November 2019 Turnarounds VOLUME 33, NUMBER 11 & Workouts News for People Tracking Distressed Businesses www.TurnaroundsWorkouts.com

In This Issue: PJT Chair Recognized for Contributions

Tim Coleman Receives 2019 to Restructuring Industry Harvey Miller Award by Colin Post Judge Opens PG&E Case to Rival Plans Tim Coleman is a partner at financial advisory and investment bank, PJT Partners, where he is the Global Chairman of the company’s Restructuring and UST Lacked Authority to Special Situations Group. Tim has led a remarkable 40-year career managing Appoint Committee in Medical Center’s Bankruptcy, Court high-profile bankruptcies and out-of-court restructurings that ultimately saved Says American jobs and rebuilt failing businesses. Continue on page 2 → Click on a title below to jump to that section

Research Report: Hedge Funds Fighting Over Control Who’s Who in Sanchez Energy Corporation of PG&E Corp. Page 6 → by Carlo Fernandez

Research Report: While Warren Buffett’s Berkshire Hathaway Energy Corp. has not indicated any Who’s Who in Legacy interest in acquiring PG&E Corp. despite prodding by California Governor Gavin Reserves Inc. Page 14 → Newsom, there is still value in California’s largest utility, recent developments in bankruptcy court suggest. Two groups of multibillion-dollar hedge funds are Special Report: fighting over control of the San Francisco-based power provider. The Nation’s Largest Claims Agents Continue on page 10 → Page 21 →

Worth Reading: Creditors’ Panel in Coalinga Chapter THE BIG BOARD: A History of the New York Stock Market 9 Case Disbanded Page 24 → by Frauline Abangan Special Report: Because its role was not correctly introduced, the committee of unsecured Outstanding Turnaround Firms – 2019 creditors in the Chapter 9 case of Coalinga Regional Medical Center found itself Page 25 → disbanded by the bankruptcy court. Judge Rene Lastreto, II, of the U.S. Bankruptcy Court for the Eastern District Gnome de Plume: Chasing Unicorns of California granted Coalinga’s motion to vacate the committee’s appointment Page 33 → Continue on page 18 → 2 Turnarounds & Workouts NOVEMBER 2019

Tim Coleman, from page 1 cases, Blackstone had been a Corporation and XL Capital. contender to acquire the company, In addition to being honored with Tim received a BA from the but declined. So Tim, representing the Harvey R. Miller Outstanding University of California at Santa a company that wanted nothing to Achievement Award for Service Barbara and an MBA from the do with the business before, had to to the Restructuring Industry, Tim University of Southern California, pitch people who ultimately bought was inducted in the Turnaround with a stint as a restaurant server it and failed to make it work. This Management Association’s in between. He began his career wasn’t a conflict of interest so Turnaround Restructuring and at Citi in 1979, where he rose to much as an issue of pride that Distressed Investing Industry Vice President by 1992, when he Blackstone’s restructuring arm Hall of Fame in 2013. Tim is an left to join what at the time was found difficult to overcome with active alumni working to grow the a fairly new player in investment prospects. Marshall School of Business at the banking and asset management, In 2014 Blackstone spun off University of Southern California, Blackstone. its restructuring arm into the and occasionally lectures at Tim worked for 23 years newly founded PJT Partners. In Columbia University and the NYU at Blackstone on a variety of just five years, Tim has helped Stern School of Business. restructuring and special situation grow PJT Partners to become assignments for companies, one of the top investment banks municipalities, creditor groups, in the world with over $2 trillion special committees of corporate in liabilities restructured in 600 boards, corporate parents of distressed situations located in troubled companies and acquirers over 30 countries, making them of distressed assets. the world’s leading advisory in As Blackstone grew into the completed restructurings in 2019. sprawling, multibillion-dollar Key bankruptcies from this year enterprise it is today, Tim’s which PJT Partners has advised team ran into new problems that on include PG&E, Windstream, Tim Coleman prevented them from winning some EP Energy, Sanchez Oil & Gas, 2019 Harvey Miller assignments. Blackstone’s private Award Recipient Bristow and Legacy Reserves. equity and lending businesses were Over the whole of his career, Tim hindering the growth of its advisory has been involved in Bear Stearns, Interview arms, including restructuring and We caught up with Tim in Delta Air Lines, Financial Guaranty special situations. advance of the 26th Annual Insurance Company, Ford Motor Not only did Blackstone’s far- Distressed Investing Conference, Company, Greece, Kaupthing flung businesses create conflicts where he will receive the Harvey (Iceland), Los Angeles Dodgers, of interest, but Tim’s team ran Miller Award and be interviewed MBIA (Re: Bank of America, into obstacles specific to selling by Judge James Peck. Detroit, Puerto Rico and Rescap), restructuring advice. In an T&W: You’ve said that the Mohegan Sun, The Weinstein interview with Debtwire, Tim Macy’s bankruptcy was your Company, Westinghouse, Xerox explained that in many insolvency

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Tim Coleman, from page 2 downgraded from investment America exposures, notional grade and would be placed into insured amount of $7.4 billion; greatest professional challenge, in rehabilitation. • Bank of America dismissed a large part because you were fairly The negotiation was between pending litigation concerning new to investment banking. What Bruce Thompson, Bank of the restructuring transactions was your greatest professional America’s Chief Financial announced by MBIA in challenge if disregarding the Officer, and myself. The New February 2009 and litigation landmark cases during your rise? York Insurance Commissioner concerning the senior In other words, what was your and his staff were also on the debt consent solicitation most difficult case after you were phone frequently, including representing $900 million of an established veteran and leader the entire weekend during the parent company debt; in reorganizations? final negotiation, as they were • MBIA dismissed litigation Tim Coleman: We represented attempting to make a determination against CountryWide relating MBIA in a transaction/lawsuit in real time whether or not to to breaches of representations against Bank of America, which place MBIA into rehabilitation and warranties on certain had recently bought CountryWide. immediately. securitizations; MBIA alleged that CountryWide It was an incredibly difficult • Bank of America received had defrauded MBIA in its creation negotiation primarily because it five-year warrants to purchase of mortgages. Separately, MBIA was one-on-one, and not only the 9.94 million shares of MBIA had also written a synthetic $5 corporation, but also the wellbeing common stock at a price of billion credit default swap (CDS) of many hardworking employees $9.59 per share; and to Bank of America based on rested on my reaching a successful • Bank of America provided commercial mortgage-backed outcome. Usually we work in a $500 million three-year securities (CMBS). teams with lawyers and clients, secured revolving credit to As the CountryWide trials but this was the opposite – it was MBIA. continued to move through the just me with support from my MBIA used the money to refund courts, with the most recent colleagues at Blackstone. inter-company loans, allowing for decisions in MBIA’s favor, the Ultimately, the outcome was a a restoration of normalcy in their synthetic CDS [obligation] was success for both firms. There was a capital structure. Immediately also inching toward a trigger point. comprehensive settlement totaling following the announcement of a MBIA had tried for years to $10 billion, the key takeaways of settlement, MBIA’s stock increased resolve both issues to no avail. which included: more than 42% to $14.29, creating The negotiators were hundreds • MBIA received a net payment $798 million of value, and Bank of of millions of dollars apart. I was of $1.7 billion, consisting of America’s stock increased more asked to get involved through a approximately $1.6 billion than 3% to $12.88, creating $4.11 separate channel to determine if a of cash and the $137 million billion of value. deal was possible. Consequently, principal amount of MBIA T&W: You got an early look at I was the lead negotiator without Inc.’s senior notes; mortgage-backed securities, well a client or lawyer at the table • Commutated all Bank of in advance of the financial crisis of and if I failed, MBIA would be

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Tim Coleman, from page 3 the U.S. territory of Puerto Rico for anyone to make claims and file access to bankruptcy protection, charges. It is the strength of the 2008 and 2009. You knew the risks will set a precedent and lead system and our democracy. and the minutia well ahead of the to some sort of bankruptcy for I have not seen egregious market, which led you to winning states. But many bankruptcy abuses, and I would note that a lot of assignments based on lawyers believe that is a one person’s view of frivolity is that. You’ve also said that nobody nonstarter. Do you think states another person’s view of serious can predict everything about the will have access to bankruptcy charges. economy. But if you wanted to in the next 10 years? T&W: You talk a lot about replicate that (getting ahead of Coleman: Many states the importance of integrity in this the market in attaining specialized have financial issues that may business. What experience from knowledge of a key problem), what not be resolvable outside of a your youth or later in life do you area of the economy would you be court proceeding. Creditors are attribute to valuing integrity or studying today? unlikely willing to compromise framing your own sense of right Coleman: This is the $64 billion debt unless all other creditors and wrong? question. Everyone is asking if, do the same. Similar to Puerto Coleman: Integrity, honesty, when and how a recession will Rico, at some point, one must hard work and personal start and which industries will be recognize the dilemma and find responsibility were all lessons affected. Today, the billions of a way to solve the balance sheet from childhood, taught to us by dollars invested in collateralized and annual spending. our parents’ words and deeds. loan obligations (CLOs) would At the time, no one thought There was no other option in our probably be most akin to the Title III and Title VI would household. mortgage-backed securities crisis. be created, and it just goes to T&W: One interesting piece CLOs are cumbersome and that show that solutions that seem of advice you give, especially has increased speculation from out of the realm sometimes are to younger professionals, is to investors and analysts alike about created when there are no other network with people your own age. what could happen to companies alternatives. Don’t spend all your time trying to when their creditors are CLOs. T&W: You’ve said that get close to the big shot graybeards. The trade war has hit many one weakness in America’s But what advice would you give to companies directly, and will likely bankruptcy system is frivolous other big shot graybeards? Who impact [many] more if it continues. litigation from people milking will you be looking to meet at Certain sectors, such as energy and the estate for fees. While you say Distressed Investing 2019? retail, continue to see a number there is an argument for keeping Coleman: Do what you enjoy. of rolling industry issues, and it this way, would any measure or Age is a factor, but not the only our team at PJT has worked with change to our system be effective factor in career decisions. Don’t several clients in each space. in curbing the most egregious miss out on other alternatives in T&W: In a 2015 Bloomberg abuses? life just because you are pursuing interview, you said that the Coleman: Our American what you know versus what you PROMESA statute, which gives system is based on the ability do not know. ¤

