LIV Golf Dormie, Mithaqal Status, and Business Ain’t Bloomin’
Below is our initial take on recent bankruptcy-related developments:
LIV Golf plans to shut down | NBC News
LIV Golf plans to wind down operations after the company stated that discussions with financial backer BC Partners failed to produce an agreement. “In light of the current circumstances, we believe shifting toward an orderly wind-down is the most responsible path forward for the League at this time,” the company said.
S&K Take: We have covered this case a few times, but there isn’t a whole lot of bankruptcy case activity, and BITB is partial to golf. So here we are again. There have been a few twists and turns this week in the LIV Golf saga. First, LIV Golf 2.0 met its demise when BC Partners pulled the plug on the RSA, which was their right if payer support didn’t meet requisite levels (in their sole discretion). If you have been following along, several big names struck deals to exit. While it was reported that 30 golfers remained interested, it sounds like getting them to sign on the line that is dotted wasn’t going so well without further assurances. That led to LIV announcing on Nov. 5 that the debtors were pivoting to a wind-down. On Sunday, however, reports suggested that BC Partners was in talks to purchase the PIF-backed DIP facility, which could open the door to a credit bid for the assets or some other permutation of BC Partners trying to piece things back together.
Clothing retailer Children’s Place files for bankruptcy, to seek sale | Reuters
Children’s retail franchise the Children’s Place has filed for bankruptcy after suffering mounting losses and low sales, as the parent of its namesake and Gymboree children’s clothing brands seek a buyer and begins to liquidate inventory. The company and 13 affiliates sought Chapter 11 protection from creditors with reported assets of $742.3 million and liabilities of $881.3 million.
S&K Take: There are a couple of noteworthy new filings, particularly the Children’s Place, which filed in the DNJ after several years of distress. The company was supported through those years (starting in 2024) by Mithaq Capital, a Saudi family investment vehicle. Mithaq provided a few unsecured financings and even converted some debt to equity, but alas, it wasn’t enough. The debtors have $282 million in DIP financing from their existing bank lenders to pursue a section 363 sale of all assets, including the Gymboree brand. The DIP was approved on an interim basis at a hearing yesterday.
Outback Steakhouse franchisee files for bankruptcy | Fox Business
Out West Restaurant Group filed for Chapter 11 bankruptcy protection on Monday, November 2 with parent company Bloomin’ Brands set to acquire the former franchisee’s 61 Outback Steakhouse locations. Bloomin’ Brands is set to pay $26.3 million for the restaurants as well as $5.5 million in interest-free debtor-in-possession financing to support Out West’s operations during the Chapter 11 proceedings.
S&K Take: This one looks like your typical franchisee case, which involves the west coast-based operator of 61 Outback Steakhouse restaurants in five states. At one point in 2018, that was 99 Outbacks. Interestingly, the debtors’ $129 million financing facility matured in 2022. The $319 million in outstanding prepetition indebtedness thus includes a staggering $190 million in interest and fees. An MCA lender would be proud. The company intend to sell its assets—the DIP lender, a Bloomin’ Brands entity (the franchisor) is also the stalking horse with a $26.3 million cash bid. Doesn’t look like we are going to clear that secured debt in this one.
