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Turnarounds
SEPTEMBER 2018
VOLUME 32, NUMBER 9
& Workouts
News for People Tracking Distressed Businesses www.TurnaroundsWorkouts.com
In This Issue: Southeastern Grocers Addresses
Indenture Trustee’s Fees and “Hot-Button Issue”
Expenses Approved
by Julie Schaeffer
Debtors Can Hire Under Sec.
363(b), SDNY Judge Says In approving the prepackaged bankruptcy of Southeastern Grocers, LLC, Judge
Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware rejected
Click on a title below to a challenge to payment of the fees and expenses of an indenture trustee for a class
jump to that section
of impaired unsecured bonds.
Research Report: “This has been a hot-button issue because payment of fees and expenses is a key
Who’s Who in Gibson element for getting deals done in Chapter 11 cases,” says Benjamin Feder, special
Brands, Inc.
Page 4 → counsel at Kelley Drye & Warren LLP, which represented the indenture trustee.
Southeastern Grocers operates a number of supermarket chains in the Southern
Research Report: United States, including Winn-Dixie, Bi Lo, and Harvey’s.
Who’s Who in The Rockport
Company, LLC Continue on page 2 →
Page 12 →
Special Report:
Restructuring Departments of
Alvarez Not “Bankruptcy
National Accounting Firms
Page 15 →
Professional” in Nine West Gig
by Christopher Patalinghug
Worth Reading:
The Governance Revolution: The U.S. Bankruptcy Court for the Southern District of New York recently
What Every Board Member
Needs to Know, NOW! authorized specialty retailer Nine West Holdings Inc., to employ Ralph Schipani,
Page 20 → a managing director at Alvarez & Marsal North America, LLC, as the Company’s
interim CEO, as well as hire additional Alvarez personnel to assist Schipani. In
Special Report:
European Restructuring so doing, the Bankruptcy Court affirmed that Chapter 11 debtors are permitted to
Practices of Major U.S. Law
Firms retain distressed management consultants pursuant to 11 U.S.C. section 363(b)
Page 21 → based on a finding that the engagement satisfies the business-judgment standard,
without requiring applicants to meet a separate burden of proof under 11 U.S.C.
Gnome de Plume:
Governance Myths Distort the section 372(a). The Bankruptcy Court also provided case law definition of a
Work of Boards of Directors
Page 29 → “professional person” as that term is used in section 327(a).
Continue on page 7 →
2 Turnarounds & Workouts SEPTEMBER 2018
Southeastern Grocers, from page 1 party seeking such payment must Feder says the U.S. Trustee’s
demonstrate that it was not merely position ignored Section 1123(b)(6) of
After being taken private, protecting its own interests in the the Bankruptcy Code, which states that
Southeastern Grocers was generating case, but that its actions benefited all a plan of reorganization may include
positive cash flow but not enough to parties. “any … provision not inconsistent
meet its significant debt load, so it The U.S. Trustee’s position in with the applicable provisions of this
began a series of negotiations with its Southeastern Grocers was consistent title.” That provision, says Feder, is a
unsecured bondholders who were the with the position the offices of the “broad authorization for negotiation
fulcrum security. U.S. Trustees have been taking in of settlements.” He adds that “a
Ultimately, Southeastern Grocers districts across the country, says number of courts have expressly
reached an agreement under which Feder, but he notes that it raises permitted payment of a creditor’s
bondholders would receive nearly logistical difficulties. “The United (not just an indenture trustee’s) fees
all of the shares of the reorganized States Trustee was essentially taking and expenses as part of a settlement
company. the position that the indenture under 1123(b)(6).”
“Hats off to the professionals trustee should be paid in the same At the confirmation hearing, Judge
involved, particularly the debtor’s consideration as the bondholders, Mary Walrath rejected the U.S.
firm, Weil, Gotshal & Manges LLP, because under the indenture, the Trustee’s arguments, stating it “is not
which completed a fully prepackaged trustee, if its fees and expenses are the only way where such expenses
Chapter 11 in about 60 days with only not getting paid, can take it out of can be approved and paid in a case.”
one impaired class of creditors, the whatever payment is received on According to Judge Walrath,
unsecured bondholders, who voted account of the bonds,” Feder says. it was “perfectly appropriate”
unanimously in favor of the plan,” “But the bondholders in Southeastern for Southeastern Grocers and the
says Feder. “This was amazing for an were getting stock in the newly bondholders “to agree to the payment
enterprise of that size.” reorganized company, not cash. And of those expenses without the necessity
As part of the plan of reorganization, that raises some fairly significant of a court having to approve them
Southeastern Grocers agreed to pay logistical hurdles, particularly in after the fact in order to get the parties
in cash the fees and expenses of the cases where the stock in the newly to come to the table and negotiate.”
unsecured bonds’ indenture trustee. reorganized company is not going to “There is no necessity that I review
But the United States Trustee in be exchanged or traded on any public those expenses or otherwise interfere
Delaware contended that separate markets.” with that agreement,” she said.
payment of the indenture trustee’s Southeastern Grocers, the Feder views Judge Walrath’s ruling
fees and expenses in cash, as part indenture trustee, and the bondholders as significant, even though it was
of Southeastern Grocers’ settlement responded to the U.S. Trustee’s made orally from the bench at the
with the unsecured bondholders, objection by arguing that the U.S. conclusion of the hearing and wasn’t
contravened section 503(b) of the Trustee’s position is based upon part of a formally issued opinion. “It
Bankruptcy Code. Under that section, an overly narrow reading of the was made in a major case in a key
payments are permissible only upon a Bankruptcy Code. district by one of the most respected
showing of “substantial contribution” Section 503(b), they said, is simply bankruptcy judges in the country,”
in the case, a difficult standard to the means by which an indenture he says. “We have a transcript of the
meet. trustee or other major creditor can hearing, and we intend to cite it as
Courts have consistently held compel payment of its fees and persuasive authority in other cases as
that the type of actions that satisfy expenses. Nothing in it prevents a this issue arises,” he says. “We think
the “substantial contribution” test debtor from agreeing to pay such fees that Judge Walrath’s position will
is narrow. Among other things, the and expenses as part of a settlement. carry weight, certainly with the other
www.TurnaroundsWorkouts.com
SEPTEMBER 2018 Turnarounds & Workouts 3
Southeastern Grocers, from page 2 expenses, among other things,” he that the Virginia judge will follow
says. “Although that case involves Judge Walrath’s ruling.”
judges in Delaware, and likely in other an ad hoc creditor group and not T h e U . S . Tr u s t e e ( v i a t h e
districts around the country.” an indenture trustee, the issue is the Department of Justice) declined to
Feder says he will be watching same. If the U.S. Trustee’s office in comment. Weil, Gotshal & Manges
the Toys ‘R’ Us bankruptcy. “The the Eastern District of Virginia presses LLP, which represented Southeastern
U.S. Trustee has filed an objection to the argument at the plan confirmation Grocers, and Morrison Foerster, the
the settlement reached in that case, hearing, and the debtor makes the bondholders’ counsel, did not respond
pointing to the payment of fees and same arguments we made, we hope to request for comment. ¤
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4 Turnarounds & Workouts SEPTEMBER 2018
Research Report
Who’s Who in Gibson Brands’ Bankruptcy Cases
by Carlo Fernandez
F ounded in 1894 and
headquartered in Nashville,
Tennessee, Gibson Brands, Inc.,
wound down.
