💥💥P. G. &. E.💥💥

Baupost Group & The Hot Mess that is PG&E.

Disruption from the Vantage Point of the Disrupted
1/27/19 Read Time = 15.6 a$$-kicking minutes
Twitter: @petition. Website: petition.substack.com

🗞News of the Week (3 Reads)🗞

1. What to Make of the Credit Cycle. Part 25. (Long Warning Signs).

Seth Klarman of Baupost Group released his annual letter to investors this past week and PETITION was lucky enough to nab a copy. While there isn’t much of a distressed investing narrative within — a bit disappointing considering Baupost’s recent involvement in Westinghouse and PG&E — there is a great summary of 2018 and some cautionary words for investors to heed in 2019. If you’d like a copy, please email us at petition@petition11.com.

Here are some highlights:

The most over-extended asset class in 2018 may well have been private equity. With public equity markets expensive and yield still scarce, many investors have lately concluded that private equity is the one place where double-digit returns may be achievable. Private equity fundraising has set records, with estimates of more than a trillion dollars in capital available to be put to work. The multiples of leverage extended in private equity transactions is approaching previous peaks, as are valuations of such transactions, while the laxity of financing terms is unprecedented. Private equity investors have had the wind at their backs for a decade, the result of a steadily growing economy and sustained low interest rates, conditions that will almost certainly not prevail forever.

We found this comment especially interesting in light of what happened in December. The market for leveraged loans and junk bonds effectively closed, temporarily squeezing some underwriters and private equity firms in the process. Without access to the capital markets, private equity can’t breathe.

Here’s what’s been happening with loans:

And yet, in certain corners, memories tend to be short:

On the high yield side:

Targa Resources marked the thawing of the cold spell with its non-LBO-related ~$1.5b issuance. Maybe all the market needed was one brave issuer to dip its toes in the waters. January has proven to be pretty robust for high-yield bonds. On Friday, Bloomberg reported:

This week was the busiest since August for the junk bond market, which has absorbed 15 deals worth a total of $11.7 billion so far this month. Underscoring the strength of demand, most were upsized, priced at the tight end of guidance, and traded up in the secondary market.

But, also per Bloomberg:

“Investors may be happy that prices have recovered, but the whipsawing doesn’t suggest to us a stable, healthy market,” said Andrew Curtis, managing director and head of Z Capital Credit Partners, which buys leveraged loans. “This whipsawing suggests to us a schizophrenic market where sentiment and prices change often, quickly, and sharply.”

Why so serious?

Next week Dun & Bradstreet intends to raise $1.35b in junk bonds, including an $850mm issue expected to be rated CCC. This issuance ought to test whether December’s swoon really is in the past.

Here’s more from Klarman:

There are also concerns that the lengthy 36-year bond bull market is nearing its end. At one point last year, rates on U.S. Treasury 10-year bonds had more than doubled from their 2016 lows. Given the length of the bond buying spree, many of today’s market participants have never experienced a bear market in bonds. The riskiness of their exposures may surprise them. And because marketplace conditions have evolved greatly over the last three decades, when we do eventually enter a fixed income bear market, neither historical correlations nor prior experience are likely to provide much guidance for how to successfully navigate this treacherous terrain.

Driven by such a protracted period of near-zero interest rates, investors have stampeded into anything – bonds, loans, REITs – offering a current return, leading to a degradation in the quality of outstanding credit. The proportion of U.S. non-financial corporate investment grade bonds rated BBB – the lowest investment grade rating – has increased to 58% today compared to 48% in 2011, even as the total investment grade market has increased from roughly $2.2 trillion in 2007 to $3.8 trillion today. The proportion of total non-investment grade issuance rated B- or below is nearly 25% of the overall high yield market. And high yield plus BBB-rated bonds comprise 68% of the total U.S. corporate bond universe.

