One online rather than in a crappy mall stall. Awesome. The structure of this case is as follows: the DIP requires a completed case within 90 days to ensure that the reorganized (and newly private) company can take advantage of Q4 seasonality. The prepackaged plan leaves general unsecured creditors unimpaired and reinstates the unsecured notes. It also provides a $2/share recovery for shareholders who opt-in to a release of principals (notably, the shares were trading at $1.33/share at Friday's market close). The stockholder consideration will be paid via a $14.26mm equity infusion, which also serves as consideration for 100% of the reorganized equity. The transaction also preserves approximately $40mm of net operating losses and other tax attributes that will inure to the benefit of the owners. 
• Jurisdiction: D. of Delaware (Judge Sontchi)
• Capital Structure: $175mm senior credit facility ($18.78mm funded)(Wells Fargo Bank), $125.4mm unsecured debt +$54.8mm accrued and unpaid interest (3 different notes). Public equity ($PERF).     
• Company Professionals:
  • Legal: Skadden Arps Slate Meagher & Flom LLP (J. Gregory Milmoe, Lisa Laukitis, Raquelle Kaye, Anthony Clark)
  • Financial Advisor: Ankura Consulting Group LLC (Stephen Marotta)
  • Investment Banker: Imperial Capital LLC (Robert Warshauer)
  • Real Estate Advisor: A&G Realty Partners LLC (Andrew Graiser)
  • Liquidators: Hilco Merchant Resources LLC & Gordon Brothers Retail Partners LLC
  • Claims Agent: Epiq Bankruptcy Solutions LLC (*click on company name above for free docket access)
• Other Parties in Interest:
  • Agent to Senior Credit Facility: Wells Fargo Bank
    • Legal: Otterbourg P.C. (Daniel Fiorillo)
  • CIII Holdings LLC
    • Legal: Nastasi Partners PLLC (Ancela R. Nastasi, Marshall E. Tracht, Moshie Solomon, William S. Katchen, Andrew Gottesman) & (local) Morris Nichols Arsht & Tunnell LLP (Robert Dehney, Curtis Miller)

Updated 9/18/17

First Day Declaration filed 8/26/17

New Chapter 11 Filing - Peekay Acquisition LLC

Peekay Acquisition LLC

• 8/10/17 Recap: The Auburn Washington-based specialty retailer of lingerie, sexual health and wellness products with 46 locations has filed for bankruptcy after failing to find an out-of-court buyer for its 5000 SKUs of lubes, $265 vibrators, sex toys and other fun stuff. This place sounds...liberated. And while the sex retail industry is allegedly gaining acceptance - at least according to the Company's own filing - it seems that Peekay was unable or incapable of capitalizing on it given its capital structure (PETITION Note: Agent Provocateur also filed for bankruptcy this year so query whether this really is a brick-and-mortar business or whether people would really rather discreetly order their sex toys on Amazon...our money is on the latter. Prior to the internet, options were a bit more limited, we gather.). Consequently, the company's Term Loan A Lenders have consented to the use of its cash collateral and are credit bidding $31mm of their debt to acquire the company after a long and failed attempt by the Company to explore other out-of-court options (which apparently included an IPO...WTF? What would the ticker be? "SEX"? "DIK"? "ASS"? We could do this all day.). 
• Jurisdiction: D. of Delaware (Judge Shannon)
• Capital Structure: $38.2mm first lien term loan ($27mm term loan A + $8.4mm interest/fees, $14.4mm term loan B + $1.98mm interest/fees), $19mm PIK seller notes    
• Company Professionals:
  • Legal: Landis Rath & Cobb LLP (Adam Landis)
  • Financial Advisor/CRO: Traverse LLC (Albert Altro)
  • Investment Banker: SSG Advisors LLC (J. Scott Victor)
  • Claims Agent: Rust Consulting/Omni Bankruptcy (*click on company name above for free docket access)
• Other Parties in Interest:
  • Term A Lenders/TLA Acquisition Corp. (Alpine Associates, Alpine Heritage LP, Alpine Heritage II LP, Alpine Heritage Offshore Fund Ltd., Chatham Capital Management IV LLC, The K2 Principal Fund LP, Tor Capital LLC, Twin Haven Special Opportunities Fund IV LP)
    • Legal: Curtis Mallet-Provost Colt & Mosle LLP (Steven Reisman, Shaya Rochester, Joshua Geller) & (local) Richards Layton & Finger PA (Mark Collins, Amanda Steele, Brendan Schlauch)
  • Official Committee of Unsecured Creditors
    • Legal: Cullen and Dykman LLP (S. Jason Teele, Nicole Stefanelli) & (local) Whiteford Taylor & Preston LLP (Christopher Samis, L. Katherine Good, Aaron Stulman, Kevin Shaw)
    • Financial Advisor: The DAK Group (Sheon Karol, Ari Fuchs, Claudia Levine)