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Who’s Who in Sanchez Energy’s Bankruptcy Cases by Carlo Fernandez anchez Energy Corporation the first quarter of 2019, the energy industry globally and, in S(OTC Pink: SNECQ) and Debtors reported production of particular, on U.S. independent its affiliates are independent approximately 76,000 Boe/d, oil and natural gas producers. exploration and production revenue of $217 million, and a net Overall, oil prices have fallen 50% companies focused on the loss of $67 million. and natural gas prices have fallen acquisition and development of Sanchez Energy (“SN”) was approximately 60% from their U.S. onshore oil and natural gas formed by certain members of the respective highs in 2014. resources. Sanchez Group in August 2011 and Sanchez Energy Corp. and 10 Sanchez Energy is currently completed its initial public offering affiliates sought protection under focused on the development of (“IPO”) in December 2011. Chapter 11 of the Bankruptcy Code significant resource potential from As a result of delisting (Bankr. S.D. Tex. Lead Case No. the Eagle Ford Shale in South proceedings by the NYSE, 19-34508) on Aug. 11, 2019. Texas, and holds other producing Sanchez Energy’s common stock The affiliated debtors are SN properties and undeveloped began trading on the OTC Pink Palmetto, LLC, SN Marquis LLC, acreage, including in the Marketplace under ticker symbol SN Cotulla Assets, LLC, SN Tuscaloosa Marine Shale (TMS) “SNEC” upon the opening of Operating, LLC, SN TMS, LLC, in Mississippi and Louisiana. trading on Feb. 21, 2019. SN Catarina, LLC, Rockin L As of Dec. 31, 2018, SN had Non-debtor Sanchez Oil & Ranch Company, LLC, SN EF 325,000 net acres of oil and natural Gas Corporation (“SOG”) is a Maverick, LLC, SN Payables, gas properties with proved reserves full-service oil and natural gas LLC, and SN UR Holdings, LLC. of 380 million barrels of oil operating company privately Sanchez Energy disclosed equivalent and interests in 2,400 owned by members of the Sanchez $2.160 billion in assets against gross producing wells. family. SOG provides general $2.855 billion in liabilities as of For the year ended Dec. 31, and administrative, reserve June 30, 2019. 2018, SN produced 79,000 barrels engineering, operational, and As of the Petition Date, the of oil equivalent per day (“Boe/d”), geological and geophysical services Debtors’ debt obligations consist split roughly in thirds among oil, to the Debtors. All individuals of: natural gas, and natural gas liquids comprising the Debtors’ workforce (i) borrowings of $7.9 million (“NGLs”), which represented are SOG employees as the Debtors in principal amount and a $17.1 production growth of 130x since do not have any employees of their million issued and undrawn SN’s 2011 IPO, surpassed $1 own. standby letter of credit outstanding billion in revenue for the first The sustained decline and under the first-out senior secured time, and reported consolidated volatility in commodity prices revolving credit facility provided net income of $85 million. For have weighed heavily on the by Royal Bank of Canada

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Who’s Who in Sanchez Energy’s Bankruptcy Cases Continued from page 6

(“RBC”), as administrative agent proposed an alternative financing Debtors’ special counsel, with and presently the sole lender; for the Debtors. partners Robin Gibbs, Sam Cruse (ii) $500 million in principal III and Brice Wilkinson, and amount of 7.25% senior secured DEBTORS associate Jorge Gutierrez, Jr., notes due February 2023 under Akin Gump Strauss Hauer & having the primary responsibility an indenture with Wilmington Feld LLP is serving as Sanchez for providing services to the Savings Fund Society, FSB, as Energy’s lead counsel. Financial Debtor. The firm is providing presumptive successor trustee, and Restructuring partners Ira S. legal services in connection with RBC, as collateral trustee; Dizengoff and James Savin, two separate lawsuits styled (i) (iii) $600 million in principal and Litigation partner Marty L. Gavilan Resources LLC v. SN amount of 7.75% senior unsecured Brimmage, Jr., are the attorneys EF Maverick, LLC and Sanchez notes due June 2021 under an primarily assigned to the case. Energy Corporation, American indenture with Delaware Trust Jackson Walker LLP is co- Arbitration Association (Case Company, as successor trustee; and counsel and conflicts counsel to No. 01-19-0000-5228) and (ii) (iv) $1.15 billion in principal the Debtors. Partners Matthew Sanchez Oil & Gas Corporation, amount of 6.125% senior unsecured D. Cavenaugh, Elizabeth Carol Sanchez Energy Corporation and notes due January 2023 under an Freeman, and Jennifer F. Wertz Sanchez Production Partners LP indenture with Delaware Trust, as are the attorneys primarily assigned v. Terra Energy Partners LLC, successor trustee. to the case. Benjamin “B.J.” Reynolds, Mark Although the Debtors have Alvarez & Marsal North Mewshaw, and Wes Hobbs (Cause not reached an agreement with America, LLC, is the Debtors’ No. 201618909). their stakeholders on the terms restructuring advisors. Jeffery Ropes & Gray LLP, led by of a comprehensive restructuring Stegenga, a managing director, Business Restructuring partners transaction, the Debtors have leads A&M’s activities under Mark R. Somerstein and Andrew secured $175 million of new the engagement. He is primarily G. Devore, and Litigation partner money debtor in possession assisted by managing director Matthew L. McGinnis, is serving financing from the members of the Jonathan Hickman and director as special counsel to the special Secured Notes Ad Hoc Group. The Don Koetting. committee of Sanchez Energy’s financing also provides for a roll- Moelis & Company LLC is board of directors. The special up of $175 million of 7.25% Senior the Debtors’ financial advisor committee -- comprised of board Secured Notes, and repayment of and investment banker. Bassam members Eugene I. Davis (a all amounts outstanding under the J. Latif, a managing director of former Akin Gump associate) and First-Out Senior Secured Notes. Moelis, heads the engagement. Adam C. Zylman -- was formed Unsecured noteholders have Gibbs & Bruns LLP is the to conduct an investigation into

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Who’s Who in Sanchez Energy’s Bankruptcy Cases Continued from page 7 and pursue, settle or otherwise funds, accounts, and/or managers participating in the DIP Facility, resolve actual or potential claims of funds or accounts, as beneficial including Loomis Sayles & and causes of action Sanchez holders of obligations arising Company and Nut Tree Capital Energy has or may have related to from or relating to the 7.25% Management. SOG, Sanchez Midstream Partners Senior Secured First Lien Notes Arnold & Porter Kaye LP and their affiliates. and as lenders under the debtor in Scholer LLP, led by partner KPMG LLP is providing audit possession facility. Jonathan I. Levine, and associate and tax consulting services to Foley & Lardner LLP, led by Ginger Clements, and Cole the Debtors. Allen S. Kekish, a partner John P. Melko, is local Schotz P.C., led by member certified public accountant and a counsel to the Secured Notes Ad Michael D. Warner, is counsel partner of KPMG LLP, leads the Hoc Group. for Wilmington Savings Fund engagement. Evercore Group LLC. is the Society, FSB, the trustee under the Prime Clerk LLC is the claims, financial advisor to the Ad Hoc Secured Notes and agent under the noticing and solicitation agent. Group. DIP Facility. As of Sept. 13, 2019, members FIRST OUT of the Secured Notes Ad Hoc UNSECURED NOTEHOLDERS REPRESENTATIVE Group are Apollo Commodities Quinn Emanuel Urquhart & Thompson & Knight LLP, led Management, LP, Capital Sullivan, LLP, led by partners by partner Tye C. Hancock and Research and Management Patricia B. Tomasco, Christopher associates Anthony F. Pirraglia Company, CQS (UK) LLP, Cross Porter and Benjamin I. Finestone, and Steven J. Levitt, is counsel Ocean Partners Management of counsel Daniel Holzman and to Royal Bank of Canada, the LP, Fidelity Management Kate Scherling, and associates administrative agent and sole & Research Company, Devin van der Hahn and Jordan lender under the first-out senior Northwestern Mutual Investment Harap, is representing the Ad Hoc secured revolving credit facility. Management Company, LLC, Group of Unsecured Noteholders. Orbis Investment Management The Ad Hoc Group of Unsecured SECURED BONDHOLDERS Limited, and Southpaw Credit Noteholders consist of certain AND DIP LENDERS Opportunity Master Fund LP. institutions that hold and/or manage Morrison & Foerster LLP, Majority, but not all, of funds, entities and/or accounts holding led by partners Dennis L. Jenkins the Secured Noteholders are 7.75% senior unsecured notes due and Brett H. Miller, is counsel to providing the DIP financing. 2021 and 6.125% senior unsecured the ad hoc group of unaffiliated Secured Noteholders that are not notes due 2023.

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Who’s Who in Sanchez Energy’s Bankruptcy Cases Continued from page 8

As of Sept. 19, 2019, members USA, Inc., and (7) McKinsey Consulting, leads the engagement. of the Unsecured Noteholders Ad Recovery & Transformation Epiq Corporate Restructuring, Hoc Group are Aetos Capital LP, Services U.S., LLC. LLC, is the information agent for Allstate Insurance Company, Milbank LLP is the the Committee. Avenue Capital Group, Bank Committee’s counsel. Evan R. of America ML, Benefit Street Fleck, a partner in the Financial OTHER KEY PARTIES Partners, L.L.C., CarVal Restructuring Group of Milbank, Haynes and Boone, LLP, is Investors LLC, D.E. Shaw & leads the engagement. counsel to Sanchez Oil & Gas Co., Franklin Advisers, Inc., Locke Lord LLP is co-counsel Corporation (“SOG”), which is First Trust Advisors, Loomis and, to the extent necessary, part of the Sanchez Group and a Sayles & Company, L.P., New conflicts counsel to the Committee. party to shared services agreements Generation Advisors, LLC, Philip G. Eisenberg, a partner with the Debtors. Nomura Securities, Nut Tree and bankruptcy practice group Paul, Weiss, Rifkind, Capital Management, LP, leader in the Houston office of Wharton & Garrison LLP, PIMCO, Shenkman Capital Locke Lord, leads the engagement. led by partners Paul Basta and Management Inc., and VR Other primary attorneys who Alice Eaton, and associate Sean Capital. will represent the Committee A. Mitchell, and Porter Hedges are Elizabeth Guffy and Simon LLP, led by partners John F. CREDITORS’ COMMITTEE Mayer. Higgins and Eric M. English, Henry Hobbs Jr., acting U.S. Jefferies LLC is the and associate Genevieve M. Trustee for Region 7, on Aug. Committee’s investment banker. Graham, are representing GSO 26, 2019, formed an official Leon Szlezinger, a managing Capital Partners LP and its committee of unsecured creditors. director and joint global head of affiliates. GSO has interests in The committee members are (1) Restructuring & Recapitalization SN EF UnSub, LP, a non-debtor Delaware Trust Company, as at Jefferies LLC, leads the unrestricted subsidiary of Sanchez indenture trustee, (2) Allstate engagement. Energy. Investments, LLC, (3) Danos, FTI Consulting Inc. is the LLC, (4) Rusco Operating, LLC, Committee’s financial advisor. JUDGE (5) Monarch Silica, LLC, (6) Michael Cordasco, a senior The Hon. Marvin Isgur is the Nabors Drilling Technologies managing director with FTI case judge. ¤

