Carestream Health files for Chapter 11 bankruptcy protection

BY Richard Summerfield

X-ray and medical imaging company Carestream Health has announced that it has voluntarily filed for reorganisation under Chapter 11 of the US Bankruptcy Code in the Bankruptcy Court for the District of Delaware.

The company, founded by Eastman Kodak Co, filed for bankruptcy protection with a lender-backed proposal which would cut its debt by $470m. Under the terms of the proposal, there will be a total debt reduction of $250m more than the company’s previously announced recapitalisation agreement. This process will significantly strengthen Carestream’s balance sheet and position the company for continued success.

“We are commencing the final stage of our recapitalization process, which will significantly enhance our ability to navigate a dynamic market,” said David C. Westgate, chairman, president and chief executive of Carestream. “Since announcing our recapitalization process in April, our lenders have remained overwhelmingly supportive, and we have worked constructively with them to complete the transaction. As our talks evolved, we determined the best course of action was to implement the agreement through an expedited court-supervised process.

“With a clear path to completion, we expect to emerge from this process as a stronger partner to our customers, with significantly reduced debt and new owners who also continue to believe in the future of Carestream. Carestream has strong market opportunities ahead. I am confident in the strength of our core business and our ability to maintain market leadership moving forward,” he added.

According to a statement announcing the filing, Carestream expects to continue operating normally throughout the court-supervised process and remains focused on serving its customers and working with suppliers on normal terms. Carestream expects to move through the Chapter 11 process on an expedited basis and complete the recapitalisation in approximately 35-45 days.

Carestream has secured an $80m debtor-in-possession financing facility from some of its existing lenders to reinforce its liquidity and fund the costs of the Chapter 11 process. Carestream entities outside the US are not part of the Chapter 11 process and will continue operating as normal.

News: Medical imaging company Carestream Health files Chapter 11 bankruptcy

Drugmaker Endo files for Chapter 11 amid opioid battles

BY Fraser Tennant

In a bid to weather a wave of opioid lawsuits, pharmaceutical company Endo International has filed for Chapter 11 bankruptcy as part of restructuring support agreement (RSA) with senior secured debtholders.

The company said that it initiated Chapter 11 proceedings to facilitate a sale process and provide an appropriate forum for bringing closure to opioid-related and other uncertainties, without recourse to costly and time-consuming litigation.

Under the terms of the RSA, the debtholder group has committed to providing total purchase consideration of approximately $6bn in the form of a credit bid, plus assumption of certain liabilities, for substantially all of Endo’s assets.

The RSA  will allow the company to advance its business transformation with a strengthened balance sheet to create compelling value for its stakeholders over the long term.

In addition, Endo has filed with the bankruptcy court a series of customary motions to maintain business-as-usual operations on all fronts and uphold its commitments to its stakeholders, including team members, customers, suppliers and business partners, during the Chapter 11 process.

Endo's India-based entities are not part of the Chapter 11 proceedings.

“The Chapter 11 process will enable us to continue our ongoing business transformation, including investing in our core areas of growth, as we work to execute a transaction to strengthen our balance sheet and secure a strong tomorrow,” said Blaise Coleman, president and chief executive of Endo. "By definitively addressing more than $8bn of debt that has burdened our balance sheet and establishing a pathway to closure with respect to thousands of opioid-related and other lawsuits, we will be able to move forward as a new Endo and reach our full potential."

Founded in 1997, Endo is a specialty pharmaceutical company committed to helping everyone it serves to live their best life through the delivery of quality, life-enhancing therapies. The company has global headquarters in Dublin, Ireland, with its US corporate office in Malvern, Pennsylvania.

“Our commitment to our mission, team members, customers, patients and communities will not change,” concluded Mr Coleman. “We look forward to emerging from this process better positioned to continue helping everyone we serve live their best lives.”

News: Endo files for bankruptcy as U.S. opioid litigation drags

Altera Infrastructure files for Chapter 11

BY Fraser Tennant

In a move designed to deleverage its balance sheet and position it for long term growth and success, global energy infrastructure services group Altera Infrastructure has filed for Chapter 11 bankruptcy so that it may implement a restructuring support agreement (RSA).

The RSA has been signed, or agreed to in principle by, holders of 80 percent of its funded debt obligations, which includes Brookfield Business Partners and approximately 91 percent of its bank lenders pending certain creditors’ internal credit approval processes.

The terms of the RSA contemplate more than $1bn of secured and unsecured holding company debt, $400m of preferred equity and $550m of secured asset-level bank debt, a comprehensive reprofiling of Altera’s bank loan facilities to better align cash flow with debt service obligations and the continued support of Altera’s equity sponsor, Brookfield.

In addition, Altera has obtained a commitment from Brookfield for a $50m debtor in possession (DIP) financing to help fund Altera’s restructuring process and ensure ordinary course operations remain unimpaired during the Chapter 11 process.

In conjunction with the petitions Altera has filed a series of motions, which, once approved by the bankruptcy court, will enable Altera to operate its business in the ordinary course without interruption. “We enter into this phase of our balance-sheet restructuring with the support of the majority of Altera’s secured lenders and equity sponsor Brookfield,” said Ingvild Sæther, chief executive of Altera Infrastructure Group Ltd.

