Reorg Research Job Posting - Distressed Debt Legal Analyst

Reorg Research is seeking a Distressed Debt Legal Analyst who is an expert in bankruptcy and/or corporate finance law and has experience in large corporate restructurings. Reorg Research is a growing provider of market-leading analysis and reporting for the distressed debt and restructuring community. Our clients include hedge funds, bankers and legal and financial advisors.

This is an ideal position for a mid-level associate who is seeking to transition to a new career in the distressed debt investing space. The Distressed Debt Legal Analyst will work closely with a small team of in-house experts (from both legal and financial backgrounds) and will be responsible with the rest of the team for producing research, analysis and reporting on distressed debt and bankruptcy law issues.

An ideal candidate will have the following:

  • JD with a strong academic record.
  • An expert understanding of bankruptcy law and 4+ years of bankruptcy law experience involving large chapter 11 cases. We will also consider attorneys with a similar level of experience specializing in corporate or bank finance in the context of large corporate restructurings.
  • Experience negotiating out-of-court restructurings.
  • Experience analyzing financial covenants and intercreditor provisions.
  • A proactive, self-starter work style and able to interact with people from varied professional backgrounds. 
  • A proven ability to multi-task and work both independently and as a team player in a fast-paced environment.

Key responsibilities include:

  • Day-to-day monitoring of distressed situations across the industry.
  • Reporting on case developments on a short timeframe and in accordance with Reorg Research’s style guide.
  • Preparing long-form analysis of legal developments (akin to client alerts at major law firms).
  • Monitoring industry publications.
  • Teleconferences and meetings with lawyers and investment professionals.

We primarily cover large corporate reorganizations and therefore cannot consider candidates whose experience does not include such cases. The candidate will work out of our New York City offices.

For those interested, please send your resume to recruiting [at] reorg-research [dot] com



Reorg Research Coverage of the EFH Bankruptcy

Yesterday was a day I've been waiting on for a long time: EFH (finally!) filed for bankruptcy in Delaware. Our coverage of the litany of filings of dockets has been amazingly comprehensive - we have written 7 stories that the buy side, sell side, advisory and legal communities have been using to stay up to date on the case. Further, our traffic was the highest it's ever been yesterday and hundreds of people in the market are using our docket alerting system to stay up to date with what's going on in the case. RSA gets filed? Our users are the first to see it. Brown Rudnick files an objection five minutes after the filing? We are the first to write it up.

To give you a sense of our coverage, here's a reproduction of our story yesterday on the EFIH DIP that has been proposed on the case. For more information on Reorg Research or to request a trial, you can visit our site here: Reorg Research

Relevant Document:

The debtors have filed a motion seeking approval of a $5.4 billion fully underwritten DIP term facility for EFIH. Proceeds of the DIP will be used to refinance existing EFIH first-lien notes - providing interest savings of $13 million per month. A second-lien DIP of approximately $1.9 billion, expected to be funded by certain PIK holders as disclosed in this morning's 8-K, will be pursued by a separate motion filed shortly. The debtors expect to seek court approval for both DIPs contemporaneously. 

Interest on the first-lien DIP will be L+225, subject to a 1% floor; the facility matures at the earlier of 24 months post-closing or the effective date of any reorganization plan. The term sheet lists a potential junior incremental facility of an amount up to $3 billion, which includes a provision that it shall be converted into equity under a plan of reorganization.

Interestingly, the debtors are pursuing a dual-track approach to the issue of the EFIH first and second lien notes' purported right to a make whole premium. Under this unique and potentially unprecedented approach, EFIH will make settlement overtures to holders of the notes and then pursue litigation against non-consenting holders.

The settlements, which will be further detailed in separate motions to be filed at a later date are:

For the first lien: a tender offer to settling first-lien holders whereby such holders can tender their claims for a 105% of par (inclusive of applicable fees). The payout for this settlement is in "EFIH First Lien DIP Roll-Up Claims" under the new first lien DIP facility. Separately, the debtors will litigate the make whole issue against those holders that do not participate in the settlement tender offer. 

For the second lien: the debtors will separately propose a second-lien refinancing and make-whole settlement funded by the proceeds of the as-yet-unproposed second-lien DIP facility. Pursuant to the second lien settlement, prepetition creditors who agree, other than Fidelity, will get principal and accrued prepetition interest in cash plus 50% of their pro rata make-whole claim. The motion notes that certain second-lien holders have agreed to forgo cash for their make-whole payments, instead taking a share of the second-lien DIP. Fidelity gets the same principal plus accrued treatment, but is also entitled to a one-time payment of $11.25 million plus the "right to receive up to $500 million (plus fees) of its payment under the EFIH Second Lien Settlement in the form of EFIH First Lien DIP Roll-Up Notes."

The motion notes that although certain creditors have agreed to the settlement, the option to participate will be open to all creditors, and the debtors will solicit participation "in accordance with applicable non-bankruptcy securities laws such that solicitation is complete on or around the entry of the final order." Importantly, EFIH will seek to consummate the full first-lien DIP regardless of whether the make-whole settlement is approved. 

The EFIH DIP motion also notes that the EFIH debtors will separately seek authority to assume a restructuring support agreement and that such motion will be filed today or shortly thereafter. According to the motion, if the court "does not approve the roll-ups, creditors may declare a termination event under the Restructuring Support Agreement." 