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PG&E, from page 1 Abrams Capital, Knighthead with a tiny stake in PG&E once it The Debtor had the sole right to Capital and Redwood Capital own emerges from bankruptcy. propose a restructuring plan. But a combined 10% stake in PG&E. The bondholders have offered after winning support from wildfire In April, the three hedge funds wildfire victims about $14.5 billion victims and general unsecured played a big role in installing former for damages not covered by insurance creditors, noteholders led by activist Tennessee Valley Authority head —about $6 billion more than PG&E hedge fund Elliott Management Bill Johnson as chief executive of offered the fire victims. They have successfully won an unusual -- but PG&E. offered to match the $11 billion not unprecedented -- court order The Honorable Dennis Montali deal with insurance companies for allowing them to file a competing initially rejected an effort by Elliott, the settlements they’ve made with plan. Apollo Capital Management and policyholders. PG&E sought bankruptcy other noteholders, to pitch their Members of the Ad Hoc Committee protection in January 2019 to own plan. But after the Ad Hoc of Unsecured Noteholders hold in address $30 billion in potential Group of Bondholders won support excess of $10 billion of funded debt liability damages from California’s from the Official Committee of claims against the Debtors. As of deadliest wildfires of 2017 and Tort Claimants, Judge Montali Oct. 21, 2019, members of the Ad 2018. Now PG&E is facing fresh terminated exclusivity and said Hoc Committee are: heat over the Kincade fire currently a dual-track plan course going 1. Apollo Global burning in Sonoma County, north of forward may facilitate negotiations Management LLC San Francisco, as well as criticism for a global resolution and narrow 2. Aurelius Capital for cutting off electricity to hundreds the issues which are in legitimate Management, LP of thousands of customers in a dispute. 3. Canyon Capital Advisors LLC defensive move to prevent fires. The Tort Claimants Committee, 4. Capital Group Pacific Gas & Electric has which represents individuals with 5. CarVal Investors, LLC proposed a plan to exit bankruptcy claims against PG&E for wildfire 6. Castle Hook Partners LP that would use $34 billion in new damages, and the Official Committee 7. Citadel Advisors LLC debt and $14 billion in equity of Unsecured Creditors have backed 8. Davidson Kempner Capital commitments to reorganize. the noteholders’ plan. The rival Management LP PG&E’s plan, backed by current plan offers more money to wildfire 9. Deutsche Bank Securities Inc. major shareholders, proposes to victims and would give debtholders 10. Diameter Capital Partners LP pay at least $20 billion for wildfire control of PG&E after it emerges 11. Elliott Management claims: (i) $11 billion to insurers from bankruptcy. Noteholders Corporation to address insurance subrogation propose putting $29.2 billion in new 12. Farallon Capital claims totaling $20 billion, (ii) money into PG&E in exchange for Management, LLC $1 billion to a group of local new debt and a controlling equity 13. Fir Tree Partners governments and state agencies, stake. Bondholders are seeking to 14. Marathon Asset Management and (iii) $8.4 billion to resolve other buy 85% of the utility’s stock for 15. Oak Hill Advisors, LP wildfire claims, including those of $19 billion. The bondholders’ plan 16. Oaktree Capital Management, individual victims. would leave the current shareholders LP

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PG&E, from page 10 the bondholders’ proposal would 20. Pentwater Capital overpay the unsecured bondholders Management LP 17. Pacific Investment by billions of dollars while diluting 21. Redwood Capital Management Company LLC the equity stake of most current Management, LLC 18. Pacific Life shareholders down to 0.1%. 22. Sachem Head Capital Insurance Company “Bondholders pay themselves Management LP 19. P. Schoenfeld Asset what they desire, wildfire plaintiffs 23. Serengeti Asset Management LP pay themselves what they desire, Management LP 20. Sculptor Capital and the estate and tens of thousands 24. Silver Point Capital, L.P. Investments, LLC of shareholders lose,” shareholders 25. Steadfast Capital 21. Senator Investment Group LP represented by Jones Day said. Management LP 22. Silver Rock Financial LP As of Oct. 21, 2019, Jones Day- 26. SteelMill Master Fund LP 23. Taconic Capital Advisors LP represented shareholders are: 27. Stonehill Capital 24. Third Point LLC 1. 683 Capital Partners, LP Management LLC 25. Varde Partners, Inc. 2. Anchorage Capital 28. Warlander Asset Group, LLC Management, LP “We are confident that our fully 3. BlueMountain Capital 29. Abrams Capital funded plan of reorganization, Management, LLC Management, LP which will satisfy all wildfire claims 4. Centerbridge Partners, LP 30. Knighthead Capital in full while treating all stakeholders 5. CSS, LLC Management, LLC fairly and protecting customers, 6. D.E. Shaw Galvanic is the better solution for all Portfolios, LLC, et al. The bondholders and fire victims, constituencies,” PG&E countered. 7. Empyrean Capital Partners, LP however, said PG&E was simply PG&E says the rival proposal is 8. Fidelity Management & trying to protect its shareholders at designed to unjustly enrich Elliott Research Company all costs. If the bondholders succeed, and the bondholders and seize 9. First Pacific Advisors, LP they would control the company and control of PG&E at a substantial 10. Golden Tree Asset wipe out the investments of current discount. Management LP shareholders. While the bondholders have 11. Governors Lane LP offered $6 billion more for fire 12. HBK Master Fund LP Timeline victims, PG&E said it couldn’t 13. Latigo Partners, LP Time is critical in the PG&E match the offer to fire victims 14. Meadowfin, LLC bankruptcy. The company has until without solid proof of the size of 15. Monarch Alternative June 30, 2020, to exit bankruptcy to the damages. It added that, under Capital LP be able to participate in an insurance bankruptcy law, it couldn’t risk 16. Newtyn Management, LLC fund created by the California over-paying the fire victims at the 17. Nut Tree Master Fund, LP legislature to cushion utilities against expense of another class: its own 18. Owl Creek Asset liabilities from future mega-fires. shareholders. Management, LP The parties, however, couldn’t According to shareholders, 19. Paulson & Co., Inc. reach a compromise, even on a

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PG&E, from page 11 ploy bondholders designed to hearings follow right behind in promote their attempt to move February.” schedule. their competing plan forward Retired judge Randall Newsome The Debtors have proposed that ahead of the Debtors. has been appointed mediator to the competing plans move forward “The [bondholders] are not facilitate negotiations between the together, and submitted a schedule satisfied with the termination competing factions. that would have the disclosure of exclusivity; instead, the TCC Gov. Gavin Newsom at the statement process and solicitation and the Ad Hoc Noteholders end of October threatened a state begin after the conclusion of the Committee now seek to usurp takeover of the company if its estimation proceeding currently exclusivity for themselves in direct investors can’t quickly agree on pending in the District Court. contravention of section 1121 a plan. “My goal is to encourage Proceedings to estimate wildfire of the Bankruptcy Code,” said those parties to achieve a swift liabilities commenced in the Stephen Karotkin, Esq., at Weil, and consensual resolution to the District Court before District Gotshal & Manges LLP, counsel Chapter 11 Cases that creates a Judge Donato and are on track for to PG&E.” new entity, one that better reflects the estimation hearing to begin in our California values and advances mid-January 2020. Mediator the safety transformations that are The financing commitments for Nine months into the case, on required. It is my hope that the the Debtor Plan require that the fire Oct. 28, Judge Montali appointed stakeholders in PG&E will put victims’ claims be estimated at less a mediator to work through the parochial interests aside and reach than $6.9 billion. rival plans and come up with a a negotiated resolution in the near The bondholders asked the compromise that would allow the term. If the parties fail to reach Court to allow them to have the utility’s reorganization to proceed. an agreement quickly to begin this rival plan considered ahead of “Certain parties are polarized; process of transformation, the state the PG&E plan, noting that the the emotions are running higher will intervene to restructure the bondholders’ plan and committed and higher, the staggering costs utility. Under either scenario, the financing for the plan, is not tied (economic and otherwise) are state must ensure that Californians to a particular result being obtained multiplying daily and very recent have a utility that provides safe, in the estimation proceeding. events that need not be repeated reliable, and affordable power,” They want their plan to proceed to here but are obvious to everyone Gov. Newsom said in a Nov. 1 confirmation before the estimation in Northern California might letter to the bankruptcy court. trial, saying that the Debtor’s make a successful reorganization Berkshire Hathaway’s cash pile extended schedule would result in even more of a challenge,” Judge has ballooned to $128 billion in a confirmation hearing beginning Montali said in his order. the third quarter of 2019. Gov. in early June, precariously close “On top of that, the clock is Newsom has encouraged Berkshire to the June 30 deadline under AB ticking on AB 1054 while the to bid for PG&E but Buffet, whose 1054. Tubbs Fire trial looms in January last major deal was in January PG&E believes this is a strategic and the district court estimation 2016, has so far been cold to the

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PG&E, from page 12 & Feld LLP, led by partners Diemer & Wei, LLP, led by Ashley Vinson Crawford, David Kathryn S. Diemer, and Willkie proposal. P. Simonds, Michael S. Stamer, Ira Farr & Gallagher LLP, led by San Jose Mayor Sam Liccardo, S. Dizengoff, and David H. Botter, Matthew A. Feldman, Joseph G. backed by mayors of 20 other is serving as counsel to the Ad Hoc Minias and Daniel I. Forman, California cities, in early Committee of Senior Unsecured represent an ad hoc group of November 2019, broached the Noteholders of Pacific Gas. subrogation claim holders, who idea of transforming PG&E from Proskauer Rose LLP, led by hold liquidated and unliquidated an investor-owned private utility partners Martin J. Bienenstock, insurance subrogation claims into a customer-owned cooperative. Brian S. Rosen, Michael A. against the Debtors. The mayors represent 5 million Firestein and Lary Alan Rappaport; The Singleton Law Firm, customers or almost one-third of and associates Maja Zerjal and APC, led by lead partner Gerald PG&E’s existing customer base. Steve Y. Ma, is serving as counsel Singleton, is representing over Weil, Gotshal & Manges LLP, to the Ad Hoc Group of Institutional 3,500 individuals who suffered led by partners Stephen Karotkin Bondholders. injuries or damages in fires started and Jessica Liou, counsel Matthew Milbank LLP, led by partners by PG&E. Goren, associate Rachael Foust, is Dennis F. Dunne, Samuel A. Khalil, Corey, Luzaich, De Ghetaldi serving as PG&E’s legal counsel. Paul S. Aronzon, Gregory A. Bray, & Riddle LLP, led by Dario de Keller & Benvenutti LLP, led by and Thomas R. Kreller, is counsel Ghetaldi, Amanda L. Riddle, partners Tobias S. Keller and Jane for the Creditors’ Committee. Steven M. Berki, and Sumble Kim, is serving as the debtors’ co- Baker & Hostetler LLP, led by Manzoor, is representing 22 cities counsel. Cecily A. Dumas, a partner in the of the Butte Fire who have reached Lazard Freres & Co. LLC, led firm’s financial restructuring group, a settlement with PG&E in the by Restructuring Group managing is serving as counsel to the official state court system but remain director Kenneth S. Ziman, is committee of tort claimants, who unpaid. serving as its investment banker. are fire victims. Other attorneys Jones Day, led by Bruce S. AlixPartners, LLP’s AP Services, of the firm involved in the case are Bennett, Joshua M. Mester, and LLC, is serving as the restructuring Lauren T. Attard, Robert A. Julian James O. Johnston, is counsel to advisor to PG&E. and Eric E. Sagerman. Knighthead Capital Management, Cravath, Swaine & Moore LLP Stutzman Bromberg Esserman LLC and other PG&E shareholders. is the debtors’ corporate counsel. & Plifka, P.C., led by Sander L. Irell & Manella LLP, led by Kevin J. Orsini, a partner, is Esserman and Cliff I. Taylor; Baron Craig Varnen, Andrew J. Strabone, representing PG&E as lead trial & Budd, P.C., led by Scott Summy Michael H. Strub, Jr.; and Cleary counsel in hundreds of lawsuits and John Fiske; and Nuti Hart LLP, Gottlieb Sheen & Hamilton LLP, led filed against the company arising led by Christopher H. Hart and by Lisa Schweitzer and Margaret out of the 2017 and 2018 California Kimberly S. Fineman, represent Schierberl are serving as counsel to wildfires. the public entities impacted by the shareholder BlueMountain Capital Akin Gump Strauss Hauer wildfires. Management. ¤

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Who’s Who in Legacy Reserves’ Bankruptcy Cases by Carlo Fernandez

egacy Reserves Inc. (OTC: The Company further had liquidity Restated Credit Agreement, dated LLGCYQ) is an independent constraints through borrowing base as of April 1, 2014, with lenders energy company engaged in the redeterminations under an RBL Credit and Wells Fargo Bank, N.A., as development, production and Agreement, as well as an inability to administrative agent; acquisition of oil and natural gas refinance or extend the maturity of • $351.2 million outstanding under properties in the United States. the RBL Credit Agreement beyond a second lien term loan pursuant Its current operations are focused May 31, 2019. to a Term Loan Credit Agreement on the horizontal development Despite the Company’s efforts to dated Oct. 25, 2019, with Cortland of unconventional plays in the navigate through the last several years Capital Market Services LLC, as Permian Basin and the cost-efficient of industry distress by reorganizing administrative agent, and certain management of willow-decline oil its corporate structure in an effort funds advised or sub-advised and natural gas wells in the Permian to facilitate the raising of additional by GSO Capital Partners LP, as Basin, East Texas, Rocky Mountain capital, as well as efforts to optimize lenders; and Mid-Continent regions. operations and reduce expenses, the • $218.1 million outstanding under The Company has built a diverse Company concluded that an open 8% senior unsecured notes due portfolio of oil and natural gas market process to market its assets 2020 pursuant to an indenture reserves primarily through the and refinance its maturing debt was with Wilmington Trust, National acquisition of producing oil and the best path forward. Based in large Association, as successor trustee; natural gas properties in established part on the results of this process, the • $134.2 million outstanding under producing trends. The Company is Company ultimately determined that 6.625% senior unsecured notes due headquartered in Midland, Texas, with pursuing a potential restructuring 2021 pursuant to an indenture with regional offices in The Woodlands, of its funded debt was necessary Wilmington Trust as successor Texas and Cody, Wyoming. to address impending defaults and trustee; and As of the Petition Date, the its $1.4 billion in aggregate funded • $112.3 million outstanding under Company had 327 employees, none indebtedness. 8% convertible notes due 2023 of whom are subject to collective After negotiating with creditors pursuant to an indenture with bargaining agreements. on the terms of a financial Wilmington Trust as trustee and Like similar companies in this restructuring, Legacy Reserves Inc. conversion agent. industry, the Company’s oil and and 10 subsidiaries sought Chapter The Company has received natural gas operations are capital- 11 protection (Bankr. S.D. Tex. Lead commitment for a $350 million intensive activities that require access Case No. 19-33395) on June 18, 2019. debtor-in-possession (“DIP”) to significant amounts of capital. An As of the bankruptcy filing, the financing from certain of the RBL oil price environment since 2015 Debtors’ funded debt is comprised of: Lenders, comprised of $100 million that has not risen to levels seen in • $563 million outstanding under a of new capital and refinancing of mid-2014 and the Company’s limited first lien reserve based revolving $250 million in outstanding first lien access to new capital have adversely credit (RBL) facility under a obligations. affected the Company’s business. $1.5 billion Third Amended and The Debtors on Nov. 6, 2019,

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Who’s Who in Legacy Reserves’ Bankruptcy Cases Continued from page 14

were slated to seek confirmation of to accept the company’s bankruptcy the noteholders that are rights offering their proposed reorganization plan, exit plan. backstop parties compared to those which provides for a substantial The key element of the Plan is the that are not. deleveraging of their capital structure, conversion of all of the Term Loan with a projected reduction of over Claims into equity in the Reorganized DEBTORS $1 billion in funded debt while also Debtors. In addition, pursuant to the Sidley Austin LLP is serving as providing a recovery to creditors. settlement embodied in the Global the Debtors’ legal counsel. Attorneys The Plan is supported by creditors RSA, the Term Loan Lenders have providing the services are partners that have executed the Global agreed to allocate a portion of their Duston McFaul, Bojan Guzina, Restructuring Support Agreement, recovery to holders of allowed general and Andrew O’Neill; of counsel including the lenders under its unsecured claims and holders of Charles Persons and Allison Ross revolving credit facility (the “RBL allowed senior notes. Senior Notes Stromberg; and associates Michael Lenders”), the lenders under its in the amount of $464.6 million (all Fishel, Maegan Quejada and Joe second lien term loan (“Second senior notes held by holders other Schomberg. Lien Lenders), and holders of than Legacy Reserves LP) will be Perella Weinberg Partners, along approximately 60% in amount in the exchanged for shares allocated under with its affiliate, Tudor Pickering aggregate of the Unsecured Notes. the Plan. General unsecured creditors Holt & Co., is acting as financial The Global RSA contemplates: will be paid in full in cash. advisor for the Company. Kevin • $256.3 million in backstopped Royal Bank of Canada and RBC Cofsky, a partner of PWP, leads the equity commitments, with certain Capital Markets are arranging the engagement. funds managed or advised by GSO exit facility, a $500 million senior Alvarez & Marsal North America, as Plan Sponsor backstopping secured revolving reserve-based LLC, is acting as restructuring $189.9 million and affiliates lending credit facility, to facilitate advisor. Mark D. Rajcevich, a of Supporting Noteholders the Debtors’ emergence from chapter managing director of Alvarez & backstopping $66.5 million; 11. The exit facility will permit Marsal, leads the engagement. • $500.0 million in committed exit the Debtors to pay off or refinance Kurtzman Carson Consultants financing from the existing RBL certain obligations, including the New LLC is the claims, noticing and Lenders; Money DIP Claims, Refinanced DIP solicitation agent. • the equitization of approximately Claims, and RBL Claims, and provide $815.8 million of prepetition debt; the Reorganize Debtors sufficient FIRST LIEN LENDERS and liquidity at exit. and DIP LENDERS • payment in full of the Debtors’ The Official Committee of RPA Advisors, LLC, is acting general unsecured creditors. Unsecured Creditors has raised as financial advisor to Wells Fargo Legacy Reserves’ $66.5 million objections to several motions filed Bank, National Association, as rights offering allows unsecured by the Debtors in court. It also said administrative agent for the RBL noteholders to purchase shares of that the Plan is unconfirmable by Lenders, administrative agent and reorganized Legacy if the class votes providing a different treatment for collateral agent for the DIP Lenders,

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Who’s Who in Legacy Reserves’ Bankruptcy Cases Continued from page 15

and sole lead arranger and sole advisor to GSO Capital Partners Noteholders hold $147 million in bookrunner under the DIP facility. LP, the Second Lien Lender and the aggregate principal amount of the Orrick Herrington & Sutcliffe Plan Sponsor. Notes (comprised of $64.5 million LLP, led by Restructuring Group Porter Hedges LLP, led by of the 2020 Notes, $61.4 million of chair Raniero D’ Aversa and New partners John F. Higgins and Eric the 2021 Notes, and $21.0 million York office leaderLaura Metzger, is M. English, and associate M. Shane of the 2023 Notes). The members legal advisor to the supporting RBL Johnson, is serving as local counsel of the Ad Hoc Group are Canyon lenders and Wells Fargo. to GSO and its affiliates. Capital Advisors LLC, DoubleLine RBL lenders who have agreed to a PJT Partners LP is acting as Income Solutions Fund, J.H. Lane cashless exchange of $2.50 of loans financial advisor for GSO. Partners Master Fund, LP, JCG under the Prepetition RBL Credit Arnold & Porter Kaye Scholer 2016 Holdings, LP, The John C. Agreement for every $1.00 of new LLP, led by partners Christopher M. Goff 2010 Family Trust, John C. money loans under the DIP Facility Odell and Seth J. Kleinman, senior Goff SEP-IRA, Kulik Partners, LP, are: Wells Fargo Bank, N.A., AG attorney Hannah D. Sibiski, Gerardo Jill Golf, Cuerno Largo Partners, Energy Funding, LLC, Banc of Mijares-Shafai, is representing LP, Goff Family Investments, LP, America Credit Products, Inc., Cortland Capital Market Services The Goff Family Foundation, Goff Bank of America, N.A., Barclays LLC, as Prepetition Term Loan Focused strategies LLC, Wilkie Bank PLC, BMO Harris Bank N.A., Agent. Colyer, MGA Insurance Company, BP Energy Company, Citibank, Inc., Pingora Partners LLC, and N.A., Credit Agricole Corporate UNSECURED NOTEHOLDERS Robert W. Stallings. and Investment Bank, Cross Ocean, Davis Polk & Wardwell LLP, led Unsecured noteholders that are Fifth Third Bank, JPMorgan Chase by Restructuring Group partner Brian backstopping the $66.5 million rights Bank, N.A., Royal Bank of Canada, M. Resnick, Litigation group partner offering for equity capital in the Santander Bank, N.A., Shell Trading Elliot Moskowitz, and associates Debtors are Canyon-ASP Fund, L.P., Risk Management, LLC, Societe Stephen D. Piraino and Michael Canyon Balanced Master Fund, Generale, The Bank of Nova Scotia, Pera, is acting as legal advisor to the Ltd., Canyon Dist. Opportunity U.S. Bank National Association, and Ad Hoc Group of Senior Noteholders. Master Fund II, Canyon-SL Value West Texas National Bank. Rapp & Krock, PC, led by senior Fund L.P., The Canyon Value counsel Henry Flores and Megan Realization Master Fund, Canyon SECOND-LIEN LENDERS Brown, is the local counsel to the Ad Blue Credit Investment Fund L.P., and PLAN SPONSOR Hoc Group. Canyon-EDOF (Master) L.P., Latham & Watkins LLP, led by Houlihan Lokey is acting as Canyon-GRF Master Fund II, Restructuring & Special Situations financial advisor for the Ad Hoc L.P., Canyon Dist. Opportunity Practice chair George A. Davis, and Group. Investing Fund II, Canyon NZ- New York partners Jonathan R. As of July 1, 2019, the members DOF Investing, L.P., Canyon Value Rod and Adam J. Goldberg, is legal of the Ad Hoc Group of Senior Realization MAC 18 Ltd., Canyon

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Who’s Who in Legacy Reserves’ Bankruptcy Cases Continued from page 16

Value Realization Fund, L.P., JCG committee of unsecured creditors in Stifel Nicolaus are serving as 2016 Holdings, LP, The John C. the Chapter 11 cases. The Committee investment banker to the Creditors’ Goff 2010 Family Trust, John C. presently consists of (1) Wilmington Committee. Richard Klein, a Goff SEP-IRA, Kulik Partners, LP, Trust, National Association, (2) managing director of Miller Buckfire, Jill Goff, Cuerno Largo Partners, Dalton Investments, LLC, (3) leads the engagement. LP, Goff Family Investments, LP, John M. Dinkel, and (4) Nicholas FTI Consulting, Inc., is the The Goff Family Foundation, Goff Mumford. Wilmington Trust is Committee’s financial advisor. Focused Strategies LLC, Wilkie the indenture trustee under the Michael Cordasco, a senior managing Colyer, MGA Insurance Company, unsecured notes, and Dalton, Dinkel director of FTI, leads the engagement. Inc., Pingora Partners LLC, Robert and Mumford hold claims on account Purple Land Management, a full- W. Stallings, DoubleLine Income of the 2020 notes. Paul C. Drueke, a service national land management firm Solutions Fund, J.H. Lane Partners manager of a retail brokerage branch with 11 offices around the country, was Master Fund, LP, GSO Energy of Stifel, Nicolaus & Co., Inc., was tapped by the Committee to facilitate Select Opportunities Fund AIV- originally appointed as member of the the Committee’s investigation of the 3, GSO Energy Partners-A LP, Creditors Committee on account of liens and security interests in the GSO Energy Partners-B LP, GSO his ownership of $2,080,000 of 2020 Debtors’ real estate assets securing the Energy Partners-C LP, GSO Energy Senior Notes but he later resigned Debtors’ RBL facility and term loan. Partners-C II LP, GSO Energy from the Committee following the Partners-D LP, GSO Palmetto panel’s retention of Miller Buckfire EQUITY HOLDERS Opport. Investment Partners LP, & Co., LLC and Stifel Nicolaus. Polsinelli PC and Polsinelli, LLP, GSO CSF III AIV-3 LP, and GSO Brown Rudnick LLP is the led by shareholder Trey A. Monsour, ADGM I LGCY LP. Committee’s lead bankruptcy counsel. principal Randye B. Soref, and Cole Schotz P.C., led by member Partners Robert J. Stark, Jeffrey L. associate Tanya Behnam, serve as Michael D. Warner, and Pryor Jonas, and Bennett S. Silverberg, counsel to the Official Committee of Cashman LLP, led by partners Seth and associates Andrew M. Carty and Security Holders. H. Lieberman and Patrick Sibley, Uchechi Egeonuig are the primary As of Sept. 6, 2019, members of the and associate Andrew S. Richmond, attorneys representing the Committee. Equity Committee are (1) William L. are serving as counsel to Wilmington Pillsbury Winthrop Shaw Eddleman Jr., (2) James Morrison, Trust, National Association, as Pittman LLP is serving as co-counsel and (3) Stephen Tsotsoros. indenture trustee under the Senior to the Committee. Partner Hugh M. Notes. Ray, III, and senior associates Jason JUDGE S. Sharp and William J. Hotze are The Hon. David R. Jones is the CREDITORS’ COMMITTEE the attorneys primarily responsible for case judge. ¤ The Office of the U.S. Trustee on representing the Committee. July 3, 2019, appointed an official Miller Buckfire and its affiliate

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Coalinga, from page 1 here. The court was asked to $200,000. The U.S. Trustee later examine a relatively uncharted filed an amended appointment, and disbanded the committee area of law and apply the statutes stating that Beckman and Elitecare because the court found that the at issue as written. The difficulty were appointed to the Committee U.S. Trustee of Region 17, which this issue presents is born not effective Dec. 21, 2018, the date appointed the committee, did not from the parties’ bad faith or poor the court issued the Order for have the authority to do so. choices, but the limits on the Relief. Judge Lastreto’s order dated ability of Congress to consider The Committee applied to Oct. 2, 2019, also denied without every scenario when a statute retain two law firms. The Debtor prejudice as moot the employment is codified or amended,” Judge objected, saying that a committee applications of Smiley, Wang- Lastreto explained. is unnecessary and it should not Ekvall, LLP and Frandzel, Robins, be compelled to pay counsel fees. Bloom and Csato, L.C. Bankruptcy Filing & The Committee also objected But the court is not closing the Committee’s Appointment to the Debtor’s proposal to lease door on a committee appointment Coalinga Regional Medical the acute care hospital and other as it continued to a later date its Center, which had served residents facilities to Coalinga Medical consideration of a creditor’s motion of southwestern Fresno County for Center, LLC, unconvinced it was to appoint a committee under almost 70 years, filed a petition the best course of action for the § 1102(a)(2) of the Bankruptcy for relief under Chapter 9 of the Debtor. The court eventually Code. Bankruptcy Code in September approved this transaction. Judge Lastreto says his decision 2018. A few months earlier, the A month later, Beckman filed is not meant to minimize the hospital had temporarily closed its its own motion asking the court to valuable effect committees have doors buckling under the weight appoint an Unsecured Creditors in Chapter 9 or 11 cases. He of pending lawsuits and cash flow Committee under 11 U.S.C. § recognizes creditor’s committees problems. 1102(a)(2) — applicable in Chapter play valuable roles in chapters 11 “We have struggled for several 9 cases under Section 901(a) — and 9 reorganization dramas. “They years due to low reimbursement which authorizes the court to can be inconvenient antagonists for rates and declining patient census,” appoint “additional committees” certain debtors trying to emerge at Sandy Beach, the Center’s board if necessary “to assure adequate play’s end fully reorganized with chairwoman, told The Business representation.” Alternatively, new funds from a powerful secured Journal following the Chapter 9 Beckman asks the court to “ratify” creditor. They can be protagonists filing. the UST’s appointment of the opposing strong constituencies in The U.S. Trustee filed a notice Committee. a herculean battle for the debtor’s of appointment in Nov. 2018, Almost concurrently, the existence.” naming Beckman Coulter, Inc., Debtor filed a motion to vacate The court’s order isn’t about and Elitecare Medical Staffing, appointment of the Committee and those roles but rather how the Inc., as members of the Unsecured to disband the Committee. committee’s role was introduced. Creditors’ Committee. Both Meanwhile, the Chapter 9 “This decision does not criticize creditors have claims exceeding case has progressed to the point the parties appointed to Committee

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Coalinga, from page 18 1102(a)(1) to be applicable in under chapter 11” in a chapter 9 chapter 9 cases. Both Beckman case. Citing In re City of Detroit, where the Debtor has filed a Plan and the UST said Detroit is not 519 B.R. 673, 677 (Bankr. E.D. of Adjustment and Disclosure persuasive. Mich. 2014), Judge Lastreto says Statement. Beckman also tells the Court that condition applies to both that disbanding Committee is the UST’s mandatory “duty” to Debate Over U.S. Trustee’s unwarranted because the Debtor appoint a committee of creditors Authority cannot adequately represent with unsecured claims and its The Debtor asserts the U.S. the interests of the unsecured discretionary authority to appoint Trustee has no authority to appoint creditors. The UST goes even additional committees of creditors unsecured creditors’ committees in further, arguing that the court does or equity security holders as the chapter 9 cases under 11 U.S.C. not have authority to disband the UST deems appropriate under § 1102(a)(1) because this section Committee it appointed. The UST Section 1102(a)(1). He contends only applies in Chapter 11 cases. cited two decisions in Chapter 11 this application of the subsection The Debtor relies heavily on cases from the Northern District is not “demonstrably at odds with Judge Rhodes’ decision in In re of Illinois: In re Shorebank Corp., the intentions of its drafters.” City of Detroit, 519 B.R. 673 467 B.R. 156, 164 (Bankr. N.D. According to Judge Lastreto, no (Bankr. E.D. Mich. 2014), the Ill. 2012), which found no power party has referred the court and the only published decision the parties to “reconstitute” committee court has not found any authority and the court found confronting membership by reviewing UST saying it was the Code’s drafters’ the UST’s authority to appoint actions) and In re Caesars Entm’t intention to require the UST to committees in Chapter 9 cases. The Operating Co., 526 B.R. 265, unilaterally appoint an unsecured Debtor also contends that § 105(a) 269-70 (Bankr. N.D. Ill. 2015), creditors’ committee or permit as implemented by Bankruptcy which ruled that Section 105(a) the UST to appoint additional Rule 2020 authorizes the court to cannot be a basis to disband a committees under § 1102(a)(1) in disband Committee. committee since court powers over a chapter 9 case. Beckman argues that the UST committees are enumerated in §§ The Court notes that there are has the authority to appoint a 1102 and 1103. many other statutory provisions Committee under §§ 901 and 1102. that support the conclusion. Because § 1102 is incorporated Ruling Explained Plus, there are provisions of § in its entirety, Beckman insists “There is nothing ambiguous or 1102 that are inapplicable in § 1102(a)(1) is applicable in mysterious about § 1102(a)(1),” chapter 9 cases even though it chapter 9 cases. The UST, for its Judge Lastreto opines. is fully incorporated in Chapter part, naturally argues the same, He notes that the subsection 9. “So, there is nothing logically saying that Congress intended to plainly states the condition to the or legally inconsistent about a incorporate § 1102 in its entirety. UST’s exercise of its authority is literal application of § 1102(a)(1) The UST pointed out that Congress “after the order for relief under excluding its application in chapter chose not to explicitly exclude chapter 11.” The Court points 9 cases,” Judge Lastreto says. § 1102(a)(1) under Section 901, out there is no “order for relief In short, Judge Lastreto contends, which means it intended for §

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Coalinga, from page 19 The court has determined that any order, process, or judgment under §§ 307, 901(a), 901(b), the Committee was not appointed that is necessary or appropriate 1102, applicable federal rules of under the proper procedure in a to carry out the provisions of’ statutory interpretation, and this chapter 9 case. According to Judge the Bankruptcy Code . . . [b]ut court finding Detroit persuasive Lastreto, neither Shorebank nor in exercising those statutory and here, UST does not have authority Caesars are apposite here. “Both inherent powers, a bankruptcy under § 1102(a)(1) to appoint an well-reasoned decisions from court may not contravene specific unsecured creditors’ committee in the Northern District of Illinois statutory provisions.” The a chapter 9 case. And just because were chapter 11 cases. Shorebank Supreme Court has “long held that the UST has a historical “practice” predates Detroit and does hold the `whatever equitable powers remain of appointing committees, it is court has no power under the Code in the bankruptcy courts must not a reason to ignore statutory to remove committee members and can only be exercised within language, the Court notes. since the power is not included the confines of’ the Bankruptcy Judge Lastreto says the in §§ 1102 or 1103. But, the issue Code.” authorities cited by Beckman of UST authority to appoint the Judge Lastreto asserts there is and the UST failed to support the committee was not part of the no specific code provision that UST’s action. decision. Caesars postdates Detroit explicitly forbids the court from The Court also contends that and disagrees that the Detroit court vacating the appointment of an disbanding the committee is properly used § 105(a) as authority unsecured creditors’ committee. authorized by law. Since § 1102(a) to disband the committee. But Section 1102 states that the (1) does not apply in a chapter the UST unquestionably had UST, not the court, shall appoint 9 case and thus the UST was authority to appoint the committee the committee. But there is no not authorized to appoint the in Caesars. The issue was not statute that forbids the court from Committee, Judge Lastretosays examined because it was not disbanding a committee. the Committee’s appointment necessary for the Caesars court. Riley C. Walter at Wanger Jones was void and Committee should Besides, the Detroit court used § Helsley PC represents Coalinga be disbanded. He says § 105(a) 105(a) as an alternative ground for Regional Medical Center. gives the court authority to order disbanding the committee.” Robin S. Tubesing is the lawyer the Committee disbanded since Judge Lastreto also notes that for the Office of the U.S. Trustee it is necessary to carry out the the court is not ordering something while Cameron Gulden is the trial provisions of title 11. Judge that is precluded by the Code. attorney for U.S. Trustee Tracy Lastreto concludes § 1102(a)(1) The U.S. Supreme Court held Hope Davis. does not apply in chapter 9, and in Law v. Siegel, 571 U.S. 415, Don J. Pool at Dowling Aaron to carry out that provision as it is 420-21, 134 S.Ct. 1188, 1194 appeared on behalf of Beckman written, the Committee should be (2014) that “[a] bankruptcy court Coulter, Inc., of the Creditors’ disbanded. has statutory authority to ‘issue Committee. ¤

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The Nation’s Largest Claims Agents

Firm Locations Senior Professionals Debtor

AMERICAN Jacksonville, Fla. Jeffrey Pirrung Goodwill Industries of South Central LEGAL CLAIMS Virginia, Inc. SERVICES, LLC americanlegal.com

ANGEION GROUP Philadelphia Steve Weisbrot PG&E Corporation (Tort Claimants’ angeiongroup.com Coral Springs, Fla. Jeffrey Palazzese Committee) Michael Trudgeon

BMC GROUP, INC. Seattle Sean Allen Rockies Region 2006 Limited Partnership, bmcgroup.com Austin, Texas Tinamarie Feil Daymark Properties, Uplift RX, JRV Chicago Jeff Kalina Group USA L.P., Sugarfina, Inc. Los Angeles Lorenzo Mendizabal Mathew Satuloff

DONLIN RECANO & New York Andrew Logan Ruby’s Diner, Inc., Urban Oaks Builders, COMPANY, INC. Roland Tomforde Republic Metals Refining Corp, Beauty donlinrecano.com Nellwyn Voorhies Brands, Maremont Corp, Starion Energy, Charlotte Russe Holding, Mayflower Communities, Broncs Inc., LaSalle Group Inc., PHI Inc.(Official Committee of Unsecured Creditors), Memory Care America, NovaSom Inc., National Merchandising Services

EPIQ BANKRUPTCY New York Brian Hunt Mattress Firm, Inc., ONE Aviation SOLUTIONS, LLC Atlanta Brian Karpuk Corporation, PGHC Holdings, National epiqglobal.com Chicago Eric Kerwood Bank of Anguilla, LBI Media, Inc., SQLC Boise, Idaho Jane Sullivan Senior Living Center at Corpus Christi, Brad Tuttle Avadel Specialty Pharmaceuticals, Ditech Holding Corporation, Trident Holding, F+W Media, Inc., Weatherly Oil & Gas, PG&E Corporation (Official Committee of Unsecured Creditors), Jones Energy, WMC Mortgage, Kona Grill, Triangle Petroleum Corporation, Gramercy Group, Cambrian Holding Company, HDR Holding, Inc., Joerns Woundco Holdings, RUI Holding Corp., THG Holdings, RAIT Funding

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The Nation’s Largest Claims Agents Continued from page 21

Firm Locations Senior Professionals Debtor

GGG PARTNERS Atlanta Katie Goodman Trop Inc., Fly Low Inc. LLC

KURTZMAN El Segundo, Calif. Rebecca Cook-DeGroot Herb Philipson’s Army and Navy CARSON New York Evan Gershbein Stores Inc., Welded Construction, CONSULTANTS Louisville, Ky. Robert Jordan ATD Corporation, Credit Management LLC Albert Kass Association, Egalet Corporation, kccllc.com Advanced Sports Enterprises Inc., Waypoint Leasing, Colleen & Tom Enterprises, Novum Pharma, Total Finance Investment, Magnum Construction Management, Achaogen Inc., White Star Petroleum Holdings, Astria Health, Emerge Energy Services

OMNI New York Paul Deutch NSC Wholesale Holdings, Mission MANAGEMENT Woodland Hills, Scott Ewing Coal Company, Senior Care Centers, GROUP Calif. Brian Gelinas USA Gymnastics, Glansaol Holdings, omnimgt.com Katie Nownes Inc., Consolidated Infrastructure Brian Osborne Group, 1515-GEEnergy Holding Co., Eric Schwarz Munchery, Inc., SAS Healthcare, Hexion Holdings, Hollander Sleep Products, FTD Companies, Center City Healthcare, Tintri Inc. (Official Committee of Unsecured Creditors), PES Holdings, L.K. Benett U.S.A., Inc.

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The Nation’s Largest Claims Agents Continued from page 22

Firm Locations Senior Professionals Debtor

PRIME CLERK New York Benjamin P.D. Schrag Dixie Electric, Sears Holdings LLC Shira D. Weiner Corporation, Fairway Energy LP, primeclerk.com Benjamin J. Steele Checkout Holding Corp., Parker Drilling Company, Specialty Retail Shops Holding Corp., Arsenal Energy Holdings, Things Remembered, Inc., Pernix Sleep, Payless Holdings, PHI Inc., Aurora Commercial Corp., Vanguard Natural Resources, Bristow Group, Cloud Peak Energy, Edgemarc Energy Holdings, Fusion Connect, Blackhawk Mining, Interlogic Outsourcing, A’GACI LLC, Furie Operating Alaska, Avenue Stores, Sanchez Energy Corp., GCX Limited, Sheridan Holding Company II, PG&E Corporation

STRETTO Irvine, Calif. Jonathan Carson Barney’s New York, Z Gallerie, Sizmek, stretto.com Denver Eric Kurtzman iPic Entertainment, Elk Petroleum Evanston, Ill. Chris Updike Inc., Diocese of Rochester, Loot New York James Le Crate, BeavEx Holding, Cedar-Haven Dayton, Ohio Brian Soper Acquisition, Diesel USA, Perfect Travis Vandell Brow Art, Willowood USA Holdings, Robert Klamser Montesquieu, Inc., Giga Watt Inc. Drew Lockard (Chapter 11 trustee), and The News- Denise Kaloudis Gazette Sheryl Betance

www.TurnaroundsWorkouts.com 24 Turnarounds & Workouts NOVEMBER 2019 Worth Reading

THE BIG BOARD: a panic on Wall Street. The NYSE A History of the New York Stock Market closed for ten days. A journalist wrote: “An hour before its doors were Author: Robert Sobel closed, the Bank of England was not Publisher: Beard Books more trusted.” Despite J. P. Morgan’s virtual Soft cover: 395 pages single-handed role in stemming the List Price: $34.95 Knickerbocker Trust panic of 1907, Order This Book Online Now » on his death in 1913, someone wrote “We verily believe that J. Pierpont Morgan has done more harm in the First published in 1965, The Big to the New York Stock and Exchange world than any man who ever lived in Board was the first history of the Board, with a more organized and it.” In the 1950s, Charles Merrill was New York stock market. It’s a story regulated system. Canal mania, which instrumental in changing this attitude of people: their foibles and strengths, peaked in the late 1820s, attracted toward Wall Streeters. His firm, earnestness and avarice, triumphs European funds to New York and Merrill Lynch, derisively known in and crash-and-burns. It’s full of volume soared to 100 shares a day. some quarters as “We, the People” and entertaining anecdotes, cocktail-party Soon, the railroads competed with “The Thundering Herd,” brought Wall trivia, and tales of love and hate canals for funding. In the frenzy, Street to small investors, traditionally between companies and investors. reckless investors bought shares in not worth the effort for brokers. Early investments in North America “sheer fabrications of imaginative The Big Board closes with this consisted almost exclusively of land. and dishonest men,” leading an story. Asked by a much younger man The few securities holders lived in economist of the day to lament that what he thought stocks would do next, cities, where informal markets grew, “every monied corporation is prima J.P. Morgan “never hesitated for a with most trading carried out in the facia injurious to the national wealth, moment. He transfixed the neophyte street and in coffeehouses. Banking, and ought to be looked upon by those with his sharp glance and replied, insurance, and manufacturing activity who have no money with jealousy and ‘They will fluctuate, young man, they increased only after the Revolution. suspicion.” will fluctuate.’ And so they will.” In 1792, 24 prominent New York Colorful figures of Wall Street businessmen, for whom stock- and included Jay Gould and Jim Fisk, who About The Author bond-trading was only a side business, in 1869 precipitated one of the worst Robert Sobel died in 1999 at the met under a buttonwood tree on Wall panics in American financial history age of 68. A professor at Hofstra Street and agreed to trade securities by trying to corner the gold market. University for 43 years, he was on a common commission basis. Almost lynched, the two were hauled a prolific historian of American Five securities were traded: three into court, where Fisk whined, “A business, writing or editing more than government bonds and two bank fellow can’t have a little innocent fun 50 books.. ¤ stocks. Trading was carried out at without everybody raising a halloo the Tontine Coffee-House in a call and going wild.” Then there was Jay market, with the president reading Cooke, who invented the national TO ORDER THIS BOOK: out a list of stocks as brokers traded bond drive and, practically unaided, each in turn. financed the Union effort in the Call: 888-563-4573 or visit The first half of the 19th century Civil War. In 1873, however, faulty www.Beardbooks.com was heady for security trading in New judgment on railroad investments led York. In 1817, the Tontine gave way to the failure of Cooke & Co. and

www.TurnaroundsWorkouts.com NOVEMBER 2019 Turnarounds & Workouts 25 Special Report

Outstanding Turnaround Firms – 2019

Firm Senior Professionals Outstanding Achievements

ALIXPARTNERS John Boken Advisor or interim manager to Aegerion New York John Castellano Pharmaceuticals, Alta Mesa, Blackhawk Mining, CTI alixpartners.com Lisa Donahue Foods, Ditech, FTD, Hexion, Jack Cooper Transport, Randall Eisenberg Mission Coal, PG&E Corp., Purdue Pharma, Holly Etlin Sheridan, Sungard, Syncreon, Welded Construction, Alan Holtz Trident Unsecured Creditors Committee, and Eric Koza Windstream Unsecured Creditors Committee David MacGreevey Jim Mesterharm Joff Mitchell David Orlofsky Becky Roof

ALVAREZ & MARSAL Gary Barton CRO to Shale Support Global Holdings, LLC. NORTH AMERICA, LLC Robert A. Campagna Restructuring advisor to Sanchez Energy Corporation; New York Mark Greenberg PES Holdings, LLC and PES Energy, Inc.; and alvarezandmarsal.com Jonathan Hickman Westmoreland Coal Company. Restructuring and Marc Liebman financial advisor to Jones Energy, Inc.; and NRG Richard Newman REMA LLC, an affiliate of GenOn Energy, Inc. Ed Mosley Financial advisor to Stearns Holdings, LLC; White Ryan Omohundro Star Petroleum Holdings, LLC; Southcross Energy Laureen M. Ryan Partners, L.P.; WMC Mortgage, LLC; Windstream Justin Schmaltz Holdings, Inc.; Imerys Talc America, Inc.; Fairway Joseph J. Sciametta Energy, LP; Parker Drilling Company; LBI Media, Inc.; unsecured creditors’ committee in NORPAC Foods and Hollander Sleep Products cases; and examiner of Samuels Jewelers, Inc.

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Outstanding Turnaround Firms – 2019 Continued from page 25

Firm Senior Professionals Outstanding Achievements

AMHERST PARTNERS Sheldon Stone Has 19 active engagements including CRO, Interim Birmingham, Mich. Scott Eisenberg CFO, Creditor Trustee, and Financial Advisory amherstpartners.com Bruce Goldstein assignments. Advised on the sale of two businesses James Morden that began as restructuring or turnaround assignments: Brian Phillips Ritzman Pharmacy was purchased by CVS; and Shareef Simaika Beach Mold & Tool was purchased by NYX. Practice continued to grow its geographical reach -- completed assignments in five states in 2017; engaged to work on assignments in 10 states in 2018; and has assignments in 15 states, including an Interim CFO engagement for a company with global operations, to date in 2019. Launched a restructuring-focused podcast series entitled Whose Company Is It Anyway, presented by Amherst Partners and hosted by Sheldon Stone. Middle-market lender survey now on second year, doubling the number of respondents and attracting the attention of local business media.

ANKURA CONSULTING John Frehse CRO to Mayflower Communities, Inc.; Harvey Moore GROUP, LLC Robert J. Frezza and Associates, Inc. and Trial Practices, Inc.; Elk Washington Philip J. Gund Petroleum, Inc.; Weatherly Oil & Gas, LLC; Payless ankura.com Peter Hardigen Holdings LLC; and Emerge Energy Services LP. Salvatore LoBiondo, Jr. Interim chief operating officer to Furie Operating Stephen Marotta Alaska, LLC. Financial advisor to Trident Holding Michael Mortell Company, LLC. Stan Murphy Quentin Olde Scott M. Pinsonnault David Sawyer Alex Sorokin

AURORA David Baker CRO to American Home Products LLC. Federal MANAGEMENT Laura Kendall Receiver for Timber Creek Holdings. Financial PARTNERS, INC. Wayne Tanner advisor to IPIC® Entertainment. Charlotte, N.C. Tim Turek auroramp.com Alex Boerema Matthew Dossey Phil Slaght

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Outstanding Turnaround Firms – 2019 Continued from page 26

Firm Senior Professionals Outstanding Achievements

BERKELEY RESEARCH Brian M. Cashman CRO to Things Remembered, Inc.; Charlotte Russe GROUP, LLC Peter C. Chadwick Holding, Inc.; Fred’s, Inc.; Avenue Stores LLC; and Emeryville, Calif. Stephen Coulombe Taco Bueno Restaurants. Financial advisor to debtors thinkbrg.com Robert J. Duffy Hospital Acquisition LLC; Egalet Corporation; Christopher J. Kearns Sugarloaf Holdings, LLC; and Verity Health System Haywood Miller of California, Inc.; and the unsecured creditors’ Edwin N. Ordway, Jr. committees of Center City Healthcare, LLC; Astria Paul Shields Health; Mission Coal Company, LLC; and Aralez Mark A. Renzi Pharmaceuticals.

CONWAY MACKENZIE Donald S. MacKenzie Clients include debtors Corsicana Bedding Inc.; Birmingham, Mich. Michael S. Correra Hantover, Inc.; Innovative Mattress Solutions conwaymackenzie.com Aurelio Garcia-Miro LLC; Tweddle Group, Inc.; and Walle Corporation. Kenneth T. Latz Originally hired by bank lender to Oakley Industries, Michael J. Musso Inc., then flipped to debtor. Engaged by retailers Timothy B. Stallkamp Kitchen Collection, LLC; and Pieology Pizzeria. Steven R. Wybo John T. Young, Jr. Jeffrey Zappone

CR3 PARTNERS, LLC Thomas O’Donoghue Jr. CRO to Sovrano, LLC; Novum Pharma, LLC; and Dallas Dawn Ragan Mid-Cities Home Medical Equipment Co., Inc. cr3partners.com Bill Roberts Financial and restructuring advisor to AutoMedx, Greg Baracato LLC. Provided restructuring and management services to Francis’ Drilling Fluids, Ltd.

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Outstanding Turnaround Firms – 2019 Continued from page 27

Firm Senior Professionals Outstanding Achievements

DEVELOPMENT William A. Brandt, Jr. Chapter 11 Trustee of CFG Peru Investments SPECIALISTS INC. Bradley D. Sharp Pte. Limited (Singapore); Advisor to the Tort Chicago Fred C. Caruso Committee in the Pacific Gas and Electric Company dsiconsulting.com Patrick J. O’Malley bankruptcy; Future Claimants Representative for Joseph J. Luzinski USA Gymnastics; Outside Director of Daymen Geoffrey L. Berman Acquisition S.A. (Luxembourg); Federal Court Steven L. Victor Receiver of 3si Systems, LLC; CRO and Financial R. Brian Calvert Advisor to Woodbridge Group; Receiver for Direct Thomas P. Jeremiassen Lending Investments, LLC; CRO and Financial A. Kyle Everett Advisor to 1 Global Capital, LLC; Federal Court Mark T. Iammartino Receiver of Pandya Restaurants LLC, et al.; Financial Yale S. Bogen Advisor to National Auto Lenders, Inc.; CRO of Total Finance AC LLC; CRO of Aéropostale, Inc., et al.; Administrative Advisor to the Litigation Trustee for Remington Arms; Assignee for the Benefit of Creditors of Accuworx Holdings, Inc., et al.; Assignee for the Benefit of Creditors of Teters Floral Products, Inc.

FORCE 10 PARTNERS, Adam Meislik CRO to Philmar Care, LLC; and Scoobeez, Inc. LLC Jeremy Rosenthal Financial advisor to Sienna Biopharmaceuticals, Inc.; Newport Beach, Calif. Nicholas Rubin Luxent, Inc.; Broncs, Inc.; and unsecured creditors’ force10partners.com Mike Vanderley committee in Ruby’s Diner, Inc. Investment banker Brian Weiss to Rockin Artwork, LLC; and Lindley Fire Protection Co., Inc. Sales consultant to Mesko Restaurant Group II, Inc.

