One day: Belk exits Chapter 11 – 24 hours after filing

BY Fraser Tennant

One day after filing for Chapter 11 bankruptcy, department store chain Belk has successfully completed its financial restructuring – finalising an expedited pre-packaged reorganisation to emerge well-positioned for long-term growth.

Belk's reorganisation plan received nearly unanimous support from majority owner Sycamore Partners and lenders, including KKR Credit and Blackstone Credit, and provides for suppliers and landlords to be paid in full as normal operations continue at all store locations and on Belk's e-commerce platform.

"We are pleased to have received nearly unanimous support from all of our stakeholders to complete this restructuring in just one day, positioning us to pursue our growth initiatives and move the company forward from a strengthened financial foundation," said Lisa Harper, chief executive of Belk. "We are immensely grateful for our loyal customers, dedicated associates, and supportive vendor partners who enabled us to complete this restructuring efficiently, without delay or disruption.”

As a result of the Chapter 11 restructuring, Belk has received $225m of new capital, significantly reduced its debt by approximately $450m and extended maturities on all term loans to July 2025. The infusion of cash and reduction in debt provides Belk with increased liquidity to focus on its key initiatives for growth, including further enhancements to its omnichannel capabilities and the expansion of merchandise offerings into new, relevant product categories.

"I want to congratulate the team at Belk for its impressive transformation from a traditional department store business into a full omni retailer," adds Stefan Kaluzny, managing director of Sycamore Partners. "The company has tripled its web business and currently fulfils over 70 percent of its web orders from its stores, providing a nimble and scalable platform for expansion. It has been a remarkable undertaking in a very challenging macro environment."

Privately-owned, Charlotte-based Belk opened its first store in 1888 and currently serves customers at nearly 300 stores in 16 south-eastern states.

Ms Harper concluded: “Belk has a bright future ahead, and I am looking forward to growing our more than 130-year legacy as a trusted retailer for many years to come.”

News: Belk OK'd to exit bankruptcy less than 24 hours after it filed

Power provider Frontera to restructure under Chapter 11

BY Fraser Tennant 

In a move to reduce its approximated £800m debt, natural gas plant operator Frontera Holdings LLC has filed for Chapter 11 bankruptcy protection in order to implement a comprehensive restructuring support agreement (RSA).

Frontera joins an expanding list of operators, which includes California Resources and a pair of natural-gas-fired power plants owned by Talen Energy Corporation, seeking Chapter 11.

Under the terms of the RSA, most of the company's debt will be converted into equity and the current term loan and revolving credit facility lenders will become the new owners of Frontera.  

Throughout the restructuring process and beyond, Frontera expects that employees and vendors will continue to be paid and that the Frontera Generation Facility – the company’s 526MW, combined-cycle natural gas plant near Mission, Texas, which exports power to Mexico – will continue to generate electricity and serve its customers.

Frontera’s subsidiary entities in Mexico are not included in the Chapter 11 filing and also are continuing to operate in the ordinary course of business.

In bankruptcy court filings, Frontera attributed its Chapter 11 filing and RSA to the coronavirus (COVID-19) pandemic's massive disruption to demand for the debtors' energy production.

“These actions represent an important milestone to reducing debt and strengthening the company for the benefit of our stakeholders,” said Lee Davis, chief executive of Frontera. “Frontera intends to use the court-supervised process to create a sustainable capital structure and position the company to achieve long-term success.”

Currently, Frontera has $773m in debt under a secured term loan and revolving credit facility, as well as $171m in secured notes. Under this agreement, lenders agree to convert a substantial portion of the current term loan and revolving credit facility debt into equity. Once approved by the Bankruptcy Court, these lenders will become the company’s new owners.

Furthermore, Frontera has secured $70m in debtor-in-possession (DIP) financing to ensure liquidity throughout the Chapter 11 process. The company's liquidity position will allow the Frontera Generation Facility to operate the business in the ordinary course and fund Chapter 11 administrative costs.

The DIP financing is part of $145m in exit financing that will be provided by lenders upon Frontera’s emergence from the Chapter 11 process.

News: Frontera Holdings Files for Chapter 11 in Southern Texas Court

Australia’s Speedcast confirms restructuring via Chapter 11

BY Fraser Tennant

In a move designed to position itself for future growth, satellite communications provider SpeedCast International Ltd is to emerge from Chapter 11 bankruptcy protection after gaining bankruptcy court approval to restructure under a new owner, private equity firm Centerbridge Partners.

The Australian company decided to recapitalise its business through voluntary Chapter 11 proceedings in April 2020, citing the weakened demand for its connectivity services to cruise lines, oil rigs and other customer platforms following the outbreak of coronavirus (COVID-19).

Under the terms of a plan of reorganisation, Speedcast will emerge from Chapter 11 with a new $500m equity investment from Centerbridge, which will be used in part to repay all of its $285m debtor-in-possession (DIP) financing, as well as a permanent reduction of all its $634m senior secured debt.

The plan also provides for a cash payment to holders of secured claims and cash payment to certain of Speedcast’s critical trade vendors. Unsecured creditors will share in recoveries from a litigation trust.