Updated 9/5/17

New Chapter 11 Filing - The Engy Group LLC

The Engy Group LLC

• 8/8/17 Recap: Houston-based energy-focused private equity shop has filed for bankruptcy. The pleadings are limited but it's safe to assume that this bankruptcy is a tack-on effect of the prior year+ bloodbath in oil and gas.
• Jurisdiction: SD of Texas (Judge Isgur)
• Company Professionals:
  • Legal: Diamond McCarthy LLP (Kyung Lee)

Updated 8/8/17

New Chapter 11 Filing - Knight Energy Holdings LLC

Knight Energy Holdings LLC

• 8/8/17 Recap: We were starting to sleep on the oil and gas services space. This trainwreck - which had been kicking around for quite a while - is finally in bankruptcy court. We could bore you with the usual details about services companies sucking wind ever since gas prices imploded - what was it? nearly 24 months ago? - but why waste precious space when we can amuse you with stories of drug racketeering instead? After all, "People Make the Difference." Hahaha. Anyway, we guess it's our duty to, in fact, bore you with some more of the mundane restructuring facts so we will once we have more information. For now, we understand that the filing is pursuant to a restructuring support agreement and the debtors seek a multi-draw DIP credit facility of $10mm. More to come.
• Jurisdiction: W.D. of Louisiana (Judge Summerhays)
• Capital Structure: $mm debt     
• Company Professionals:
  • Legal: Heller Draper Patrick Horn & Dabney, LLC (Douglas Draper, William Patrick III, Tristan Manthey, Cherie Nobles)
  • Financial Advisor: Opportune LLP (Gary Pittman)
  • Investment Banker: Bayshore Partners (Michael Turner)
  • Claims Agent: Donlin Recano & Company Inc. (*click on company name above for free docket access)
• Other Parties in Interest:
  • Sponsor: Clearlake Capital Group LP
  • DIP Agent: Cantor Fitzgerald Securities
  • Official Committee of Unsecured Creditors
    • Legal: Baker Donelson Bearman Caldwell & Berkowitz PC (Jan M. Hayden, Edward H. Arnold III, Lacey Rochester, Susan Matthews)

Updated 9/21/17

New Chapter 11 Filing - TerraVia Holdings Inc.

TerraVia Holdings Inc.

