Aurelius, Payless ShoeSource Deconstructed & More
|Feb 27||Public post|
Disruption from the Vantage Point of the Disrupted
2/27/19 Read Time = 11.7 a$$-kicking minutes
Twitter: @petition; Website: petition.substack.com
🗞News of the Week (2 Reads)🗞
1. We (STILL) Have a Feasibility Problem (Long the “Two-Year Rule”). Part IV.
Man. That aged poorly AF.
That’s one + two + three…yup, three total “success” claims and that’s just the heading, subheading and intro paragraph. EEESH. This has turned into the bankruptcy equivalent of Oberyn Martell taking a victory lap in the fighting pits of King’s Landing.
And, sadly, it almost gets as cringeworthy:
Of course, we obviously know now that the Payless story is about as ugly as Oberyn’s fate.
Payless is back in bankruptcy court — a mere 18 months after its initial filing — adorning the dreaded Scarlet 22. It will liquidate its North American operations, shutter over 2000 stores, and terminate nearly 20k employees. All that will remain will be its joint venture interests in Latin America and its franchise business — a telltale sign that (a) the brick-and-mortar operation is an utter sh*tshow and (b) the only hope remaining is clipping royalty and franchise fee coupons on the back of the company’s supposed “brand.” And so we come back to this:
That’s right. We have ourselves another TWO YEAR RULE VIOLATION!!
Okay. We admit it. This is all a little unfair. We definitely wrote last week’s piece entitled, “💥We (Still) Have a Feasibility Problem💥,” knowing full-well — thanks to the dogged reporting of Reuters and other outlets — that a Payless Holdings LLC chapter 22 loomed around the corner to drive home our point. Much like Gymboree and DiTech before it, this chapter 22 is the culmination of an abject failure of epic proportions: indeed, nearly everything Mr. Jones stated in the press release reflected above proved to be 100% wrong.
Let’s start, given a dearth of new financial information, with the most obvious factor here as to why this company has round-tripped into bankruptcy — destroying tons of value and irreversibly hurting retail suppliers en masse along the way. In the company’s financial projections attached to its 2017 disclosure statement, the company projected fiscal year 2018 EBITDA of $119.1mm (PETITION NOTE: we’d be remiss if we didn’t highlight the enduring optimism of debtor management teams who consistently offer up, and get highly-paid investment bankers to go along with, ridiculous projections that ALWAYS hockey stick up-and-to-the-right. Frankly, you could strip out the names and, in a compare and contrast exercise, see virtually no directional difference between the projected revenues of Payless and the actual revenues of Lyft. Seriously. It’s like management teams think that they’re at the helm of a high growth startup rather than a dying legacy brick-and-mortar retailer with sh*tty shoes at not-even-discounted-for-sh*ttiness prices.
On what realistic basis on this earth did they think that suddenly — POOF! — same store sales would be nearly 10%.
Seriously. Give us whatever they’re smoking out in Topeka Kansas: sh*t must be lit. Literally.
So what did EBITDA actually come in at? Depending on which paragraph you read in the company’s First Day Declaration filed in support of the chapter 22 petition: negative $63mm or negative $66mm (it differs on different pages). For the mathematically challenged, that’s an ~$182mm delta. 🙈💩 “Outstanding leadership team,” huh? The numbers sure beg to differ.
This miss is SO large that it really begs the question: what the bloody hell transpired here? What is this dire performance attributable to? In its 2017 filing the company noted the following as major factors leading to its bankruptcy:
Since early 2015, the Debtors have experienced a top-line sales decline driven primarily by (a) a set of significant and detrimental non-recurring events, (b) foreign exchange rate volatility, and (c) challenging retail market conditions. These pressures led to the Debtors’ inability to both service their prepetition secured indebtedness and remain current with their trade obligations.