“The court’s confirmation of the plan marks a key milestone in our efforts to become a stronger business and positions us to emerge in the near term, having achieved our goals,” said Stephe Wilks, chair of Speedcast. “Throughout the restructuring process, our global workforce has delivered on its commitments while adapting to change. On behalf of the Board, we are immensely grateful for the ongoing patience and trust that the company’s employees, customers and partners have shown in this process.”

Speedcast, which serves more than 3200 customers in over 140 countries, expects to emerge from the Chapter 11 process in the first quarter of 2021, subject to final regulatory approvals and satisfying customary closing conditions.

Following emergence, Joe Spytek, who has served as Speedcast’s president and chief commercial officer over the last year, will take on the role of chief executive, leading the company under the new Centerbridge ownership.

Mr Spytek concluded: “Speedcast is well-positioned to maximise its full potential as the company works to build a platform that addresses customers’ most demanding operations and application requirements now, and in the future.”

News: Speedcast to emerge from Chapter 11 with $500M Centerbridge investment

Escape from New York? – NRA files for Chapter 11

BY Fraser Tennant

In what it calls the "most transformational moment in its history”, the National Rifle Association (NRA) has filed for Chapter 11 protection in order for it to reincorporate in Texas and escape “a corrupt political and regulatory environment” in New York, where it is currently incorporated.

The NRA has stated that the Chapter 11 filing is part of a restructuring plan rather than financial problems and that it is not bankrupt or going out of business. Rather, the association has indicated that it is in its strongest financial condition in years.

The gun-rights group’s plan to restructure and move to Texas comes amid a legal battle with New York’s attorney general Letitia James, who has vowed to investigate the “legitimacy” of the NRA and seek its dissolution.

To this end, in August 2020, the NRA was sued by Ms James, accusing NRA chief executive and executive vice president Wayne LaPierre and other senior leaders of illegally diverting tens of millions of dollars from the association through excessive expenses and contracts that benefitted relatives or close associates.

In response, the NRA rapidly filed its own lawsuit, stating that there was no evidence to support the attorney general’s claims that the NRA was a “terrorist organisation” and a “criminal enterprise”. Moreover, the association believes that the attorney general’s investigation is for purely political purposes.

Aiming to swiftly move through the Chapter 11 restructuring process, the NRA seeks court approval to reincorporate the association in the state of Texas – home to more than 400,000 NRA members – while continuing its day-to-day operations, training programmes and second amendment advocacy.

“Texas values the contributions of the NRA, celebrates our law-abiding members, and joins us as a partner in upholding constitutional freedom,” said Mr LaPierre. “We seek protection from New York officials who illegally abused and weaponised the powers they wield against the NRA and its members.”

Established in 1871, the NRA is America’s largest and oldest civil rights organisation, with approximately five million members. Furthermore, through its restructuring plan, the NRA aims to streamline costs and expenses, proceed with pending litigation in a coordinated and structured manner, and realise many financial and strategic advantages.

“The plan represents a pathway to opportunity, growth and progress,” concludes Mr LaPierre. “The NRA is pursuing reincorporating in a state that values the contributions of the NRA, celebrates our law-abiding members and will join us as a partner in upholding constitutional freedom. This is a transformational moment in our history.”

News: N.R.A. Declares Bankruptcy and Seeks to Exit New York

Superior Energy Services files for Chapter 11

BY Fraser Tennant

In a move to unburden itself of more than $1bn in debt, oilfield services company Superior Energy Services has filed for Chapter 11 bankruptcy protection in order to implement a proposed pre-packaged restructuring plan.

The filing is the latest in a series of bankruptcies to have hit the energy industry in recent months, including those of Seadrill Partners and Noble Corporation. In 2020 to date, 54 oilfield services companies have filed for bankruptcy.

Superior Energy’s restructuring plan eliminates all of its funded debt and related interest costs, as well as establishing a capital structure that the company believes will improve its operational flexibility and long-term financial health, even in a low-commodity-price environment.

“Since the initial announcement of our planned recapitalisation initiative, we have been encouraged by the growing consensus of the noteholders that have agreed to support the plan, as well as the ongoing strong backing and support provided by our customers and lenders,” said David Dunlap, president and chief executive of Superior Energy. “We look forward to quickly emerging from the Chapter 11 in early 2021.”

The company also intends to operate its businesses and facilities without disruption to its customers, vendors and employees, and is filing motions with the Bankruptcy Court to ensure that all undisputed trade claims against it – whether arising prior to or after the commencement of Chapter 11 proceedings – will be paid in full in the ordinary course of business.

Founded in 1991, Houston-based Superior Energy serves the drilling, completion and production-related needs of oil and gas companies worldwide through a diversified portfolio of specialised oilfield services and equipment that are used throughout the economic lifecycle of oil and gas wells.

Mr Dunlap concluded: “We thank all of our employees for their ongoing hard work and commitment to our company and our customers and are grateful to our vendors and other valuable business partners for their continued support.”

News: Superior Energy Services files Chapter 11 bankruptcy to restructure