Doors closing: Barneys New York files for Chapter 11

BY Fraser Tennant

In a move which threatens its almost 100-year history, US luxury department store operator Barneys New York filed for reorganisation under Chapter 11 of the US Bankruptcy Code.

As a part of the Chapter 11 process, Barneys New York will close its physical store locations in Chicago, Las Vegas and Seattle, in addition to five smaller concept stores and seven warehouse locations.

Alongside the bankruptcy process, the company has secured $75m in new capital which, combined with operating cash flow, will help it to meet its go-forward financial commitments, as well as facilitate a going concern sale process.

Well known for its high-end designer collection, Barneys New York has struggled in recent years with high rents and changing consumer tastes.

"For more than 90 years, Barneys New York has been an iconic luxury specialty retailer, renowned for its edit, strong point of view, creativity and representation of the world's best designers and brands," said Daniella Vitale, chief executive of Barneys New York. “Like many in our industry, Barneys New York's financial position has been dramatically impacted by the challenging retail environment and rent structures that are excessively high relative to market demand.”

“In response to these obstacles, the Barneys New York board and management team have taken decisive action by entering into a court-supervised process, which will provide the company the necessary tools to conduct a sale process, review our current leases and optimise our operations,” she continued. “While doing that we are receiving new capital to help support the business.”

Despite the store closures, Barneys New York will continue to serve customers in five flagship locations. In addition, Barneys.com and BarneysWarehouse.com will continue serving customers without disruption.

Serving as Barneys New York’s legal adviser is Kirkland & Ellis LLP. Houlihan Lokey is financial adviser, while M-III Partners, L.P. is restructuring adviser.

Ms Vitale concluded: "I would like to express my deep appreciation and profound gratitude for the continued support of our employees, vendor community and customers – truly the lifeblood of Barneys New York. We are unwavering in our commitment to executing our forward thinking vision on what retail should look like today."

News: New York retail icon Barneys files for bankruptcy

Oil and natural gas firm Exco emerges from Chapter 11

BY Fraser Tennant

With enhanced financial flexibility to support long-term growth, US oil and natural gas exploration firm Exco Resources has successfully completed its financial restructuring and emerged from Chapter 11.

As a result of the Chapter 11 process, the company has reduced its leverage by more than $1.1bn and is moving forward with approximately $325m in committed exit financing from a new credit facility.

Exco originally filed for Chapter 11 in January 2018 due to a sustained downturn in commodity prices and uncertainty in the energy market.

“This is an exciting day for Exco and marks the beginning of the next chapter as an even stronger, more competitive company,” said Hal Hickey, chief executive and president of Exco. “Through the restructuring process, we have significantly improved our capital structure and reduced our debt, and our operations have progressed uninterrupted.”

Headquartered in Dallas, Exco’s principal operations are located in Texas, North Louisiana and the Appalachia region. Following its emergence from Chapter 11, the firm has stated that it will now continue to engage in the exploration, acquisition, development and production of onshore US oil and natural gas properties.

“Our successful emergence from this process is a testament to our former board and talented employees, whose continued focus on our operational initiatives enabled us to execute on our drilling and completion activities while maintaining an exemplary safety record throughout this process,” added Mr Hickey. “I also want to thank our customers, business partners and lenders for their ongoing support. I am honoured to be part of this team and confident our new board will be an asset to Exco as we enter our next stage of business development.”

Now privately-owned, Exco’s shares are no longer available for trading on a public exchange. In accordance with the restructuring plan, Exco’s new five-member board includes representatives from the holders of the firm’s newly issued common stock. The current management team remains in place.

Serving as Exco’s legal adviser during the Chapter 11 process was Kirkland & Ellis LLP. Alvarez & Marsal North America, LLC served as restructuring adviser, with PJT Partners LP serving as financial adviser.

Mr Hickey concluded: “Exco is now better positioned to capitalise on our strong asset base and operational expertise, as we continue enhancing our business and serving our customers, partners and other stakeholders.”

News: US firm Exco Resources emerges from Chapter 11 bankruptcy

Legacy Reserves files for Chapter 11 to facilitate RSA

BY Fraser Tennant

In a move designed to significantly reduce its debt and realign its operations, energy company Legacy Reserves, together with its subsidiaries, has filed for Chapter 11 bankruptcy. The filing is to facilitate a global restructuring support agreement (RSA) with its lenders, announced just days previously.

Legacy’s bankruptcy woes are a direct result of uncertainty in the oil industry, with fluctuating oil prices doing much to saddle the company with massive debt as it attempted to continue operating through the market’s peaks and troughs.   

Moreover, Legacy has stated that it sought Chapter 11 bankruptcy protection in order to implement its RSA and cut more than $900m of its debt. The RSA will provide the company with liquidity and capital structure, while minimising operational disruptions.

“We explored a wide variety of alternatives to address our balance sheet and looming bank maturity during a sustained downturn in oil and gas prices,” said Dan Westcott, chief executive of Legacy. “After concluding this process, we felt that the financial restructuring negotiated with our creditors provides the best path forward for the company. Through the proposed terms of the plan of reorganisation, we believe our right-sized balance sheet will enable us to successfully compete in the current environment.”