The company continued:
Specifically, a confluence of events in 2015 lowered Payless’ EBITDA by 34 percent—a level from which it has not fully recovered. In early 2015, the Debtors meaningfully over purchased inventory due to antiquated systems and processes (that have since undergone significant enhancement). Then, in February 2015, West Coast port strikes delayed the arrival of the Debtors’ products by several months, causing a major inventory flow disruption just before the important Easter selling period, leading to diminished sales. When delayed inventory arrived after that important selling period, the Debtors were saddled with a significant oversupply of spring seasonal inventory after the relevant seasonal peak, and were forced to sell merchandise at steep markdowns, which depressed margins and drained liquidity. Customers filled their closets with these deeply discounted products, which served to reduce demand; the reset of customer price expectations away from unsustainably high markdowns further depressed traffic in late 2015 and 2016. In total, millions of pairs of shoes were sold below cost in order to realign inventory and product mix. (emphasis added)
You’d think that, given these events, supply chain management would be at the top of the reorganized company’s list of things to fix. Curiously, in its latest First Day Declaration, the company says this about why it’s back in BK:
Upon emergence from the Prior Cases, the Debtors sought to capitalize on the deleveraging of their balance sheet with additional cost-reduction measures, including reviewing marketing expenses, downsizing their corporate office, reevaluating the budget for every department, and reducing their capital expenditures plan. Notwithstanding these measures, the Debtors have continued to experience a top-line sales decline driven primarily by inventory flow disruption during the 2017 holiday season, same store sales declines resulting in excess inventory, and challenging retail market conditions. (emphasis added).
Like, seriously? WTF. And it actually gets more ludicrous. In fact, the inventory story barely changed at all: the company might as well have cut and pasted from the Payless1 disclosure statement:
The Debtors also faced an oversupply of inventory in the fall of 2018 leading into the winter of 2019. As a result, the Debtors were forced to sell merchandise at steep markdowns, which depressed margins and drained liquidity. Customers filled their closets with these deeply discounted products, which served to reduce customer demand for new product. In total, millions of pairs of shoes were sold at below market prices in order to realign inventory and product mix. (emphasis added)
As if that wasn’t enough, the company also noted:
The delayed production caused a major inventory flow disruption during the 2017 Holiday season and a computer systems breakdown in the summer of 2018 significantly affected the back to school season, leading to diminished sales and same store sales declines.
Sheesh. Did the dog also eat the real strategy? Bloomberg writes:
The repeat bankruptcies are a sign the original restructuring may have been rushed through too quickly or didn’t do enough to solve the retailers’ industry-wide and company-specific problems.
And this quote, clearly, is dead on:
“One of the easiest ways to waste time and money in Chapter 11 is to use the process only to effect a change in ownership but not to take the time and protections afforded by the bankruptcy process to fix underlying operations,” Ted Gavin, a turnaround consultant and the president of the American Bankruptcy Institute, told Bloomberg Law.
This begs the question: what did the original bankruptcy ACTUALLY accomplish? Apparently, it accomplished this pretty looking chart:
And not a whole lot more.*
The company also failed to achieve another key strategic initiative upon which its post-bankruptcy business plan was based: investment in its stores and the deployment of omni-channel capabilities that, ironically, would make the company less dependent upon its massive brick-and-mortar footprint. Per the company:
…the Debtors’ liquidity constraints prevented the Debtors from investing in their store portfolio to open, relocate, or remodel targeted stores to keep up with competitors.
Moreover, Payless was unable to fulfill its plan for omni-channel development and implementation, i.e., the integration of physical store presence with online digital presence to create a seamless, fully integrated shopping experience for customers. As of the Petition Date, the completion of this unified customer experience has been limited to approximately two hundred stores. Without a robust omni-channel offering, Payless has been unable to keep up with the shift in customer demand and preference for online shopping versus the traditional brick-and-mortar environment.
In other words “success” really means “still too much effing debt.” This would almost be funny if it didn’t tragically end with the termination of thousands of jobs of people who, clearly, mistakenly put their faith in a management team so entirely in over their heads. Literally nothing was executed according to plan. Nothing.
Seven months after emerging from bankruptcy the company was already in front of its lenders with its hand out seeking more liquidity. Which…it got. In March 2018, the company secured an additional $25mm commitment under the first-in-last-out portion of its asset-backed credit facility. What’s crazy about this is that, never mind the employees, the supplier community got totally duped again here. In the first case, the debtors extended their suppliers by ONE HUNDRED DAYS only for them, absent critical vendor status, to get nearly bupkis** as general unsecured claimants. Here, the debtors again extended their suppliers by as much as 80 days: the top list of creditors is littered with manufacturers based in Hong Kong and mainland China. Who needs Donald Trump when we have Payless declaring a trade war on China twice-over? (PETITION NOTE: we know this is easier said than done, but if you’re a supplier to a retailer in today’s retail environment, you need to get your sh*t together! Pick up a newspaper for goodness sake: how is it that the entire distressed community knows that a 22 is coming and yet you’re extending credit for 80-100 days? It’s honestly mind-boggling. The company cites over 50k total creditors (inclusive of employees) and $225mm of unsecured debt. That’s a lot of folks getting torched.)
