Bankruptcy News Makers


    Alvarez and Marsal Managing Director Julie Hertzberg is Named New President of INSOL International, Will Look to Lead on Diversity Issues

    May 16, 2019 – Julie Hertzberg, a Managing Director with Alvarez & Marsal’s (“A&M”) Restructuring & Turnaround practice and head of A&M’s Case Management Services division, has been named the new President of INSOL International (“INSOL”), a world-wide federation of national associations of accountants and lawyers who specialize in turnaround and insolvency. Ms. Hertzberg is the first woman to serve as INSOL’s President.

    In a press release announcing the appointment, A&M stated that: “Ms. Hertzberg brings her significant international insolvency experience and credentials complemented by her commitment to promoting diversity within the international insolvency community. Currently, women account for about a third of the practitioners in the restructuring and insolvency profession and comprise 25 percent of INSOL’s membership.”

    Bryan Marsal, CEO and Co-Founder of A&M, commented: “Julie exemplifies the values, professionalism and dedication that A&M and INSOL share. We are proud of Julie’s achievements at A&M and her contributions to INSOL. We applaud her vision to promote diversity within the insolvency community.”

    Jason Baxter, INSOL’s COO, added, “Julie is an accomplished professional who has contributed significantly to INSOL and its initiatives over many years. It is an interesting time for INSOL and there are external challenges that it must respond to. I believe that Julie is the right President to help ensure the organization delivers what its members value, and what its stakeholders expect.”

    For her part, INSOL’s new President further commented, “I am committed to strengthening INSOL and leading the needed transitions to maintain the organization’s relevance in the restructuring and insolvency community. My key priority is diversity; namely, generating greater interest from young professionals and increasing the number of women in leadership positions in the industry.”

    Ms. Hertzberg, who trained as an attorney, specializes in complex Chapter 11 bankruptcy restructuring case preparation and management. She has more than 20 years of restructuring experience and has advised hundreds of bankruptcy proceedings. Ms. Hertzberg's team's most recent consulting assignments include: Lehman Brothers, Citadel Broadcasting, Visteon Corporation, Lear Corporation, Cooper Standard Automotive, The Chicago Tribune, SIRVA, Vertis and Aleris International.

    Ms. Hertzberg earned a J.D. from the University of New Mexico and a bachelor's degree from the University of Virginia. She has been active in a number of industry organizations in addition to INSOL, including the Turnaround Management Association (TMA) and the American Bankruptcy Institute (ABI).


    Bankruptcy Data Industry Best Awards

    The winners of our the Bankruptcy Data Industry Best rankings for 2018 received their awards last week at the American Bankruptcy Institute's annual meeting in DC.  In a ceremony during the Friday Luncheon, New Generation Research CEO James Hammond revealed the winners in the for categories tracked:  Investment Bank, Law Firm, Financial Advisory, and Claims Agent.

    Claiming the prize for Best Law Firm was Michael Nestor, Vice Chairman and Partner of Young Conaway.  He was joined by Evan Blum, Managing Director of Alvarez & Marsal, and Michael Blaustein, Senior Managing Director and Co-President of Prime Clerk.  Alvarez & Marsal and Prime Clerk were, respectively, Best Financial Adivsor and Best Claims Agent.  (the winner of Best Investment Bank was Houlihan Lokey.)

    From left to right, NGR CEO James Hammond, Evan Blum of Alvarez & Marsal, Michael Nestor of Young Conaway, Howard Blaustein of Prime Clerk, NGR COO Ben Schlafman, and NGR Head of Research Nick Montgomery.

    This is the second year for BankruptcyData’s Industry Best Awards. Award criteria are primarily objective and reflect the will of the market, based on  metrics and statistics from 2018, sourced and collected by the analysts at BankruptcyData. 

    Relative to last year, there are names both familiar and new atop our league tables. We congratulate all of the finalists but reserve special kudos for the winners in each category. They have shown special perseverance in a year that failed to deliver the boon many had predicted in restructuring activity. While the pace and volume are greater than 2017, it is still low by historical standards. 

    The winners hustled the most, and reaped commensurate reward. Their momentum may serve them in good stead. With corporate debt piling up to record levels, there is justified anticipation of increased industry activity on the horizon

    As a publisher of data, information and intelligence for over 29 years, NGR’s Bankruptcy Data is the information resource of record to the trade. People sometimes ask why it is important to single out the firms with the most visible and sizable market activity….in a word, why BankruptcyData’s Industry Best Awards? 