• 8/1/17 Recap: TerraVia, a publicly-traded (Nasdaq: $TVIA) "next-generation" algae-based food company based out of San Francisco filed for bankruptcy. The company has a stalking horse bidder lined up to buy it for $20mm plus certain assumed liabilities and seeks to jam this case through bankruptcy in about 6 weeks lest it run out liquidity in the process (even with a proposed $10mm DIP); it claims that more time is unnecessary given that it ran a robust marketing process pre-filing that included outreach to over 100 parties. We'll let the company economics do the rest of the talking (see below).
• Jurisdiction: (Judge Sontchi)
• Capital Structure: $144.2mm 5% '19 convertible senior subordinated notes (GLAS Trust Company LLC) & $33.475mm 6% '18 convertible senior subordinated notes (Wilmington Trust)   
• Company Professionals:
  • Legal: Davis Polk & Wardwell LLP (Damian Schaible, Steven Szanzer, Adam Shpeen, Benjamin Kaminetzky) & (local) Richards Layton & Finger P.A. (Mark Collins, Amanda Steele)
  • Financial Advisor: 
  • Investment Banker: Rothschild & Co. (Tero Janne)
  • Claims Agent: KCC (*click on company name above for free docket access)
• Other Parties in Interest:
  • DIP Agent: Wilmington Savings Fund Society FSB & Ad Hoc Consortium of Holders of Convertible Senior Subordinated Debt (Gilead Capital LP, Higher Ground SICAV PLC Core Wealth Fund, Lazard Asset Management LLC, Passport Capital LLC, Wolverine Asset Management LLC, Zazove Associates LLC)
    • Legal: Brown Rudnick LLP (Robert Stark, Steven Levine, Brian Rice, Kellie Fisher) & (local) Ashby & Geddes P.A. (William Bowden, Gregory Taylor, Katharina Earle)
    • Financial Advisor: GLC Advisors & Co. LLC
  • Passport Capital
    • Legal: Shearman & Sterling LLP (Joel Moss) & (local) Drinker Biddle & Reath LLP (Patrick Jackson)
  • 6% Notes Successor Trustee: Wilmington Trust NA
    • Legal: Katten Muchin Rosenman LLP (Craig Barbarosh, Karen Dine, Jerry Hall) & (local) Morris James LLP (Eric Monzo)
  • JV Partner: Bunge Global Innovation LLC
    • Legal: Jones Day (Joshua Morse)
  • Silicon Valley Bank
    • Legal: Troutman Sanders LLP (Harris Winsberg, Stephen Roach) & (local) Chipman Brown Cicero & Cole LLP (William Chipman Jr., Mark Olivere)
  • Corbion NV
    • Legal: Baker & McKenzie LLP (Debra Dandeneau, Frank Grese) & (local) Whiteford Taylor & Preston LLC (L. Katherine Good, Aaron Stulman)

Updated 8/26/17

First Day Declaration.

New Chapter 11 Filing - Lombard Public Facilities Corporation

Lombard Public Facilities Corporation

• 7/28/17 Recap: Illinois-based not-for-profit corporation formed to finance the cost of acquiring, designing, constructing, and equipping a conference center, hotel (Westin), restaurant and related improvements in the Village of Lombard filed for bankruptcy with a prearranged deal with its creditors. The corporation was funded via revenue bonds (A through C, with the A-2 bonds wrapped by an ACA Financial Guaranty Corporation policy) on the basis of a 2005 market study. Much like we saw with the Chapter 9 filing of The Kennewick Public Hospital District back in June, the study proved to be off the mark and the project has underperformed from the get-go. Some of this was bad timing: the project came online in August 2007: we all know what came shortly thereafter. The convention business the Project depended upon never came, rendering revenues insufficient and debt service payments difficult. Reserves set aside for the bonds were quickly depleted and the Project defaulted on the bonds. The Project enters bankruptcy with the A bonds as the declared fulcrum and a consensual restructuring in hand with each of ACA, holders of a majority of the bonds (here, Nuveen Asset Management LLC and OppenheimerFunds Inc.), and the hotel and restaurant managers, respectively. Taking it as given that Lombard is an "affluent" suburb of Chicago, you have to wonder why people thought this financing was a good idea. Lombard sounds quaint and all - with its annual Lilac Festival and parade - but there's nothing there, far as we can tell, that screams "convention business." Query how many Mom and Pop municipal bond investors are getting burned by this (seemingly) ill-advised financing. 
• Jurisdiction: N.D. of Illinois (Judge Cox) 
• Capital Structure: $246.65mm principal and interest municipal debt (Amalgamated Bank of Chicago)   
• Company Professionals:
  • Legal: Adelman & Gettleman, Ltd. (Henry Merens, Brad Berish, Alexander Brougham)
  • Financial Advisor: EisnerAmper LLP (Thomas Buck, Deborah Friedland, Allen Wilen)
  • Claims Agent: Epiq Bankruptcy Solutions LLC (click on case name above for free docket)
• Other Parties in Interest:
  • ACA Financial Guaranty Corp.
    • Legal: Greenberg Traurig LLP (Nancy Peterman)
  • Lord, Abbett & Co. LLC
    • Legal: Shaw Fishman Glantz & Towbin LLC (Peter Roberts)
  • Indenture Trustee: Amalgamated Bank of Chicago
    • Financial Advisor: FTI Consulting Inc.