A leading global energy services provider to the oil and gas industry, Altera focuses on supplying critical infrastructure assets to its customers in the offshore oil and gas regions of the North Sea, Brazil and the East Coast of Canada.

Altera’s fleet of 41 vessels includes floating production, storage and offloading units, shuttle tankers, long-distance towing and offshore installation vessels, as well as a unit for maintenance and safety.

Ms Sæther concluded: “We are confident that the Chapter 11 process will result in a comprehensive recapitalization transaction that will not only stabilise liquidity, but also deleverage our balance sheet and better position Altera for future growth.”

News: No impact to employees as Altera Infrastructure announces Chapter 11 bankruptcy

Space company Masten files for Chapter 11

BY Fraser Tennant

Signalling serious financial distress and putting at risk a NASA-funded mission to send one of its landers to the surface of the moon, pioneering NewSpace company Masten Space Systems has filed for Chapter 11 bankruptcy.

Masten is one of five companies that had won contracts from NASA to deliver payloads to the lunar surface. NASA issued an award originally valued at $75.9m to Masten in April 2020 to deliver a suite of experiments to the lunar surface using its XL-1 lander.

However, the NASA contract did not cover the entire cost of mission and Masten had difficulty raising additional funds by finding private payloads to fly to the lunar surface. Originally scheduled for 2022, the mission was pushed back to November 2023 because of what the company said in June 2021 were pandemic-related supply chain issues.

“NASA received notification its payloads slated for delivery aboard Masten Mission One may be impacted by Masten business operations,” said NASA in a statement. “The agency is working closely with the company to ensure that any potential changes comply with federal acquisition regulations. In the event Masten is unable to complete its task order, NASA will manifest its payloads on other flights.”

According to the Chapter 11 filing, Masten, based in Mojave, California, has estimated assets of between $10m and $50m, and estimated liabilities in the same range. Among the company’s creditors are SpaceX, Psionic LLC, Astrobotic Technology, NuSpace and Frontier Aerospace.

The filing follows months of losing key employees, including Sean Mahoney, chief executive, and Reuben Garcia, director of technical operations and manager of landing systems.

The company has also laid off 20 employees, including 15 engineers working on the XL-1 lander.

“Masten intends to use the Chapter 11 process to streamline its expenses, optimise its operations and conduct sale processes that maximise value for its unsecured creditors,” said Masten in a statement. “We expect the case to move quickly in order to minimise expenses.”

The company has also furloughed the remainder of its staff in the hope that they can be brought back if the company’s financial situation improves.

“We are hopeful that the Chapter 11 process will enable us to continue operations and deliver value for our customers and the space industry,” concluded Masten.

News: Space company Masten files for bankruptcy after struggle with NASA moon contract

Voyager Digital files for Chapter 11 bankruptcy protection

BY Richard Summerfield

Amid considerable difficulty within the cryptocurrency market, Voyager Digital, a cryptocurrency broker, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court of the Southern District of New York.

Last week, Voyager, which is based in New Jersey, suspended all withdrawals and trading and said “volatility and contagion” in the crypto markets had forced it into a Chapter 11 filing.

The wider cryptocurrency market has experienced a significant slump of late. Today, the industry which was valued at $3 trillion at its peak last November, is now valued at less than $1 trillion, with the decline accelerating in May when a multibillion-dollar cryptocurrency, Terra, collapsed.

In its Chapter 11 bankruptcy filing on Tuesday, Voyager estimated that it had more than 100,000 creditors and somewhere between $1bn and $10bn in assets and liabilities. Alameda Research – a cryptocurrency trader – was Voyager’s largest single creditor, with unsecured loans of $75m. Alameda holds a stake of over 9 percent in Voyager.

“This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers,” said Stephen Ehrlich, chief executive of Voyager. “Voyager’s platform was built to empower investors by providing access to crypto asset trading with simplicity, speed, liquidity, and transparency. While I strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital (‘3AC’) on a loan from the Company’s subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now. The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.”

Last week, Voyager said it had issued a notice of default to Singapore-based crypto hedge fund 3AC for failing to make payments on a crypto loan totalling over $650m. 3AC filed for Chapter 15 bankruptcy in a federal bankruptcy court in the Southern District of New York last Friday, in hopes of shielding its US assets after a court in the British Virgin Islands reportedly ordered the firm into liquidation.

According to the statement announcing Voyager’s filing, the company’s reorganisation plan, upon implementation, would resume account access and return value to customers. Under the terms of the plan, which is subject to change given ongoing discussions with other parties, and requires Court approval, customers with crypto in their accounts will receive in exchange a combination of the crypto in their accounts, proceeds from the 3AC recovery, common shares in the newly reorganised company, and Voyager tokens. The plan contemplates an opportunity for customers to elect the proportion of common equity and crypto they will receive, subject to certain maximum thresholds.

News: Crypto lender Voyager Digital files for bankruptcy