    Industry activity may still be far away from the highs following 2008, but our long period of economic recovery, during which low interest rates have abounded and lending practices have been relaxed, will sooner or later be followed by a period of adjustment.

    The Goldilocks scenario will see increased restructuring activity in the larger context of general expansion in the economy. A pessimistic scenario posits a period of economic contraction in addition to an increase in trouble for businesses. In either scenario, people will be looking for support and advice from the best professional they can afford. 

    BankruptcyData’s Industry Best Awards provide a yardstick for this selection. 

    The Bankruptcy Data Industry Best Awards are traditionally announced at the ABI Annual meeting in the Spring of each year.  Derived from data collected by NGR's Bankruptcy Data analysts, the full league tables are available on, as well as in the 2019 edition Bankruptcy Data Yearbook and Almanac.


    Quinn Emanuel Adds Pair of Partners to Restructuring Teams in Houston and New York

    March 5, 2019 − Quinn Emanuel Urquhart & Sullivan has added restructuring partners Patricia (“Patty”) Tomasco to its Houston office and Deborah Newman to it New York office.

    Ms. Tomasco, who joins from Jackson Walker’s Houston office, has more than 30 years’ experience solving corporate insolvency problems. She focuses on workouts, distressed acquisitions and corporate restructuring, and debtor and creditor representation in chapter 11 cases and related litigation. Ms. Tomasco frequently represents clients in the energy and telecommunications industries and high-tech debtors in both reorganizations and litigation. 

    Ms. Tomasco graduated from Rice University in 1985 and received her J.D. from South Texas College of Law Houston in 1988.

    Ms Newman, who joins Quinn Emanuel from Akin Gump, has a practice that focuses on bankruptcy-related litigation and complex commercial litigation. Ms. Newman represents creditors, bondholders, indenture trustees, hedge funds, institutional investors, creditor committees and debtors in the full range of complex litigation matters arising in the course of chapter 11 restructurings, cross-border insolvencies and other bankruptcy contexts, as well as other complex commercial litigations occurring in state and federal courts. 

    Ms. Newman graduated from the University of Michigan with honors in 1997 and received her J.D. from Columbia University School of Law in 2002.


    Westwind Manor Resort Association, Inc. – Custom Golf Club Manufacturer (and Golf Course Owner/Operator) Files Chapter 11 Citing Decline in Sport’s Popularity

    March 5, 2019 − Westwind Manor Resort Association, Inc. and 9 affiliated Debtors (“Westwind” or the “Company”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of Texas, lead case number 19-50026. The Company, a manufacturer of custom golf clubs (d/b/a Warrior Custom Golf) and the owner/operator of 18 golf courses, is represented by Michael D. Warner of Cole Schotz P.C. Further board-authorized engagements include (i) Force Ten Partners LLC as financial advisors and (ii) Donlin Recano as claims agent. Documents filed with the Court list the Company's three largest unsecured creditors as (i) Anthony Ivankovich ($2.0mn note), (ii) Raymond J. Kiefer ($1.2mn note) and (iii) A and O Family ($1.1mn note).

    Chapter 11 Goals

    In a declaration in support of the Chapter 11 filing (the “Rosenthal Declaration”), Jeremy Rosenthal, Westwind’s Chief Restructuring Officer outlined the Company’s Chapter 11 objectives, “These Chapter 11 cases will provide the Debtors with access to funds through debtor in possession financing so that they can maximize value of their assets while seeking to reorganize their businesses. The Debtors intend to stabilize their operations, pursue initiatives to rationalize business expenses, conduct a forensic analyses of the Debtors’ historical financial transactions and maximize the value of both the golf course business and the custom club business for the benefit of all stakeholders.”

    Events Leading to the Chapter 11 Filing

    The Rosenthal Declaration provides the following background, “The Debtors, like many other entities in the golf industry, have faced a challenging environment over the last several years. In general, there has been a nationwide downturn in the golf industry caused by, among other things, an overall decline in the number of players, an increase in cost of water and labor to operate golf courses, an overabundance of golf courses, escalating labor costs and the increasing price of equipment. 

    Complicating matters further, poor weather across the United States in 2018 and the beginning of 2019 resulted in significantly fewer rounds of golf played and ultimately the closure of significant portions of the Debtors’ most profitable golf course, Cimarron Golf Resort, at its most profitable time of the year due to flooding. Those external factors, coupled with Debtors’ obligations under its debt instruments, contributed to the Debtors’ overall liquidity constraints. 

