Below is our initial take on recent bankruptcy-related developments:
Genetic test maker Invitae files for bankruptcy protection in US | Reuters
On Tuesday, Invitae, the San Francisco-based genetic test maker, filed for voluntary Chapter 11 bankruptcy protection in a U.S. bankruptcy court and plans for a sale process. The Softbank-backed company has requested court approval to finance its bankruptcy protection by using cash on hand to ensure its normal business operations, stating that it hopes to transition into Chapter 11 without disturbing operations.
S&K Take: We had a trio of bigger file cases in three different jurisdictions (although all Kirkland cases) since we last wrote, with Invitae hitting the docket in New Jersey, Sientra filing in Delaware, and Robertshaw in Texas (Houston to be exact). Invitae, a genetic testing company, hits the Garden State with a TSA with its senior secured noteholders, looking to pursue the ubiquitous “value maximizing sale.” The company has about $350 million in secured debt, with $1.15 billion in unsecured debt. The unsecured group apparently submitted a competing TSA prepetition that was rejected. Sientra, a surgical aesthetics company (we try to keep it clean here, this blog is for the kids after all), filed with a $90 million Deerfield DIP opting for a “robust” sale process. Interestingly, Judge Dorsey sua sponte pushed back on the sale timeline at the first day hearing, setting February 27 as an “interim” hearing subject to the to-be-formed Committee’s views on the process. I think we all know what that view will be (and justifiably so). Robertshaw marks a return to Houston, although that can largely be explained by the prepetition LME/PET/creditor on creditor violence (or other moniker du jour). The case can be impacted for better or worse by Judge Isgur’s decision on the uptier in Wesco/Incora, so that bears watching. Otherwise the debtor teed up the issues in much the same way.
Express shares slide on report that retailer is headed toward possible bankruptcy filing | The Columbus Dispatch
Share prices of apparel retailer Express Inc. fell 40% on Tuesday amid reports that the company is headed near a possible Chapter 11 bankruptcy filing. According to the WSJ, the apparel retailer is attempting to avoid filing for bankruptcy by hiring advisers to figure out how to restructure almost $280 million of debt as the company’s sales continue to struggle.
S&K Take: Some interesting names in the restructuring press this week, with Express being one of them. Sounds like they are going to try to dodge bankruptcy, although like most retail, they would probably benefit from the ability to shed unprofitable locations. The CEO copped to some missteps in strategy. Big picture, seems like they are in a tough spot with younger consumers opting for other (more e—commercey) names like Shein as well as a dip in the prevalence of workplace attire. The other name is The Children’s Place, although seems like they found a lifeline today, with Gordon Brothers providing a $180 million facility.
Some Boy Scouts' victims ask Supreme Court to stop $2.46 billion settlement | Reuters
Two small groups of sex-abuse victims and several insurers asked the U.S. Supreme Court to stay the youth organization’s $2.46 billion bankruptcy settlement from advancing while they appeal.
S&K Take: Hot off the presses, the dissenting parties in interest were successful in staying the implementation of the Boy Scouts’ plan, with the US Supreme Court issuing an administrative stay pending the Purdue third-party release decision. The dissenters had been unsuccessful at both the District Court and the Circuit Court level. Third time is a charm it seems. Yours truly had predicted that the Purdue decision would be unlikely to impact the Boy Scouts’ case, mainly premised on the notion that the plan would have been significantly implemented by decision time (in my defense this was after the Third Circuit had denied a stay). Hand up on that one.