Gibson Innovations, the
operating subsidiary of Gibson
the ABL/Term Loans.
A hearing is scheduled for Sept.
27, 2018, wherein the debtors
and its subsidiaries design and GI Holding B.V. which operated will seek confirmation of their
manufacture guitars and other Gibson’s consumer electronics debt-for-equity plan. Under the
fretted instruments. Gibson’s business that was acquired Plan, holders of secured notes will
brands include the Les Paul, from Koninklijke Philips N.V. in receive 100% of the new common
SG, Flying V, Explorer, J-45, November 2013, has commenced stock in reorganized Gibson.
Hummingbird, and ES-335, among a l i q u i d a t i o n p ro c e e d i n g Although their equity interests in
others. under Hong Kong law. Other Gibson will be cancelled for no
Over the years, the debtors’ subsidiaries of Gibson Innovations consideration under the Plan, the
businesses expanded beyond commenced liquidation or wind- debtors’ principals, namely David
guitars to include the design, down proceedings. Berryman and Henry Juszciewicz,
manufacture and international As of the bankruptcy filing, will be retained by the reorganized
distribution of various musical Gibson Brands and its affiliated debtors to provide post-Effective
instruments and professional and debtors have outstanding secured Date services pursuant to one-
consumer audio products. debt in the principal amount year management employment
Gibson Brands, Inc. and 11 of more than $518 million, and consulting agreements to aid
affiliates commenced Chapter consisting of (i) $100 million the new owners of the reorganized
11 cases (Bankr. D. Del. Lead balance on account of ABL/term debtors position the business for
Case No. 18-11025) on May 1, loans under the Amended and growth.
2018, after reaching terms of a Restated Loan Agreement dated DEBTORS
restructuring plan with holders Feb. 15, 2017, (ii) $375 million Goodwin Procter LLP
of senior secured notes and its of principal amount of 8.875% is serving as the debtors’ lead
principal shareholders. senior secured notes due 2018, counsel, with partners Michael H.
Promptly after the filing, Gibson and (iii) guarantee obligations Goldstein and Gregory W. Fox,
Brands announced that it will on account of term loans, with and associates Barry Z. Bazian,
be re-focusing the company on principal balance of $24 million, Grace D’Arcy, and Samuel J.
the manufacturing of world- used to finance the GI business Gamer leading the engagement.
class, musical instruments and pursuant to an International Term Pepper Hamilton LLP is the
professional audio products. Loan Agreement, dated as of Feb. debtors’ Delaware and conflicts
The company said its consumer 15, 2017. counsel. Attorneys providing the
electronics business referred to as E x i s t i n g n o t e h o l d e r s a re services are partner David M.
“Gibson Innovations”, which is providing $135 million to finance Fournier, and associates Michael
largely outside of the U.S., will be the pre-negotiated case and pay off Custer and Marcy McLaughlin.
www.TurnaroundsWorkouts.com
SEPTEMBER 2018 Turnarounds & Workouts 5
Research Report
Who’s Who in Gibson Brands’ Bankruptcy Cases
Continued from page 4
Alvarez & Marsal North managing associate Alison legal counsel, to the ad hoc
America, LLC, is serving as Franklin, and managing associate group of unaffiliated noteholders
restructuring advisor. Brian J. Lauren Macksoud lead the that is supporting the debtors’
Fox, the firm’s managing director engagement. restructuring. Attorneys involved
and co-head of its Eastern Region KPMG LLP is the debtors’ in the case include Bankruptcy
restructuring practice, has been auditor, with partner James D. and Corporate Reorganization
designated as chief restructuring Powell leading the engagement. Department co-chair Brian
officer of the debtors. Managing PricewaterhouseCoopers S. Hermann, counsel Robert
director Steven Kotarba, senior LLP is providing tax compliance Britton, and associates Kellie A.
director Michael Leto, director services, with the engagement led Cairns and Adam M. Denhoff.
Paul Kinealy, senior associate by partner Benjamin K. Stanga. Young Conaway Stargatt &
Kumanan Ramanathan, and Bates & Bates is special Taylor, LLP, is the Delaware
associate Adam Frenekl are also intellectual property counsel, counsel to the noteholders.
involved in the case. managing all aspects of the Attorneys responsible for the
Jefferies LLC has been debtors’ IP portfolio, including engagement are Bankruptcy and
providing investment banking 1700+ trademarks and 350+ Corporate Restructuring Practice
and general financial advisory patents worldwide, and manages chair Pauline K. Morgan, partner
services to Gibson since August foreign counsel with respect to the Sean T. Greecher, and associate
2016. The engagement is led by protection of the debtors’ IP rights Andrew L. Magaziner.
managing director Jeffrey Finger. outside of the United States. Lead PJT Partners is the noteholders’
Professionals involved in the case professionals working on the IP financial advisor.
also include senior vice president matters are partners Andrea E. As of June 28, 2018, the ad
John D’Amico, associate Paul Bates, John Bates, Kate Cox, hoc group of secured noteholders
Shin, and analyst Ervis Vukaj. Jason Cox, Kurt Schuettinger, held $285.9 million (76%) of the
Prime Clerk LLC is the Kevin Dawson and Dan Beitey, senior secured notes and have DIP
claims and noticing agent and and associate Laura Dienes. facility commitments of $104.4
administrative advisor. CBRE, Inc., is the real estate million. The members of the ad
Dentons US LLP is special broker tasked to market and sell hoc group are Grantham, Mayo,
coordinating counsel to the the debtors’ property. Stephen Van Otterloo & Co. LLC, KKR
debtors, serving as local counsel Kulinski, managing director, Credit Advisors (US) LLC,
in the People’s Republic of China heads the engagement. Melody Capital Partners LP,
with respect to issues relating to Silver Point Capital L.P., and
the debtor’s subsidiaries in China. SECURED NOTEHOLDERS Wilks Brothers LLC.
Partner Claude Montgomery, Paul, Weiss, Rifkind, Wharton
partner Brian Cousin, senior & Garrison LLP is providing
www.TurnaroundsWorkouts.com
6 Turnarounds & Workouts SEPTEMBER 2018
Research Report
Who’s Who in Gibson Brands’ Bankruptcy Cases
Continued from page 5
LENDERS AND AGENTS and White & Case LLP, led by with partners Adam G. Landis
Arnold & Porter Kaye Scholer Richard S. Kebrdle, are serving as and Matthew B. McGuire and
LLP, led by partner D. Tyler counsel to GSO Capital Partners associate Matthew R. Pierce as
Nurnberg and associate Steven LP, the sole term loan lender under the professionals involved in the
Fruchter, is representing Cortland the ABL/Term Loan Agreement case.
