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The Default Notice — Why wait? Entering the era of pre-emptive LMEs
•33 min read
The following article contains a copy of The Default Notice — 9fin's weekly restructuring briefing. With 9fin, clients can access access a full suite of Distressed and Restructuring news, analysis and tools. For access to any of the links within this article, just drop a message to marketing@9fin.com
Top news
The results are in, and LMEs are continuing their inevitable bleed into healthier credits and/or those with longer-dated maturities — and not only that, they’re good for recoveries.
Bank of America’s Global Research team published a 24 July study declaring this “the era of pre-emptive LMEs,” in which the main takeaway is: “the extent of distress in credit is no longer predictive of its future default.”
On the front lines here at 9fin, we indeed see the truth of this every day. This week, 9fin reported on natural ingredient supplier Florida Food Productshiring LME specialist advisors while lenders formed a co-op, with term loan debt is due 2028 and 2029. Same for healthcare staffing company Ingenovis Health, whose lenders organized in 2024 and now have co-op debt in place being sold in a BWIC.
Similar to Ingenovis, website hosting and marketing company Newfold Digital’s capital structure also includes its bulky maturities coming due in 2028 and 2029. Both have revolvers that are either current or will be current soon that could prove the catalyst of a more holistic deal. Newfold’s sponsor Clearlake has embraced the aggressive LMEs that engage lenders years from maturity so that there’s still runway before lenders have a hard maturity to hold over the sponsor.
And recall earlier this month when 9fin reported how Peraton’s debt experienced some distress. Immediately the company and lenders hired advisors and lenders went restricted, hoping to strike a deal addressing 2028 and 2029 maturities — before lenders told the company advisors to pound sand when they asked for a straight A&E!
Per BofA, the share of LMEs has gradually increased post 2020, now comprising 60% of all loan defaults. The default rate has most markedly increased for debt maturing in four or more years, as all four of the defaults among these loans in 2025 have been LMEs. And most importantly, recoveries are stronger because the partial exchanges and restructurings are taking place at higher prices, according to BofA — with the big caveat that there can be multiple LMEs by one company and of course, they can still lead to bankruptcy in the long run.
”In some sense LMEs beget more LMEs, and eventual value destruction for credit investors could ultimately become indistinguishable whether through hard or soft defaults,” BofA wrote.
BofA notes that because of these trends, default rates will remain elevated, as will recoveries. New predictors will be needed to determine loan default rates, and private credit will remain a lifeline for companies struggling with their debt. “Peak LME” seems to be a thing of the past as the time between a downgrade to CCC and an LME transaction lengthens.
The following articles are part of our new Latin America coverage, which will ultimately require a separate subscription to view. For more info on this product, contact subscriptions@9fin.com
Pemex gets support from sovereign, still missing a full refinancing strategy
Mexico’s state-owned Pemexwill pay long-suffering suppliers soon, with the $7bn to $10bn it expects to receive from a repo transaction planned by the federal government. Vendor debt reached a record $24.5bn as of 31 March, and both the federal government and the company have been promising a payment plan for the last seven months. Some companies complain that 2023 payments are still outstanding and even more debt has yet to be invoiced. Next week’s 2Q 25 earnings are unlikely to include a comprehensive strategy for supplier and financial debt — Pemex has around $20bn in maturities in 2026 and 2027 — since that is contingent on next year’s federal budget, which is still in the works.
Unigel could file for in-court restructuring (again)
Brazil’s Unigel reversed on a decision to close its Chapter 15 in New York Bankruptcy Court as it contemplates restructuring options, including a local in-court proceeding. The company was quick to point out it hasn’t made a final decision, and it only seeks to negotiate the temporary suspension of some debt payments for now. But 9fin sources said that going back on its May motion to end the Chapter 15 is unusual, and there would be few other reasons other than restructuring for a company to want to keep its Chapter 15 open. Unigel is working with E.Munhoz Advogados and Houlihan Lokey.
This week’s news (from the last seven days)
CD&R and LMEs — We published another edition in our series of LME profiles of private equity companies, focusing on Clayton, Dubilier & Rice and its investments. The private equity firm has earned a reputation for taking over companies with untapped potential, but at least six of its current portfolio investments are showing signs of distress.
Cloud 9fin — 9fin’s distressed debt editor Rachel Butt brings in Jonathan Foster, founder of Current Capital Partners, todiscuss Jon’s career, his book On Board, corporate governance in restructurings and bankruptcies, and thorny topics including the so-called super repeaters trend and third party releases.
