Monitronics / Brink's Home Security Chp 11 Bankrupt, $500 Million Burned
Just 4 years ago, Monitronics declared Chapter 11 bankruptcy, burning lenders for nearly $900 million. Now, Monitronics is doing it again, burning leaders for another $500 million, while creating brand damage for Brinks whose brand they licensed a few years ago.
In this note, we examine the Bankruptcy filing and the pressures against the residential security market and why this is bad for Monitronics expansion but moderately good for the rest of the industry.
Monitronics ********
*** **** ******** ************, ********** **** ********, *********** ******** *** ******* ******** with *** *******, ****** ******* **** was **** *** "***" *******, *** problems *********** ** ** ** ******:
***/***, **** **** *** *** **** risk *** **** *** *** ****.
** **** ****, **** ****** **** they "******** ** ********** **** ** the ********* ****" *** **** **** company ******* **************** *****(*** *** **** ** *****, *** parent ******* *** * ******) *** made *** ***.
*** ********** ************ ********** **** **** are *** ******* *********** ** ********* lower ***** **** *** *** *** that **** *** ** *** "***" bad *****:
** ****, ** ******* ***,*** *** subscribers ** * *** ******** ********
*******, *** ******* *** *** ******** what *** ******* *** ***** **** was *** ****. ** ***** ****** their ******* ** ** ********* *** Monitronics ** ** *** ****** *********. Even *** *** ** ***** *** better ******** ** ******************* ** *** ********** ****** **** over ****.
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*** ******* ********* *** *** *******'* lenders *** ****** *** *** ** the **** ** *****.*** *** *********** owes **** **** $** *******, ** the *********** *** ********** ******** *****:
**********, **** *** **** *****-******** ** a ******* ******* ** *****'*:
*** ****** **** ** *****'* ** to *** *****, *** *** ***** confusion ** ***** ********** **** ***********. The *****'* ******* ** ******** ****** and ***** ********** ****, **** ***** notwithstanding.
*** ******* ****** ******* *** ***** wiped ***, ***** ********* ** *** last ******** ******** ********** ******** *** following *********:
*** *** ******* ******* *** ****** ~$500 ******* ** ******** **** ****** the *** ********* ****** ****** ** the *******:
*** ******* ******* ***** *** *******’* 2019 ******** **** **** ********, ********* funds ******* ** ******* *********** ******* LP (“*******”) *** ******* ****** ******* Management, ***. (“*******”) ** *** ******* lenders, **** ****** *** *** ********* equity ****** ** ***********, ********* *** Company **** ********** ******* ** ******* on *** ******** ****.
*** *****-**** ***** ******* *********** **** ** REORGANIZATION ** ***********.
Bad *** *********** *********
***** ** *** ** ****** *** Monitronics ** **** *** $*** ******* in **** ****** **** ** **** down ** **** *** *****, **** will ***** *** ******* ** ** even **** ************ *** ***** *** company ** ********* *** ************* ** the ******* ** ***** **** ********** and ******* **** ***-**** ********* ************* (which ** ******** *** *** ******* into **** ********).
Contributing *******
*** **** ** ******** ***** *** the ******* ** *********** ******** ******** likely *********** ** ****, ****** *********** does *** ****** **** ****** **** most ****** ********** ******.
**** **** *******, *** *********** ******** market ********* ******* **** **** / near-zero ******** *****, ****** ** ******* to ***** ****-**** *******. *******, **** the ***** **** ** ******** ***** over *** **** * *****, ********* like *********** ***** *********** ********* ** debt ********, ************* ********* *** *******'* entire *****.
**** ******** ********* *** ******** ********* that *********** ******** ** ********* (*.*.,******* *** *** ** **** ********** Results ********). ****, **** * ******** ** people ****** (**** ******* ** *** rise ** ******** *****), ** ****** making ** ****** *** *********** ** win *** ********.
Good *** ******** ** *****
***** *** *********** ******** ****** ***** faces *** **** ** *** *********** the ******/********* ******'* ******* ******, ***********' second ********** **** ****** **** *********** more ************, ******* ****** ** **** share *** ********* **** **** *** weakening **********.
****… ** *****, **** ******, *** not ********, ** **********, ***** ** get ***** “****** ******** ******** *********”.**** ********* ** **** ******** *** the ******* ********* ** *******/*******.*********** **** ** ******** **-**% ******** attrition...unstainable **** ** *******, **** ** customer ********, ********, ************, ************. ** aware **** *** **** *** **** “customer ******** *********”, *** ****** ***** IPO, **** ******* *** ********** ** “customer ******* *********”, ***** *** **, and **, *********** *** ***** ******.*** ******* ***** **% ********* *** we ******* ** ** **** ** 15% *** *** ***** ** ***** mysterious ********. **********: * ** *** a ********* ************.
* ****** **** ** *** ** the **** ****. *** **** ****** disclosure ** ***** **** ** ***** debt ***** *** **** ** ****:
***** ***** *** *** ** *** $40 ******* *****, **** ******* ***** debt ** ~$* *******.
**** ** ******** *** ****** **** in **** **** *** **** ***** was **% ******:
** ******, *** **** ********** *** writing *** ****** $*** ******* ** debt ******.
*********** **** ** ** ********** ********, e.g. *** ******** *********** ********* $*** ******* **** ******* - ***: