Below is our initial take on recent bankruptcy-related developments:
Since the Saudi Public Investment Fund, which spent more than $5 billion on LIV Golf since it launched in 2022, pulled out as an investor, the league is focusing on raising new funds but has begun to lay the groundwork for a possible U.S. bankruptcy filing.
S&K Take: There seem to be conflicting sentiments out there regarding the future of LIV. It is clear that the PIF has pulled funding. Bloomberg first reported that the league was contemplating bankruptcy, although reports over the last 24 hours indicate that the league is looking for about $250 million in financing. Those reports suggest that the league’s view is that it could become profitable in 20 months. Raising $250 million given the league’s profile and the players involved seems doable, although it is hard to believe that is enough to fund player contracts and prize pools. It has been cited that non-US league entities took a $461.8 million loss in 2024, and that the PIF has lost billions on the enterprise while being squeezed by the war in Iran and its impact on the oil trade. A bankruptcy would be fascinating—unpacking player contracts, team ownership and TV rights would be a heavy lift.
Boating supplies and fishing gear American retailer West Marine has entered into a restructuring agreement with key stakeholders and filed for Chapter 11 bankruptcy protections. The restructuring is intended to address the company’s capital structure, reduce debt, and position the business for long-term sustainability.
S&K Take: West Marine filed on Sunday in Delaware to implement a RSA purportedly supported by almost all of its lenders. The RSA provides a toggle. One path is a debt for equity deal where the $251.2 million term loan converts into equity, the ABL and the FILO either stay in place or are paid out in cash. GUCs get the short end of the stick, with a $250,000 pot spread across $120 million in trade debt (a .2% recovery for those that might be interested). The committee has some wood to chop on that one. The alternative is a going concern sale that would see proceeds distributed in order of priority. The company intends to use bankruptcy to right size its lease portfolio while they are at it. The Debtors are going to finance the case with cash on hand, and a cash collateral order was entered on Tuesday. We will keep an eye on this one for the maritime references alone.
In the face of fraud allegations and a complex bankruptcy case, First Brands has reached a deal to sell its Horizon North America business to a subsidiary of Flex-N-Gate for $64 million. However, Judge Christopher Lopez will still need to pass judgement this upcoming week on whether the case proceeds as Chapter 11 or moves to liquidation under Chapter 7.
S&K Take: It has been a minute since we covered First Brands, and catching up on all that has happened would defeat the purpose of this blog—a short and sweet recap of a few restructuring scenarios. So we will just rewind a week. The Debtors had filed a plan, with the DS hearing set for May 20. The Debtors had also filed a motion to approve a sale of its Horizon North America business line for $64 million. A slew of parties objected to the DS, including the UST, the ABL Lenders, certain SPV lenders, factors and trade creditors. So, basically everyone other than the UCC and the AHG. The main objection was to the death trap provision in the plan, which the Debtors ultimately agreed to remove (at least most of it). The Debtors sought to push forward with the DS on Wednesday, but despite a couple of short adjournments, the Court ultimately pushed the hearing to Tuesday the 26th. That same day the Court will consider the UST’s motion to dismiss or appoint a C11 Trustee. Big day for the First Brands case. Also on the docket is the sale motion we mentioned above. Debtors’ professionals may not be able to kick back on Monday and enjoy Memorial Day. Now that we are back in the First Brands mix, we will watch this one as it unfolds next week.