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Published January 29, 2009 at 1:46 PM
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BANKRUPTCY FINANCING There was a boom in bankruptcy financing last year. In fact, debtor-in-possession financing in 2008 was at the highest level it's been for at least five years, in terms of both the number and volume of commitments. The $18.1 billion in DIP volume represented a 33% increase vis-à-vis the $13.6 billion registered in 2007. The number of deals, meanwhile, jumped 41% to 328, from the 232 recorded in the previous year.
View tables after the jump.
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| Bankruptcy financing |
| Debtor-in-possession loan metrics, Jan. 1-Dec. 31, 2008 |
| Top lenders by volume* |
Rank |
Lender |
No. of commitments |
Volume ($mill.) |
1 |
General Electric Co. |
21 |
$1,960.1 |
2 |
Wells Fargo & Co. |
38 |
1,533.7 |
3 |
Barclays plc |
5 |
1,128.8 |
4 |
Bank of America Corp. |
24 |
1,120.9 |
5 |
General Motors Corp. |
2 |
977.3 |
6 |
Credit Suisse Group |
6 |
947.0 |
7 |
J.P. Morgan Chase & Co. |
10 |
862.2 |
8 |
Citigroup Inc. |
5 |
738.9 |
9 |
Marathon Asset Management LP |
1 |
592.5 |
10 |
Deutsche Bank AG |
2 |
563.0 |
|
| Top lenders by number* |
Rank |
Lender |
Volume ($mill.) |
No. of commitments |
1 |
Wells Fargo & Co. |
$1,533.7 |
38 |
2 |
Bank of America Corp. |
1,120.9 |
24 |
3 |
General Electric Co. |
1,960.1 |
21 |
4 |
Cerberus Capital Management LP |
412.4 |
15 |
5 |
ING Groep NV |
30.3 |
12 |
6 |
J.P. Morgan Chase & Co. |
862.2 |
10 |
| PNC Financial Services Group Inc. |
184.6 |
10 |
7 |
UBS AG |
276.2 |
7 |
| CIT Group Inc. |
223.2 |
7 |
8 |
Credit Suisse Group |
947.0 |
6 |
| Highland Capital Management LP |
129.7 |
6 |
| |
| Annual trend |
Year |
No. of deals |
Volume ($bill.) |
2004 |
150 |
$7.7 |
2005 |
164 |
14.0 |
2006 |
218 |
9.5 |
2007 |
232 |
13.6 |
2008 |
328 |
18.1 |
| |
| Largest loans |
Rank |
Debtor |
Date |
Commitment ($mill.) |
1 |
Delphi Corp. |
5/9/08 |
$4,354.0 |
2 |
LandSource Communities Development LLC |
6/8/08 |
1,185.0 |
3 |
Circuit City Stores Inc. |
11/10/08 |
1,100.0 |
4 |
Quebecor World Inc. |
1/21/08 |
1,000.0 |
5 |
Delphi Corp. |
8/6/08 |
950.0 |
6 |
Linens Holding Co. |
5/2/08 |
700.0 |
7 |
Mervyn's Holdings LLC |
7/29/08 |
465.0 |
8 |
Lehman Brothers Holdings Inc. |
9/17/08 |
450.0 |
| Pilgrim's Pride Corp. |
12/1/08 |
450.0 |
9 |
Vertis Inc. |
7/15/08 |
380.0 |
10 |
Buffets Inc. |
1/22/08 |
285.0 |
*Includes loans provided by units.
Of recent note: Bank of America Corp. includes Merrill Lynch & Co.; Barclays plc includes Lehman Brothers Inc.; Cerberus Capital Management LP includes GMAC LLC and Chrysler LLC; PNC Financial Services Group Inc. includes National City Corp.; Wells Fargo & Co. includes Wachovia Corp.
Source: www.BankruptcyInsider.com; pipeline.thedeal.com |
General Electric Co. led all lenders in commitment volume with $1.96 billion on 21 deals. Wells Fargo & Co., the top lender by the number of deals with 38, was the runner-up in volume with $1.53 billion. Wells Fargo gained 15 deals worth $760.26 million through its acquisition of Wachovia Corp. By the same token, Bank of America Corp. bulked up with the purchase of Merrill Lynch & Co., absorbing four financings valued at $161.96 million, thus vaulting it to second place in terms of deal count with 24 on $1.12 billion in volume, good for fourth place. BANKRUPTCY ADVISORY
The boom in big bankruptcies last year was highlighted by the largest ever Chapter 11 case. Investment bank Lehman Brothers Holdings Inc. listed $639 billion in assets in its petition. There were 160 Chapter 7, 9, 11 or 15 bankruptcy petitions filed last year, in which the debtor listed assets of at least $100 million. In comparison, there were only 50 such cases filed in 2007, which equates to a 220% increase. Among the biggest bankruptcy filings, the advisers detailed below loomed largest, gaining the most cases or assignments involving debtor, creditor and other roles.