    In addition, the Debtors have been negatively impacted by a lack of management depth and professional financial support. The Debtors, operating without a financial officer, lacked financial controls and the ability to recognize and mitigate their economic distress. As a result, the Debtors were unable to meet certain of their imminent expenses. 

    Further contributing to the urgency of the Chapter 11 Cases is the entry of the Default Judgment against Warrior Custom Golf and Warrior Golf. The Twelfth Judicial Circuit Court in and for Manatee County, Florida required Warrior Custom Golf, Warrior Acquisitions and Warrior Golf to post collateral in the aggregate amount of $1.3 million by March 4, 2019 to allow a stay of the execution of the Default Judgment while Warrior Custom Golf, Warrior Acquisitions and Warrior Golf pursue a vacatur of the judgment. The Debtors lacked sufficient funds to post the full amount of $1.3 million while they challenge the default judgment and, thus, the appropriate option was to file bankruptcy to prevent further execution on the Default Judgment, preserve their businesses as a going concern and avoid the preferential judgment lien filed against the Royal St. Augustine Golf Club in St. Augustine, Florida, owned by Warrior Golf. 

    These Chapter 11 cases will provide the Debtors with access to funds through 30.debtor in possession financing so that they can maximize value of their assets while seeking to reorganize their businesses. The Debtors intend to stabilize their operations, pursue initiatives to rationalize business expenses, conduct a forensic analyses of the Debtors’ historical financial transactions and maximize the value of both the golf course business and the custom club business for the benefit of all stakeholders.”

    About Westwind

    The Debtors operate two (2) distinct business segments. Warrior Custom Golf focuses on the manufacture and sale of custom golf clubs. Warrior Acquisitions manages affiliates, like Warrior Golf, LLC (“Warrior Golf”), that own and manage golf courses. Warrior Custom Golf was founded in 1998 by Brendan Flaherty (“Flaherty”). It develops, manufactures markets and sells affordable custom golf clubs and related equipment to golfers worldwide. Warrior Custom Golf’s products are custom built to the specifications of each customer. Potential customers are generally identified through direct response advertising, including television and direct mail advertising. Warrior Custom Golf also identifies customers and sells its products through its website, 

    The second business segment revolves around Warrior Acquisitions. Warrior Acquisitions is the manager of six (6) entities that own and operate 18 golf courses and parcels of land located throughout the United States. Warrior Acquisitions’ courses (i.e. those under its indirect management) serve their local communities and are located in secondary and tertiary markets.


    Stretto Announces Acquisition of Legal Technology Services Provider CINgroup®

    March 1, 2019 – Stretto, a market-leading bankruptcy-technology firm serving the corporate-restructuring and consumer-bankruptcy industries, has acquired CINgroup® and its Best Case® Bankruptcy/CINcompass® software and data-services platforms.  

    In a press release announcing the acquisition, Stretto commented, “CINgroup, including Best Case Bankruptcy, CINcompass and CIN Legal Data Services®, represent the leading brands in bankruptcy.  Serving more than 15,000 law firms and their clients for more than 25 years…This acquisition complements Stretto’s portfolio of bankruptcy-related services and technology solutions with the addition of software and data resources designed to support legal professionals engaged in bankruptcy matters."

    Jonathan Carson, co-CEO of Stretto, commented, “At Stretto, we are focused on driving new efficiencies in case administration as well as developing and managing a technology platform at the center of the bankruptcy ecosystem. The acquisition of CINgroup perfectly aligns with our strategic vision, as it broadens our resources and capabilities in and around the bankruptcy industry, enabling us to create the only end-to-end bankruptcy-technology platform in the market.”

    Dave Danielson, CEO of CINgroup, added “At CINgroup, our goal is to provide innovative software and due diligence products for the bankruptcy market. By integrating with Stretto, we will be able to deliver an even greater suite of products, services and efficiencies for attorneys and other legal professionals.”

    Equity financing for the transaction was provided by Carson, co-CEO Eric Kurtzman, other members of Stretto’s management team and investment funds managed by Stone Point Capital LLC. This is Kurtzman and Carson’s second recent partnership with Stone Point Capital. The pair, who sold Kurtzman Carson Consultants LLC (KCC) to Computershare in 2009, partnered with Stone Point Capital LLC in acquiring Stretto (formerly, Bankruptcy Management Solutions (BMS) until a January 2019 rebranding) in 2017.  

    Terms of the CINgroup acquisition were not disclosed.