The leveraged loan market, a critical funding source for lower quality issuers, has been on fire, with a record $788 billion of leveraged loans issued globally in 2017, and just below that pace of issuance in 2018. Almost 80% of the 2018 vintage was issued as “covenant-lite” – compared to about 30% in 2007. Record annual volumes of low grade bond issuance – including a 130% increase in the U.S. CLO market since 2008 – has surely created a vast future supply of distressed debt, but any calamity has seemed off in the distance. By year-end, however, it appeared to draw closer. Bank trading desks have pulled back from risk-taking, resulting in lower liquidity for bondholders and the possibility of greater price volatility. Late in the year, corporate credit spreads started to widen. The credit markets were hard hit in November, with yields on U.S. corporate debt reaching an 8 1⁄2-year high of 4.38%. Yields on the debt of fallen icon GE at one point hit 6.4%, from under 3% earlier in the year.

By the end of the year, cracks had also started to appear in the leveraged loan market, and investors pulled a record $3.3 billion out of U.S. loan funds in one week in mid-December. Junk bond fund outflows also set a record in 2018. Higher interest rates will significantly burden today’s highly leveraged issuers, and the challenges will be made more severe when the next economic downturn hits. (emphasis added)

Whenever that might be.


2. Happy PG&E Bankruptcy Week (Long Liquidity Needs).

What’s that sound? That dripping sound. Do you hear that?

We hear it. Surely you hear that, right?

Drip. Drip. Drip.

Wait…that can’t be? Oh wow. It sure is. That is the sound of saliva hitting the floor, splashing into a massive puddle of anticipation. That, dear readers, is the restructuring industry getting hot and heavy at the thought of a big, juicy, non-retail, expensive multi-year chapter 11 bankruptcy filing. Introducing, Pacific Gas & Electric Corporation (“PG&E”). Like flies on sh*t, restructuring professionals are angling for some piece of what could be a behemoth bankruptcy of EFH-like proportions (without the…cough…cough…suppression of laughter…”restructuring support agreement”).

We briefly touched on PG&E on Wednesday when, in the context of discussing a channeling injunction in a new asbestos case, we noted:

…PG&E is likely to end up with some kind of plan of reorganization that features a litigation trust (for affected claimants) and a channeling injunction. Except, as John Rapisardi and Daniel Shamah of O’Melveny & Myers point out, there are limitations to that structure. They write:

There is one significant obstacle to any PG&E bankruptcy: the likely inability to discharge liabilities associated with wildfires that have not yet occurred. There have been numerous mass tort bankruptcies in the past that have been resolved through the formation of a litigation trust and channeling injunction, forcing litigants into a single forum where claims are satisfied through trust assets. See, e.g., 11 U.S.C. §524(g) (channeling injunction for asbestos debtors); In re TK Holdings, Doc. No. 2120, Case No. 17-11375 (Bankr D. Del.) (confirmation order with channeling injunction for debtor that manufactured airbags with defective components). But that structure only works for claims based on prior conduct or acts. PG&E, in contrast, faces perennial liability associated with wildfires and inverse condemnation. It may be challenging to discharge the inverse-condemnation liabilities associated with a post-petition wildfire. See 28 U.S.C. §959(a) (debtors-in-possession may be sued “with respect to any of their acts or transactions in carrying on business connected with such property.”).

Prior conduct or acts, huh? A discontinued product that happened to contain asbestos fits that bill. Likewise, a remedied airbag (the TK Holdings referenced above refers to Takata Airbags). Sadly — especially for Californians, there is nothing prior about environmental issues. Those are very much a present and future thing.

There’s so much more to this.