Some other notes about this case:
Liquidators. Much like with Things Remembered and Charlotte Russe, they mysteriously have bandwidth again such that they no longer need to JV up as a foursome as they did in Gymboree. Instead, we’re back to the slightly-less-anti-competitive twosome of Great American Group LLC ($RILY) and Tiger Capital Group.
Kirkland & Ellis. There’s something strangely ironic here about the fact that the firm went from representing the company in the chapter 11 to representing its liquidators in the 22. Seriously. You can’t make this sh*t up.
Independent Directors. Here we go again. Remember: the Payless 11 led us to Nine West which led us to Sears. We have documented that whole string of disasters here. In the first case, Golden Gate Capital and Blum Capital got away with two separate dividend recaps totaling millions of dollars in exchange for a piddling $20mm settlement. Moreover, to incrementally increase the pot for general unsecured creditors, senior lenders had to waive their deficiency claims that would have otherwise diluted the unsecured pool and made recoveries even more insubstantial. So, here we are again. Two new independent directors have been appointed to the board and they will investigate whether controlling shareholder Alden Capital Management pillaged this company in a similar way that it has reportedly and allegedly pillaged newspapers across the country.***
Fees. If you want to quantify the magnitude of this travesty, note that the first Payless chapter 11 earned the following professionals the following approximate amounts:
Kirkland & Ellis LLP = $4.995mm
Armstrong Teasdale LLP = $495k
Guggenheim Securities LLC = $6.825mm
Alvarez & Marsal = $1.9mm
Munger Tolles = $898k
Pachulski Stang Ziehl & Jones LLP (as lead counsel to the UCC) = $2.5mm
Province Inc. = $2.6mm
Michel-Shaked Group = $560mm
Now THAT was money well spent.****
*Via three separate store closing motions, the company shuttered 686 stores. The second store closing motion proposed 408 store closures but was later revised downward to only 216.
**Unsecured creditors received their pro rata share of two recovery pools in the aggregate amount of $32.3mm, $20mm of which came from the company’s private equity sponsors as settlement of claims stemming from two pre-petition dividend recapitalization transactions. In exchange, the private equity firms received releases from potential liability (without having to admit any wrongdoing).
***Alden Global Capital is no stranger to controversy over its media holdings. In the same week it finds itself in bankruptcy court for Payless, Alden found itself in the news for its reported desire to buy Gannett. This has drawn the attention of New York Senator Chuck Schumer who expressed concerns over Alden’s “strategy of acquiring newspapers, cutting staff, and then selling off the real estate assets of newsrooms and printing presses at a profit.”
***This is but a snapshot. There were several other professionals in the mix including, significantly, the real estate advisors who also made millions of dollars.
2. Windstream Files for Bankruptcy (Long Litigation-Induced Bankruptcy).
Well, that sure escalated quickly.
Days after being on the wrong-side of a ruling by Judge Jesse Furman in the United States District Court for the Southern District of New York in U.S. Bank National Association v. Windstream Services, Inc. v. Aurelius Capital Master, Ltd., Case No. 17-cv-7857 (JMF), Arkansas-based Windstream Holdings Inc. ($WIN) — a provider of (i) network communications and technology solutions for businesses and (ii) broadband, entertainment and security solutions to retail consumers and small businesses in small rural areas across 18 states — filed for bankruptcy in the Southern District of New York (along with 204 affiliates). The upshot of Judge Furman’s decision is that, as of the petition date, the debtors are on the hook for approximately $5.6b in funded debt obligations. And they are f*cking pissed about it. Likewise, a number of investors (Blackrock, Vanguard), hedge funds (Elliott Management Corporation, Brigade Capital Management LP, PointState Capital LP, BlueMountain Capital Management LLC), retirees (California Public Employees’ Retirement System) and counterparites (AT&T…yikes…a $49.5mm unsecured claim) are likely also a wee bit miffed this week. But remember: “💥Aurelius is NOT Litigious, Y'all💥” and “The Rise of Net-Debt Short Activism (Short Low Default Rates).” MAN THIS IS SAVAGE.
In the press release announcing the debtors’ bankruptcy filing, CEO Tony Thomas said:
“The Company believes that Aurelius engaged in predatory market manipulation to advance its own financial position through credit default swaps at the expense of many thousands of shareholders, lenders, employees, customers, vendors and business partners. Windstream stands by its decision to defend itself and try to block Aurelius’ tactics in court. The time is well-past for regulators to carefully examine the ramifications of an unregulated credit default swap marketplace.
“Windstream did not arrive in Chapter 11 due to operational failures and currently does not anticipate the need to restructure material operations,” Thomas said. “While it is unfortunate that Aurelius engaged in these tactics to advance its returns at the expense of Windstream, we look forward to working through the financial restructuring process to secure a sustainable capital structure so we can maintain our strong operational performance and continue serving our customers for many years to come.”
Eeesh. Here’s a live shot of Mr. Thomas after getting board authorization for the bankruptcy filing:
In turn, here’s a live shot of Aurelius’ Capital Management LLP’s Mark Brodsky:
(Yes, we thought that Mike Tyson was an apt choice here given how hard this punch landed). Aurelius absolutely loves this sh*t.
For those of you who are new to this sh*tshow, here is a link to Judge Furman’s decision. If you don’t feel like reading 55 pages of boring legalese, here is a summary by Weil Gotshal & Manges LLP. Therein, Weil succinctly recounts (i) the 2015 transaction wherein Windstream created a new holdco to enter into a sale-leaseback transaction with a spunoff real estate investment trust, Uniti Group Inc. ($UNIT), and (ii) the 2017 transaction wherein WIN obtained post facto consent from a majority of noteholders to waive the resultant (alleged) default in exchange for money money money and new notes. To these events, Aurelius was like:
And Judge Furman concurred; he ruled that the 2015 transaction was a prohibited sale-leaseback transaction under WIN’s indenture and invalidated the 2017 consent solicitation, awarding Aurelius $310.5mm plus interest. As justification, the Judge basically concluded that (i) the new holdco was just a legal shell/pretense, (ii) the subsidiaries who previously owned the assets continued to use those assets, (iii) the subsidiaries exercised effective control over the assets, (iv) the subsidiaries were effectively paying rent under the lease by way of dividending payments up through the new shell holdco, and (v) WIN had admitted to nine state regulators that the transferor entities would get the benefit of the leaseback. In other words, for all intents and purposes, the new holdco’s name was on the transaction but no legal abracadabra was going to fool anyone into thinking that the original transferring subsidiaries weren’t the real parties under the lease.
Yet, suffice it to say, this result was not at all what WIN expected. Here was WIN’s statement relating to the decision. And here is Aurelius laughing and pointing at WIN as it responded to WIN’s statement. They wrote:
We take no pleasure in Windstream's resulting financial predicament. Windstream could easily have averted it – first by not playing fast and loose with its noteholders in 2015, hoping nobody would hold the company to account, and second by settling. Instead, Windstream wasted an exorbitant amount – more than would have been needed to settle with us at the time – on an ineffective exchange offer and then on litigation.
In our view, a management and a board with an extreme and unwarranted assessment of Windstream's legal case chose to bet the company. The company lost.
They take no pleasure, huh? We find that a bit hard to believe. Why? This is a live shot of Aurelius writing its response:
Check out the rest:
According to its statement last Friday, Windstream now intends to appeal. This is welcome news for our fund, as it will require Windstream to post a surety bond exceeding $300 million. That surety bond will pay in full the notes our fund owns when Windstream loses the appeal. We are happy to take the surety company's credit over Windstream's.
To noteholders who chose to play the company's game even after it had broken its promise, we wish you luck with your exchange notes. Between their dubious status and their OID risk in bankruptcy, we suspect you will need it.
Dubious status? What dubious status? Per Weil:
While the court held that the notes issued under the Indenture—i.e. any notes outstanding prior to the exchange offers—are accelerated, it specifically declined to hold that the New Notes issued in the 2017 exchange are invalid, giving rise to confusion over their status. (See Op. at 51). Because the Court held that the Third Supplemental Indenture containing the waiver of default was invalid, it follows that all holders of the 2023 Notes at the time of the exchange—not just Aurelius—should be entitled to a judgment. At least some of this confusion could have been obviated by a finding that all holders of the New Notes are to be restored to their status quo ante as it existed prior to the exchange offers. While this ruling would also raise complex issues, it would better accord with the operation of the Indenture.
