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Key Considerations in Distressed Retail Engagements

I’m honored to have been selected as chair of the Editorial Advisory Board starting in 2019. Together with our new CEO, Scott Stuart, and Editor Eddy McNeil, we’re planning some innovative changes to the JCR that should provide a lot value to our membership and continue to position us as the premier member-focused periodical in the restructuring community.

This year has proven to be a busy time the turnaround industry and even more so within retail restructuring, the theme for this issue of the JCR. In fact, 2018 is on pace to be one of the most active years for large retail Chapter 11s since passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCA), second only to 2017’s 27 Chapter 11 filings in the sector.

Our authors have provided thoughtful perspectives on key considerations for retailers in this time of evolution and dislocation in the industry. In fact, these same individuals have led many of 2017 and 2018 cases, which have shown an impressive decrease in liquidations, suggesting that as a community, we’re starting to find ways to “Thread the Needle in a Tattered Industry,” as the title of Bracewell’s article suggests.

Our cover feature is a provocative article from Ajay Bijoor of Guggenheim Securities LLC cautioning retailers against merely attempting to cut their way to success and proposing thoughtful reinvestment to drive the top line. There are many timely illustrations of best practices among retailers and things to avoid.

Adam Rogoff and Rachael Ringer of Kramer Levin highlight some of the latest thinking in crafting financing agreements to enhance protections for creditors in retail cases, including thoughts on how to think about nuances within surcharges and marshalling.

Norman Kinel and Nava Hazan of Squire Patton Boggs explore the Czyzewski v. Jevic Holding Corp. case and its impact on structured settlements for unsecured creditors.

Potential issues that arise from having separate collateral pools for different lender groups are explored by a group from Latham & Watkins’ restructuring team, including Mitch Seider, Jeff Bjork, Adam Goldberg, and Liza Burton.

Jennifer Feldsher, Mark Dendinger, and Logan Kotler of Bracewell LLP outline best practices to strategically and proactively address unique issues faced by restructuring retailers.

We wrap up with Alexander McKeown and Benjamin Kaplan of Hilco Merchant Resources and Hilco Streambank, respectively, who discuss balancing tangible and intangible value and how to retain the value of a retailer’s intellectual property during an inventory liquidation, which can return substantial value to the estate.

Spencer Ware

Spencer Ware, CTP

AlixPartners

Spencer M. Ware, CTP, is a director with AlixPartners’ Turnaround & Restructuring Services group in New York and has more than 17 years of experience advising clients on complex financial and operational restructuring matters. He chairs TMA’s Editorial Advisory Board and has held senior volunteer leadership positions at TMA, Haverford College, and the London School of Economics, among others. Ware received TMA’s 2018 Mid-Size Transaction of the Year Award for his work as CRO of Eastern Outfitters.

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