Capital Market Services, LLC, and the ITLA. FTI Consulting, Inc., is serving
in its capacity as the DIP agent as the committee’s financial
with respect to the debtors’ DIP UNSECURED advisor, with Samuel E. Star,
financing facility. CREDITORS’ COMMITTEE senior managing director, leading
In addition to representing the ad The Office of the U.S. Trustee the engagement.
hoc group of secured noteholders, for Region 3 formed an official
Young Conaway also serves as committee of unsecured creditors, FEE EXAMINER
Delaware counsel to Cortland. comprised of: (1) TKL Products Maria Aprile Sawczuk,
Morris James LLP, led by Corp., (2) Grover Musical a partner at Goldstein &
partner Eric J. Monzo, and Pryor Products, Inc., (3) EDC, Inc., McClintock LLLP, has been
Cashman LLP, led by partners (4) Advance Plating, Inc., (5) appointed as the fee examiner in
Seth H. Lieberman, Patrick Koninkijke Philips N.V., (6) the bankruptcy cases. The fee
Sibley, and Marie Hofsdal, are Guoguang Electronic Co., Ltd., examiner tapped her own firm
representing Wilmington Trust, and (7) Tronical GmbH. as counsel, to provide assistance
N.A., the successor trustee and Lowenstein Sandler LLP is in her analysis and preparation
collateral agent to the senior the committee’s legal counsel. of attendant reports concerning
secured notes. Jeffrey Cohen, partner, leads the the fees and expenses of retained
Winston & Strawn LLP, led engagement. Other professionals professionals. Associate Amrit
by partner Jason E. Bennett and involved in the case are partners Kapai and paraprofessional
associate Christina M. Wheaton, Wojciech F. Jung and Bruce Margaret Wabiszewski are the
is representing Bank of America, Buechler, counsel Andrew D. G&M personnel staffed on the
N.A., the administrative and Behlmann, Courtney E. Alvarez matter.
collateral agent under the ABL/ and Michael Savetsky, and
Term Loans. associates Christina Trapani and BANKRUPTCY JUDGE
Fox Rothschild LLP, led by Gabriel L. Olivera. The Hon. Christopher S. Sontchi is
partner Jeffrey M. Schlerf and Landis Rath & Cobb LLP the case judge. ¤
associate Margaret M. Manning is the committee’s co-counsel,
www.TurnaroundsWorkouts.comSEPTEMBER 2018 Turnarounds & Workouts 7
Nine West, from page 1 the acquisition closed to facilitate decisions that were directed by the
the transition and implement the new parent board (of which I was not a
Nine West, a mall retailer of board of directors’ business plan, member). I estimate I did so fewer
footwear, accessories, women’s which focused on organizing and than 20 times over the two-year
apparel, and jeanswear under brands developing the Company’s various period during which I served on
that include Nine West®, Anne brands and lines as separate business the Subsidiary Boards,” Schipani
Klein®, Bandolino® and Gloria units. At the time of the firm’s explains.
Vanderbilt®, asked the Bankruptcy engagement, Schipani served as
Court for permission to hire Schipani an officer but not as a director of
and Alvarez pursuant to Bankruptcy
The U.S. Trustee filed a
certain of Nine West’s affiliates and
Code sections 105(a) and 363(b), and subsidiaries. He initially served as the lone objection, arguing that
explicitly stated that the proposed vice president of operations, and later Alvarez and Schipani are
retention is not governed by section as President of Nine West beginning professional persons within
327. Notwithstanding, Nine West in May 2015. He was later appointed the meaning of section 327
added, Alvarez and Schipani as Interim CEO in June 2016. From and may only be hired solely
satisfied the Bankruptcy Code’s September 2015 to November 2017, and exclusively under that
disinterestedness requirement. he also served as a director on the
statute. It argued a debtor
The U.S. Trustee filed a lone boards of directors of One Jeanswear
objection, arguing that Alvarez and
can’t use section 363(b)
Group, Inc., one of the debtor entities;
Schipani are professional persons certain foreign non-debtor affiliates; to employ a professional
within the meaning of section 327 and Kasper Topco Limited after it person.
and may only be hired solely and was acquired by Nine West in January
exclusively under that statute. It argued 2017. In some instances, he was According to Schipani, Alvarez’s
a debtor can’t use section 363(b) to appointed to an officer or director role, role since its initial engagement in
employ a professional person. Taking including director of subsidiaries Nine 2014 has been focused exclusively
its argument a step further, the U.S. West Group International Limited and on making personnel available to
Trustee said Alvarez and Schipani GRI Group Ltd., to replace employees manage the day-to-day business of
can’t meet the disinterestedness who had resigned from their positions. the Company, exploring corporate
requirement of section 327(a) due to Schipani resigned from each of his opportunities, and planning and
their role in the Company prior to the board positions as of November 22, executing business strategies. “We
bankruptcy filing and, therefore, the 2017. were not hired for the purpose
firm’s engagement must be denied. “My role on each of the Subsidiary of restructuring the Company’s
Boards, including One Jeanswear obligations or otherwise assisting in
Pre-Bankruptcy Role Group, Inc. and the various the administration of a bankruptcy
In April 2014, Sycamore Partners foreign subsidiaries, was strictly proceeding. Bankruptcy was not a
Management, L.P., a private equity administrative and did not entail possibility that was discussed until the
investment group, acquired The substantive decision making as a summer of 2017, when the Company,
Jones Group Inc. in a $2.2 billion director. The boards on which I sat in consultation with other advisors and
leveraged buyout transaction. As did not hold any meetings, formal independent of A&M’s activities and
part of that deal, The Jones Group or informal. Over the course of responsibilities, began considering
merged with several affiliates and my service on these boards, my debt restructuring options,” he says.
the newly merged company was involvement was always ministerial Schipani explains that when Nine West
renamed as Nine West Holdings. The in nature: my actions were limited approached and entered bankruptcy
Company hired Alvarez shortly after to signing written consents to enact earlier this year, Alvarez personnel
www.TurnaroundsWorkouts.com8 Turnarounds & Workouts SEPTEMBER 2018
Nine West, from page 7 of a plan of reorganization; (3) in-possession financing; assisting in
whether the employment is directly the postpetition sale of a substantial
performed some services relating to related to the type of work carried portion of the business where they
the Company’s chapter 11 process. out by the debtor or to the routine evaluated bids, qualified certain bids,
This was a necessary extension and maintenance of the debtor’s business and participated in the auction which
continuation of the team’s existing operations; (4) whether the entity ultimately led to a very significant
role in managing operations, he noted. is given discretion or autonomy to sale for the Company; participating
“To the extent that A&M personnel exercise its professional judgment in discussions in implementing a key
play a role in other bankruptcy in some part of the administration employee retention plan for certain of
activities, such as the Company’s of the debtor’s estate; (5) the extent the Company’s management team; and
formulation of a chapter 11 plan or of the entity’s involvement in the being in contact with the Creditors’
its obtaining debtor-in-possession administration of the debtor’s estate; Committee’s professionals regarding
financing, this too is an inevitable and (6) whether the entity’s services the restructuring and meeting with the
outgrowth of our role in managing the involve some degree of special Committee members.
daily operations of the business. A&M knowledge or skill, such that it can
personnel support the professionals be considered a “professional” within
who were hired by the Company the ordinary meaning of the term.
