Business Finance & Restructuring Representations
Representation of Aéropostale, Inc. and its subsidiaries in their chapter 11 cases filed in the U.S. Bankruptcy Court for the Southern District of New York. Filing for bankruptcy protection in May 2016, Aéropostale’s bankruptcy has played out in the mainstream press and trade publications alike. Weil pursued expedited, dual-path chapter 11 cases for a transaction to sell substantially all of Aéropostale’s 800-plus stores and other assets. Successfully avoiding outright liquidation, Aéropostale received bankruptcy court approval in Sept. for a sale that could preserve more than 229 stores and more than 10,000 jobs. The Wall Street Journal reported that the outcome was an “extraordinary result in a challenging case” that could prove “a model going forward for mall-based retailers that are stressed or distressed.”
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 a joint venture composed of Hilco Merchant Resources, LLC, SB Capital Group, LLC, Tiger Capital Group, LLC, and Gordon Brothers Group as the winning bidder to enter into an agency agreement to conduct liquidation sales in 226 of 642 stores in the chapter 11 cases of Borders Group, Inc. and its affiliates in the United States Bankruptcy Court for the Southern District of New York. On behalf of the joint venture, Weil negotiated an agency agreement with the debtors and drafted a sale order pursuant to which the joint venture managed the court-approved sales of inventory at certain of the debtors’ retail locations.
Representation of Daffy’s, Inc., a discount retailer, in its chapter 11 case, which was commenced to facilitate a sale of undermarket leasehold interests and facilitate the liquidation of inventory. In less than nine months after the commencement of the case, Weil helped Daffy’s confirm, effectuate, and make distributions to creditors under its chapter 11 plan of reorganization, which provided for payment in full (with interest) of all claims and left all equity interests in place. Weil’s expertise helped Daffy’s not only wind down its business with minimal delay, but also maximize returns to creditors and existing equity.
Representation of Deb Shops, Inc. and its affiliates, a retailer of junior “fast fashion,” in their chapter 11 cases. With Weil’s assistance, Deb Shops completed the sale of substantially all of its assets to its first lien lenders pursuant to a section 363(b) sale in less than four months after commencing its chapter 11 cases. As a result of this fast-tracked sale process, Weil enabled Deb Shops to quickly emerge from bankruptcy as a going concern enterprise that continued operating most of its retail stores.
Representation of leading NYC-area supermarket operator Fairway Group Holdings, Inc. in its chapter 11 bankruptcy. The prepackaged plan, which was accepted by all creditors entitled to vote and was subsequently confirmed by the Court, provided for a substantial reduction of Fairway’s existing funded debt by approximately $140 million and a reduction of Fairway’s annual debt service obligations by up to approximately $8 million. The plan right-sized Fairway’s balance sheet and set it on the path to emerge from bankruptcy as a leaner, healthier enterprise positioned to thrive and grow its iconic New York City brand. The reorganization is notable for its execution and efficiency: Fairway emerged from chapter 11 in July 2016, after just 63 days.
Representation of Finlay Enterprises, Inc., the operator of several fine jewelry retailers, including Bailey, Banks and Biddle, as well as jewelry departments in major department stores, in its chapter 11 cases. Weil assisted in conducting an auction of substantially all of Finlay’s assets, at which Gordon Brothers Retail Partners, LLC, as the “stalking horse,” submitted the highest bid, increasing the stalking horse bid by $7 million and in liquidating substantially all of the retail locations for the benefit of Finlay’s creditors.
Representation of Recycled Paper Greetings, Inc., the then-leading greeting card company, in its prepackaged chapter 11 case. The case was filed in connection with an acquisition agreement pursuant to which American Greetings purchased Recycled Paper for approximately $151 million. The plan was confirmed approximately six weeks after the commencement of the case.
Representation of VF Corporation in the acquisition of all of the worldwide intellectual property of Rock & Republic, a high end apparel company, pursuant to Rock & Republic’s chapter 11 plan of liquidation filed in the United States Bankruptcy Court for the Southern District of New York.
Representation of TSIC, Inc. f/k/a Sharper Image Corporation, a multichannel specialty retailer of innovative and high quality personal and home products, in its chapter 11 case. Weil assisted Sharper Image in selling substantially all of its assets, including its intellectual property and tradename, to a joint venture formed by Gordon Brothers Retail Partners, LLC; GB Brands, LLC; Hilco Merchant Resources, LLC; and Hilco Consumer Capital, LLC.
Representation of Steve & Barry’s, a retailer of apparel and accessories with approximately 300 stores in thirty-nine states, in its chapter 11 cases. Approximately one month into the chapter 11 cases, Weil successfully obtained a Bankruptcy Court order authorizing the company to sell a substantial portion of its business to Bay Harbour Management LLC and liquidate the remainder of the business through going out of business sales. After the purchaser subsequently filed for chapter 11 relief itself and defaulted on its obligation to pay certain operating expenses under the asset purchase agreement, Weil enabled the company’s estate to avoid protracted litigation with the purchaser’s estate by negotiating a favorable stipulation that escrowed certain funds to fund the purchaser’s obligation under the asset purchase agreement, thereby mitigating the exposure to the company’s estate from the purchaser’s chapter 11 case.
Weil advised The Children’s Place Retail Stores, Inc., the parent company of Hoop Holdings, LLC, in the chapter 11 cases of Hoop Holdings, LLC and its affiliates in the United States Bankruptcy Court for the District of Delaware. Hoop Holdings operated stores that sold The Walt Disney Company merchandise.
Weil represents The Great Atlantic & Pacific Tea Company, Inc., better known as A&P, and its direct and indirect subsidiaries in their ongoing chapter 11 cases. In one of 2015’s highest-profile bankruptcies, Weil avoided a fire sale and helped ensure that hundreds of supermarkets and tens of thousands of jobs survived restructuring. The sales of hundreds of other stores continued in 2016, ultimately generating more than $1 billion in sale proceeds and preserving over 18,000 jobs.
Representation of Uno Restaurant Holdings Corporation, a portfolio company, and 152 affiliated debtors, the operator and franchisor of a full-service, casual dining restaurant chain, and operator of quick-serve retail outlets and a consumer foods division, in their prenegotiated chapter 11 cases. The prenegotiated plan converted $142 million of senior secured notes into a controlling equity stake in the reorganized company. The plan of reorganization also incorporated an innovative settlement that provided for an offer by the secured noteholders to purchase the general unsecured claims out of cash distributions made to those secured noteholders under the plan. The plan was confirmed less than six months after the commencement of the chapter 11 cases.