Right. That probably would have made more sense. Insert some litigation here. And Weil doesn’t otherwise comment one way or another as to whether the Judge took liberties by extending his review outside the four corners of the legal document. They simply state:
The Court’s reliance on Windstream’s admissions is a reminder for counsel to consider not just whether a proposed transaction fits within the literal terms of the debt documents, but also whether it is: (1) consistent with the company’s public statements; (2) supported by the contemporaneous factual record; and (3) whether the economic substance of the transaction is consistent with its characterization.
But Professor Stephen Lubben did. He writes:
The court readily concedes that the plain language of the indenture does not cover the transaction on its face. Rather the court repeatedly argues that the “economic realities” of the transaction bring it within the terms of the indenture.
In essence, the court has granted Aurelius covenant protection that it (and its predecessors) were not savvy enough to negotiate in the first place. That’s the kind of interpretive stretch that law professors expect to see with sympathetic plaintiffs – the classic “widowers and orphans.” But Aurelius?
As the author of a law school corporate finance text, I’ve read my share of these sorts of opinions. I often tell my students that the one constant theme running through the bulk of corporate finance jurisprudence is that “if you want protection, you’d better contract for it.”
The Windstream opinion represents a clear departure from that trend. Instead, the theme seems to be, “I know what you really meant.”
Meh. We could get an ID with a picture of Chris Hemsworth next to it but that doesn’t make us Chris Hemsworth. You get what we’re saying?
Anyway, Lubben also reiterates a prior alarm that credit default swaps are having a deleterious effect on the market. He writes:
Long ago I warned that the growth the of the CDS (credit default swap) market represented a threat to traditional understandings of how workouts and restructurings are supposed to happen. The recent Windstream decision from the SDNY shows that these basic issues are still around, notwithstanding an intervening financial crisis and resulting regulatory reform.
Bloomberg’s Matt Levine adds:
“…the universal assumption is that Aurelius has also bought a lot of credit-default swaps that will pay out if Windstream defaults on its debt: By pushing Windstream into default, Aurelius will make a profit on its CDS, even if it loses money on the bonds. And, look, in general, I am all for CDS creativity, but here even I find it distasteful. “We, along with others in the market, found Windstream’s arguments that Aurelius pursued this litigation in bad faith and in order to ensure a payout on its CDS to be compelling,” wrote analysts at CreditSights.”
The Financial Times writes:
“The judge just missed . . . the big picture”, said one hedge fund set to lose money from the ruling, noting Aurelius’ position in credit derivatives. “This decision opens a Pandora’s Box and is going to encourage a lot of aggressive behaviour”.
Ugly fights between creditors and companies over clauses in dense legal agreements are nothing new. But Aurelius’s win has companies suddenly wondering what enterprising hedge fund is now combing through their past wheeling-and-dealing, looking for an obscure technical violation that could result in a ransom payment. Debt investors have recently targeted Sprint/T-Mobile and Safeway over similar covenant technicalities.
Matt Levine rightly continues:
“Windstream’s accusation of market manipulation is nonsense,” says Aurelius, and that is completely correct as far as it goes. As far as Windstream is concerned, all that Aurelius did was read its bond documents, assert its rights under those documents, go to court to argue its position, and win in court. None of those things could be market manipulation. If Aurelius also bet in the CDS market that it would be correct, well, (1) that doesn’t sound like manipulation to me and (2) Windstream wasn’t selling CDS so the integrity of the CDS market isn’t its problem.
But of course the overall result is very much Windstream’s problem: Windstream is bankrupt now because Aurelius came after it, and it’s hard to imagine Aurelius coming after it if Aurelius hadn’t bought a lot of CDS on Windstream first. (Windstream’s other bondholders were very willing to forgive Windstream’s covenant violation, tried to help it fend off Aurelius, and are now facing huge losses due to Aurelius’s activism.) It is not hard to sympathize with Windstream’s view that something is wrong with the CDS market, if this is the result.
Sure, but, like, maybe don’t hate the player, hate the game??
Putting aside the CDS aspect, the (one) comment to Mr. Lubben’s piece is indignant and raises valid points. Sisi Clementine (cute name) writes:
WIN opco spun out the assets, and then holdco leased them back. What did holdco do with those assets? Well, they allowed opco to use the assets freely. Hmm, okay, but then how did holdco pay rent? Well, opco pays a dividend to holdco in the exact rent amount and then holdco pays it to the spinoff. I see. So do holdco and opco share the property? No, holdco has no separate address, employees or business, so the property is for the exclusive use of opco. Umm, does this smell funny to anyone else?