Despite the Interim CEO
specifically for bankruptcy purposes, “There is no denying the central tag, Schwartz asserts that
such as Lazard Frères & Co. LLC and role A&M and Schipani are playing Alvarez and Schipani are
Kirkland and Ellis, LLP, but does so in in the Debtors’ reorganization,” says intimately involved in
the same way that in-house employees Andrea B. Schwartz, who represents Nine West’s restructuring
and officers of any company going U.S. Trustee William K. Harrington. and are central to the
through a restructuring typically Despite the Interim CEO tag, Schwartz
reorganization.
would in my experience,” Schipani asserts that Alvarez and Schipani are
continues. “For example, we help intimately involved in Nine West’s
gather relevant information and restructuring and are central to the The U.S. Trustee also notes
prepare forecasts and similar work reorganization. Moreover, the Schipani has confirmed he played
product to present to stakeholders so Company is not seeking to separately a “large role” in the negotiations of
that they can evaluate restructuring retain a chief restructuring officer the restructuring support agreement.
and financing options. These activities because Schipani’s “background in The U.S. Trustee says Schipani and
involve the same kind of work that understanding chapter 11” allows Alvarez will almost certainly be
we have been performing for years, him to “handle the restructuring centrally involved in the formation
outside the context of bankruptcy.” role,” she adds. of a plan of reorganization that is
Alvarez’s work in Nine West’s prosecuted to confirmation.
‘Intimately Involved’ case has included assisting in claims According to the U.S. Trustee, to
Courts frequently examine six work and reviewing various contracts the extent Nine West may argue that
factors when determining whether for the Company and assisting with Alvarez and Schipani in a CEO and
an entity constitutes a “professional “contract cures”; dealing with the CRO role may not be professionals
person”: (1) whether the entity Company’s vendors and customers as opposed to when they serve in a
controls, manages, administers, on a regular basis; actively reviewing financial advisor role, the proposed
invests, purchases or sells assets the Company’s contracts to determine duties of Alvarez and Schipani in
that are significant to the debtor’s which contracts to assume or reject; Nine West’s case substantially overlap
reorganization; (2) whether the entity preparing the 13-week cash flow with the scope of services the firm
is involved in negotiating the terms forecast; assisting with the debtor- has provided when retained as a
www.TurnaroundsWorkouts.comSEPTEMBER 2018 Turnarounds & Workouts 9
Nine West, from page 8 debtor argued that the employee was compliance in all material respects
added to the board solely because it with each of its requirements.
did not have an adequate number of
financial advisor in other cases. The
directors to act on the resolution to
U.S. Trustee cites In re LightSquared According to the Court,
file bankruptcy. The court found that
Inc., et al., No. 12-12080 (Bankr.
despite that the employee’s role as
the U.S. Trustee’s position
S.D.N.Y. May 14, 2012), where the now on section 363(b) lacks
director was extremely limited, the
court authorized the debtors to employ
unambiguous language of section 327 “intellectual honesty and
Alvarez & Marsal to provide financial
cannot be disregarded and “section consistency,” particularly
advisory services.
105(a) cannot be used to circumvent when considered in light
Not Disinterested the clear directive of section 327(a).” of the so-called Jay Alix
Section 101(14)(B) defines a The U.S. Trustee contends that Protocol adopted by the
“disinterested person” as one who Nine West’s use of section 363 is a
U.S. Trustee.
is not and was not, within two years backdoor way to avoid the limitations
before the bankruptcy filing date, of section 327(a), including the
a director or officer of the debtor. disinterestedness requirement. There The Jay Alix Protocol, while not
The U.S. Trustee relates that in In re can be no dispute that Schipani and a law and not binding on bankruptcy
Essential Therapeutics, Inc., 295 B.R. Alvarez are not disinterested under courts, has developed into a national
203, 204 (Bankr. D. Del. 2003), the the plain reading of the statute, the policy adopted by the U.S. Trustee
court denied the debtors’ request to U.S. Trustee asserts. whereby the U.S. Trustee assents to the
retain counsel after it was disclosed retention of distressed management
that a partner at that law firm held Jay Alix Revisited consultants by a debtor pursuant
the position of secretary of several “The Court is not persuaded by to section 363 as long as the firm
of the debtors during the two years any of the U.S. Trustee’s arguments complies with certain requirements
prior to the bankruptcy filing. The with respect to section 363(b) and the contained in the Protocol. The
debtor in Essential Therapeutics Debtors’ alleged inability to utilize Protocol’s core requirements include:
asserted that the partner’s officer this section of the Code to provide the (a) the firm sought to be retained
role was ministerial and that even basis for retention of A&M and Mr. must serve in only one capacity (i.e.,
if the partner was not disinterested, Schipani in this case,” the Honorable as either a financial advisor, crisis
his disqualification should not Shelley C. Chapman rules, agreeing manager, claims agent, or investor);
disqualify the entire law firm. The with both Nine West and Alvarez that (b) the firm’s retention application
court disagreed, however, stating the Objection contradicts the U.S. must be filed under section 363
that section 101(14) is unambiguous Trustee’s own policy of allowing of the Bankruptcy Code and the
and the only inquiry is whether the retention under section 363(b) in application must disclose the firm’s
professional was in fact an officer similar circumstances over the last relationships with interested parties
during the proscribed time. 14 years. According to the Court, the and make other disclosures showing
The U.S. Trustee also cites In U.S. Trustee’s position now on section the firm is otherwise disinterested; (c)
re United Color Press, Inc., 129 363(b) lacks “intellectual honesty the firm must file monthly staffing
B.R. 143, 144 (Bankr. S.D. Ohio and consistency,” particularly when reports, which must be subject to
1991), where the court denied the considered in light of the so-called Court review; and (d) retention of
debtor’s retention of a management Jay Alix Protocol adopted by the persons furnished by the firm must
consulting firm because an employee U.S. Trustee. The Court points out be approved by and act under the
of the consulting firm had served as a the Objection failed to mention the direction of an independent board of
director prior to the petition date. That Protocol at all, let alone Alvarez’s directors.
www.TurnaroundsWorkouts.com10 Turnarounds & Workouts SEPTEMBER 2018
Nine West, from page 9 done at the discretion and under the Schipani and A&M or that providing
direction of the parent boards and for competent corporate leadership
Nine West and Alvarez speculate primarily involved what can fairly during their chapter 11 cases is not
in their reply to the U.S. Trustee’s be characterized as ministerial duties in the best interest of the Debtors’
objection that the true origin of the and approvals of transactions he had estates. Nor has the U.S. Trustee
Objection is the firm’s alleged non- previously vetted in his role as an even attempted to articulate how the
compliance with footnote three of the officer. interests of the creditors or any of the
Protocol, given Schipani’s service as a Irreplaceable Debtors’ stakeholders could possibly
director of a lone Debtor entity within “For fourteen years, the crisis and be served by abruptly removing the
two years prior to the Petition Date. interim management industry has Debtors’ Interim CEO or A&M.”