The first thing to understand is that this is California. Sh*t gets crazy out in California. It just does. Let’s not sugarcoat that: there’s a reason why the Ninth Circuit has the reputation it does; and there’s a reason why California isn’t a high-trafficked jurisdiction for bankruptcy. It’s literally the wild wild west. With some wild laws. Back in July we wrote the following in “⚡️Is PG&E in Trouble?⚡️” — after PG&E’s publicly-traded parent company reported earnings:

The company’s results suffered from what it deems an overly draconian “strict liability construct” or “inverse condemnation” that applies to investor-owned utilities in California. That is, these utilities must pay costs associated with disasters — think wildfires — regardless of a finding of negligence or full causation and without any recourse to customers. Sadly, wildfires in California have become the “new normal” and so PCG has a significant amount of financial exposure.

We made a special point to highlight what the company noted on its July 26th 2018 earnings call:

…we took a $2.5 billion non-cash charge this quarter for 14 of the 16 Northern California wildfires for which Cal Fire has concluded its investigations. We're also seeing negative impacts in the insurance markets as providers are adjusting to the increased frequency and severity of wildfires across the state, coupled with the unsustainable strict liability standard.

With respect to insurance, the company noted:

…we have seen dramatic changes in the insurance market for California investor-owned utilities, with increased pressure on both price and capacity. Some carriers have significantly reduced their exposure by reducing limits or excluding events that were previously covered, and all have significantly increased their premiums.

This is clearly not a positive development for the company. Indeed, the company expects to incur $350mm in annualized insurance costs as a result, $300mm of which isn’t currently baked into rates. While $80mm of that amount could be deferred as a regulatory asset, the remaining $220mm flows to the bottom line. In other words, if you live in California, get ready for a rate hike. 😬😬

All three ratings agencies recently downgraded PCG. These downgrades have had the affect of increasing the company’s cost of capital.

We continued:

None of the analysts on the earnings call outright asked about bankruptcy but “capital raising efforts” were in focus. Here is what the company said on the subject:

Obviously, liquidity is clearly a focus for us. The $2.5 billion dollars of debt that we raised at the utility in 2017 was intended to largely address our ongoing financing needs for 2018 and 2019, to give us the flexibility to work through the complexities that we've outlined.

As we've said, uncertainty with respect to legislative reform, the uncertainty with respect to the timing of the judicial challenges of inverse condemnation, create a challenging environment for incremental financing. That's why – I'll come back to our commitment at least early on if our non-cash – if we fall below the minimum equity ratio from a non-cash charge we will file a capital structure waiver. If that is denied, ultimately, we will look at other tools and we will seek to balance the balance sheet health of the company, but as well protect the interest of both our customers and shareholders. And I think just given all of the uncertainty it's hard to be any more specific than that at this time.

Analysts. Pssssst. Not one analyst raised the specter of bankruptcy on this call. What does that tell you?

So here you have — more than half a year ago — the company foreshadowing that its (i) cost of capital was increasing, (ii) liquidity was tightening, (iii) insurers were getting fidgety and raising premiums, and (iv) risk of (exorbitant) liability was high and increasing. And due to legislation and environmental trends, there was absolutely no limit to how high that liability could go. 🤔

So, what does the company do? First it drew down its credit facilities in mid-November. Then, to comply with various state laws and create a sense of urgency around the “inverse condemnation” laws, PG&E announced on January 14 2019 (after weeks of leaks) that it intends to file for bankruptcy on or around January 29, 2019. Now, mind you, on the date of the above-referenced earnings call, the stock of PG&E’s parent company, PG&E Corporation ($PCG) closed at $44.70/share. It’s been massacred since — though, we’d be remiss not to point out that the stock is actually trading UP since January 14th.

In fact, do you see that little blip on the right side of the chart where the stock seems to take a sudden upward turn? That is January 24, 2019, the date that the state of California apparently cleared PG&E of responsibility for the “Tubbs” fire, the massive blaze that ripped through wine country in 2017 and killed scores of people. The stock market — thinking the elimination of that liability might change PG&E’s course — reacted wildly, shooting the stock back up (making some lucky m*therf*cker a ton of money in the process).