In fact, it does! The judge! In his ruling, he cite a body of case law on leases that shows that a person who makes regular fixed payments in exchange for the exclusive use of a space is the holder of a lease, regardless of whether a paper contract exists. Personally, I find this conclusion to be on firmer legal ground than Windstream's version of events, which is essentially that the lease goes to holdco and then disappears inside the company in an opaque cloud of trust.
Of course, the Judge did not rely exclusively on this reasoning for his judgment. He added two further, independent reasons why the opco was party to the lease. The first is that Windstream, as a regulated telecom carrier, required approval from state regulators for the transaction. When regulators expressed concern, WIN formally told them it was a sale-leaseback transaction to reassure them. The judge then estopped WIN from changing its story in court. The second independent reason is that WIN opco signed 120 subleases on the space. You cannot sublease without a lease, therefore opco must have had a lease in order so sign those contracts.
What Prof Lubben has not told you, is that the court's habit of siding with businesses in matters of likely covenant breaches is only about a decade old. Market participants have found it troubling that businesses are given the benefit of the doubt as long as they have some legal explanation, no matter how tenuous. Management has grown increasingly brazen over the last few years, often with the backing of their private equity sponsors. The fact that it has taken an opportunist like Aurelius to right this wrong is proof that there are no heroes here. But maybe one day the legal establishment will wake up and end this plainly predatory behavior. (emphasis added)
Apologies, Clementine, but Aurelius may have achieved the impossible with all of this:
Aurelius, of all funds, may actually live long enough to see itself become the hero. In contrast to Levine, Clementine is saying that WIN is the predator, NOT Aurelius! And Clementine isn’t alone:
You can choose to view Aurelius not as an interloper messing up a perfectly amicable situation between a company and its bondholders, but rather a vindicator of the rights of bondholders against an overbearing issuer. The story might be that, in 2015, Windstream flagrantly violated the terms of its bonds and dared its bondholders to do something about it, and those bondholders were too meek or confused to defend themselves. They were simple long-only credit investors, they don’t have the time or inclination to sue, their positions weren’t concentrated enough to make it worthwhile, they weren’t expert document-readers, or whatever: They were mugged by Windstream and had no practical way to stand up for themselves. But eventually they (well, some of them) sold their bonds to Aurelius, and Aurelius stood up for bondholders’ rights. And now other bond issuers will think twice before trying to steamroll their bondholders in the future, knowing that Aurelius may be lurking to call them on it.
“Windstream’s accusation of market manipulation is nonsense,” says an Aurelius spokesperson. “Rather than whining about us and Judge Furman, Windstream’s management and board should engage in much-needed introspection. They alone caused the company to enter into a terrible sale-leaseback and prejudice its bondholders by breaking its promises to them.”
Things really ARE getting weird in distress these days. Just imagine what will happen when we finally tip into an actual distressed cycle…? Will less boredom lead to less “manufactured” action??
So, where do things stand now? The bankruptcy court held the first day hearing yesterday and generally the debtors got all requested relief approved (including access to $400mm in interim funding — out of a committed $1b — under the DIP credit facility). This will obviously address the immediate liquidity crunch the company faced upon the post-judicial-decision acceleration of its debt.
So now all focus turns to Uniti Group Inc. which, itself, isn’t exactly unscathed by all of this.
Uniti’s future is clouded because the company gets more than two-thirds of its revenue from its former parent, with a master lease giving Windstream the exclusive right to use the Uniti’s telecommunications network. That lease could be in jeopardy because of its sizable expense to Windstream -- more than $650 million a year -- and bankruptcy proceedings often lead to revision or rejection of existing contracts.
Windstream relies on Uniti to serve its customers, and it’s also Uniti’s biggest customer, making a complete cutoff of their relationship less likely.
So, yeah. There’s that. There are also those — notably, the ad hoc group of second lien noteholders — who may agitate for the debtor to go after Aurelius for its “manufactured default.”
Eliza Ronalds-Hannon@ElizaHannonSCOOP: Windstream Holdings preparing to file for bankruptcy as soon as today after losing court fight with Aurelius https://t.co/fVmdI0AZ9x via @markets
Not for everyone (if it happens…we’re dubious). In fact, we’re pretty sure none of WIN, its debt and equity investors, or its other interested parties find this “interesting” at all.
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