Richards, Layton & Finger PA led all law firms last year, gaining 28 cases. Weil, Gotshal & Manges LLP was the runner-up with 25, and Kelley Drye & Warren LLP placed third with 24.
| Top bankruptcy law firms* |
| New cases gained on the largest bankruptcy cases filed in 2008, Jan. 1 - Dec. 31, 2008 |
Rank |
Law firm |
No. of new 2008 cases |
1 |
Richards, Layton & Finger PA |
28 |
2 |
Weil, Gotshal & Manges LLP |
25 |
3 |
Kelley Drye & Warren LLP |
24 |
4 |
Young Conaway Stargatt & Taylor LLP |
22 |
5 |
Reed Smith LLP |
21 |
| Saul Ewing LLP |
21 |
6 |
Ballard Spahr Andrews & Ingersoll LLP |
16 |
| Pachulski Stang Ziehl & Jones LLP |
16 |
7 |
Latham & Watkins LLP |
15 |
| Morgan, Lewis & Bockius LLP |
15 |
8 |
Kirkland & Ellis LLP |
14 |
9 |
Duane Morris LLP |
13 |
10 |
Akin Gump Strauss Hauer & Feld LLP |
12 |
*Includes all debtor, creditor and other assignments on Chapter 7, 9, 11 and 15 cases listing assets of at least $100 million
Source: www.BankruptcyInsider.com; pipeline.thedeal.com |
| Top bankruptcy lawyers* |
| New assignments gained on the largest bankruptcy cases filed in 2008,Jan. 1 - Dec. 31, 2008 |
Rank |
Lawyer |
Law firm |
No. of new 2008 assignments |
1 |
James Carr |
Kelley Drye & Warren LLP |
78 |
2 |
Thomas Leanse |
Katten Muchin Rosenman LLP |
67 |
3 |
David Pollack |
Ballard Spahr Andrews & Ingersoll LLP |
57 |
4 |
Mark Collins |
Richards, Layton & Finger PA |
23 |
5 |
Kurt Gwynne |
Reed Smith LLP |
18 |
6 |
Brian Huben |
Katten Muchin Rosenman LLP |
17 |
| Mark Minuti |
Saul Ewing LLP |
17 |
7 |
Neil Herman |
Morgan, Lewis & Bockius LLP |
15 |
8 |
Laura Davis Jones |
Pachulski Stang Ziehl & Jones LLP |
12 |
| Gary Seitz |
Rawle & Henderson LLP |
12 |
9 |
Timothy Cairns |
Pachulski Stang Ziehl & Jones LLP |
9 |
| John Knight |
Richards, Layton & Finger PA |
9 |
*Includes all debtor, creditor and other assignments on Chapter 7, 9, 11 and 15 cases listing assets of at least $100 million
Source: www.BankruptcyInsider.com; pipeline.thedeal.com |
Topping the list of investment banks that gained the most cases on the biggest bankruptcy petitions was Houlihan Lokey Howard and Zukin Inc. with 23. The largest case involved Lehman Brothers, where it was hired as financial adviser to unsecured creditors. Lazard placed second with eight, while Mesirow Financial Holdings Inc. and Moelis & Co. tied for third place with seven each.
| Top investment banks* |
| New cases gained on the largest bankruptcy cases filed in 2008, Jan. 1 - Dec. 31, 2008 |
| Rank |
Investment Bank |
No. of new 2008 cases |
1 |
Houlihan, Lokey, Howard & Zukin Inc. |
23 |
2 |
Lazard |
8 |
3 |
Mesirow Financial Holdings Inc. |
7 |
| Moelis & Co. LLC |
7 |
4 |
Chanin Capital Partners LLC |
5 |
5 |
Rothschild |
4 |
6 |
Financo Inc. |
3 |
| Imperial Capital LLC |
3 |
| Jefferies & Co. |
3 |
| Miller Buckfire & Co. LLC |
3 |
| Navigant Capital Advisors LLC |
3 |
| Perella Weinberg Partners LP |
3 |
7 |
Barclays plc |
2 |
| Gordian Group LLC |
2 |
| Greenhill & Co. |
2 |
| Seabury Group LLC |
2 |
*Includes all debtor, creditor and other assignments on Chapter 7, 9, 11 and 15 cases listing assets of at least $100 million
Source: www.BankruptcyInsider.com; pipeline.thedeal.com |
| Top investment bankers* |
| New assignments gained on the largest bankruptcy cases filed in 2008, Jan. 1 - Dec. 31, 2008 |
Rank |
Investment Banker |
Investment Bank |
No. of new 2008 assignments |
1 |
Eric Siegert |
Houlihan, Lokey, Howard & Zukin Inc. |
6 |
2 |
David Hilty |
Houlihan, Lokey, Howard & Zukin Inc. |
5 |
| Larry Lattig |
Mesirow Financial Holdings Inc. |
5 |
3 |
Jonathan Cleveland |
Houlihan, Lokey, Howard & Zukin Inc. |
4 |
| William Derrough |
Moelis & Co. LLC |
4 |
4 |
Edward Casas |
Navigant Capital Advisors LLC |
3 |
| Andrew Turnbull |
Houlihan, Lokey, Howard & Zukin Inc. |
3 |
*Includes all debtor, creditor and other assignments on Chapter 7, 9, 11 and 15 cases listing assets of at least $100 million
Source: www.BankruptcyInsider.com; pipeline.thedeal.com |
Among crisis management firms, FTI Consulting Inc. was the frontrunner with 35 new cases. Lehman Brothers proved to be FTI's largest case, in which the restructuring firm was hired to represent the committee of unsecured creditors.
| Top crisis management firms* |
| New cases gained on the largest bankruptcy cases filed in 2008, Jan. 1 - Dec. 31, 2008 |
Rank |
Crisis Management Firm |
No. of new 2008 cases |
1 |
FTI Consulting Inc. |
35 |
2 |
Alvarez & Marsal LLC |
16 |
3 |
Capstone Advisory Group LLC |
10 |
4 |
Traxi LLC |
7 |
5 |
Zolfo Cooper LLC |
6 |
6 |
AP Services LLP |
5 |
7 |
AlixPartners LLC |
4 |
| Carl Marks Advisory Group LLC |
4 |
| Conway Del Genio Gries & Co. LLC |
4 |
| Conway, MacKenzie & Dunleavy |
4 |
| CRG Partners Group LLC |
4 |
8 |
Loughlin Meghji + Co. |
3 |
*Includes all debtor, creditor and other assignments on Chapter 7, 9, 11 and 15 cases listing assets of at least $100 million
Source: www.BankruptcyInsider.com; pipeline.thedeal.com |
| Top crisis managers* |
| New assignments gained on the largest bankruptcy cases filed in 2008, Jan. 1 - Dec. 31, 2008 |
Rank |
Crisis Manager |
Crisis Management Firm |
No. of new 2008 assignments |
1 |
Bob Duffy |
FTI Consulting Inc. |
9 |
2 |
Michael Eisenband |
FTI Consulting Inc. |
8 |
3 |
Samuel Star |
FTI Consulting Inc. |
7 |
4 |
Steven Joffe |
FTI Consulting Inc. |
6 |
5 |
Perry Mandarino |
Traxi LLC |
5 |
6 |
Steve Coulombe |
FTI Consulting Inc. |
4 |
| Tim Dragelin |
FTI Consulting Inc. |
4 |
7 |
Randall Eisenberg |
FTI Consulting Inc. |
3 |
| Christopher Kearns |
Capstone Advisory Group LLC |
3 |
| Edwin Ordway Jr. |
Capstone Advisory Group LLC |
3 |
| Steve Simms |
FTI Consulting Inc. |
3 |
| William Snyder |
CRG Partners Group LLC |
3 |
*Includes all debtor, creditor and other assignments on Chapter 7, 9, 11 and 15 cases listing assets of at least $100 million
Source: www.BankruptcyInsider.com; pipeline.thedeal.com |
Alvarez & Marsal LLC gained 16 to land in the runner-up spot, while Capstone Advisory Group LLC came in third place with 10. - Chelsey Franks and Neil Malcolm
| The pile up |
| Largest PE-backed companies that landed in bankruptcy in 2008 |
Company
(Sector) |
Date filed |
Sponsor(s) |
Acquisition price ($mill.)
