BANKRUPTCY & LEGAL
Wells Fargo Leads $90MM DIP ABL Facility for Hollander Sleep Products
Hollander Sleep Products, a North American supplier of pillows and mattress pads, filed voluntary petitions to restructure under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. The company’s Canadian subsidiary is also voluntarily commencing parallel proceedings under the companies’ Creditors Arrangement Act in Canada.
To fund the company’s operations while in Chapter 11, Hollander secured $118 million in debtor-in-possession financing, comprised of $28 million in incremental “new money” and an additional $30 million of committed “exit” financing to support a full range of business improvement initiatives once the company exits from bankruptcy, which were provided by a group of the company’s existing term lenders. The balance of the DIP financing was funded through a $90 million DIP ABL facility provided by the company’s prepetition ABL lenders and led by Wells Fargo Bank.
These funds and Hollander’s cash from operations are expected to provide ample liquidity during the Chapter 11 process to maintain normal operations.
The company also filed a Chapter 11 reorganization plan, which is supported by 100% of the company’s existing term lenders.
“We are pleased to have reached this agreement with the term lenders, Wells Fargo and our current stakeholders to provide funding and support to restructure our business for long-term success,” said Marc Pfefferle, Hollander CEO. “Hollander is making and will continue to make significant progress on improving all facets of our operations, introducing new products, improving customer service levels, lowering our costs and scaling our E-commerce presence. Upon emergence, we will have a stronger balance sheet and the financial flexibility needed to compete in today’s dynamic business environment now and over the long-term.”
Hollander’s offices and plants around the world will remain open, staffed, and supplied with the resources necessary to meet customers’ needs. The company expects the Chapter 11 process to last approximately four months.
Citigroup to Lead DIP Revolver to Support Weatherford Restructuring
Weatherford International has executed a restructuring support agreement with a group of its senior noteholders. The agreement anticipates $1.75 billion in DIP financing, which would include a revolver led by Citigroup.
Cloud Peak Files for Chapter 11, Ankura to Agent DIP Financing
Coal company Cloud Peak Energy filed voluntary petitions under Chapter 11. Ankura Trust will serve as both administrative and collateral agent on DIP facilities to support the company through the bankruptcy process.
Cortland Agents $100MM DIP Facility for Sungard
Sungard Availability Services successfully emerged from its prepackaged Chapter 11 restructuring. Cortland Capital Market Services agented a DIP facility in the aggregate amount of $100 million to support the company’s restructuring.
iHeartMedia Successfully Completes Restructuring
iHeartMedia emerged from Chapter 11 and completed its restructuring process, significantly reducing debt from $16.1 billion to $5.75 billion. A $450 million DIP facility agented by Citibank includes a feature to convert into an exit facility at emergence, upon meeting certain conditions
Barclays Agents Up to $155MM DIP for CTI Foods
CTI Foods confirmed its plan of reorganization with the U.S. Bankruptcy Court for the District of Delaware. Barclays will serve as administrative agent for a superpriority DIP, asset-based revolving credit facility in an aggregate principal amount of up to $80 million and a superpriority DIP term loan credit facility in an aggregate principal amount of up to $75 million.
Noah Bank CEO Indicted on Bribery, Fraud Charges
The U.S. Attorney’s Office arrested Edward Shin, the CEO of Noah Bank, for allegedly taking bribes in connection with the bank’s issuance of loans and causing the bank to issue loans to companies in which he had a secret interest.
The U.S. Attorney’s office complaint contends Noah Bank, based in Elkins Park, PA, made loans guaranteed by the Small Business Administration available to eligible businesses in the New York and New Jersey area. These loans required compliance with SBA regulations and procedures in order to be issued.
Specifically relevant to Shin’s case, bank officers were prohibited from receiving any payments related to the loans, and loans were barred from being extended to businesses in which a bank officer held an interest.
According to the U.S. Attorney’s office, Shin directly violated these rules.
Noah Bank issued a statement contending it is neither a defendant nor a suspect in relation to any of the alleged charges. The bank will remain open to conduct business as usual. Its deposits are insured by the FDIC up to the maximum extent allowed.
Hyunjun An, Noah Bank’s chief financial officer, has been named acting president of the bank.