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Outstanding Turnaround Firms – 2019 Continued from page 28

Firm Senior Professionals Outstanding Achievements

FTI CONSULTING, INC. Clark Ansel CRO to F+W Media, Inc.; Cambrian Holding New York Alan Boyko Company, Inc.; and EP Energy Corporation. fticonsulting.com Albert Conly Financial advisor and CRO to PHI, Inc.; and Michael Cordasco Halcon Resources. Financial advisor to unsecured Robert Del Genio creditors’ committee of Jack Cooper Ventures, Inc.; Michael Katzenstein Sanchez Energy Corporation; Legacy Reserves David Rush Inc.; PG&E Corporation; and Senior Care Centers, Samuel Star LLC. Financial advisor and forensic accountant to John Strek Liquidating Trustee of Miami International Medical Conor P. Tully Center, LLC; and Uplift Rx, LLC. Financial advisor Clifford Zucker to debtors PWR Invest, LP; Perkins & Marie Callender’s, LLC; Monitronics International, Inc.; Cloud Peak Energy Inc.; Hexion Holdings LLC; Fuse, LLC; Sizmek Inc.; Goodwill Industries of Southern Nevada, Inc.; Synergy Pharmaceuticals Inc.; Oak Rock Financial, LLC; Checkout Holding Corp.; Waypoint Leasing Holdings Ltd.; Petroquest Energy, Inc.; Preferred Care, Inc.; and Fusion Connect, Inc.

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Outstanding Turnaround Firms – 2019 Continued from page 29

Firm Senior Professionals Outstanding Achievements

GETZLER HENRICH & Joel Getzler Hired in 92 middle-market turnaround, bankruptcy, ASSOCIATES William Henrich due diligence and liquidation situations in 2019, New York Robert Gorin including Associated Supermarket Group; getzlerhenrich.com Marjorie E. Kaufman Bloomington Wholesale Garden Supply; College Mark D. Podgainy of New Rochelle; Diesel USA.; Duro Dyne; Mark G. Samson Firestar Diamonds; The Four Seasons restaurant; Daniel Polsky iFresh; Isolux Corsan Liquidating Trust; Live Well David R. Campbell Financial; Mammoet-Starneth; clothing retailer Milly; Monitronics International; National Wholesale Liquidators; PakLab; Chapter 11 Trustee for William J. Focazio; Watson; WorldWise; 130-yo, international, $110M activewear manufacturer and distributor; $300M business services company; family-owned food and gift catalog and online business; tier-two global automotive supplier, with manufacturing operations in six countries; $100M distributor of kitchen gadgets and tabletop products; importer and distributor of sunglasses and readers; P/E-backed company that provides Edge security and internet data content warehousing across the globe; well- known New York-based charitable organization; medical practice partnership; P/E-backed mulch, specialty and mixed soil manufacturer; outdoor furniture manufacturer and distributor; professional trade association representing the collegiate retailing industry; $170M leading waste transportation company; publicly held $400M construction and telecommunications company; P/E-controlled specialty surgery hospital and its associated physicians’ group; and high-end women’s apparel company.

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Outstanding Turnaround Firms – 2019 Continued from page 30

Firm Senior Professionals Outstanding Achievements

GLASSRATNER Ian Ratner CRO in Howell Munitions; Ruby’s Diners, Inc.; ADVISORY & CAPITAL Ron Glass Regional Health Properties; Campbellton Graceville GROUP Wayne Weitz Hospital; Lockwood Holdings; and Pine Creek Atlanta Alan Barbee Medical Center. CRO and Financial Advisor to glassratner.com J. Michael Issa Inverness Village; DC Solar; and Frank Investments. Marshall Glade CRO and Expert Witness to Point.360. Financial Tom Buck Advisor to Great Eastern Energy and Agera Holdings; Carol Fox Alliance Health; Curae Health; Premier Exhibitions; Michael Thatcher Uplift/Alliance Health; Committee in True Health; Mark Shapiro and Committee in Epic Companies, Shale Support. Tom Santoro Assignee in the ABC of Fandor.com; and GoDigital, Seth Freeman Inc. Receiver in Momentum Auto Group; and Fenton Motors.

HARNEY James E. Harney CRO to The LaSalle Group, Inc. Business consultant MANAGEMENT Gregory S. Milligan to Chapter 11 Trustee of KHRL Group, LLC. PARTNERS, LLC Bill Patterson Healthcare consultant to Little River Healthcare Chicago Karen Nicolaou Holdings, LLC. harneypartners.com Thomas L. Hidder Mac Rowland James G. Keane

M-III PARTNERS, LP Mohsin Y. Meghji Hired as CRO for Sears Holdings Corporation and New York Colin Adams Barneys New York, Inc. Tapped as financial advisor miiipartners.com William Gallagher to RAIT Funding, LLC. Charles H. F. Garner Brian Griffith Martin Young William Murphy Lyle Bauck Chris Good Mary Korycki Matthew Manning

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Outstanding Turnaround Firms – 2019 Continued from page 31

Firm Senior Professionals Outstanding Achievements

MORRISANDERSON Dan Dooley Financial advisor to Greenpoint Tactical Income Chicago Mark Welch Fund; Perkins and Marie Callender’s Bank Group; morrisanderson.com Daniel Wiggins and Kona Grill’s Bank Group. CEO to Midwest Paper Colin McClary Group. CRO to Nobilis Health. Liquidating Trustee Rob Novak in Wellmand Dynamics and Swift Air.

OPPORTUNE LLP David Baggett Restructuring advisor to EdgeMarc Energy Holdings, Houston Ryan Bouley LLC; Vanguard Natural Resources, Inc.; and Gastar opportune.com Exploration Inc. Financial advisor to Halcon Resources Corporation’s Unsecured Creditors Committee. Dacarba LLC, an Opportune Company, is CRO to Burkhalter Rigging, Inc.; and financial advisor to PetroQuest Energy Unsecured Creditors’ Committee.

PHOENIX Joseph Nappi CRO to New England Motor Freight, Inc.; and MANAGEMENT Brian Gleason Hooper Holmes Inc. d/b/a Provant Health. Financial SERVICES Vince Colistra advisor to SAS Healthcare, Inc. Philadelphia Jim Fleet phoenixmanagement.com Michael Jacoby

PORTAGE POINT Matthew Ray CRO to Loot Crate, Inc.; and Energold Drilling Corp. PARTNERS, LLC Thomas J. Allison Administrator of Synergy Pharmaceuticals Inc.’s Chicago Stuart Kaufman confirmed liquidation plan. Financial advisor to Total portagepointpartners.com Dave Martinelli Finance Investment Inc. Restructuring advisor to Dave Querio DURA Automotive Systems, LLC. Board member Steve Shaheen of Outcome Health. Advised Birch Lake Fund Mark Berger Management LP in financing to Faraday Future. Arun Lamba Scott Canna Zach Rose

THE CLARO GROUP, Douglas J. Brickley Financial advisor and CRO to KP Engineering, LP and LLC KP Engineering LLC. Financial advisor to Chapter 11 Chicago Trustee of American Green Technology; and The Falls theclarogroup.com Event Center Creditors’ Committee.

www.TurnaroundsWorkouts.com NOVEMBER 2019 Turnarounds & Workouts 33 Gnome de Plume

Chasing Unicorns by Deborah Hicks Midanek

e in the restructuring world know all about sway over shareholders, are fortunately not so gullible. Wvaluation. To value a company, come up with a Aggressive, deep-pocketed venture investors like story, put numbers to it, and frame it in lovely complex SoftBank have made it easier for companies to stay private spreadsheets. In recent years, technology startups have for longer, absorbing staggering amounts of capital in the told the best stories. Uber moves men and mountains and process. But these backers must cash out eventually, and everything in between. Airbnb imagines a world in which that usually requires an IPO as strategic acquirers will not anyone and everyone belongs, wherever they are. WeWork likely pay enough. When the paper gains in venture rounds enables comfortable productivity for anyone anywhere. turn out to have been imaginary, later-stage investors will These big stories were attached to even bigger numbers, be telling a different kind of tale. tough to swallow even for us pragmatic restructuring And since these companies are not typically burdened folks who want to see plans confirmed. Uber: $68 billion; with such prosaic things as significant assets, where will Airbnb: $47 billion; WeWork: also $47 billion. Now these investors find a floor once the tides have turned? Not even stories are being tested with investors in public markets, we story loving restructuring mavens will be able to see who have strangely enough proven less willing to engage value in the phantom of the unicorn. ¤ in magical thinking. Uber, has been trading 30% below its May IPO price; Lyft is down more than 40% since its Deborah Hicks Midanek March debut. Airbnb has wisely said it won’t risk a listing President of Solon Group, Inc. and author of before next year. The Governance Revolution: What Every Board No company has crashed into the reality of the public Member Needs to Know, Now! markets harder than WeWork, which shelved its IPO on Contact: [email protected] reports that its valuation could fall as low as $10 billion. The company bravely pushed out its iconic-in-his-own- mind CEO after investors balked at his egregious self- In The Next Issue... dealing and mismanagement. WeWork reportedly plans

to lay off thousands of employees and halt all new lease ● Who’s Who in Purdue Pharma L.P. agreements as it looks to cut costs. ● Who’s Who in Jack Cooper Ventures, Inc. Behind each of these situations lies a common problem: the companies lose tremendous amounts of money. This ● Special Report: Sources of Debtor-in- was fine when they were playing with a circle of investors Possession Financing who were happy to provide cash as long as valuations ● Special Report: Outstanding Restructuring purportedly kept climbing. Public investors, more Lawyers – 2019 interested in profits and less keen on founders with outsized

www.TurnaroundsWorkouts.com About This Publication: Turnarounds & Workouts is a newsletter for people tracking distressed businesses in the United States and Canada. Turnarounds & Workouts is published by Beard Group, Inc., Telephone: (240) 629-3300. Copyright 2019 by Beard Group, Inc. ISSN 0889-1699. All rights reserved; unauthorized reproduction strictly prohibited. Editor: Christopher Patalinghug ([email protected]). Assistant Editors: Frauline Maria S. Abangan, and Peter A. Chapman. Subscription Rate: $447 per year per firm for one recipient plus $25 per year for each additional recipient. Contact [email protected] for comments and coverage suggestions.

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