Reorg Blog

Coming off a record-setting year of chapter 11 filings in 2020 as the Covid-19 pandemic swept the globe and affected multiple industries, our First Day team analyzed the 2021 chapter 11 filing trends from Q1 and Q2 in our midyear report. The first half of 2021 trended well below historical averages, with a low point in May. Compared with the busiest second and third quarters of 2020 where consumer discretionary sector cases and, in particular, brick-and-mortar heavy companies, were filing with unprecedented frequency, 2021’s first-half consumer discretionary cases dropped by almost half. Real estate was the only industry to see...

Since our webinar earlier in the year, two key judgements have provided helpful guidance on circumstances where the courts will use their unfettered discretion in the refusal to sanction restructuring processes. Hurricane Energy provided a landmark judgment, being the first time since its introduction, that the court has pushed the refusal to sanction a restructuring plan.  The court rejected the company’s submission as to the “relevant alternative” to the restructuring plan and was unconvinced that the creditors subject to the cross class cram down would have been no worse off under the plan than the relevant alternative.  Even had such conditions been...

After completing its IPO in June 2020, the AZEK Company debt covenants and capital structure have become more complicated. The company’s gross profit increased 23.3% year over year at the end of Q2 2021 and during Q2, AZEK amended both its term loan and ABL facility to decrease pricing. Their springing financial covenants show that they must maintain a fixed charge coverage ratio of at least 1x, plus their debt and lien capacity shows that permissions from their term loans, ABL, and their unsecured debt are making an impact on the company’s leverage ratios.  To read our Americas Covenants team's...

As the AS Adventure restructuring process continues hedge funds are starting to look at the company as the next big equity play. When the pandemic hit, the Benelux-based outdoor sports clothing and equipment retailer was fearful for their liquidity, but their restructuring process has been fruitful, making the restructured loans interesting for investors. The company's June ‘21 recurring EBITDA is up more than 60% when compared to their levels in June ‘19 and their base-case implied equity value is estimated at €210M with LTV of 49%. As part of the AS Adventure restructuring, 50% of the company’s equity was stapled...

Analyzing the JBF Industries debt, our Asia Core Credit team provided an update on the bid process for the company's NPLs. Under the Swiss challenge method CFM ARC has been announced as the successful bidder. Initiated by BOB Capital Markets Ltd., a process advisor appointed by a Bank of Baroda-led consortium of lenders, the Swiss challenge auction showed no competing bids for the NPLs and Reliance Industries is backing an all-cash offer for the JBF Industries debt. There were a few options for CFM based on the JBF recovery probability as well as their competing bids, but since there were no competing bids the NPLs will...

The ever-growing subscriber base for Reorg in the Americas has long enjoyed premium content, including our coverage of legal and financial analysis as well as reporting of performing, stressed and distressed credits. Part of our “secret sauce” is Reorg’s trifecta approach, which combines experienced reporting with the expertise of seasoned financial analysts and lawyers. This results in more than the sum of its parts, as it provides customers with an unmatched holistic perspective. In recent months, the Americas team has been busy covering the litigation, regulatory and chapter 11 restructuring spaces. Chapter 11 filing frequency in the beginning of the...