YAKIMA, Wash. -- The owner of a longtime medical supply business said he plans to stay open despite filing for bankruptcy earlier this month.

Chuck Vetsch, president of Keeler's Medical Supply, said several issues, including changes in federal Medicare and Medicaid programs, led the company to file for Chapter 11 bankruptcy on June 15 with the Eastern District of Washington of U.S. Bankruptcy Court.

Keelers Medical Supply, which has been in business since 1948, sellsa variety of home medical equipment including walkers, bathroom safety products and breast pumps.

Vetsch said he tried to keep the business operating in recent years despite reductions in reimbursements from Medicare and Medicaid programs the business once received. In addition, the business was dealing with several audits which the business is fighting that led both programs to reclaim distributed payments.

Sales fell from just under $10 million in 2010 to a little over $1.6 million in 2016, Yakima attorney Roger Bailey wrote in a court document. As of June 1, the company had about $785,000 in assets including pending payments for sales, inventory and office supplies.

Court document show that the company liabilities include nearly $1 million owed in various federal and state taxes, including $862,000 with the Internal Revenue Service.

When it became clear that issues would not be resolved quickly, the company decided to file so it could negotiate payment plans with its creditors, Vetsch said.

We just needed everyone to take a breather, he said.

This story will be updated.

Here is the original post:

Yakima medical supply business to remain open during bankruptcy process - Yakima Herald-Republic

TOKYO Japan's Takata Corp (7312.T), the firm at the centre of the auto industry's biggest ever product recall, filed for bankruptcy protection in the United States and Japan, and said it would be bought for $1.6 billion by U.S.-based Key Safety Systems.

In the biggest bankruptcy of a Japanese manufacturer, Takata faces tens of billions of dollars in costs and liabilities resulting from almost a decade of recalls and lawsuits.

Its airbags have been linked to at least 17 deaths around the world.

TK Holdings, its U.S. operations, filed Chapter 11 bankruptcy in Delaware on Sunday with liabilities of $10 billion to $50 billion, while the Japanese parent filed for protection with the Tokyo District Court early on Monday.

Takata's total liabilities stand at 1.7 trillion yen ($15 billion), Tokyo Shoko Research Ltd estimated.

Final liabilities would depend on the outcome of discussions with carmaker customers who have borne the bulk of the replacement costs, a lawyer for the company said.

The filings open the door to the financial rescue by Key Safety Systems (KSS), a Michigan-based parts supplier owned by China's Ningbo Joyson Electronic Corp (600699.SS).

In a deal that took 16 months to hammer out, KSS agreed to take over Takata's viable operations, while the remaining operations will be reorganised to continue churning out millions of replacement airbag inflators, the two firms said.

The U.S. company would keep "substantially all" of Takata's 60,000 employees in 23 countries and maintain its factories in Japan. The agreement is meant to allow Takata to continue operating without interruptions and with minimal disruptions to its supply chain.

"We believe taking these actions in Japan and the U.S. is the best way to address the ongoing costs and liabilities of the

airbag inflator issues with certainty and in an organised manner," Takata CEO Shigehisa Takada said in a statement.

Takada said he and top management would resign "when the timing of the restructuring is set."

His family - which still has control of the 84-year-old company - likely would cease to be shareholders.

Jason Luo, president and CEO of KSS, said in a statement the "underlying strength" of Takata's business had not diminished

despite the airbag recall, citing its skilled employee base, geographic reach and other safety products such as seat belts.

The companies expect to seal definitive agreements for the sale in coming weeks and complete the twin bankruptcy processes in the first quarter of 2018.

The filings have, however, not resolved all issues.

Honda Motor Co (7267.T), Takata's biggest customer, said it had reached no final agreement with Takata on responsibilities for the recall.

Honda said it would continue talks with the supplier but anticipated difficulties in recovering the bulk of its claims.

UNPRECEDENTED RECALLS

Takata faces billions in lawsuits and recall-related costs to its clients, including Honda, BMW (BMWG.DE), Toyota Motor Corp (7203.T) and others which have been paying recall costs to date.

It also faces potential liabilities stemming from class action lawsuits in the United States, Canada and other countries.

Global transport authorities have ordered about 100 million inflators to be recalled.

Industry sources have said that recall costs could climb to about $10 billion.

The ammonium nitrate compound used in the airbags was found to become volatile with age and prolonged exposure to heat,causing the devices to explode.