    Morrison & Foerster Announces London Hire of Senior Finance Lawyer Christopher Kandel

    February 19, 2019 – Morrison & Foerster, announced that Christopher Kandel had joined the firm’s London office as a partner in its Finance practice. He comes to MoFo from Latham & Watkins, where he served as co-chair of the global banking practice. 

    Mr. Kandel’s practice spans a broad spectrum, including European and U.S. senior, second lien and mezzanine financings, high yield securities, structured loans, capital markets and restructurings. Over the course of his career, he has advised on many significant matters, including numerous European acquisition financings, the largest LBO financing in Asia, the second-ever high yield issue in Japan, the first international syndicated loan to a corporate in Turkey, the first super-senior revolver in Europe, the first pari passu secured bank/bond issue in Europe, and the first western-sponsor style leveraged buyout financing in Russia.
    “Chris is a market-leader with more than 20 years of experience in the London finance market,” said Larren Nashelsky, chair of Morrison & Foerster. “He has extensive experience leading leveraged finance and restructuring matters under both English and U.S. law, setting him apart in the market and further building our ability to support our clients with their most complex cross-border financial transactions. We are delighted that Chris has decided to join our growing London team, and we are certain he will contribute greatly to our increasingly robust global Finance practice.”

    “Chris’s addition underscores the momentum of our London office, as we continue our transformation following two years of exceptional growth,” added Paul Friedman, Morrison & Foerster’s managing partner for Europe. “Given his tremendous reputation in the market, I am delighted that our continued progress enables us to continue to attract new partners of Chris’s caliber.”

    Mr. Kandel commented, “I believe the acquisition finance market is looking for more choice. Morrison & Foerster has all the right elements in London to make an impact — great M&A, real estate, funds and competition lawyers, a growing finance team and, for deals that run into problems afterwards, a standout U.S./London restructuring practice. The vision here is compelling.”
    Mr. Kandel earned his B.A. from Yale University (magna cum laude with distinction) and his J.D. from Cornell Law School (cum laude). He is qualified as a solicitor in England and Wales, and is admitted to the bar in California, the District of Columbia and Maryland. 


    Mintz & Gold Taps Andrew Gottesman to Lead Its New Bankruptcy and Restructuring Practice

    January 30, 2019 – Mintz & Gold announced the hiring of Andrew Gottesman to lead the firm’s new Bankruptcy and Restructuring Practice

    In a press release announcing the hiring, Mintz & Gold stated, “For over 20 years, Andrew Gottesman has represented both debtors and creditors in the public and private sectors. In addition to his work at AmLaw150 firms and serving as in-house bankruptcy counsel for J.P. Morgan Chase, Mr. Gottesman has experience with the business side of claims and distressed debt trading, having run a trading desk for a small broker dealer. Mr. Gottesman represents both corporate and individual clients in bankruptcy, consumer protection, creditors’ rights, corporate restructuring and distressed asset transactions; his clients include debtors, secured lenders, unsecured creditors, asset purchasers, asset sellers and equity holders.” 

    Co-founding partner Steven Mintz further commented on the hire, “Andrew brings substantial business and legal acumen which will benefit our clients both in and outside of bankruptcy and restructuring.” 

    Prior to joining Mintz & Gold, Mr. Gottesman worked in the Business Reorganization and Restructuring departments of Willkie Farr & Gallagher and Schulte Roth & Zabel and ran his own successful practice. Andrew is a graduate of St. John’s University School of Law, where he was an editor of the American Bankruptcy Institute Law Journal, and Ithaca College. During the last major economic crisis, Andrew clerked for the Hon. James M. Peck in the United States Bankruptcy Court for the Southern District of New York and has completed the American Bankruptcy Institute/St. John’s University School of Law Bankruptcy Mediation Training program.

    Mr. Gottesman is a member of the Bar of the State of New York and is admitted to practice before the United States District Courts for the Southern and Eastern Districts of New York. 


    Bankruptcy Management Solutions (BMS) Rebrands as "Stretto"

    January. 22, 2019 – Irvine, California-based Bankruptcy Management Solutions (BMS) unveiled a new name and brand, Stretto, intended to "reflect the company’s growth and evolution into a full-service bankruptcy-administration technology and services provider."  

    Eric Kurtzman, co-CEO at Stretto, stated, “We’re excited to announce the launch of our new brand and, in essence, a new company direction. We have not only changed the look, touch and feel of BMS, but also have grown the company from its roots as the market leader in consumer-bankruptcy services to now provide a wider array of administrative solutions to the broader fiduciary industry.” 

