Leslie's, TalkTalk, Apollo, and EA bondholders

Hi {{first_name}}

Passing along a few key restructuring and credit news from the last few days.

Lenders are set to take control of Leslie's, which is looking to erase roughly $685mn of debt and close 76 stores. BT bought TalkTalk out of administration debt-free for about £400mn, wiping out shareholders and reportedly leaving other creditors with hundreds of millions of pounds unrecovered. Meanwhile, Apollo has traded more than $35bn of private credit, EA bondholders are alleging a $1.4bn default after the $55bn buyout, and L’Oréal is exploring a sale of its mounting litigation liabilities.

Logan Group, the Chinese property developer, has asked a Texas bankruptcy court to recognize its Hong Kong and Cayman Islands debt restructuring scheme, covering $11.9bn, as a foreign main proceeding under Chapter 15.

The scheme was sanctioned by courts in Hong Kong and the Cayman Islands last month, after Logan defaulted on its offshore debt in 2022 during China's property crisis. US recognition would help protect the restructuring from holdout creditor actions and facilitate the cancellation and exchange of existing securities.

Logan is one of several Chinese developers to have used parallel Hong Kong-Cayman schemes to bind dissenting creditors to restructuring terms, a mechanism that has become increasingly common across the sector's prolonged wave of defaults.

Leslie's, the 63-year-old pool and spa care retailer, has filed for Chapter 11 in the US Bankruptcy Court for the Southern District of Texas, seeking to eliminate roughly $685mn of its $786.7mn in long-term debt and close 76 of its more than 900 stores.

Under the prearranged plan, a group of existing lenders is expected to become the company's majority owner once it exits Chapter 11. Leslie's is seeking court approval for $90mn in new-money debtor-in-possession financing alongside a $225mn asset-based financing facility from existing lenders.

Ahead of the filing, Leslie's had been in talks with creditors including Grey Helm Capital, Axar Capital Management, Cerberus Capital Management and Contrarian Capital Management over a deal to hand over control, though an agreement had not been finalized beforehand.

A judge disqualifies Herbert Smith Freehills Kramer as debtor counsel in the Omnis Pleasants Chapter 11 in Delaware, finding a conflict of interest. The U.S. Trustee and Omnis Fuel Technologies brought the motion to remove the firm.

HSF Kramer previously represented TRAG, the entity led by Tony Robbins, and its affiliate RG Energy on cash collateral matters. Both now assert lender, lien, and credit-bid rights against the West Virginia coal-fired plant and rank among its largest creditors.

The judge keeps the sale calendar in place to protect the integrity of the process. Kirkland & Ellis replaces HSF Kramer as debtor counsel, and Young Conaway stays on as Delaware co-counsel to keep the case moving.

BT Group has acquired TalkTalk Telecommunications Limited and PlatformX Communications Limited out of administration on a debt-free basis, in a pre-pack sale that carries a total cash cost to BT of about £400mn. The businesses serve 1.5mn retail and 1mn wholesale customers, and about 900 employees transfer to BT.

Ares Management, TalkTalk's majority shareholder and a creditor, is reported to receive about £100mn, with a further £60mn reported to go to KKR, which acted as securitisation agent. Shareholders including founder Sir Charles Dunstone are wiped out, and other creditors are reported to be owed hundreds of millions of pounds that they are unlikely to recover.

The government has issued a Public Interest Intervention Notice under the Enterprise Act 2002 ahead of the Competition and Markets Authority's review. Alvarez & Marsal acted as joint administrators.

Apollo has traded more than $35bn of private credit since it began making markets in the asset class, co-head of corporate credit John Cortese said on Bloomberg Television.

The desk has traded about 500 assets with 160 counterparties. Roughly a third of the volume involved loans Apollo did not originate.

In its early days, the desk had traded about $2bn of Apollo's own originations with around 60 active clients. The firm has since added daily NAV pricing and ICE security identifiers, and lined up JPMorgan, Goldman Sachs and three other banks as broker-dealers.

Apollo Debt Solutions BDC, with about $26bn of assets, capped withdrawals at 5% for a third straight quarter last month after 14.7% of shares sought to exit.

Electronic Arts bondholders have alleged a $1.4bn default following the video game publisher's $55bn leveraged buyout by Saudi Arabia's Public Investment Fund, Silver Lake, and Affinity Partners. The dispute centers on whether EA must repurchase its outstanding bonds at 101% of face value following the change in control.

Instead, EA sought to defease the notes by setting aside US Treasuries to cover future principal and interest payments on bonds maturing in 2031 and 2051. Bondholders argue the arrangement does not extinguish their contractual repayment rights, particularly after major credit rating agencies declined to maintain investment-grade ratings.

Creditors have retained Akin Gump and Houlihan Lokey to challenge the arrangement, raising questions about the enforceability of change-of-control protections in the largest leveraged buyout in history.

L’Oréal’s US subsidiary has reportedly retained Weil Gotshal & Manges and Ducera Partners to explore transferring its mounting chemical-related litigation liabilities to an outside investor. The cosmetics group is considering separating the claims into a standalone entity that could be sold without entering bankruptcy proceedings.

L’Oréal reported approximately 760 pending US proceedings involving alleged asbestos contamination in talc-containing products as of June 30, up from 620 at the end of 2025. The company also faces thousands of lawsuits involving its hair-relaxing products, although it strongly disputes the allegations.

The proposed strategy resembles Honeywell's separation of asbestos-related liabilities, which involved approximately $1.68bn in financial support. A comparable transaction could transfer L’Oréal’s litigation exposure to a specialized entity while separating the claims from its operating businesses.

As always, I am here to help. Do not hesitate to reply to this email with any questions on recruiting, restructuring, or anything else.

I would also love to hear your feedback on this news-focused email. Did you find it helpful? Would you like to see more of these? What would you change? If you replied to this email, that would be amazing.

Best,
Rx

Recruiting for Restructuring or Special Sits roles, or about to hit the desk? Check out our three new programs