Business Finance & Restructuring Representations
Representation of Blockbuster Inc. and certain domestic subsidiaries, one of the world’s largest in-home movie and gaming companies, in their chapter 11 cases. Weil assisted Blockbuster, with the support of its secured lenders, in obtaining approval of the sale of all or substantially all of its assets, pursuant to section 363 of the Bankruptcy Code after a two-day auction, to DISH Network Corporation, the second largest satellite provider in the United States.
Representation of Extended Stay Inc., the largest owner of mid-priced extended stay hotels, and its debtor affiliates in one of the largest chapter 11 cases in the commercial mortgage-backed securities (CMBS) market. With more than 680 hotels across forty-four states and two Canadian provinces, Extended Stay’s chapter 11 cases involved approximately $7.4 billion in debt, consisting of a $4.1 billion mortgage loan and, in the aggregate, $3.3 billion of mezzanine debt spread across ten levels. Weil confronted novel and unprecedented issues relating to CMBS restructurings, including issues regarding the authority of the special servicer and the mechanism for voting on a plan of reorganization. As the cases progressed, two groups of interested investors instituted a bidding war to become the plan sponsor. After considering proposals from a consortium comprised of Centerbridge Partners LP, Paulson & Co., and affiliates of Blackstone Group LP, and a rival consortium led by Starwood Capital Group, Extended Stay ran a Court-sanctioned auction resulting in the successful sale to the Centerbridge-Paulson-Blackstone consortium for approximately $3.9 billion. With Weil’s assistance, the restructuring plan was approved approximately thirteen months after the commencement of the chapter 11 cases, with Extended Stay successfully emerging from bankruptcy under new ownership.
Representation of the Mashantucket Pequot Tribal Nation (MPTN), owner of Foxwoods Resort Casino, in its out-of-court restructuring of $2.3 billion in debt obligations. As a Native American Tribe, MPTN faced two primary hurdles in restructuring negotiations: eligibility for chapter 11 and the ability to issue equity to noteholders in a debt-for-equity swap. Weil successfully negotiated with multiple classes of creditors and interested parties, resulting in 99% of bondholders voting to approve the comprehensive restructuring.
Representation of LodgeNet Interactive Corporation, the leading provider of interactive media and connectivity services to the hospitality and healthcare industries in the United States, and certain subsidiaries in their prepackaged chapter 11 cases. Prior to filing the chapter 11 case, Weil facilitated the signing of an investment agreement by multiple stakeholders, which set the stage for the prepackaged bankruptcy. This transaction, which involved the sale of 100% of the new common stock of the reorganized LodgeNet for $68 million, was the basis for the plan of reorganization, which also provided for the payment in full of LodgeNet’s prepetition lenders and general unsecured creditors, and was confirmed less than two months after the cases were filed.
Representation of Trump Entertainment Resorts, one of the largest casino operators/owners in Atlantic City, New Jersey, in its chapter 11 case. After a long and contentious fourteen months in chapter 11 that included the appointment of an examiner, the filing of approximately thirteen plans of reorganization, ten disclosure statement hearings, and nearly three weeks of highly-contested confirmation hearings, Weil secured confirmation of the plan of reorganization proposed by Trump Entertainment and an ad hoc committee of second lien noteholders over a competing plan of reorganization proposed by Trump Entertainment’s senior lenders, Beal Bank and Icahn Partners. The confirmed plan provided for a $225 million equity infusion by certain creditors, the restructuring of the company’s first lien credit facility through a $125 million cash payment and the issuance of new first lien term notes, the cancellation of $1.25 billion of second lien debt and all existing publicly-held common stock, and the execution of a new trademark agreement with Donald J. Trump in exchange for new common stock and warrants.
Representation of The New York Racing Association Inc. (NYRA), the nonprofit owner and operator of New York State’s premier thoroughbred racetracks, in its chapter 11 case. Weil assisted in opposing the motion of New York State to dismiss the chapter 11 case and, in turn, commenced litigation, on behalf of NYRA, against the Governor and various agencies and New York State officials seeking declaratory and injunctive relief. Weil secured confirmation of a chapter 11 plan that incorporated settlements of the pending litigation and enabled NYRA to pay all creditors in full.
Representation of Magna Entertainment Corp., a leading owner and operator of horse racetracks and “racinos” (horse racetracks that include gambling operations) in its chapter 11 case. During its fourteen-month chapter 11 case, with Weil’s assistance, Magna successfully completed several sale transactions, including the sales of Lone Star Park, Thistledown Racetrack, and Remington Park, and was embroiled in hotly-contested litigation brought by the creditors’ committee against Magna’s largest prepetition secured creditor and majority shareholder. [Weil helped negotiate] a settlement of that litigation, pursuant to which Magna transferred its remaining racetrack assets and its interest in certain joint ventures to that creditor pursuant to a chapter 11 plan in exchange for certain contributions, payment in full of all administrative expenses, and payments to certain general unsecured creditors, with certain general unsecured creditors receiving payment in full.