Bankruptcy and Restructuring

Debtor/Corporate Restructuring

Experience

Earth Fare, Inc.

Welded Construction, L.P

Welded Construction was one of the largest mainline pipeline construction contractors in the United States overseeing pipeline projects in lengths ranging from a few hundred feet to over 200.  Young Conaway was retained as lead restructuring counsel for the company after Welded Construction began facing operating cash flow and liquidity issues stemming from a series of discrete challenges related to in-process pipeline projects, including cost-overruns, weather, regulatory delays, government/regulatory mandated shut downs and other matters that, in many instances, were not specific to Welded Construction. Since the commencement of the chapter 11 cases on October 22, 2018, Young Conaway worked with Welded Construction to obtain post-petition financing and negotiated a series of agreements with Welded Construction’s customers to arrange for compensation to complete the pipeline projects that were in various stages of completion. Absent the agreements with the customers to pre-fund ongoing operations, the projects would not have been completed resulting in significant claims and potentially conversion of the chapter 11 cases to chapter 7.

After the completion of the in-process pipeline projects, Welded Construction commenced a marketing process for the company and its assets.  With the assistance of Young Conaway, the company obtained authority to enter into an agency agreement with Gordon Brothers and Richie Brothers to sell the company’s extensive inventory of heavy equipment and machinery. The proceeds from the sale and auction process satisfied the postpetition financing facility and are funding the wind down and the chapter 11 cases while the company pursues litigation against certain parties.

RMH Franchise Holdings, Inc. and affiliates

Young Conaway serves as restructuring counsel to the Debtors.  Prior to the filing of their chapter 11 cases in May 2018, the Debtors formed what is believed to be the second-largest franchisee operator of Applebee’s restaurants, operating 159 restaurants across 15 geographically diverse states. The Debtors filed their chapter 11 cases to further the restructuring efforts they had commenced out-of-court in 2017 through additional lease renegotiations and optimization of their restaurant portfolio, and to avoid the forfeiture of their valuable franchise rights as a result of certain precipitous actions threatened by their franchisor, Applebee’s Restaurants LLC and certain of its affiliates. As sole restructuring counsel to the Debtors, Young Conaway guided the Debtors into the chapter 11 process on an expedited basis, preparing the “first day” pleadings necessary to ensure a smooth transition into chapter 11 for the company’s business operations, and working with the Debtors to further their restructuring efforts by, among other things, closing certain underperforming restaurant locations and rejecting the associated leases and franchise agreements, obtaining authority to make certain post-petition severance payments to their employees in connection with the closed locations, and obtaining Court approval of the Debtors’ sale of certain real property. Most importantly, Young Conaway defeated Applebee’s efforts to terminate the Debtors’ franchise agreements, and ultimately guided the Debtors through a consensual new value restructuring whereby the Debtors’ existing equity holder remained in place and the Debtors emerged with a significantly de-levered balance sheet. Young Conaway continues to advise the Debtors as they analyze claims and various other matters.

Triangle Petroleum

Triangle Petroleum is an independent energy holding company with a strategic focus in the Williston Basin of North Dakota.  Triangle Petroleum commenced its bankruptcy case to consensually restructure approximately $167 million in secured not obligations in accordance with a pre-packaged plan of reorganization, which was confirmed after approximately six weeks.  As a result of Triangle Petroleum’s plan, JP Morgan Securities, LLC obtained 100% of the new common stock of the reorganized entity, and general unsecured claims were left unimpaired. Young Conaway served as co-counsel to the debtor with Paul, Weiss, Rifkind, Wharton & Garrison LLP, and served in a lead capacity in many aspects of the case.

HPS Investment Partners, LLC

On November 21, 2018, LBI Media, Inc. and its affiliated debtors commenced chapter 11 cases.  LBI was the largest privately held, minority-owned Spanish-language broadcaster in the United States, having expanded over the years into a national media company that owned or licensed twenty-seven (27) Spanish-language television stations and radio stations in the largest markets in the United States, as well as EstrellaTV, a Spanish-language television broadcast network. Prior to the commencement of the chapter 11 cases, after a competitive process to solicit financing bids to replace its first lien debt, HPS had assumed the rights and obligations of LBI’s first lien noteholders, including those in an intercreditor agreement between the first lien noteholders and second lien secured creditors, which set-out the relative rights, position, and priorities of the Debtor’s first lien and second lien secured creditors. In spite of the intercreditor agreement and the second lien secured creditors’ obligations thereunder not to challenge HPS’s loans, in the chapter 11 cases, a group of the second lien secured creditors attacked those loans, which had the potential to derail LBI’s restructuring with extended litigation. Ultimately, the parties were able to reach a consensual resolution after protracted and contentious negotiations. Young Conaway was retained to represent HPS as co-counsel working with Paul, Weiss, Rifkind, Wharton & Garrison LLP and Mololamken LLP.

Arsenal Energy Holdings LLC

The debtor and its affiliates are engaged in the acquisition and development of natural gas resources in the Appalachian Basin, holding one of the largest acreage positions in West Virginia.  The debtor commenced bankruptcy as part of a comprehensive recapitalization transaction that significantly reduced the company’s debt while leaving operations unaffected and trade creditors unimpaired. The debtor’s pre-packaged plan of reorganization, which converted subordinated notes totaling approximately $861 million into equity and provided the company with access to an additional $35 million in liquidity, was confirmed and went effective just ten days after the petition date. Young Conaway, along with Simpson Thacher & Bartlett LLP, led the debtor through this novel chapter 11 filing, which was the first of its kind to be approved in the Bankruptcy Court for the District of Delaware.

David’s Bridal, Inc. and it’s affiliates

Young Conaway, along with co-counsel Debevoise & Plimpton, represented the debtors in connection with their $800 million debt restructuring, which was implemented through a consensual chapter 11 plan.  Young Conaway assisted the nation’s largest wedding retailer in meeting its goals to continue to provide uninterrupted, exceptional service to customers during the chapter 11 process and emerge from bankruptcy within two months of filing in time for the peak wedding dress retail season beginning in January 2019.

Mattress Firm, Inc.

Mattress Firm, Inc. is the largest specialty mattress retailer in the United States, operating more than 3,200 stores across 49 states prior to the company’s chapter 11 filing.  Young Conaway, together with Sidley Austin LLP, successfully navigated the company and its affiliates through a prepackaged chapter 11 process designed to simplify and de-leverage the debtors’ capital structure and right-size their real estate footprint. The debtors confirmed their prepackaged plan of reorganization, which provided for payment in full of nearly all unsecured creditors, and emerged from bankruptcy in less than 50 days. The restructuring provided the company with enhanced financial flexibility through a $525 million exit financing facility and significant cost savings realized from the rejection of hundreds of store leases, setting the stage for the company’s long-term success.