Footnote three states that a financial relied on the implicit consent of the Lawyers at Milbank, Tweed, Hadley
advisor “shall not seek to be retained U.S. Trustee that such firms can be & McCloy LLP, led by Dennis Dunne,
in any capacity in a bankruptcy retained in a bankruptcy case pursuant Andrew M. Leblanc and Alexander
proceeding for an entity where any to section 363 rather than section B. Lees, which represents Alvarez,
principal, employee or independent 327 if they meet the requirements concur: “There is no dispute that the
contractor of [the advisor] serves or of the Protocol, and the industry Debtors’ continued retention of A&M
has served as a director of the entity has developed its business model is a sound exercise of their business
or an affiliate thereof within two years based on the understanding that the judgment and that their inability to
prior to the petition date.” Counsel U.S. Trustee would enforce this maintain their existing executive
for the U.S. Trustee confirmed this policy consistently and fairly,” Judge team could potentially imperil their
at the hearing on the employment Chapman notes. The U.S. Trustee is reorganization efforts.”
application. now reversing course in Nine West’s Creditors representing virtually all
Judge Chapman says Alvarez case without regard to the economic levels of Nine West’s capital structure
has not violated the purpose of the disruption that Schipani’s departure filed statements in support of Alvarez’s
Protocol, which is preventing a would cause. “The U.S. Trustee engagement, including (i) Wells Fargo
consultant from using its position has chosen to take a position that Bank, National Association, in its
in one capacity to benefit itself in would unquestionably visit damage capacity as ABL/FILO DIP Agent
another capacity. Judge Chapman on this case, this company, and its and Prepetition ABL/FILO Agent; (ii)
agrees with Nine West and Alvarez creditors; he chooses compliance with the Ad Hoc Secured Lender Group
that, while Schipani served as a a footnote over the interests of every that collectively beneficially own or
director on a single subsidiary board creditor in this case.” manage (or are investment advisors or
within two years of the Petition Lawyers at Kirkland & Ellis, led managers for funds that beneficially
Date, neither he nor any other by James H.M. Sprayregen, P.C., own or manage) approximately (a)
Alvarez employee has ever served Christopher J. Marcus, P.C. and $227.5 million in aggregate principal
on the parent boards responsible Joseph M. Graham, which represents amount of the loans under the Term
for approving the prepetition or Nine West, argue that Schipani and Loan Credit Agreement, dated as of
postpetition retention or compensation Alvarez, with their vital role in April 8, 2014, (b) $17.5 million in
of the firm. Nor did Schipani’s service managing the Company’s day-to- aggregate principal amount of the
on certain subsidiary boards overlap day and strategic operations the past loans under a Secured Superpriority
with the timing of the consideration four years, are neither new nor easily Debtor-in-Possession Term Loan
of either Alvarez’s 2014 or 2018 replaceable. They also state that: “No Credit Agreement, dated as of April
engagement letters. Judge Chapman party—including the U.S. Trustee— 11, 2018; and (c) $17.5 million in
also holds that Schipani’s service has even suggested the Debtors lack commitments for future fundings
on certain subsidiary boards was a good business reason to retain under the DIP Term Loan Credit
www.TurnaroundsWorkouts.comSEPTEMBER 2018 Turnarounds & Workouts 11
Nine West, from page 10 time when management services are debtor organization.” Meanwhile, the
most needed. “An absurd result, to Dairy Dozen-Milnor court stated that
Agreement; (iii) the so-called Ad say the least,” she says. a “professional person” under section
Hoc Group of Crossover Lenders, Rehabilitating a debtor and 327(a) is one who “takes a central role
a group of holders of loans under preserving the value of the debtor’s in the administration of the debtor’s
the Prepetition Secured Term Loan business—significant Bankruptcy bankruptcy estate and bankruptcy
Credit Agreement and loans under Code-related objectives—can be proceedings as opposed to one who
an Unsecured Term Loan Credit best accomplished by permitting provides services to the debtor that
Agreement, dated as of April 8, 2014; the company to utilize estate assets are necessary regardless of whether a
(iv) GLAS Trust Company, LLC, in under section 363 to hire the advisory bankruptcy petition was filed.”
its capacity as Administrative Agent services firm and its personnel who
under the Prepetition Unsecured played key management roles at the
Judge Chapman agrees
Term Loan Credit Agreement; (v) company prepetition, thus ensuring
with Alvarez that both
Brigade Capital Management, LP, the continuity of those services, Judge
Schipani and the firm do
one of the Debtors’ largest economic Chapman says.
not fall under the definition
stakeholders, serving as (a) a lender Judge Chapman agrees with
under the DIP Term Loan Credit Alvarez that both Schipani and the
of “professional person”
Agreement, (b) a holder of loans under firm do not fall under the definition in section 327(a) because
the Prepetition Secured Term Loan of “professional person” in section their roles—both pre- and
Credit Agreement, (c) a holder of 327(a) because their roles—both post-bankruptcy filing—
loans under the Prepetition Unsecured pre- and post-bankruptcy filing—are are focused on running the
Term Loan Credit Agreement, and (d) focused on running the business. business.
a holder of 8.25% Senior Notes Due She declined the U.S. Trustee’s
2019; and (vi) the Official Committee invitation to take the ruling in Comm. Judge Chapman ruled that the
of Unsecured Creditors. of Asbestos-Related Litigants v. services Schipani and Alvarez have
“As aptly pointed out by the Johns-Manville Corp., et al (In re provided to support Nine West’s
Debtors, if, however, section 327 is Johns-Manville Corp.), 60 B.R. 612, bankruptcy-specific professionals
the only path available for a chapter 619 (Bankr. S.D.N.Y. 1986), which are largely work that the officers and
11 debtor to retain a restructuring stated that “a professional person is managers of any bankrupt entity would
advisory firm and officers supplied one who plays an intimate or central have to do in the ordinary course. “It
by such firm, firms that previously role in the administration of the would be an absurd result if their work
provided firm personnel to fill debtor’s bankruptcy proceeding.” in such roles was sufficient to render
necessary management roles at the Judge Chapman finds the decision them ‘professional persons;’ if this
company must be jettisoned when in In re SageCrest II, LLC, Nos. were the case, virtually every senior
the company files for chapter 11 by 3:10CV978, 3:10CV979, 2011 WL executive of every chapter 11 debtor
virtue of the fact that, having served 134893, at *7 (D. Conn. Jan. 14, would have to be retained under
as officers of the debtor, the firm 2011), and In re Dairy Dozen-Milnor, section 327(a). This simply cannot
and its personnel are arguably not LLP, 441 B.R. 918, 920 (Bankr. be,” Judge Chapman says.