Out-of-court
Saks Global — The luxury department store, which has been battling liquidity stress and tanking bond prices, announced a two-phase LME — in which bondholders have the opportunity to exchange their 11% notes for new 11% notes. Concurrently with the exchange, the indentures will be amended to modify certain restrictive covenants. 9fin dug into the LME and Saks’ business here.
Newfold Digital — A group of minority lenders to the Clearlake and Siris-backed IT services company has hired Guggenheimas investment banker to advise on a possible LME transaction.
Florida Food Products — The Ardian-backed company grouped up with Evercore and Weil Gotshal as a lender co-op group formed. The company is facing a weak liquidity profile comprised of $5m in revolver availability and $27m of cash, as of Q1 25.
New Fortress Energy — The natural gas energy provider may just be playing hardball with the current Puerto Rican government, knowing that it has leverage as the only game in town providing liquified natural gas to the northern side of the island. But that doesn’t make it any less precarious hanging out in the $9bn capital structure with secured bonds trading in the 20s, while a $20bn deal hangs in the balance.
AMC Entertainment — The most recent transaction that AMC Entertainment has orchestrated is a coda to the masterclass of liability management that continues to create windfalls for certain creditors while mostly continuing to eviscerate retail shareholders.
DigiCert — The technology company looked to private credit to refinance $2.4bn of debt as it approaches an October 2026 maturity on its TLB. Ares and HPS are leading the financing, which includes a new $160m revolver and $2.2bn of term loan debt. It's the second time this year its sponsor Clearlake has tapped direct lenders for support.
Rinchem — The Stonepeak-backed chemical logistics firm recently disclosed to private investors that the company has designated some subsidiaries as unrestricted.
Digicel — Digicel launched the sale of over $2.7bn of debt to refinance some of its post-reorg capital stack. As part of its return to the capital markets following its January 2024 restructuring, the Jamaica-based communications services provider is pitching prospective lenders on its leaner business model and a targeted net leverage goal of 2.9x by FY 28 — more than two full turns below its pre-restructuring leverage of 5.1x.
GrafTech International — The graphite electrode maker reported financial results for Q2 25 with revenues and earnings coming in below consensus estimates and pricing for its graphite electrodes remaining under pressure due to excessive supply from China.
Ardagh— Trading in the Irish packaging company’s bond plus CDS basis packages reflects growing uncertainty about whether derivative contracts referencing the Irish packaging firm could be rendered worthless. This comes as Ardagh appears to be edging closer to a deal that would hand control of the business to its senior unsecured noteholders.
Thames Water— The water company has confirmed that it will once again defer its challenge of Ofwat’s determinations for the current regulatory period to the UK Competition and Markets Authority, according to an announcement. Read also our legal analysis about what a SAR would mean for Thames Water.
Prosafe — The offshore accommodation company has launched its shareholder warrant offer, marking the final step in its recapitalization after formally completing a $193m debt-for-equity swap. Prosafe confirmed on 21 July that the recapitalization is now effective, with 321.6 million new shares issued in exchange for equitizing secured debt.
United Site Services — The Platinum Equity-backed reportedly released Q2 results, disclosing a 29% drop in adjusted EBITDA to $40.1m for the quarter, while revenue fell 11% to $222m. The report noted it has around $69m of liquidity and projected another potential revenue drop in 2026.
Sarepta Therapeutics — The medical research and drug company saw its stock tumble and debt fall by about 10 points over the week after the US FDA forced it to pause shipments of its muscle disorder gene therapy that was linked to three deaths. The European Union’s drug regulator declined to back its gene therapy Elevidys, used for treating Duchenne muscular dystrophy. Sarepta had recently announced a reorganization process.
AM General — The company’s $600m senior secured notes due 2028 gained a few cents on the dollar as the military vehicle manufacturer signed a $150m deal with Israel’s Defense Ministry, Bloomberg reported. The bonds peaked at 78 on 23 July — its highest level since dropping to distressed levels in May — and sat at 75.4 cents on 25 July, per 9fin data.
CDK Global — The Brookfield-backed automotive data and tech solutions provider had its $4bn term loan drop into the late 70s following a report that a federal judge had allowed a lawsuit by rival Tekion, alleging antitrust violations by CDK, to proceed. CDK Global is on 9fin’sDistressed Pitch List.
Claire’s — The French subsidiary of the Elliott-backed tween retailer — which itself is said to be heading towards a Chapter 22 — is reported to have been placed in receivership in France.