Despite the roll-up features of the DIP, EFIH argues that it does not pose the risks that typically accompany "roll-up" DIP facilities because "the Prepetition EFIH First Lien Creditors' participation in the syndication of the EFIH First Lien DIP Financing (other than with respect to the EFIH First Lien Settlement) is on the same terms as the other "new money" lenders and does not impose onerous terms on the EFIH Debtors that are typically associated with roll-up DIP facilities."

In addition, a footnote states that "the EFIH Debtors will seek to consummate the full EFIH First Lien DIP Financing regardless of whether the EFIH Makewhole Settlements are approved." However because the EFIH Debtors believe that none of the approximately $1 billion in liquidity necessary over a 26-month period is needed in the first 30 days of the case, the EFIH Debtors are not seeking interim financing or use of EFIH Cash Collateral during the interim period. They are seeking approval of DIP fees pursuant to the Interim Fee Order.

The motion also cites a "First Lien Makewhole Memorandum" that will be filed shortly. Previewing the arguments therein, the EFIH debtors argue that the EFIH first lien indentures do not provide for a makewhole premium "when the outstanding debt is accelerated by the EFIH debtors' chapter 11 filing." Citing to Calpine and S. Side House, the EFIH debtors note that secured creditors may only recover a makewhole premium when the payment is expressly provided for in a contract provision. Next, the debtors argue that the acceleration provision does not contain the phrase "Applicable Premium," which is the defined term that incorporates a makewhole premium in the indenture, nor does it reference the "Optional Redemption" provision that also references "Applicable Premium." As a result, the debtors conclude that the parties to the indenture did not intend to have the makewhole premium due upon a bankruptcy filing. The EFIH debtors request that EFIH first lien notes' claim be allowed in the amount of $3.985 billion, plus accrued and unpaid interest and any other allowable fees and expenses, but "excluding any EFIH First Lien Makewhole Premium." The settlement offer for 105% of par will likely proceed separately from EFIH's litigation of the allowed amount of the first lien claim.

The EFIH DIP motion requires entry of an interim fee order within 10 days of the petition date and entry of a final order within 110 days after the date of the Commitment Letter, which was April 28, 2014.  

The EFIH first-lien arrangers are Deutsche Bank, Citi, Merrill Lynch, Bank of America, Morgan Stanley, Barclays, Royal Bank of Canada, Union Bank, Loop Capital Markets and The Williams Capital Group. 



TMA New York NextGen Hosts "The Future of the Gaming Industry"

I have been affiliated with the Turnaround Management Association's New York Chapter for many years. The NextGen group, comprised of young professionals in the restructuring, distressed, and turnaround industries, is making a fantastic push into putting on certain educational events with the intent to take a topical issue in our space and organizing a group of experienced panelists to shed light on the issue.

On April 10 at 8am, TMA NY NextGen will be hosting an event titled: "The Future of the Gaming Industry: Jackpot or Bust?" Given Caesars is one of the top discussed names in distressed along with a proliferation of industry trends that may weigh on the cash flow and credit stats of a number of names in the space, this event looks to be a phenomenal one.

Panelists include Tom Benninger, of GLC, Scott Butera, CEO of Foxwoods, Dan D'Arrigo, CFO of MGM, and Todd Miranowski of Silver Point. The panel will be moderated by Jeffrey Horwitz of Proskauer.

For more information, or to register, you can visit the TMA page here: TMA Future of Gaming Industry Panel.

Look forward to seeing you there!



Distressed Conference: Booth's 9th Annual Credit, Restructuring, Distressed Investing & Turnaround Conference

On April 4, Booth will be hosting its 9th annual CReDIT Conference (CReDIT = Credit, Restructuring, Distressed Investing & Turnaround). We've covered the event in the past as this conference has always had a strong focus on distressed debt investing. The distressed investing panel includes a good friend of mine, Matt Dundon of Pine River Capital, Triet Nguyen of Axios, and Dave Trucano at Blackrock.

Other speakers include representatives of Peter J Solomon, Centerview, Lazard, Rothschild, Wynnchurch, Jones Day, Davis Polk, Faegre Baker and Kirkland. The keynotes this year include Jack Butler, who recently moved to Hilco from Skadden, Mark Okada, CIO at Highland, and Stuart Davies, PM and head of Special Situations at Sankaty.

For more information, you can visit the conference page here: http://student.chicagobooth.edu/group/credit/conference/

Hope to see you there!



10th Annual Wharton Restructuring and Distressed Investing Conference

Over the past few years, Distressed Debt Investing has attended and covered the annual Wharton Restructuring and Distressed Investing Conferences. The event is always top notch and probably does the best out of many distressed conferences I've attended in presenting a full view of the distressed investing process from operations, legal, and financial.

Wharton will be hosting their 10th annual Restructuring and Distressed Investing Conference on Friday February 21st. The keynotes speakers are really amazing:

  • Kevyn Orr, Emergency Manager of Detroit
  • Jack Butler, Partner at Skadden
  • Michael Weinstock, CEO of Monarch
  • Michael Psaros, Co-Founder of KPS
The panels at the conference include ones focused on distressed PE, Hedge Funds, a case study of Rescap, among others. Panelists include representatives from Davis Polk, Cravath, Weil Gotshal, Lazard, Bayside, Versa, Schulte Roth Zabel, Kramer Levin, Paulson & Co, Kirkland, Ropes & Gray, Blackstone, and GSO to name a few. 

We will be in attendance and look forward to seeing you there! For more information you can visit the conference website here: http://www.wrdic.org/



hunter [at] distressed-debt-investing [dot] com

About Me

I have spent the majority of my career as a value investor. For the past 8 years, I have worked on the buy side as a distressed debt and high yield investor.