disinterested within the meaning of D.N.D. 2010), more instructive. The Because it has been determined
section 101(14) and thus cannot be SageCrest II court explained that “[o] that section 327(a) does not apply to
retained under section 327(a),” Judge fficers responsible for the day-to-day Alvarez and Schipani, Judge Chapman
Chapman further explains. This business of the debtor . . . stand in declined to take up the U.S. Trustee’s
practice, she continues, would disrupt contrast to professionals hired for additional argument that they aren’t
company management at the precise the sole purpose of reorganizing the “disinterested.” ¤
www.TurnaroundsWorkouts.com12 Turnarounds & Workouts SEPTEMBER 2018
Research Report
Who’s Who in The Rockport Company’s Bankruptcy Cases
by Carlo Fernandez
F ounded in 1971 and
headquartered in West Newton,
products directly through the
websites www.rockport.com and
planned.
The Rockport Company and
Massachusetts, The Rockport www.rockport.ca nine affiliates sought Chapter 11
Company, LLC, and its subsidiaries (iv) International Business. The bankruptcy protection (Bankr. D. Del.
are global designers, distributors, company partners with 22 distributors Lead Case No. 18-11145) on May
and retailers of comfort footwear in worldwide to sell its products in 14, 2018. The debtor-affiliates are
more than 50 markets worldwide. 35 countries, including China, Rockport Blocker, LLC, The Rockport
They offer a wide array of men’s Indonesia, Egypt, South Africa, Group Holdings, LLC, TRG 1-P
and women’s casual and dress style Mexico, and Peru. In addition, Holdings, LLC, TRG Intermediate
shoes, boots, and sandals, under certain of the company’s non-debtor Holdings, LLC, TRG Class D, LLC,
their namesake Rockport brand and foreign subsidiaries operate 121 retail The Rockport Group, LLC, DD
their owned Aravon and Dunham stores around the world. Management Services LLC, Rockport
brands. Their Rockport brand is In 2015, Reebok International Canada ULC, and Drydock Footwear,
recognized as a global leader in Ltd., a subsidiary of adidas AG, LLC.
lightweight, technology-infused engaged in a sale transaction with On May 16, 2018, the debtors
comfort footwear for all occasions. Berkshire Partners LLC and New commenced an ancillary proceeding
They also offer premium footwear for Balance Holding, Inc. Pursuant to the under Part IV of the Companies’
comfort-conscious customers through transaction, Reebok sold its Rockport Creditors Arrangement Act (Canada)
their women’s-oriented Aravon and division to debtor The Rockport in Toronto, Ontario, Canada before
outdoor-inspired Dunham brands. Group, LLC, an entity formed by the Ontario Superior Court of Justice
Rockport’s multi-channel business Berkshire and New Balance. Then, (Commercial List).
are as follows: New Balance contributed its owned CB Marathon OpCo, LLC, an
(i) Wholesale Business. brands, Cobb Hill, Aravon and entity formed by Charlesbank Capital
Comprising 57% of company sales Dunham, to TRG. Partners, LLC, signed a deal to
is the supply of men’s and women’s In late 2017, Berkshire and acquire most of the debtors’ assets,
footwear to well-known retailers New Balance sold 100% of their absent higher and better offers. The
across a variety of wholesale formats, interests in Rockport to its present agreement with Charlesbank includes
including department stores, family noteholders. Rockport said a costly the sale of Rockport’s global wholesale
retail outlets, internet retailers, and and time-consuming separation from assets, e-commerce platform and
independently owned retailers. the Adidas networks contributed to retail operations in Asia and Europe.
(ii) Retailer Store Business. The operational challenges and liquidity The North American retail assets were
company operates 8 full-price and issues. Separation of the company’s excluded from the sale. The debtors
19 outlet stores in the United States, operations from the Adidas networks are conducting store closing sales for
and 14 full-price and 19 outlet stores was not completed until November their North American stores.
in Canada. 2017, and proved to be more complex, A July 10 auction was cancelled
( i i i ) e C o m m e rc e B u s i n e s s . took meaningfully longer, and was after the debtors did not receive
The company also sells footwear significantly more expensive than qualified competing bids. The court
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Research Report
Who’s Who in The Rockport Company’s Bankruptcy Cases
Continued from page 12
then approved the sale to Charlesbank, Association, of up to $60 million rendered services to the debtors are
which agreed to purchase the assets in which rolls up the full amount of managing director Steven Tishman,
exchange for (i) $150 million in cash, prepetition ABL loans, and (ii) a DIP director Nathan Court, vice president
subject to adjustments; (ii) a warrant note facility from existing noteholders, Sanaz Memarsadeghi, associate
to purchase up to 5% of common comprising $20 million in new money Nicholas Watson, and financial
equity of the indirect parent of CB DIP notes and a roll-up of $40 million analysts Dustin Nguyen, Adam
once CB receives a return equal to in outstanding prepetition notes. Gzowski and Zachary Fineberg.
2.5 times its initial equity investment; Borden Ladner Gervais LLP is
and (iii) the assumption of certain DEBTORS the debtors’ Canadian bankruptcy
liabilities. Richards, Layton & Finger, P.A., counsel, with the engagement headed
Pursuant to a settlement, the is the debtors’ counsel. Professionals by partner Roger Jaipargas.
debtors agreed to pay $8 million to designated to represent the debtors Deloitte Tax LLP, is the tax
former owner Adidas in full and final are directors Mark D. Collins, service provider, with the overall
satisfaction of all of its claims against Michael J. Merchant and Mark A. engagement under the supervision of
Rockport. Kurtz, counsel Cory D. Kandestin, James J. DeSisto, tax partner.