    Jonathan Carson, Stretto’s other co-CEO and with Kurtzman a pioneering influence in the bankruptcy administration sector, added, “With our expanded focus and new brand, Stretto provides the foundation to manage the complex administrative and fiduciary needs of the corporate and consumer bankruptcy industries. While we have a new name and new look, our commitment to clients remains stronger than ever, and we are well-positioned for continued expansion and success.”

    Kurtzman and Carson, who sold Kurtzman Carson Consultants LLC (KCC) to Computershare in 2009, partnered with investment funds managed by Stone Point Capital LLC in acquiring the business in 2017.  Under this combined executive leadership, the company looks to offer a more comprehensive range of fiduciary services for professionals, including an expanded suite of corporate restructuring solutions, a receivership-focused practice and specialty deposits business line. 

    In the press release announcing the name change, Stretto further noted the recent arrival of several new team members and bankruptcy industry veterans, including James Le as chief operating officer, Scott Barna as chief integration officer and Chris Updike as general counsel. 


    Gymboree and why retailers are increasingly prone to ‘Chapter 22’

    January 18, 2019 – Gymboree Group on January 17 became the latest retailer to file for ‘Chapter 22’ – a euphemism for a second bankruptcy – and the 60th since 1984, according to BankruptcyData. With 2019 certain to be another tough year for retailers, there are liable to be more such Chapter 22’s, begging the question as to why the retail sector seems so prone to bankruptcy recidivism.
    Gymboree follows Wet Seal, Walking Company Holdings and Samuels Jewelers as retailers that have had to declare bankruptcy again in the past 24 months. As BankruptcyData lays out, this is the second petition for Gymboree in under two years, the Debtors having previously announced a pre-negotiated Chapter 11 plan on June 11, 2017 and having emerged from that bankruptcy on September 29, 2017. In its first turn on the bankruptcy roundabout, Gymboree cancelled $171mn of its then-outstanding unsecured notes and approximately $770mn of Gymboree’s then-outstanding funded debt was converted into equity. Additionally, the Company raised $80mn of new capital through a rights offering, and arranged $285mn in exit financing.
    Unfortunately, while many companies and their new, often private equity, owners, see Chapter 11 as a way to slash their debt and re-emerge with a right-sized balance sheet, financial restructurings and operational restructurings are two very different and largely separate challenges. Balance sheet restructurings of retailers like Gymboree have often not been accompanied by equal post-emergence attention to the core operational issues that led to the original bankruptcy filing in the first place.
    In the declaration in support of the Chapter 11 filing, Stephen Coulombe, Gymboree’s Chief Restructuring Officer cited stiff competition from other direct bricks-and-mortar competitors and an assault on its business from discount stores, big-box retailers, and, of course, internet retailers like Amazon competing on price. Piper Jaffray in a recent report said that Amazon already controls about half of the US online retail marketplace and that share is still growing. 
    Experts say these are  difficulties common to all high street retailers and, given there appears no letup in them – indeed, they are intensifying – they are major reasons why retail Chapter 22’s are becoming so commonplace, since bankruptcy does little to solve these underlying problems. Gymboree also cited a failure to keep up with changing customer tastes, a process which only seems to be accelerating with the advent of the digital age and Millennials. 
    “Closing unprofitable stores without changing the underlying economics and developing a consumer-focused strategy is an ineffective way to emerge from bankruptcy for retailers, [while] inefficient supply chains with slow design, manufacturing and shipment processes make retailers unable to quickly change their products to match current trends,” David Berliner, partner and leader of BDO’s business restructuring & turnaround services practice, points out in a comment piece. 
    Yet it is about more than just Amazon, online shopping and competing in a rapidly evolving marketplace. Compounding such problems is that many of these retailers are still burdened with too much debt, even after going through bankruptcy once before, ie. balance sheets were sometimes NOT being fixed. 
    Some of this stems from retailers being targeted by private equity, which used record low interest rates to acquire many of these businesses earlier this decade. According to 2018 research by Chuck Carroll and John Yozzo of FTI Consulting, the retail sector accounted for 17% of Chapter 11 filings by private equity-owned companies in 2011-2017 versus 7% for non-private equity-owned filers. This is because debt-fueled buyouts followed by a program to expand stores and other operations to facilitate a sale or IPO is a risky strategy, especially where margins for error are very narrow. Moody's Investors Service said in a report in 2017 that 19 distressed retailers had “well over” $3.7 billion in debt that matures over the next five years – most of that either came due last year or will come due this year. Rising interest rates will only exacerbate this problem.