Updated 7/28/17

New Chapter 11 Filing - Rent-a-Wreck of America, Inc.

Rent-a-Wreck of America, Inc.

• 7/24/17 Recap: When we saw that this company filed for bankruptcy, we were practically drooling. We immediately thought: the narrative had to be an Uber-is-to-blame story for a company like Rent-a-Wreck filing for bankruptcy, didn't it? And so we decided to cover it, despite its relatively small size, writing the following: In Silicon Valley, "disruption" is a buzzword that wide-eyed startup founders use to drum up excitement about their new venture, raise funding, and determine product/market fit. 79-90% of the time - depending on which data you rely on - those companies flame out. But sometimes they don't. And in the even rarer case that a startup doesn't just succeed but becomes a unicorn - or maybe even a decacorn a la Uber - that success is usually to the detriment of other incumbent companies. Take Rent-a-Wreck ("RAWA"). RAWA, through its wholly-owned opco, Bundy, sells and administers franchises for the operation of vehicle rental/leasing/sharing, among other automobile business lines. There are 76 RAWA franchises in 28 US states in addition to some international operations. The company makes its money from franchise fees, servicing fees, and insurance underwriting via a non-debtor insurance subsidiary. Or, we should say, MADE its money. EXCEPT, according to the company's First Day Declaration, this isn't an innovation/disruption story. It's a more mundane cash-flow-draining-litigation story. How disappointing. The company filed for bankruptcy to rightsize its franchise network, stop the bleed from litigation/judgments, streamline ops, and try to maximize the value of its intellectual property. It seeks a $750k DIP from its prepetition lender/equityholder to do so. What a waste of a solid Silicon Valley commentary. 
• Jurisdiction: D. of Delaware 
• Capital Structure: $2.47mm secured debt     
• Company Professionals:
  • Legal: Quarles & Brady LLP (Faye Feinstein, Christopher Combest) & (local) Saul Ewing LLP (Mark Minuti, Aaron Applebaum)
  • Claims Agent: KCC (*click on company name above for free docket access)
• Other Parties in Interest (no UCC appointed):
  • 100% Equity Owner & DIP Lender: JJF Management Services Inc.

Updated 8/26/17

New Chapter 11 Filing - Prospector Offshore Drilling S.a r.l.

Prospector Offshore Drilling S.a r.l.

• 7/20/17 Recap: So that was fast. Like lightening fast. Like if you blinked you may have missed it. Just two days ago Paragon Offshore emerged from bankruptcy and one of the debtors, Paragon Offshore plc, continues down the road of administration. But now it's effectively in bankruptcy again because of feasibility. No, no, just kidding on that. That would be TOO crazy. The issue here pertains to sale leaseback agreements with third-party lessors affiliated with SinoEnergy Capital Management Ltd. and related forbearance agreements that were entered into pre-bankruptcy to keep certain subsidiary entities out of the prior proceeding. Those subsidiaries are debtors here. The debtors intend to use the "breathing spell" provided by the bankruptcy automatic stay to negotiate a resolution to the disputes under the agreements with the third-party lessors. 
• Jurisdiction: D. of Delaware
• Company Professionals:
  • Legal: Weil Gotshal & Manges LLP (Gary Holtzer, Stephen Youngman, Christopher Lopez, Jessica Liou, Alfredo Perez, Clifford Carlson, Patrick Thompson) & (local) Richards Layton & Finger PA (Mark Collins, Amanda Steele)
  • Financial Advisor: AlixPartners LLP
  • Investment Banker: Lazard Freres & Co. LLC
  • Claims Agent: KCC (*click on company name above for free docket access)