Kohl’s — The department store saw meme stock-like gains on 22 July when its stock jumped over 100% before trailing off again shortly after market open, while its bonds all rose slightly between 21 and 22 July.
Bankruptcy
Prospect Medical Holdings — A plaintiff group of nurses and doctors who were laid off as a result of the closing of a Chester, Pennsylvania medical facility and commenced an adversary proceeding against the company for WARN Act violations survived the motion to dismiss stage as Judge Jernigan found more evidence was necessary to make a determination. The company is also pursuing a number of sales processes, which are progressing towards closing in the coming months. Finally, the company commenced a lawsuit against the US government after its PA Medicare eligibility was cancelled.
Ascend Performance — The UCC in the case has requested standing to commence an adversary proceeding to challenge certain liens held by the prepetition lenders.
Exela Technologies — The judge overseeing the case overruled a request for a preliminary injunction from the UCC that sought to stop the debtors’ plan from going effective.
23andMe — The retention application for Wilmer Hale was approved after the court ruled that current representation of Regeneron Pharmaceuticals by the firm did not disqualify it from assisting the CPO.
Corvias Campus Living USG — The court will take up several contested motions, one from the BOR to transfer venue and the other from the debtors to require mediation, at a hearing the week beginning 28 July.
Party City — The party goods retailer is in the process of reaching a settlement with New Amscan, the purchaser of its assets, after New Amscan commenced an adversary proceeding alleging that the debtors had violated the APA.
Altice France — The company was granted Chapter 15 recognition of its French accelerated safeguard proceeding.
Azul Airlines — The Brazilian airline received final approval of its DIP financing after the debtors were able to come to agreements with parties on revised language in the order.
Intrum — The Swedish debt collector emerged from Chapter 11, having raised fresh financing and cut its prepetition debt by 10%.
Cloud 9fin — Jane’s LME Addiction — DQ lists are overrated — Jane Komsky sits down with Jason Mudrick, and Akin partners Jaisohn Im and Dan Fisher to discuss disqualified lender lists and the practical effects.
EBITDA Addbacks — 9finanalyzed financial disclosures in 244 OMs from 2024 and H1 25 to explore how much issuers have relied on EBITDA addbacks to market deals. Saks Global tops the list.
Out-of-court
Saks and Deals Away — Third party lenders are increasingly feeling as though they’ve been ‘left at the altar’ after a roster of companies, including Saks Global, turned to existing creditors for more financial flexibility instead.
Affordable Care— Lenders to the tooth replacement provider worked with lawyers now at Paul Hastings as the company confronted concerns about available liquidity.
Allen Media — The Byron Allen-owned television network company is reported to have hired Moelis to help selling $1bn worth local TV stations. Term loan lenders had recently finalized a cooperation agreement after a joint co-op for loan and bondholders expired, while the bondholder group advised by Paul Weiss was separately in the process of extending its own co-op through maturity.
Altice International — Altice International appears to be gearing up for change — although what this change may be remains to be seen. With leverage reported to be 5.5x, and with net debt at €8.7bn, it comes as no surprise that the company needs to do something to address this precarious position.
Altice USA — The company has raised a $1bn receivables facility due 2031 through an unrestricted subsidiary, shortly after reports that subsidiary Cablevision Lightpath was considering an up to $2.8bn fiber optic backed ABS raise. The new facility is backstopped by Goldman Sachs and TPG Angelo Gordon and is a securitization of receivables from the company’s Bronx and Brooklyn business and corresponding hybrid-fiber coaxial assets.
Anchor Glass Container — The CVC Capital-backed container maker is assessing LME options as it faces a cash crunch, though is likely seek a less coercive route with its creditors.
Anthology — The company is reportedly exploring a sale as it negotiates with lenders over what to do with its debt stack after completing an LME in 2024.
Atento — The Latin American call center operator has extended the maturity of its secured notes from 2026 to 2029 and has concluded a broader consent process over its restructuring plan.
Bally’s — In the latest blow to Bally’s $4bn Bronx casino’s prospects, the New York City Council rejected the company’s rezoning application for the project.
Bayer—The pharmaceutical giant is reported to have added AlixPartners to its advisory roster as the company navigates drawn-out legal battles surrounding a popular weedkiller product produced by US subsidiary Monsanto. 9fin had first reported on Latham & Watkins being hired, and that a Chapter 11 filing is being considered.
Better Health — The Kinderhook Industries-backed primary care service provider let two holdout lenders into its January exchange after they threatened litigation in March through Selendy Gay. While terms are close to what the steerco were given, the holdouts won’t be required to kick in new money and will get a partial cash paydown (deal details here).