Consequently, BlueMountain Capital Management LLC reiterated its earlier view that a bankruptcy filing would be costly and foolish, agitating for a proxy fight to upend the Board of Directors. California Governor Gavin Newsom’s office estimated that this (convenient) ruling would reduce the company’s liability by approximately $17b. Others claimed that Mr. Newsom’s assessment may be too sanguine a view. Either way, PG&E, when asked whether this changed anything, was basically like:

In other words: nothing. Nothing changed. Well, other than the stock then falling back to earth — down ~15% on Friday — thereby causing analysts everywhere to clamor to revise their price targets. Not that we should care: again, where were they back in July?

Indeed the company reacted by releasing a statement:

Regardless of today's announcement, PG&E still faces extensive litigation, significant potential liabilities and a deteriorating financial situation, which was further impaired by the recent credit agency downgrades to below investment grade. Resolving the legal liabilities and financial challenges stemming from the 2017 and 2018 wildfires will be enormously complex and will require us to address multiple stakeholder interests, including thousands of wildfire victims and others who have already made claims and likely thousands of others we expect to make claims.

We’ve never seen so much urgency by a management team to ENTER bankruptcy. Typically there’s denial to the 11.5th hour. Here, we’re half expecting management to do this before Tuesday:

So, what gives?

Again, liquidity. The company needs to get a hold on its liquidity. Hence the news about “funding secured”: (i) a $250mm bridge loan from JPMorgan Chase ($JPM) and (ii) a $5.5b DIP credit facility from JPM, Bank of America Corp. ($BAC), Barclays PLC and Citigroup Inc. ($C) that could only be obtained in bankruptcy with a bankruptcy court order blessing senior secured superpriority status. And hence the prior news that the company (a) had retained Morgan Stanley and Citi to market certain of the company’s assets (a 363 sale coming to a bankruptcy court near you) and (b) had no intention of paying its $21.6mm interest payment due on its 2040 notes. Still, bolstering liquidity is difficult to do while investigations of certain fires are pending, the California Public Utilities Commission dillydallies with respect to the issue of whether the company can share wildfire liability with rate payers and “inverse condemnation” looms large. Compounding matters is the lack of clarity as to whether California Senate Bill 901 will cap the company’s liabilities and/or whether any of those liabilities could be paid for through the issuance of “recovery bonds” (and, by extension, whether securitization is at all possible, either in whole or in part. Our read? Likely no dice vis-a-vis the 2018 Camp Fire).

The company, post-revolver draws, has approximately $22b of debt (on top of preferred and common equity) striated throughout countless tranches (exclusive of holdco debt), the breakdown of which is basically:

  • ~920mm of municipal notes;

  • ~$3b unsecured fully-drawn revolver; and

  • ~$18b of unsecured debt.

The unsecured debt trades anywhere between the mid-70s to the high 90s. Liquidity stands at approximately $1.5b.

So back to those drooling professionals.

Aside from (a) the company, which is advised by Weil Gotshal & Manges LLP (as if Sears Holding Corporation hadn’t been sucking up enough bandwidth), Cravath Swaine & Moore LLP, Alvarez & Marsal North America LLC and Lazard ($LAZ), (b) the Board, advised by AlixPartners and Evercore, (c) an ad hoc group of unsecured bondholders (including Elliott Management), advised by Milbank Tweed Hadley & McCloy LLP, (d) an ad hoc group of equity and debt crossholders, advised by Jones Day, and (e) Baupost Group — yes, the very same Baupost Group we discussed above — a holder of equity, debt and insurance subrogation claims, advised by Rothschild, there’s still plenty of action to latch on to.

In fact, there will be plenty of home and property insurers who are on the hook for billions of (unsecured) claims looking to play a role: many have filed subrogation claims against PG&E on the basis of negligence, etc. By extension, there are entities who purchased those claims who will step into the shoes of the insurers (which have sold the claims to limit downside and lock in liquidity of their own). This is where Baupost Group is significant. In fact, speaking of drool, claims traders who have had very little to do (other than, maybe, Toys R Us and Sears admin claims) can now start getting a little active. Buyer beware, however: rulings like the recent Tubbs conclusion could certainly affect the ability to collect on those claims.