As of the Petition Date, the debtors and associates Amanda R. Steele, Prime Clerk LLC serves as the
had total outstanding liabilities and Brendan J. Schlauch, Megan E. debtors’ claims, noticing agent and
other obligations of $287 million of Kenney and Travis J. Cuomo. administrative advisor.
funded indebtedness, comprised of: Alvarez & Marsal North America, HYPERAMS, LLC, has been
• $57 million outstanding on account LLC, is the debtors’ restructuring tapped by the debtors to be their
of revolving loans under an ABL and interim management advisor. liquidation consultant in connection
facility, with Citizens Business Alvarez’s Josh Jacobs has been with the store closing sales at the
Capital, as administrative agent designated as interim chief operating debtors’ North American retail
and collateral agent; officer and Paul Kosturos is the locations. The engagement is headed
• $188.3 million outstanding under interim chief financial officer for by Thomas E. Pabst, president.
senior secured notes due 2022, the debtors. Other Alvarez personnel
with Cortland Capital Market providing services in the case include NOTEHOLDERS &
Services LLC, as collateral agent; managing director Jay Herriman, DIP LENDERS
• $11.9 million outstanding under director Reilly Olson, consultant Debevoise & Plimpton LLP, led
subordinated notes; and Lacie Melasi, and analyst Jordan by partner My Chi To, counsel Erica
• $29.6 million outstanding in Kravette. S. Weisgerber and associate Daniel
trade debt. Houlihan Lokey Capital, Inc., E. Stroik, along with Pachulski
The debtors have arranged is the debtors’ financial advisor and Stang Ziehl & Jones LLP, led by
postpetition secured financing investment banker. Christopher attorneys Bradford J. Sandler,
comprised of (i) DIP ABL facility Di Mauro, a managing director at James E. O’Neill and Colin R.
from lenders Citizens Bank, N.A., Houlihan, leads the engagement. Robinson, represent holders of
and HSBC Bank USA, National Other principal professionals who have prepetition senior notes issued by
www.TurnaroundsWorkouts.com14 Turnarounds & Workouts SEPTEMBER 2018
Research Report
Who’s Who in The Rockport Company’s Bankruptcy Cases
Continued from page 13
certain of the debtors and purchasers Agent and DIP ABL Agent. led by partner Stephen Moeller-Sally
of notes under the debtors’ proposed and associates Marc B. Roitman and
DIP financing. CREDITORS’ COMMITTEE Kimberly J. Kodis, are representing
As of May 14, 2018, the prepetition On May 23, 2018, the Office Adidas and subsidiary Reebok, which are
noteholders and DIP note purchasers of the United States Trustee for former owners of the Rockport business
are Crescent Mezzanine Partners Region 3 appointed an official and two of the largest unsecured creditors
VI, L.P., Crescent Mezzanine committee of unsecured creditors, of the debtors and their affiliates.
Partners VIB (Cayman), L.P., consisting of three members: (i)
Crescent Mezzanine Partners VIC, Earth, Inc.; (ii) Hemisphere Design BUYER
L.P., Corporate Capital Trust, & Manufacturing LLC; and (iii) Goodwin Procter LLP, led by
Inc., Oregon Public Employees Simon Property Group, L.P. Boston partners Jon Herzog, and
R e t i re m e n t F u n d , N Y L C A P Cooley LLP is the committee’s Joseph F. Bernardi, Jr., in Boston,
Mezzanine Partners III, LP, lead counsel, with the engagement Massachusetts, and New York partner
NYLCAP Mezzanine Partners III led by partner Jay R. Indyke, and and Financial Restructuring practice
Parallel Fund, LP, and NYLCAP associates Robert Winning, Max co-chair William P. Weintraub,
Mezzanine Partners III 2012 Co- Schlan, Sarah A. Carnes, and serves as counsel to CB Marathon
Invest, LP. The noteholders are Lauren Reichardt. Opco, LLC, an affiliate of Charlesbank
affiliated with investment firms Whiteford, Taylor & Preston Equity Fund IX, Limited Partnership.
Crescent Capital Group LP, KKR LLC is the committee’s Delaware Pepper Hamilton LLP, led
Credit Advisors (US) LLC, and counsel. The WTP professionals by Corporate Restructuring and
GoldPoint Partners LLC. primarily staffed on the matter are Bankruptcy Practice Group co-chair
Holland & Knight LLP, led by partners Christopher M. Samis and David M. Fournier and partner
Chicago partner Joshua Spencer, and L. Katherine Good, and associates Evelyn J. Meltzer, also serves as
Pachulski Stang Ziehl & Jones LLP Aaron H. Stulman and Kevin F. counsel to CB Marathon Opco.
are serving as counsel to Cortland Shaw.
Capital Market Services LLC, Province, Inc., is the financial advisor OMBUDSMAN
as Collateral Agent and DIP Notes to the committee. Carol Cabello, senior Alan Chapell was appointed as the
Agent. director, leads the engagement. Other Consumer Privacy Ombudsman by
Riemer Braunstein LLP, led by professionals involved in the case are the U.S. Trustee on June 6, 2018. The
senior partner Donald E. Rothman, director Walter Bowser, senior associate Ombudsman tapped his firm, Chapell
partner Lon M. Singer, partner Walter Bowser, and associate Ricky Ng. & Associates, LLC, as counsel.
Jaime R. Koff, and associate Jeremy
Levesque, and Ashby & Geddes, P.A., FORMER OWNERS BANKRUPTCY JUDGE
led by director Gregory A. Taylor, Cole Schotz P.C., led by members The Hon. Laurie Selber Silverstein is
are counsel to Citizens Business Norman L. Pernick and Patrick J. the case judge. ¤
Capital, the ABL Administrative Reilley, and Ropes & Gray LLP,
www.TurnaroundsWorkouts.comSEPTEMBER 2018 Turnarounds & Workouts 15
Special Report
Restructuring Departments of National Accounting Firms
Firm Senior Professionals Recent Representative Clients
BDO USA David Berliner Served as accountants, auditors or tax advisors to Chapter 11
New York, NY Michele Michaelis debtors Alevo USA, Cenveo, Forbes Energy Services, Hydroscience
(212) 885-8347 Joe Cashel Technologies and Solid Seismic, Nine West Holdings, and
bdo.com Dan Ventricelli Wonderwork; as financial advisors to the Unsecured Creditors’
Baker Smith Committee in the Chapter 11 cases of AcuSport, CIBER Inc., and
Basil Karampelas Schletter Inc.; and as independent registered public accountant to
Larry Goddard Acura Pharmaceuticals, Anthera Pharmaceuticals, Apollo Medical
Maryellen Sebold Holdings, Dolphin Entertainment, Enphase Energy, FalconStor
Software, Jaguar Health, Kadmon Holdings, Kona Grill, Marathon
Patent Group, Midatech Pharma Plc, Molecular Templates, Novan
Inc., Synergy Pharmaceuticals, and Tel-Instrument Electronics
CBIZ CORPORATE Esther DuVal Served as accountants, auditors or tax advisors to Chapter 11