BrandSafway— The CD&R and Brookfield-owned scaffolding contractor saw a 21% decline in year-over-year adjusted EBITDA in Q1 25,, and its debt traded into stressed territory.
Brightline— The Fortress- backed passenger railroad was reported to have said it will defer a July interest payment on two tranches of its tax-exempt debt. Nevertheless, the company’s proposed $400m municipal bond raise is moving forward, having undergone public comment and been sent to state authorities for consideration.
B. Riley Financial — The troubled financial services company announced its fifth bond exchange in recent months, this time completing a private exchange of $43m in senior notes due 2026, and 2028 for new second lien notes due 2028 and warrants.
Brook & Whittle — Genstar Capital-backed plastic label manufacturer Brook & Whittle has tapped Houlihan Lokey and Weil Gotshal for advice as the company’s debt sank deeper into distressed territory, according to 9fin sources.
Cabinetworks — An ad hoc group of lenders tothe Platinum Equity-backed company holding a term loan designated as co-op / non-coop is expected to take pitches for a financial advisor in short order to work alongside Paul Weiss.
Calumet Specialty Products — The specialty products manufacturer reported better than expected Q1 25 results and launched a partial redemption of its 2026 notes as it continues to focus on deleveraging through improved cash flows and strategic alternatives. Read our earnings review here.
City Brewing — Following an LME in April 2024 and recent stopgap funding from existing creditors, City Brewing is assessing restructuring options which could entail handing control to a group of existing lenders on a non-pro rata basis, according to 9fin sources. Talks are ongoing and it is unclear whether a deal will take place in or out-of-court, sources said.
Club Car — The Platinum Equity-backed golf cart manufacturer is reported to have disclosed to investors that it had repurchased some of its bonds in the open market, and its debt rose in response.
CommScope— The company is reported to be exploring a sale of its broadband connectivity and cable business to raise cash to pay down debt, while evaluating other options such as selling the entire company.
Compass Diversified— An investigation by advisors to the middle-market business holdco has determined that the irregularities in key subsidiary Lugano’s financing, inventory and accounting practices extend to FYs ended December 2022 and 2023 as well. Compass had earlier signed a forbearance agreement through 25 July with lenders under its credit facilities in exchange for some concessions.
Conair— The American Securities-backed consumer brand extended more than 80% of its $500m ABL to February 2028 and secured $50m from a new ABL lender. That gives Conair about $550m of liquidity until May 2026, when the ABL was originally due.
Congruex— According to an S&P note, the company completed a restructuring involving its revolver and first lien term loan which gives it temporary liquidity relief in the form of part PIK interest and an amortization holiday for seven quarters and some covenant relief through Q2 25.
Cooper Standard — The automotive components manufacturer saw its shares and debt climb after reporting strong operating performance in Q1 25 with adjusted EBITDA nearly doubling YoY to $58.7m driven by cost reductions and purchasing savings. Management is in wait and watch mode on tariffs.
DigiCert— The Clearlake-backed company and its lenders have kickstarted talks via advisors for a potential amend and extend deal to address the company’s upcoming debt maturities.
EchoStar— EchoStarmade some interest payments and chose to skip others as it seeks a resolution of the FCC’s investigation in its compliance with buildout obligations and the use of its 2 GHz (AWS-4) spectrum license.
eHealth — The online health insurance marketplace is looking to refinance its debt with private credit lenders.
Endo/Mallinckrodt — The companies’ shareholders voted to approve a merger transaction making Endo a subsidiary of Mallinckrodt, blending the two generic pharmaceutical companies for a purchase price of $80m, as previously announced. Mallinckrodt shareholders will own 50.1% of the pro forma company.
Fender — The Servco-owned guitar maker, which imports from China and Mexico, grouped up with Gibson Dunn and Moelis on worries of labor inflation and tariffs, 9finreported. Its term loan B has moved concurrently with President Trump’s tariff escalations and retreats.
FleetPride — Certain lenders are seeking advice from Gibson Dunn ahead of looming debt maturities, led by a $620m first lien TLB due 2026.
Ferrellgas— The propane distributor, which emerged from bankruptcy in 2021, faces the maturity of its revolver in December 2025 and $650m in senior unsecured notes in April 2026. 9fin examines the company’s credit profile, capital structure, and potential refinancing options.
Fossil Group—Following quarters of dismal results and with an operational restructuring ongoing, Fossil announced the resignation of its CFO and the appointment of Andy Skobe of Ankura to provide interim CFO services.