And then there are the third-parties who supply power to PG&E pursuant to “power purchase agreements” or PPAs — a significant percentage of which are renewable energy generators who supply power at meaningfully higher than “market” rates and are therefore at risk of having their agreements rejected, at worst, in bankruptcy, or, perhaps at best, renegotiated.

Query to what degree this has the cascading effect on the PPA counterparties’ respective credit ratings (and/or elevates project finance default risk).🤔 No doubt those parties are lawyering up too. They provide nearly half of the company’s power (the other half stems from company-owned generation facilities). Major PPA counterparties include, among many others, Clearway Energy Inc. ($CWEN), Berkshire Hathaway, and enterprises controlled by Ares Capital Management. There may be a bunch of funds second-guessing those big infrastructure strategies.

Others include NextEra Energy Inc. ($NEP), NRG Energy Inc. ($NRG), Exelon Corp. ($EXC), and Consolidated Edison Inc. ($ED), all of which have reached out to the Federal Energy Regulatory Commission (“FERC”) to step in and rule that PG&E cannot “abrogate, amend or reject” any of the of the terms of its wholesale power-purchase agreements. For the uninitiated, FERC regulates the company’s wholesale pricing. Interested in FERC’s role here? Take a listen to this hyper-boring-and-not-even-remotely-funny-despite-trying-so-hard-yet-moderately-educational podcast. It discusses FERC’s role in the FirstEnergy bankruptcy case which could be instructive here and highlights how the FirstEnergy decision doesn’t bode well for these PPA counter-parties. Then again, this IS California. Contrarian Capital of the World.

Anyway, suffice it to say that these guys surely want to maintain their current terms. If their PPAs are rejected (if they’re even ALLOWED to be rejected), the question then becomes whether these parties will be able to collect the full extent of their rejection damage claims which, like most everything else in this scenario, depends in large part on the extent of the wildfire liabilities. A separate analysis of each and every counter-party for contract AND concentration risk is warranted. On the latter point, several of them are dependent upon PG&E for double-digit annual revenue. Whoops.

Indeed, the hits are already coming. Already a number of suppliers suffered downgrades recently. Relating to PPA rejections, the New York Times wrote:

PG&E said Monday that it would use bankruptcy to resolve huge liabilities arising from two years of deadly wildfires. Such a move would allow the company to try to revoke or renegotiate contracts it signed with suppliers when power prices were higher than they are now. That, analysts said, could hurt companies that borrowed based on the higher prices — especially those whose power comes from renewable resources.

That prospect was underscored this week when credit-rating agencies downgraded the debt of Topaz Solar Farms, which is owned by a unit of Warren E. Buffett’s Berkshire Hathaway and whose sole customer is PG&E, and Genesis Solar Farm, a large project in the Mojave Desert developed by NextEra Energy. Both companies said they were operating normally, but were monitoring PG&E’s problems closely.

Bank of America Merrill Lynch downgraded Edison International ($EIX). And then on Friday, PG&E “scrapped plans to renew [its] license for a small hydropower project.” Expect the environmentalists to be all over this bankruptcy too. Oh, and Erin Brockovich. Because, like, sure, why not? Like we said: this is California. Who’s wants “next”? Leonardo DiCaprio?

Anyway, don’t forget the federal government. It, too, through loans to renewable energy projects, has some exposure here.

If you’re head isn’t spinning yet, you must not be fully appreciating the gravity of this clusterf*ck. Everyone is hit by this: bond funds, life insurers, Mom and Pop retirees looking at utilities for fixed income streams. And, naturally, rate payers.