The company has also stated that it intends to operate ‘in the ordinary course of business’ throughout the Chapter 11 process and has filed a number of first-day motions to this effect. Specifically, Legacy has requested authority to pay in full employee wages and honour existing employee benefit programmes, vendors and other operating expenses, joint interest billings for non-operated properties and royalties to mineral interest owners under terms of applicable agreements.

An independent energy company engaged in the development, production and acquisition of oil and natural gas properties in the US, Legacy’s current operations are focused on the cost-efficient management of shallow-decline oil and natural gas wells in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions.

Mr Westcott concluded: “Following the negotiated restructuring, we look forward to having substantially less debt and significantly enhanced prospects for our company, our employees and our future."

News: Oil and gas producer Legacy Reserves to seek Chapter 11 protection

Jones Energy emerges from Chapter 11 – 33 days after filing

BY Fraser Tennant

In what is a remarkable turnaround given the precarious state of the industry, oil and natural gas company Jones is emerging from Chapter 11 bankruptcy – 33 days after filing.

Jones Energy’s pre-packaged Chapter 11 plan – which fully equitises its funded debt, authorises an exit facility and satisfies all trade, customer, employee, royalty and working claims – was confirmed by the United States Bankruptcy Court for the Southern District of Texas on 6 May. The company believes that it has emerged from bankruptcy stronger, well-capitalised and strategically positioned to maximise the value of its asset portfolio.

A family business which dates back three generations to the 1920s, Jones Energy engages in the exploration and development of oil and natural gas properties in the Anadarko basin of Oklahoma and Texas.

“Our successful record-pace emergence from Chapter 11 reflects extraordinary effort by all parties involved,” said Carl Giesler, director and chief executive of Jones Energy. “We thank our employees for their persistence, patience and professionalism throughout this process. We also thank our mineral interest holders, vendors and suppliers for their steadfastness and cooperation, as well as the various legal and financial advisers for their judgments and guidance.”

Jones Energy has also entered into a new reserve-based credit facility with a group of banks led by TD Securities and an initial borrowing base of $225m. The company has initially elected an aggregate commitment of $150m and will have no outstanding borrowings upon emergence.

“The substantial capital commitment from our bank group highlights the operating momentum achieved by our team and the significant progress made to position the company to enhance the value of our assets,” added Mr Giesler. “Our ongoing optimisation initiatives have yielded strong well results that continue to outpace expectations and have already effected substantial reductions to our cost structure. We recognise the efforts to secure this liquidity, particularly given the current challenging financing environment.”

Mr Giesler concluded: “Jones Energy emerges from Chapter 11 in a strong financial position with the flexibility to optimise the value of its assets for all our stakeholders.”

News: Jones Energy Emerges from Bankruptcy with $225 Million Borrowing Base Agreement

Oil and gas giant Weatherford to restructure through Chapter 11

BY Fraser Tennant

Another victim of the industry’s continuing downcycle, multinational oil and natural gas company Weatherford International plc has filed for Chapter 11 bankruptcy protection amid mounting debt. 

Through a prepackaged Chapter 11 process, the company expects to implement a comprehensive financial restructuring agreement to significantly reduce its long-term debt and related interest costs, provide access to additional financing and establish a more sustainable capital structure.

In addition to its Chapter 11 filing, as a company domiciled in Ireland, Weatherford has also filed Irish examinership proceedings. Furthermore, as part of the bankruptcy and restructuring process, Weatherford intends to continue engaging in discussions with, and begin soliciting votes from, its creditors in connection with a proposed plan of reorganisation prior to filing.

"During the past year, we have been executing a company-wide transformation to fundamentally improve the way we operate our business and to strengthen Weatherford for the long run," said Mark A. McCollum, president and chief executive of Weatherford. "Despite the challenging market dynamics our industry continues to face, we believe that our transformation strategy, which is designed to improve our execution capabilities, lower our cost structure and create efficiency to allow us to better price our products and services, will position Weatherford for long-term success.”

Weatherford expects to continue to operate its businesses and facilities during the Chapter 11 and restructuring process, without disruption to its customers, vendors, partners or employees.

“However, we still face a high level of debt that affects our ability to make investments in our Company and implement further elements of our transformation plan,” continued Mr McCollum. “We expect that the new capital structure will allow us to continue to capitalise on our momentum and build a truly integrated service company with sustainable profitability and long-term growth potential."

One of the world’s largest oilfield service companies, Weatherford operates in over 80 countries and has a network of approximately 650 locations, including manufacturing, service, research and development and training facilities and employs approximately 26,000 people.

Mr McCollum concluded: “Our customers, partners, employees and vendors should not experience any changes in the way we do business, and we expect their experience will improve after the restructuring is complete.”

News: Oilfield services firm Weatherford to file for Chapter 11 bankruptcy