Bankruptcy Debrief for the Week of October 1st

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PacerMonitor's look back on the week's most compelling filings.

Mattress Firm Looks for Soft Landing in Bankruptcy Court

Specialty retailer Mattress Firm filed for chapter 11 after being unable to secure additional funding because of its over-$3.2b debt load. Mattress Firm is looking for a quick restructuring with a proposed 45- to 60-day exit from bankruptcy with what the company is calling a prepackaged plan.

During the case, Mattress Firm intends to close as many as 700 of its 3,230 stores as it has been met with rising competition from online competitors such as Casper. The company has already secured $250m of debtor-in-possession financing and $525m of exit financing to fund business operations of the restructured company.

The terms of the proposed plan include all prepetition secured debt and all general unsecured claims being paid in full. The reorganized Mattress Firm will continue to be owned by nondebtor parent company, Stripes US Holdings.

Read COO and CFO Hendre Ackermann’s declaration in support of the first day motions here. 

View the Chapter 11 petition here. 

 

American Tire Rolls Into Bankruptcy Court With Plan to Swap Debt for Equity

American Tire sought chapter 11 protection to restructure the business by transferring ownership of the company to bondholders in exchange for forgiveness of debt. The company is hoping for a smooth trip through bankruptcy, having entered chapter 11 with support of 75% of the bondholders.

The proposed plan will equitize over $1bn of debt into 95% of reorganized American Tire, and existing equity sponsors Ares Management and TPG Capital will retain 5% ownership.

The case will be funded by a $1.23b debtor-in-possession loan, which will provide, among other things, payment in full for all general unsecured claims. As of the filing, the company had roughly $2.6b of funded debt, inclusive of $1.05b of 2022 unsecured notes.

Read EVP and CFO William Williams’ declaration in support of the first day motions here. 

View the Chapter 11 petition here. 

 

 

 

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