Foundever— The customer service firm recently reported further earnings deterioration, with Q1 25 EBITDA of $88m representing a 13% drop from $101m the period prior, partly on a revenue slump of around 7% YoY.
Gladieux Metals Recycling— The FTAI Infrastructure-backed petroleum catalyst recycler is seeking advice from Jefferies while creditors brought on a law firm as Gladieux struggles with its more than $300m in municipal bond debt. It is also reported that Gladieux parent Aleon Metals has hired counselto advise on restructuring options.
Global Switch — Certain bondholders are informally seeking advice from restructuring advisors after the data center provider reached an agreement to sell its Australian subsidiary.
GoHealth — The health insurance marketplace operator included a going concern warning in its latest 10-Q, noting impending covenant breaches.
GPS Hospitality — The restaurant franchisee is reportedly in talks with lenders, with Paul Hastings and Houlihan Lokey advising the company.
Guitar Center — The musical instruments retailer has an agreement for an ad hoc group of creditors holding over 70% of its $550m of 8.5% SSNs due 2026 to exchange their holdings into new first lien SSNs due 2029. It also launched a concurrent public exchange offer and consent solicitation for the notes.
Hertz — The US Supreme Court is reportedly asking the Trump administration for its opinion on the car rental company’s case seeking to avoid paying bondholders postpetition interest in its 2020 bankruptcy.
Hudson Pacific Properties — Following dismal Q1 25 results, the REIT priced a roughly $600m offering of common stock and pre-funded warrants. Proceeds are intended to be used largely to pay down debt.
Hunkemoller— Plaintiffs in the Hunkemoller LME litigation scored a victory when the judge allowed for standing despite the no action clause and allowed for some of their breach of contract claims to survive various motions to dismiss.
IngenovisHealth — Lenders to the Cornell and Trilantic Capital Partners backed healthcare staffing company are working with Gibson Dunn as post-pandemic demand for travel nurses slows.
INNOVATE — The diversified holding company announced a series of debt exchanges and maturity extensions that, once completed, will postpone the maturities of the vast majority of the company’s $672m debt stack to 2026 and 2027. The company has only agreements in principle for some of the transactions but aims to finalize those agreements by 4 August.
International Data Group— The Blackstone-owned company has finalized the restructuring of its existing debt with its private credit lenders, which agreed to equitize 20% to 25% of the debt while structuring some as a PIK.
Intrum — The Swedish Financial Supervisory Authority announced that it will investigate whether the debt collector’s restructuring deal has impacted its ability to comply with the country’s NPL regulations.
iRobot — The company further extended a covenant waiver, this time to 14 August, in exchange for a small prepayment and an in-the-money warrants issuance to lenders.
Jeld-Wen— The Window and door maker posted dismal first quarter results, with management indicating that it would continue to face difficulties and withdrawing FY 25 guidance. Read our earnings review here.
John Wood Group — Private placement noteholders in the London-listed engineering services business have appointed advisors from Akin Gump and Moelis over the firm’s ongoing refinancing negotiations and Sidara’s potential takeover bid. The RCF lenders have mandated FTI Consulting.
KIK Consumer Products — The company’s bonds plunged after news of a fire broke out at its facility in Atlanta. In a message to private lenders, KIK said the fire and resulting damage was limited to an insured warehouse and its production areas can restart once the area is safe to re-enter.
Kloeckner Pentaplast— SVP is planning to provide around €275m of funding to refinance the German plastic packager’s senior debt coming due next year. SVP has agreed to provide around €75m of equity and €200m of new debt. The proceeds will be used to repay around €125m of outstanding senior debt.
Kosmos Energy — The deepwater O&G exploration and production company is reported to be negotiating with banks to raise financing as it faces over $1bn in debt coming due through 2028. The company is on 9fin’s Distressed Pitch List.
Leslie’s — 9finexplores the liability management exercise options available to Leslie’s in its latest LME breakdown.
LOGIX Fiber Networks — The fiber-based voice and data company hiredHoulihan Lokey to advise it ahead of an upcoming maturity wall.
Mavenir — The Siris-backed network solutions providerengaged in its recapitalization transaction after a potential sale fell through due to industry conditions, 9fin sources said.
Medical Solutions — The Centerbridge-backed travel nurse staffing company was recently downgraded to triple-C territory, further weighing on US CLO triple-C buckets. 9fin broke down CLO exposure to the company. 9fin had earlier reported that lenders haveengagedGibson Dunn.