    It turns out that bankruptcy law itself can actually exacerbate a retail bankruptcy, with the Chapter 11 lifecycle often failing to match up with a retailer’s selling cycle. David Berliner of BDO points to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BACPA), which stipulated that bankrupt retailers have only an initial 120 days to assume or reject leases and can only receive one additional 90-day extension without landlord approval. Prior to BACPA, bankrupt retailers could in practice seek as many extensions that a bankruptcy court would approve, which enabled them to keep stores open through at least one holiday season and take their time to determine if these stores should continue operating. “Bankrupt firms were able to wait until after the holidays to decide which stores to close so that the sales associated with holiday season spending could be used in their analysis. BACPA, however, eliminated this option to continue to extend the decision as to whether to assume or reject leases,” he writes.
    Thus, a rush to exit bankruptcy the first time around without fixing balance sheets properly, high debt levels often from leveraged buyouts amid rising interest rates, and the radically changing face of retail mean ‘Chapter 22’ will likely be one trend that retailers will continue to set.


    Bondholders accuse LBI Media’s CEO and directors of $129mn fraud

    January 16, 2019 – A group of bondholders of bankrupt LBI Media, the largest privately held Spanish-language broadcaster in the US, have accused the CEO and other directors of the company of perpetrating a fraudulent scheme that prevented them from recovering about $129.5 million.
    In documents filed with the US Bankruptcy Court for the District of Delaware on January 15, the “Plaintiff Group of Noteholders” – a subset of holders of the 11½-13½% PIK toggle second priority secured subordinated notes due 2020 – requested leave to prosecute president and CEO Lenard Liberman, a group of directors, and the company’s investment adviser HPS Investment Partners for cutting a deliberately bad restructuring deal that cost them about $129.5 million. 
    “This action arises out of a deceptive scheme perpetrated by Defendants LBI; the Company’s President, Chief Executive Officer, controlling shareholder, and director, Liberman; its remaining directors, J. Liberman, Horton, Delgadillo, Connoy, and Goldman (collectively, the “Director Defendants”); and HPS, to prevent Plaintiffs from recovering about $129.5 million to which they are contractually and otherwise entitled as creditors of LBI,” the documents state.
    The plaintiffs lay out an elaborate and “deceptive” scheme by Liberman, the directors and HPS involving a 2014 debt exchange, which was intended to serve as bridge financing until the sale of certain assets by LBI in a Federal Communications Commission spectrum auction, the proceeds of which would be used to reduce LBI’s debt. “In this regard, the second lien indenture expressly required that the proceeds of any such sale be used to retire the company’s first lien debt and not for any other purpose,” the document says.
    However, after the sale by LBI of the spectrum assets, the plaintiffs allege that LBI violated this core contractual restriction and set about trying to disenfranchise the holders of the second lien notes. “Specifically, in the months leading up to the Company’s inevitable bankruptcy, and while LBI was insolvent, Defendants wrongfully diverted funds to preferred creditors and company insiders, thereby eliminating Plaintiffs’ ability to recover on their notes and precluded Plaintiffs, as holders of LBI’s 'fulcrum’s securities', from receiving the 100% ownership stake in the reorganized debtor to which they would otherwise have been entitled,” they claim.
    The plaintiffs allege the overall scheme harmed them in several ways, including: diverting millions of dollars to pay fees and indemnities to third parties like HPS, which bought the company’s debt at prices several percent higher than the company itself could have paid; giving HPS a “make whole” penalty that – if enforceable – added $87 million to the company’s debt; and turning the first lien debt into the company’s “fulcrum securities” whereas the second lien debt had previously held that position. 
    LBI Media, a Spanish-language media company headquartered in Burbank, California, filed for bankruptcy on November 21, 2018 under Chapter 11 (case number 18-12655).


    Moody’s Sees Global Defaults Rising in 2019 After Falling for 2nd Straight Year in 2018

    January 11, 2019 – Moody’s Investors Service said its global trailing 12-month speculative-grade default rate ended 2018 at 2.3%, down from 2.8% at the end of the third quarter, though the rating agency expects the global default rate to begin rising again in 2019, reaching 3% by the end of the year.