Updated 8/8/17

New Chapter 11 Filing - Dynamic International Airways LLC

Dynamic International Airways LLC

• 7/19/17 Recap: North Carolina based "aviation enterprise" that services transportation between, among other places, JFK International Airport and so-called secondary cities like Nanjing China, filed for bankruptcy. The company is allegedly approved to fly to more Chinese cities than any other US-based carrier. Not too shabby for an "aviation enterprise" that, when described like that, sounds like it should be piloted by Pablo Escobar. The company pegs operational challenges including rapid management turnover as one cause of bankruptcy. Another is a series of lawsuits. Aside from a $6mm security interest, the capital structure consists of "unsecured debt" which sounds suspiciously like equity held primarily among the two principals, one of whom is providing a $6mm DIP. 
• Jurisdiction: MD of North Carolina
• Capital Structure: $6mm secured debt
• Company Professionals:
  • Legal: Garman Turner Gordon LLP (Gerald Gordon) & (local) Bell Davis & Pitt (Daniel Bruton)
  • Financial Advisor: MJAC LLC d/b/a Allison Consulting

New Chapter 11 Filing - Beaulieu Group LLC

Beaulieu Group LLC

• 7/17/17 Recap: Georgia-based carpet manufacturer filed for bankruptcy as consumers increasingly prefer hardwood flooring over carpets that remind them of a convalescent center. Consequently, the $10b market has gotten increasingly competitive and price compression is the result: the company's revenues have declined nearly 50% from $1b in 2007 to approximately $525mm in 2016. Recognizing these trends, the company commenced an operational restructuring in 2016 but with sustained overhead and a bloated cost structure, the company needs to do more. Its borrowing base, however, has decreased and the company, therefore, has run out of liquidity to continue pursuing its efforts. The company has arranged a $70mm DIP facility to facilitate a restructuring - the form of which is unspecified. 
• Jurisdiction: ND of Georgia 
• Capital Structure: $51.7mm RCF (Bank of America NA), $15.8mm TL (Cygnets LLC), $6mm third lien loan (CT Lender LLC) 
• Company Professionals:
  • Legal: Scroggins & Williamson PC (Robert Williamson, Ashley Reynolds Ray, Matthew Levin)
  • Financial Advisor: Armory Strategic Partners LLC (Scott Avila)
  • Investment Banker: Coveview Advisors LLC and Advisory Group Equity Services Ltd. (Thomas Canning)
  • Claims Agent: American Legal Claim Services LLC 
• Other Parties in Interest:
  • Prepetition & DIP Agent: Bank of America NA
    • Legal: Parker Hudson Rainer & Dobbs LLP (C. Edward Dobbs, James Rankin Jr.)
  • Official Committee of Unsecured Creditors
    • Legal: Fox Rothschild LLP (Michael Menkowitz, Paul Labov, Jason Manfrey, Marie Dooley) & (local) Thompson Hine LLP (John Isbell, Garrett Nail, John Allerding, Douglas Walters)
    • Financial Advisor: Phoenix Management Services LLC (Michael Jacoby, Bayard Hollingsworth, Pat Bellot)

Updated 9/21/17

New Chapter 11 Filing - Cocoa Services LLC

Cocoa Services LLC

• 7/14/17 Recap: The company is a (i) part of a vertically-integrated group of companies that supported supply chain for cocoa products and (ii) wholly-owned subsidiary of Transmar Commodity Group Ltd. ("TCG"), which previously filed for bankruptcy and is in the process of being sold and wound down. TCG was the company's largest customer so...well, the bankruptcy of one has effectively dominoed into the bankruptcy of another. The company intends to sell itself to an entity known as JB Cocoa Inc. And since there's nothing else particularly interesting about this case, we're going to pour ourselves some bowls of cocoa puffs. Just because. 
• Jurisdiction: S.D. of New York (Judge Garrity) 
• Capital Structure: $5.3mm debt (Bank of the West), $2mm unsecured note (assumed from Transmar).      
• Company Professionals:
  • Legal: Riker Danzig Scherer Hyland & Perretti LLP (Joseph Schwartz, Tara Schellhorn, Rachel Gillen) & (local) Klestadt Winters Jureller Southard & Stevens LLP (Tracy Klestadt, Joseph Corneau)
  • Financial Advisor/CRO: Deloitte CRG (Robert Frezza)
  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)

Updated 8/8/17