(year) |
Equity investment ($mill.) |
Liabilities upon filing ($mill.) |
Heartland Automotive
(Automotive) |
Jan. 8 |
Quad-C Management |
Undisclosed
(2005) |
$39.0 |
$396.0 |
Propex Inc.
(Building products) |
Jan. 18 |
Genstar Capital LLC, The Sterling Group LP, Laminar Direct Capital LP |
$349.3
(2004) |
70.0 |
527.4 |
Buffets Holdings
(Restaurants) |
Jan. 22 |
CI Capital Partners, Sentinel Capital Partners |
665.0
(2000) |
139.0 |
1,156.0 |
PRC LLC
(Media) |
Jan. 23 |
Diamond Castle Holdings |
286.5
(2006) |
Undisclosed |
261.0 |
American Lafrance
(Automotive) |
Jan. 28 |
Patriarch Partners |
Undisclosed
(2005) |
Undisclosed |
89.1 |
Global Motorsport Group
(Automotive) |
Jan. 31 |
Ableco Finance LLC, Stonington Capital Appreciation 1994 Fund LP |
Undisclosed |
Undisclosed |
155.7 |
Wickes Holdings LLC
(Retail) |
Feb. 3 |
Sun Capital Partners |
Undisclosed
(2002) |
Undisclosed |
208.0 |
Sirva Inc.
(Automotive) |
Feb. 5 |
Clayton, Dubilier & Rice |
350.0
(1999) |
165.0 |
1,230.0 |
Holley Performance Products
(Automotive) |
Feb. 11 |
Kohlberg & Co. |
100.0
(1998) |
66.0 |
243.0 |
BWAS Holdings
(Automotive) |
Feb. 12 |
KPS Capital Partners |
Undisclosed
(2005) |
Undisclosed |
86.5 |
Sharper Image Corp.
(Retail) |
Feb. 19 |
Sun Capital Partners 1 |
Undisclosed |
>13.8 |
199.0 |
Lillian Vernon
(Retail) |
Feb. 20 |
Sun Capital Partners |
Undisclosed
(2006) |
Undisclosed |
1.0 |
Wellman Inc.
(Chemical) |
Feb. 22 |
Warburg Pincus |
125.4
(2003) |
125.4 |
600.0 |
Ziff Davis Media Inc.
(Media) |
March 5 |
Willis Stein/DLJ Merchant Banking Partners |
780.0
(1999) |
550.0 |
500.0 |
Leiner Health Products Inc.
(Consumer products) |
*March 10 |
Golden Gate Capital/North Castle Partners |
20.0
(2002) |
20.0 |
551.0 |
| Powermate Corp. |
March 17 |
Sun Capital Partners |
Undisclosed
(2004) |
Undisclosed |
50.0 |
Aloha Airlines
(Airlines) |
March 20 |
Yucaipa Cos. LLC |
100.0
(2006) |
100.0 |
155.0 |
ATA Holdings
(Airlines) |
*April 3 |
MatlinPatterson Global Advisers |
100.0
(2006) |
52.0 |
100.0 - 500.0 |
VI Acquisition Corp.
(Restaurants) |
April 3 |
Wind Point Partners |
225.0
(2003) |
65.0-100.0 |
100.0 |
EOS Airlines
(Airlines) |
April 26 |
Golden Gate Capital, Maveron LLC, Sutter Hill Ventures |
85.0 |
85.0 |
34.9 |
Home Interiors & Gifts
(Retail) |
April 28 |
HM/Capital Partners
(formerly Hicks Muse Tate & Furst); Highland Capital Management |
852.0
(1998) |
350.0/54.0 |
100.0 |
Linens 'N Things Inc.
(Retail) |
May 2 |
Apollo Management; Silver Point Capital Fund Investments; NRDC Real Estate Advisors I LLC |
1,300.0
(2005) |
|
1,417.0 |
Jevic Holding Corp.
(Transportation) |
May 20 |
Sun Capital Partners |
40.0
(2006) |
Undisclosed |
50.0 |
Vertis Holdings
(Media) |
May 22 |
Thomas H. Lee Partners; Evercore Partners |
1,700.0
(1999) |
|
1,300.0 |
Progressive Moulded Holdings
(Automotive) |
June 20 |
Thomas H. Lee Partners |
528.0
(2004) |
Undisclosed |
|
JHT Holdings Inc.