Michaels— After having hired advisors to help address tariff pressures, the Apollo-backed craft store is reported to have seen an improvement in financial performance on the back of the failures of competitors Party City and Joann and has declined financing from its bondholders. Michaels recently acquired JoAnn’s intellectual property and private labels out of Joann’s bankruptcy.
Mobico— The transport group’s recently proposed sale of its North American school bus operator has led some hedge funds to investigate the possibility of declaring an event of default using a “cessation of business” clause in the transport firm’s debt documentation.
Mobileum — The DOJ is reported to be investigating the 2022 sale of a majority stake in the company by Audax to HIG. Meanwhile, litigation between former sponsors Audax and HIG continues even after the company’s recent emergence from bankruptcy.
Netceed—The French telco equipment provider is looking to equitize around €1.2bn of its outstanding debt under its restructuring plan. In exchange for this the TLB creditors will take majority ownership through a debt for equity swap, as previously reported.
Nexeo Plastics— GPD, the parent of the thermoplastic resins distributor, completed a debt exchange, with holders of 99.7% of its senior notes due 2026 exchanging into new secured notes due 2029 and also receiving $175m in cash.
Nine Energy Service — The company posted solid earnings for Q1 25 and announced a freshly refinanced (and extended) ABL facility despite slack oil prices and a persistently low equity valuation that led the NYSE to recently threaten delisting its stock. Read our earnings review here.
One Call — Apollo is in talks to lead a refinancing of the company’s existing debt with direct lenders, 9fin sources say.
Oriflame— The Swedish beauty company’s recently unveiled restructuring deal — which will see noteholders write off around €520m of debt in exchange for upside participation and a slice of €24.5m new money — has seen the support of holders of over 91% of the company’s bonds.
Parts Authority — First lien lenders advised by PJT Partners and Davis Polk have started confidential talks with the Kohlberg & Co.-backed company, while Carlyle, the holder of Parts Authority’s second lien loans, is working with Latham & Watkins.
Peraton— Discussions with lenders have stalled after an early-stage dialogue about an amend and extend of Veritas-backed defense contractor’s 2028 and 2029 maturities.
Petra Diamonds— The diamond miner and a group of its bondholders have appointed legal advisors as the company looks to address debt maturities falling due in early 2026. The bondholder group, led by Kyma Capital, and the company have hired counsel.
Petrofac — The distressed engineering firm is considering an appeal to the UK Supreme Court following a recent court of appeal decision striking down the firm’s two proposed Part 26A plan.
Petwise— KKR took a 35% equity stake in the pet products supplier after a restructuring transaction in which the company’s sponsor infused $42m in capital, part of which was used to pay down the company’s term loan.
Pretium Packaging— Clearlake Capital has vastly expanded its disqualified lender (DQ) list to include almost 100 names for Pretium, after an investor disclosed its desire to take over the troubled plastic container manufacturer.
PODS — The storage and moving company secured a $145m preferred equity investment from Ontario Teachers' Pension Plan.
Prosafe — The offshore accommodation specialist’s creditors are set to take 90% of the company in exchange for equitizing 56% of their debt in a restructuring deal, the company announced.
QVC — The distressed teleshopping company had a director resign from its board, and then appointed two independent directors — Roger Meltzer, chairman emeritus of DLA Piper, and Carol Flaton, a restructuring expert.
Rackspace — 9fin examines the LME options the cloud computing service provider could have to restructure its capital structure, which remains unsustainable following its LME completed in 2024, and reviews Q1 25 earnings.
Rinchem — The Stonepeak Partners-backed logistics company reportedly told lenders it moved some of its assets into an unrestricted subsidiary. The move came after a majority and minority group of lenders organized around advisors.
Ritz Carlton Yacht Collection — The Oaktree-backed luxury yacht line’s $300m SSN’s have tumbled in recent weeks after a call with bondholders on which it indicated it likely wouldn’t have positive earnings for several years, according to a report.
RSA Security— Talks between the Clearlake-backed company andits lenders broke down after the company pushed to maintain some flexibility in its credit agreement and earnings showed no signs of rebounding.
Rugs USA — Lenders to the retailer have brought on Gibson Dunn and Houlihan Lokey as the company approaches the need for a debt restructuring.
Sandvine — The once US Department of Commerce-blacklisted tech company announced that it had received court approval under the Canadian CCAA to implement its restructuring backed by 97% of its secured lenders that will hand control to lenders and will net it $45m in new money, and US Chapter 15 recognition of the CCAA approval.