So, a bankruptcy filing will trigger the “automatic stay” and potentially provide one forum for the bazillions of parties in interest to be heard. A filing will supply the company with much-needed liquidity, chill insurers, help the company preserve cash, put pressure on the state of California and CPUC to figure out how to address wildfire liabilities, and put political pressure on the state to do something about “inverse condemnation.” That is, if dealing with the latter is even in play. Sh**********t. For good measure the company may even try and play a game of chicken with its unions/pensioners. Meanwhile, the company can use the “breathing spell” provided by the bankruptcy to reflect on its future.

What will that future look like? Hard to say. Perhaps they’ll try the utility equivalent of “good bank, bad bank” and try and ring-fence the liabilities within a discreet legal entity. Perhaps the enterprise will be privatized. Who knows? What we do know is that a filing will force all of the parties to the table and towards a global resolution. From the company’s recent lender presentation:

How long will all this take? The company is sizing the DIP to give itself a 2-year runway (with a 12-month extension) if that’s any indication.

What we also know is that the future looks bright for bankruptcy professionals clamoring for some level of involvement. 2-year case? Sheesh. Total. Cash. Cow. We can already envision the inevitable cover story in the WSJ: “Bankruptcy Pros Reap Millions While Rate Payers Pay More.” 100% certainty.

At least bankruptcy professionals are handling this all with the level of seriousness that it therefore deserves. According to one source, this little ditty has apparently been “making the rounds” this week 🎼🎼:

Here’s to guessing that bondholders, equity investors, ratepayers, environmentalists, and legislators will be none-too-amused.


3. The Mar-Bow/McKinsey Conflict Casts a Shadow (Long Winter is Coming).

The hits. Just. Keep. On. Coming. And thanks to the Mar-Bow (Jay Alix)/McKinsey battle, other professionals are also starting to feel the additional scrutiny that’s (finally) coming from the U.S. Trustee’s office. Call it “The Mar-Bow Effect.” Take the case of Synergy Pharmaceuticals Inc., for instance. In that matter, the U.S. Trustee objected to the retention of Centerview Partners under section 327(a) of the Bankruptcy Code because Centerview, while representing the debtors, also represents Ironwood Pharmaceuticals Inc. ($IRWD), a direct competitor (and license counterparty) of the debtors. Centerview, of course, says that their representation of Ironwood is wholly unrelated to the Synergy mandate and that, regardless, they have “appropriate walls in place” between the “two separate teams” to eliminate any conflict.

The U.S. Trustee’s office, however, is like Game of Thrones’ Knight King; it seems to have, thanks to Mr. Alix, finally woken up from a LONG summer slumber to realize that, uh, maybe, conflicts do exist in bankruptcy (?!?). In light of the competitive and contractual nature of Ironwood’s relationship with Synergy, the UST argues that Centerview cannot “tender undivided loyalty and provide untainted advice and assistance in furtherance of their fiduciary responsibilities.” All of this has prompted The Wall Street Journal to quip, “Transparency Gets a Fresh Look in Bankruptcy Court.” See, however, our previous bit: “💩The Fiction that is Transparency in Bankruptcy💩.”

Whatever the outcome here, it’s clear that the Mar-Bow/McKinsey affair has shed some light on the UST’s failure to properly enforce disclosures and conflicts. In fact, in Centerview’s January 22 reply to the UST’s objection, they, to some degree, underscore how many potential conflicts may have slid by the UST in the past with a fulsome chart delineating no less than 33 other situations where the UST neglected to object to a retention that, eventually, “the court approved…despite [PROFESSIONAL FIRM XYZ’S] simultaneous representation of major competitors.” We read that and we were like, “you sure you want to go that route, bro?” 🤔