(Transportation) |
June 24 |
D.B Zwirn & Co. LP, Goldman Sachs Capital Partners, Spectrum Investment Partners LP |
Undisclosed
(2006) |
Undisclosed |
<1,000.0 |
Steve & Barry's LLC
(Retail) |
July 9 |
TA Associates |
Undisclosed
(2006) |
Undisclosed |
<500 |
Pierre Foods Inc.
(Consumer products) |
July14 |
Madison Dearborn Partners LLC |
422.0
(2004) |
142.0 |
440.0 |
Western NonWovens Inc.
(Manufacturing) |
July 14 |
Cerberus Capital Management LP |
Undisclosed
(2007) |
Undisclosed |
106.9 |
SemGroup LP
(Energy) |
July 23 |
Carlyle Group, Riverstone Holdings LLC |
75.0
(2004) |
>75.0 |
7,530.0 |
Mervyn's Holdings LLC
(Retail) |
July 29 |
Cerberus Capital Management LP; Sun Capital Partners Inc.; Lubert-Adler.Klaff Partners LP 2 |
1,250.0
(2004) |
455.0 (est.) |
<50.0 |
Mrs. Fields Famous Brands LLC
(Retail) |
Aug. 24 |
Capricorn Holdings Inc. |
Undisclosed
(1996) |
Undisclosed |
100.0 |
American Fibers and Yarns Co.
(Manufacturing) |
Sept. 24 |
Monitor Clipper Partners |
100.0
(1999) |
Undisclosed |
<50.0 |
Hospital Partners of America
(Healthcare/Medical) |
Sept. 24 |
New Enterprise Associates; Tailwind Capital Partners; Questmark Partners LP |
Undisclosed
(2003) |
55.0 |
100.0 |
Motor Coach Industries International Inc.
(Automotive) |
Sept. 27 |
JLL Partners Inc. |
125.0
(1999) |
50.0 |
843.5 |
Ciena Capital LLC
(Real estate) |
Sept. 30 |
Allied Capital Corp. |
128.0
(2003) |
327.0 |
100.0 |
Sleep Innovations Inc.
(Consumer products) |
Oct. 3 |
Catterton Partners |
(2005) |
113.0 (est.) |
100.0 |
Archway & Mother's Cookie Co.
(Food & beverage) |
Oct. 7 |
Catterton Partners |
Undisclosed
(2005) |
Undisclosed |
500.0 |
Fitness Holdings International
(Retail) |
Oct. 20 |
Hancock Park Associates |
Undisclosed
(2003) |
27.5 |
<100.0 |
Greatwide Logistics Services Inc.
(Transportation) |
Oct. 21 |
Investcorp, Hicks Holdings LLC; Fenway Partners 3 |
735.0
(2006) |
275.0 |
500.0 |
BTWW Retail LP
(Retail) |
Nov. 3 |
Sage Capital LLC, Luther King Capital Management |
Undisclosed
(2007) |
Undisclosed |
<100.0 |
American Furniture Co.
(Retail) |
Nov. 4 |
Hancock Park Associates |
93.0
(2006) |
Undisclosed |
<10.0 |
National Wholesale Liquidators
(Retail) |
Nov. 10 |
Madison Dearborn Partners LLC |
Undisclosed
(1998) |
Undisclosed |
|
Hawaiian Telcom Communications Inc.
(Telecommunications) |
Dec. 1 |
Carlyle Group |
1,600.0
(2005) |
430.0 |
1,269.0 |
EZ Lube
(Automotive supplier) |
Dec. 9 |
Bruckman Rosser Sherrill & Co. |
Undisclosed
(2005) |
Undisclosed |
114.4 |
CDX Gas LLC
(Oil & gas exploration) |
Dec. 15 |
TCW Group |
835.0
(2006) |
Undisclosed |
1,000.0 |
Special Devices Inc.
(Automotive supplier) |
Dec. 15 |
J.F. Lehman & Co. |
293.4
(1998) |
74.0 |
103.6 |
DHP Holdings II Corp.
(Consumer products) |
*Dec. 30 |
H.I.G. Capital |
200.0
(2002) |
Undisclosed |
133.2 |
* indicates second bankruptcy filing
1 A Sun Capital affiliate was the largest shareholder
2 Cerberus sold stake in operating company in 2007
3 Fenway Partners sold all but 10% of its stake, making 4 times its original outlay
Source: The Deal, Bankruptcy Insider |
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