Screenvision — The company repaid its term loan due 2025, per an S&P note, which withdrew its credit ratings on the company.
Spartech— Lenders to the plastics manufacturer have organized in anticipation of a debt restructuring, sources say.
Staples— The office supplies company revealed on an investor call that it imports around $400m of product annually from China and Vietnam.
Stem — The clean energy software provider — which has seen dwindling revenues and cash reserves — completed a debt exchange and new money deal.
STG Logistics — STG Logistics filed its final reply in support of its motion to dismiss the LME litigation brought by non-participating term lenders, where the company asserts that the plaintiffs cannot overcome the “two insurmountable barriers facing their claims”: (1) the language in the credit agreement and (2) the recent Mitel decision.
Summit Behavioral Healthcare— The psychiatric services provider reported further revenue and EBITDA declines in Q1 25. The companywas earlier reported by 9fin to be eyeing an incremental capital raise as it faces operational pressures and a revolver due in 2026.
Superior Industries — The highly levered aluminum wheel manufacturer announced that it has reached a deal with a group of its term loan lenders, including Oaktree, to delever its balance sheet.
Symplr Software — Certain lenders to the Charlesbank and Clearlake-backed company are getting legal advice from Gibson Dunn as the healthcare tech company faces upcoming debt maturities.
Telesat — We published a series of distressed Legal QuickTakes on the distressed satellite firm’s debt documents. You can read them here, here and here.
Thrasio— According to a Moody's report, the Amazon aggregator, which emerged from bankruptcy in 2024, entered into an amendment with its lenders to extend the PIK interest period on its first-out and second-out term loans through June 2026.
Traeger — The grill maker launched an operational restructuring plan which is expected to be substantially completed by FY 25-end.
Trinseo — The chemicals and specialty material solutions manufacturer continued to see a slowdown in demand and increased uncertainty in its end markets, especially in China and in the automotive sector, in Q1 25. Management withdrew FY 25 guidance due to tariff uncertainty and shared Q2 25 guidance instead. Read our earnings review here.
Upstream Rehabilitation — The Revelstoke-backed physical therapy provider has retainedKirkland & Ellis as it contends with its looming 2026 debt maturities.
Veracode— Some lenders to the application security software company are in talks with Davis Polk for possible help evaluating their options, according to sources, as the company’s term loan debt has hit distressed levels and the company is expected to be cash flow negative on the year.
Viasat — We published a review of LME blockers in Viasat’s credit agreement.
Wellful— The Kainos Capital-backed health and wellness firm raised new money via a superpriority loan and completed an exchange of its existing debt, according to a Moody’s note, while also acquiring Ancient Nutrition.
WorldStrides— Lenders to the student trip company have retained a financial advisor in order to develop potential alternatives to the recently expired discounted exchange offer. Some of the company’s creditors are under a co-op.
Xerox — The document management company released an 8-K outlining further revisions to the financing package it used to acquire Lexmark International, and its stocks and bonds traded off.
Zayo— The EQT and DigitalBridge- backed communications infrastructure group is reported to be nearing a debt extension deal with creditors which involves its secured loan being paid down and unsecureds receiving a coupon increase, and will also address financing for Zayo’s Crown Castle acquisition.
Bankruptcy
At Home Group— Judge Sticklesapproved the company’s $600m DIP facility on a final basis after the company resolved the objection of unsecured creditors’ committee and objections of a number of landlords. 9fin also examined the UCC’s potential challenges to the company’s 2023 LME.
Big Lots— The debtors secured approval on its sale and pre-closing administrative expense motions.
CareerBuilder — The company’s bidding procedures for the sale of its assets were approved, paving the way for a 24 July sale hearing.
CITGO— The judge overseeing the case released his “inclinations” with respect to approving a proposed stalking horse bid for the Crystallex v. Venezuela litigation that has been pending since 2017.
Container Store — The judge overseeing the case denied the US Trustee’s motion for stay of the confirmation pending appeal. The US Trustee has appealed the confirmation order due to the releases contained therein.
Cutera — The debtors’ plan was confirmed after the judge overseeing the case overruled objections to releases contained therein by the US Trustee.
Del Monte — The company enteredChapter 11 and received interim approval of its DIP financing at its first day hearing. In addition, the timing of the company’s Chapter 11 has left open a possibility for the debtors to claw back funds paid to minority lenders paid via a settlement.
Edgio— The company filed its proposed plan and disclosure statement which proposes to issue new term loans and new equity and to create a liquidating trust to liquidate certain assets.