Recovery Services Charles Berk debtors CST Industries Holdings, Macavity Company, and Bond and
New York, NY Jeffrey Varsalone Company Jewelers Inc.; served as financial advisors to the Chapter
(212) 790-5700 Brian Ryniker 11 trustees in the cases of 919 Prospect Ave LLC and Avenica Inc.,
cbiz.com Coral Hansen and the Unsecured Creditors’ Committee in the Chapter 11 cases of
Blanche Zelmanovich Choxi.com, Limited Stores Company, Orion Healthcorp, Wachusett
Brian Ayers Ventures, and Yoga Smoga; and provided crisis management services
to Chapter 11 debtors Advanced Contracting Solutions and GEM
Hospitality (CBIZ MHM LLC’s managing director Jeffrey Varsalone
hired as chief restructuring officer in both cases)
CLIFTONLARSONALLEN Bruce W. Braunewell Served as accountants to Chapter 11 debtors The Archdiocese of
New York, NY Peter Bray Saint Paul and Minneapolis, Cranberry Growers Cooperative, Crapp
(646) 475-8336 Mark M. Dalbey Farms Partnership, Enviro-Safe Refrigerants, GYPC, Jolivette
claconnect.com Craig W. Olsen Hauling, KC7 Ranch Ltd., The University of Wisconsin Oshkosh
Harold Parsons Foundation, and Wordsworth Academy
Michele Pratt
Brian Shull
Matt Smutz
www.TurnaroundsWorkouts.com16 Turnarounds & Workouts SEPTEMBER 2018
Special Report
Restructuring Departments of National Accounting Firms
Continued from page 15
Firm Senior Professionals Recent Representative Clients
COHNREZNICK LLP Chad J. Shandler Served as accountants, auditors, appraisers or tax advisors in
New York, NY Kevin P. Clancy the Chapter 11 cases of Apex Xpress, Little Saigon Supermarket
(212) 297-0400 Clifford A. Zucker (Litigation Trustee); SIW Holding Company, and Wall Street Theater
cohnreznick.com Company; provided crisis management services to Chapter 11 debtor
Neighbors Legacy Holdings (Chad J. Shandler named as chief
restructuring officer); served as financial advisor and/or investment
banker to Chapter 11 debtors Alevo USA, Garces Restaurant
Group, and Zero Energy Systems, and to the Unsecured Creditors’
Committee in the Chapter 11 cases of 4 West Holdings, Acadiana
Management Group, ADPT DFW Holdings, Fargo Trucking, Folts
Home, Louisiana Medical Center, Preferred Care, RPM Harbor
Services, Rupari Holding Corp., and Uplift RX; and served as
independent registered public accountant to ADMA Biologics,
MabVax Therapeutics, and OpGen Inc.
CROWE LLP Brian R. Chmiel Served as accountants or financial advisors to Chapter 11 debtors 4
f/k/a Crowe Horwath Bernie Costich West Holdings, General Wireless Operations dba RadioShack, and
Chicago, IL Kipp Fagerstrom Hobbico; and as independent registered public accountant to Spanish
(312) 899-7000 Jeff Fishel Broadcasting System, Resonant Inc., and Zero Gravity Solutions
crowe.com John A. Grivetti
Brian Jordan
Dennis Kalten
DELOITTE Kirk Blair Served as accountants, auditors or tax service providers to Chapter
New York, NY John Doyle 11 debtors Claire’s Stores, Dawson International Investments
(212) 492-4000 Michael J. Epstein (Kinross) Inc., EV Energy Partners, GST Autoleather, The Gymboree
deloitte.com/us/crg Timothy Hurley Corporation, HGIM Holdings, Keystone Tube Company, Novation
Rich Infantino Companies, The Rockport Company, Tidewater Inc., Tops Holding II
Anthony Jackson Corporation, True Religion Apparel, and VER Technologies Holdco;
John Little provided crisis management services to Chapter 11 debtors Cocoa
Todd Patnode Services, LLC and Morgan Drive Associates (Deloitte Transactions
Tony Sasso and Business Analytics’ Robert Frezza hired as chief restructuring
Mike Sullivan officer), and Transmar Commodity Group (Frezza also hired as
CRO); provided valuation services to Chapter 11 debtor Vanguard
Natural Resources; and served as independent registered public
accountant to Aspirity Holdings, Babcock & Wilcox Enterprises,
Behringer Harvard Opportunity REIT I Inc., Ignite Restaurant
Group, Northern Oil and Gas, pSivida Corp., TerraVia Holdings, and
VAALCO Energy
www.TurnaroundsWorkouts.comSEPTEMBER 2018 Turnarounds & Workouts 17
Special Report
Restructuring Departments of National Accounting Firms
Continued from page 16
Firm Senior Professionals Recent Representative Clients
EISNERAMPER Thomas W. Buck Served as financial advisor to Chapter 11 debtors Garces Restaurant
New York, NY Anthony Calascibetta Group, Inc., Lancaster Fine Foods/Earth Pride Organics, Lombard
(212) 949-8700 Rick Frimmer Public Facilities Corporation, Neighborhood Health Services
eisneramper.com Michael Imber Corporation, and the Unsecured Creditors’ Committees in the
Robert D. Katz Chapter 11 cases of B. Lane Inc., Cinram Group, BICOM NY,
Jay Lindenberg LLC; as restructuring advisor to bond issuer, Anuvia Florida, LLC;
Edward A. Phillips as fiduciary (post-confirmation, Chapter 7 Trustee or receiver) in
David Ringer the following matters: Control Technology Solutions, Huntington
Allen Wilen Telecom, SDI Opco Holdings, Standard Register Company, Verengo
Distribution Trust, West Haven Lumber; as financial advisor to
trustees and post-confirmation fiduciaries in the following matters:
ASHINC Corporation Liquidating Trust, Cal-Dive International,
Calypso St. Barth, Inc., KiOR Liquidating Trust, Moyer Group,
New Century Transportation, Sheehan Pipe Line Construction
Company, Woodside Management, Inc., JP Nissen Company and
Metaldyne Corporation
ERNST & YOUNG Kevin W. Brower Served as accountants, auditors or tax advisors to Chapter 11
New York, NY Kevin S. Corbett debtors Cenveo Inc., Cobalt International Energy, Cumulus Media,
(212) 773-3000 Charles A. Giraud EXCO Resources, Gander Mountain Company, GST AutoLeather,
ey.com Kyle R. Green Gulfmark Offshore, iHeartMedia, Keystone Tube Company,
Peter Greene Optima Specialty Steel, Payless Holdings, Real Industry, rue21 inc.,
Gregory Greenwood Scottish Holdings and Scottish Annuity & Life Insurance Company
David Johnston (Cayman), Seadrill Limited, Sotera Wireless, Southeastern Grocers,
James A. Luzecky SquareTwo Financial Services, Stone Energy Corporation, Tidewater
Ryan C. Moore Inc., TK Holdings Inc., Toys “R” Us, Velocity Holding Company,
Mark A. Wood Venoco LLC, Walter Investment Management Corp., and The
Wet Seal; as restructuring advisor to Chapter 11 debtor Orexigen
Therapeutics; and as independent registered public accountant to
Armstrong Energy, Avinger Inc., BakerCorp International, Diana
Containerships, DragonWave Inc., DURECT Corporation, Ocera
Therapeutics, Onconova Therapeutics, Windtree Therapeutics, and
XOMA Corporation
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