Milbank LLP has successfully represented Internap Corporation and certain of its affiliates (together, “INAP”) in its chapter 11 cases, achieving confirmation of INAP’s prepackaged plan of reorganization on May 4, 2020 and emergence from bankruptcy shortly thereafter on May 8, 2020. This resolution comes only seven weeks after Milbank filed chapter 11 bankruptcy petitions on behalf of INAP in the US Bankruptcy Court for the Southern District of New York (“Bankruptcy Court”) on March 16, 2020. INAP’s chapter 11 cases are among the first to be both commenced and have a plan consummated amidst the COVID-19 pandemic.
Milbank has served as counsel to the global provider of premium data center infrastructure and cloud solutions since January 2020, when INAP approached the firm to help it navigate complex financial challenges. INAP faced a mounting liquidity crisis and declining profits, caused by stiff market competition and an overleveraged balance sheet with $463.9 million of prepetition funded indebtedness against $4 million of cash on hand.
Prior to the filing in the Bankruptcy Court, and after INAP was unable to find a suitable buyer, the Milbank team successfully secured a Restructuring Support Agreement with an ad hoc group consisting of holders of approximately 77% of INAP’s prepetition term loans, putting INAP on a path for success post-bankruptcy by deleveraging its balance sheet. The agreement backed a prepackaged chapter 11 plan of reorganization which equitized the majority of the company’s prepetition loans, left general unsecured creditors unimpaired, and allowed equity holders to obtain warrants for new equity in the reorganized company. In connection with the plan, INAP also converted its new-money DIP financing facility into a new $75 million secured exit facility and converted a portion of its prepetition loans into a new $225 million term loan facility.
INAP’s disclosure statement and prepacked plan were approved on May 4, leading to the company’s swift emergence on May 8, 2020.
As a result of Milbank’s efforts, INAP has significantly strengthened its financial position by substantially reducing debt, extending maturities and enhancing liquidity.
The Milbank team included Financial Restructuring partners Dennis Dunne, Abhilash Raval and Tyson Lomazow and associates Daniel Denny, Benjamin Schak, Rachel Franzoia, Justin Cunningham, and Adeola Adeyosoye; Global Capital Markets special counsel Sam Badawi; Alternative Investments special counsel Jennifer Harris ; Global Corporate partners Scott Golenbock and Bob Kennedy and associate Danny Tyrrell; Transportation & Space partner Patrick Campbell and associate Lafayette Greenfield; Tax partners Russell Kestenbaum and Max Goodman and associate David Hanno; Technology partner Nicholas Smith; Executive Compensation partner Manan (Mike) Shah and associate James Beebe; and Litigation partner Alex Lees and associate Ryan Parchment.