Genesis Global— Genesis’s litigation oversight committee, appointed by the bankruptcy court to oversee and resolve claims, filed two complaints before the Delaware Chancery Court and the US Bankruptcy Court for the Southern District of New York, each in an attempt to recover value for creditors that was allegedly fraudulently transferred to insiders while the company was insolvent.
Genesis Healthcare — The debt-ridden nursing home operator commencedChapter 11 with a related party stalking horse bid in hand as it pursues the sale of its assets. It received all requested relief at a hotly contested first day hearing.
Global Clean Energy— The company secured final approval of its DIP facilities, as well as approval of its disclosure statement after the debtor was able to resolve objections to the requested relief made by the UCC.
Gol Airlines — The UST was denied a stay of the third-party releases in the debtors’ plan based on its use of opt out clauses as it awaits a ruling from a higher court and its plan went effective on 6 June.
Hooters — The restaurant and its lenders are facing complaints filed by Lags, a creditor in the case, as well as an objection to confirmation, alleging that the debtors do not own certain royalties of Lags. In addition, the company received conditional approval of its disclosure statement, setting up a confirmation hearing at the end of July.
Incora — The judge has recommended the dismissal of tortious interference claims in the adversary proceeding on the 2022 liability management transaction.
Invitae — After hearing arguments on the UCC’s standing motion for litigation related to uptiers and arguments over makewholes, Judge Michael Kaplan decided to issue a preliminary ruling denying the standing motion and reserved his ruling on the makewhole issue.
JoAnn Stores — The retailer received confirmation of its liquidating plan after a significant majority of creditors voted in favor of the plan.
Li-Cycle— The lithium-iron battery recycler initiated proceedings under the Canadian CCAA and its US subsidiaries filed for Chapter 15 recognition in the Southern District of New York.
LifeScan — The ailing blood glucose monitoring device maker filed a prearranged Chapter 11 pursuant to a restructuring support agreement with current equity sponsor, Platinum Equity, and the ad hoc group of lenders to pursue a dual track for a 363 sale of its assets or alternatively, an equitization restructuring that would transfer majority ownership to its 2L lenders. It received all requested relief at a consensual first day hearing.
Maverick Gaming — The cash-strapped gaming and casino operator entered Chapter 11 pursuant to an RSA with the ad hoc group of 1L and 2L lenders and with the consent of its landlords — Blue Owl Capital and Angelo Gordon. It won all requested relief at a consensual first day hearing.
Mesquite Energy— The three-judge panel of the Fifth Circuit issued an opinion on 30 May, reversing the bankruptcy court determination of Judge Marvin Isgur and finding that 100% of the equity of Mesquite Energy, the reorganized name of debtor Sanchez Energy, should have been awarded to the DIP lenders, Apollo and Fidelity Investments.
Nikola — The electric truck maker commenced Chapter 11 with the intent of pursuing an auction and sale of its assets.
Purdue Pharma — The company received approval of its disclosure statement, allowing it to begin soliciting acceptances ahead of a mid-November confirmation hearing.
Rite Aid — A controversy between Rite Aid and CVS with respect to the meaning of certain terms in the relevant APAs was resolved by the court.
Robertshaw — The post-effective date debtor is seeking authority to make an interim distribution to Invesco, while the appeals of an order resolving an objection to Invesco’s claims are still pending.
Solar Mosaic — The solar company received final approval of its DIP facility on a fully consensual basis.
Steward Health Care — The former healthcare provider’s Chapter 11 liquidating plan which has an early 2027 effective date was confirmed after a hotly contested two-day hearing culminating in a two-hour bench-ruling requiring, among other things, that administrative expense claims must be paid in full as a condition precedent to the plan going effective.
Sunnova — The solar company secured final approval of its DIP financing and bidding procedures on a consensual basis after resolving objections from the UCC in the case, but the UCC voiced its concerns for the case moving forward.
Terraform Labs — The US Trustee has objected to a fee application filed by Genesis Credit Partners, and has asked the court to either completely deny the fee application, or reduce it by 50%.
Wellpath — The prison healthcare company secured court approvals for its Chapter 11 plan and settlement with HIG Capital. The bankruptcy plan sets up a liquidating trust to pay the company’s unsecured creditors, including the holders of personal injury and wrongful death claims against the company.
Yellow Corp — MFN Partners, the debtors’ largest holder of its traded stock, has moved to convert the Chapter 11 cases to a Chapter 7 liquidation. The motion will be addressed at a mid-June hearing.
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