    The data tallies with that of BankruptcyData, which reported that the number of public companies and assets filing for bankruptcy in 2018 fell for the second year in a row. However, BankruptcyData analysts agree this trend will reverse in 2019, as a combination of retail’s continuing woes, tightening debt markets, and large volumes of lower quality bond and bank debt coming due take their toll on the health of corporate America.

    Moody’s said in its “2018 Default Report”, published January 9, that 77 companies defaulted in 2018, down from 104 in 2017 and 144 in 2016. This left the agency’s trailing 12-month global speculative-grade default rate at the end of the fourth quarter at 2.3%, down from 2.8% at the end of the previous quarter and 3.4% at the end of 2017. 

    The default count surged to 10 in December 2018, pushing up the default tally to 17 in the fourth quarter, up from 14 in the third quarter. December’s defaulters included three companies in Construction & Building, three in Non-Bank Financials and two in Oil & Gas. The month's largest defaulter was Checkout Holding Corp., a provider of consumer-driven digital media solutions, including discount coupons.
    For the whole of 2018, retail recorded 16 defaults, the most of any sector. Of the 35 industry groups Moody’s tracks, 16 industries had fewer defaults in 2018 than in 2017, while 10 recorded more defaults. Defaults fell the most in Oil & Gas (15 defaults in 2018 vs 27 defaults in 2017) as the industry continues to recover. “Many companies in the sector have taken advantage of higher oil prices to reduce debt, sell assets and transform their property portfolios toward higher oil content and lower cost production,” Moody’s noted.

    BankruptcyData also showed that last year’s top 10 public chapter 7 and chapter 11 filings were dominated by the oil & gas and retail sectors, with three of the year’s largest top 10 public bankruptcies coming in retail.

    Looking ahead to 2019, Moody’s forecasts that after dipping to 2% in the second quarter of 2019, the global default rate will begin rising again, to reach 3% by the end of the year, with advertising, printing and publishing seeing the most defaults in the US in 2019, and the hotel, gaming and leisure sector to be the most troubled in Europe.

    “Our default rate forecast assumes more difficult market conditions in 2019 as economic growth slows, credit conditions tighten and borrowing costs increase,” Moody’s Sharon Ou said in the report. “We also expect escalated volatility in the high-yield market due to uncertainty around interest rates and geopolitical issues, including U.S.-China trade tensions, though most Moody’s-rated companies have low refinancing risk in the coming year and corporate profits and liquidity remain healthy.”


    Sidley Austin Announces Pair of Additions to Global Restructuring Practice, Mark Knight in London and Charles Persons in Dallas

    January 9, 2019 - Sidley Austin LLP announced a pair of additions to its global restructuring practice; Mark Knight who will join Sidley in London as a partner and Charles Persons who will join Sidley’s Dallas team as counsel.

    In a press release announcing the Knight hire, James Conlan, Sidley’s Global Head of Restructuring, and Patrick Corr, firmwide Restructuring Practice Area Team Leader, shared their view that “Mark Knight adds strength to our market-leading Restructuring practice.”

    Mr. Knight is experienced in leading complex, precedent- setting multijurisdictional restructurings on both the creditor and debtor sides….Before joining Sidley, Mr. Knight served as a partner and general counsel of an investment platform that services non-performing loans in some of Europe’s most challenging restructuring jurisdictions, including Greece and Italy. Prior to this, Mr. Knight was a partner in the restructuring group of an international law firm where he advised clients on the acquisition, disposal and reorganization of distressed businesses.

    In an announcement heralding the arrival of Mr. Persons, Yvette Ostolaza, Managing Partner of Sidley’s Dallas office, noted, “Charles is a valuable addition to our global Restructuring group and will be an integrated member of our practice everywhere.” Commenting on his arrival at Sidley, Mr. Persons added, “Sidley is well-known for its work on high-profile and complex Chapter 11 cases….I’ve worked with many of the talented lawyers here at Sidley and am delighted to be joining such an incredible firm.”

    Mr. Persons has experience in the representation of major domestic and international debtors and creditors’ groups and has built a practice around public and private out-of-court reorganizations and in-court Chapter 11 cases, advising on a variety of multifaceted matters including high-profile multinational restructurings. These include distressed acquisitions and a variety of bankruptcy litigation matters across multiple industries, from oil and gas to manufacturing and retail.


    Two Financial Restructuring Experts Among Stroock Promotions

    December 18, 2018 – Stroock announced the promotion of two lawyers to partner and six lawyers to special counsel, including Alon M. Goldberger (Partner) and Christopher Guhin (Special Counsel), each New York-based members of Stroock’s Financial Restructuring Group.