Also perplexing is the investment bank’s attempt to obfuscate its prior relationship with Prime Clerk LLC, the claims and noticing agent and proposed administrative advisor in the case. Centerview is a reputed investment bank that services clients of all types and sizes; it has done impressive double-digit billion dollar M&A deals; it has had a major role in countless restructuring transactions. Of all of the entities to run through its screen and be deemed in need of critical confidentiality, that entity here was…Prime Clerk?!? A claims and noticing agent?!? What on God’s good earth could be so critical about that particular relationship that this investment bank would risk its reputation and seek to purposefully and intentionally keep it off of the United States Trustee’s radar? Of ALL parties-in-interest, wouldn’t the claims agent be the FIRST to understand the need for, and agree to, transparency? After all, its primary function is to act as the Clerk of the Court and promote disclosure. Notice. Due process. Notice is exactly what was avoided here. On purpose. This seems…irregular.

So it is also clear that 2019 will be replete with more scrutiny of professional retentions. And that is how it should be. The industry — THE U.S. TRUSTEE!! — has gotten a wee bit too cavalier about abiding by disclosure requirements. The Mar-Bow/McKinsey conflict is as much if not more of an incrimination of the U.S. Trustee’s office than it is about the respective restructuring advisory firms.


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💼Pros Say💼

Makewhole. Morrison & Foerster LLP’s Dennis Jenkins, Jennifer Marines and Rahman Connelly summarize the recent Fifth Circuit decision in In re Ultra Petroleum Corp. Likewise, Weil Gotshal & Manges LLP’s Alfredo Perez, Chris Lopez and Patrick Thompson chime in on the decision. Annnnnnd, Bracewell LLP’s Jason Cohen, David Lawton and David Shim also cover the decision. Clearly this is something of serious investor interest: otherwise very busy lawyers are rushing to make sure their views on the matter get out in the universe.

Retail. Ten predictions from AlixPartners.


🗓Events🗓

FEATURED EVENT:

The Columbia Business School Private Equity Club is excited to announce the 25th Annual Private Equity Conference on February 8th, 2019, at the Marriott Marquis. Each year the conference attracts hundreds of attendees including top investment industry leaders, professionals from across the private capital landscape, distinguished faculty, and MBA students. Please refer to https://cbspe2019.com/ for additional information on this year’s panels and speakers.

WE HAVE A COMPLIMENTARY ADMISSION: EMAIL US IF YOU’RE INTERESTED AND WE’LL CONDUCT A RAFFLE OF INTERESTED FOLKS AND NOTIFY THE WINNER.


⛓Notable: What We're Reading (4 Reads)⛓

1. 3D Printing (Long Tailwinds). 3D-printing has long been replaced by AR, VR, AI, and various other hot-at-the-moment technologies but it’s not going anywhere and still has all kinds of disruptive potential. This week, Desktop Metal, a Massachusetts-based 3D-printing startup focused on commercial and industrial use raised $160mm at a $1.5b valuation from a subsidiary of Koch Industries.

2. Meal Kits (Short Them All). Another one bites the dust.

3. Shipping (Short Greece). Greek shipping always seems to be a source of restructuring activity. Here, Reorg reports that Eletson Holdings Inc. is headed towards a potential bankruptcy filing.

4. Trucking (Long ebbs and flows). There was a YOY decline in trucking volume in December, the first negative comp in two years. Leading indicator?


🙌Congratulations to:🙌

Jarom Yates for his promotion to Counsel at Haynes & Boone LLP (Dallas).


📚Resources📚

We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. 💥You can find it here💥.


💰New Opportunities💰

Conway MacKenzie is seeking senior-level professionals as part of a significant expansion of their Houston office. 

In addition to Restructuring candidates, they are seeking senior level practice leaders and support staff specializing in Transaction Advisory Services and Litigation Support Services.  Applicants are required to have 10+ years of relevant experience.  Strong preference will be given to those with Big Four and international consulting firm backgrounds.   Relocation packages for those from other markets will be considered.

Qualifying individuals should submit an experience summary to: nklein@conwaymackenzie.com.


Nothing in this email is intended to serve as financial or legal advice. Do your own research, you lazy rascals.