    Mr. Goldberger’s practice focuses on a variety of complex finance transactions, with an emphasis in debt finance. He represents agents, lenders, public and private borrowers, private equity sponsors and their portfolio companies, business development companies, and other providers (bank and non-bank) of senior and subordinated debt financing. He also advises clients across a variety of industries and business structures on a broad range of financing transactions, including first- and second-lien revolving and term-loan credit facilities, asset-based and cash-flow based lending, acquisition financing, unitranche credit facilities, refinancings, recapitalizations and both in-court and out-of-court restructurings. Goldberger is nationally recommended by The Legal 500 United States and has been recognized as a “Rising Star” by IFLR1000. He received his law degree from the Benjamin N. Cardozo School of Law and his undergraduate degree from Touro College.

    Mr. Guhin’s practice focuses on providing counsel to banks, private equity funds, hedge funds and large investment managers. He specializes in the analysis of legal rights and obligations under complex contracts and developing strategies to maximize clients’ leverage. Guhin is currently representing two investment banks in a contractual dispute with a mutual client who failed to pay fees owed upon consummation of a tender offer, and an investment bank in a contractual dispute with former employees of an Australian subsidiary. He spent part of 2013 and 2014 seconded to the compliance division of a major investment bank. He received his law degree from the University of Virginia School of Law and his undergraduate degree from Brown University.


    Marc J. Carmel Joins McDonald Hopkins as Member of Restructuring Group

    October 22, 2018 - Marc J. Carmel has joined the Business Restructuring Services Group at McDonald Hopkins LLC as a Member in their Chicago office. Mr. Carmel joins from litigation finance firm Longford Capital Management where, as a director, he advised on investments in the bankruptcy and restructuring sector. Previously. Mr. Carmel had practiced law at Kirkland & Ellis and Paul Hastings. 
    Mr. Carmel has two decades of experience representing public and private companies, private equity and other investment firms, directors and executives, lenders, committees, and equityholders in a variety of distress and non-distress engagements. Mr. Carmel regularly advises clients regarding strategic alternatives, including: out-of-court and in court restructurings and bankruptcies; mergers and acquisitions, refinancings, recapitalizations, and sales; and fiduciary duties and governance matters throughout the United States and internationally.
    Sean D. Malloy, chair of McDonald Hopkins’ Business Restructuring Services Department, commented on the hire, “Marc has deep experience and a national reputation, and we are thrilled to welcome such an accomplished and respected restructuring attorney to McDonald Hopkins.”  Mr. Carmel added, “I am impressed with the McDonald Hopkins platform and excited to join. Particularly with its Midwest footprint and recent additions to an already-strong presence in Chicago, the firm is positioned to expand rapidly in the middle market.”
    Mr. Carmel is a frequent author and speaker on restructuring topics, with a focus on fiduciary duties, acquisitions of distressed assets, and strategies and tactics to address bankruptcy issues, as well as writing and speaking about litigation finance. Mr. Carmel earned his J.D. from Harvard Law School and his Masters of Accounting and Bachelor of Business Administration degrees from the University of Michigan. Mr Carmel is also a Certified Public Accountant.


    Alison Miller to Join Omni Management Group as Senior Vice President

    October 23, 2018 - Omni Management Group, an affiliate of Beilinson Advisory Group (“Beilinson”), announced the appointment of Alison Miller as Senior Vice President. Ms. Miller will focus on sourcing new opportunities, developing and directing strategic initiatives aimed at growing the firm's market share, and supporting its relationships within the bankruptcy, restructuring and investing communities. Notably, the addition of Ms. Miller to the Omni team is part of a larger growth strategy for the firm, which was acquired earlier this year by management, Beilinson Chairman Marc Beilinson, and affiliates of Beilinson.  

    Commenting on Ms. Miller’s move, Mr. Beilinson noted, “The expansion of the Omni leadership team to include Alison and her business development expertise and expansive network is in line with Beilinson Advisory Group’s commitment to grow the company, expand market share and continue exploring additional opportunities.”  

    Ms. Miller began her career in the Restructuring Group in the New York office of Kirkland & Ellis (“K&E”), where she represented financially distressed companies in all aspects of corporate restructuring. After leaving K&E, Ms. Miller served in a series of business development roles, where she was responsible for developing and implementing various strategic marketing and origination initiatives at firms in the legal, private equity and bankruptcy administration sectors

    Ms. Miller holds a J.D. with honors from Fordham University School of Law.

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