Costs so far have pushed the company into the red for three years, and it has been forced to sell subsidiaries topay fines and other liabilities.

Founded as a textiles company in 1933, Takata beganproducing airbags in 1987 and at its peak became the world's No.2 producer of the safety products.

It also produces one-third ofall seatbelts used in vehicles sold globally, along withother components.

The Tokyo Stock Exchange said its shares would be delisted on July 27. The stock has collapsed 95 percent since January 2014 as the recalls mounted.

(Reporting by Naomi Tajitsu; Additional reporting by David Shepardson on Washington D.C., Tom Hals in Wilmington, Delaware and Maki Shiraki in Tokyo; Editing by William Mallard, Stephen Coates and Edwina Gibbs)

Activist investor Daniel Loeb's Third Point LLC on Sunday unveiled a stake of more than 1 percent in Switzerland's Nestle SA and urged the world's largest packaged foods maker to improve its margins, buy back stock and shed non-core businesses.

FRANKFURT German insurer Allianz expects to book a loss of around 200 million euros ($224 million) from the sale of private bank Oldenburgische Landesbank to U.S. private equity firm Apollo , it said on Sunday.

Here is the original post:

Japanese airbag maker Takata files for bankruptcy, gets US sponsor - Reuters

Legendarybankruptcy expert Dr. Edward Altmancautioned that this benign credit cycle characterized by low default rates, low yields, low spreads, and lots of liquidity could come to an abrupt end.

Its been a terrific market for investors for quite a long time and if anything is concerning its that we now are more than eight years into a benign credit cycle, Altman, a professor at NYU Stern School of Business, told Yahoo Finance. Weve never had such a long benign cycle. And just that one little fact is something that we should be concerned about because if it comes to one and it could come to an end very dramatically.

Altman, the creator of the financial-distress sniffingAltman Z-Score, warned in mid-2007 of a Great Credit Bubble and that there was going to be trouble in the market.He predictedthat a meltdown would stem from corporate defaults. While the primary culprit of the financial crisis turned out to be mortgage-backed securities, investors who heeded Altmans warning nevertheless avoided a lot of grief.

So, how does todays market compare to the market in 2007.

There are some similarities, yes, although the situation back in the great financial crisis was pre-meditated by the mortgage-backed securities and we dont have that problem now, he said.

Troublingly, Altmansees the reckless behaviorof 2007 surfacing again.

Lehman Brothers world headquarters is shown in New York, the day the 158-year-old investment bank, choked by the credit crisis and falling real estate values, filed for bankruptcy. (AP Photo/Mark Lennihan)

Back in 2007 prior to the crisis in 08 and 09, the fundamentals of credit risk of the companies issuing bonds and taking out loans were quite low, he said.And the similarity that I see now between 2007 and 2016 is very similar fundamentals, quite a bit high risk and it doesnt seem to bother the market because its the only game in town in terms of getting yield greater than what you can get for low-risk securities like governments and high-grade corporates.

In other words, investors arent buying junk bonds just because the risk-reward balance is favorable. Theyre buying because the rewards of investing in lower risk bonds just arent cutting it anymore.

Altman is perhaps best known for the Z-Score, a formula he created 50 years ago thats used to predict bankruptcies. Since that time, he noticed that bankruptcies have gotten increasingly bigger.

Read More

[What] Ive seen over the years is larger and larger companies filing for bankruptcy on a regular basis. On average, in the United States, something like 15 more than $1 billion companies, in terms of liabilities, go bankrupt every year, on average, Altman said. This year already its 13. Last year, it was almost 40.

He noted that inflation has something to do with it, but whats actually happening is companies have been taking advantage of debt and low interest rates like never before, and the corporate debt ratios are way up.

Speaking about the Z-score, if you compare the average Z-score of companies in 2007 with the average in 2016, which is the last time we looked at it, guess what. The average is actually lower today than it was in 2007, and 2007 was right before the great financial crisis, and of course, in 08 and 09 we saw a tremendous increase in corporate bond defaults and loans.

Low Z-scores are associated with financial distress.

He added: So the good news is that its no worse, but the bad news is, fundamentally, the companies are no better than they were back in 2007at least by our model.

At the moment whats keeping companies from going bankrupt as they did during the financial crisis is the incredible amount of liquidity and lowinterest rates.

Well see how long that lasts.

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.

Visit link:

Bankruptcy guru Edward Altman sees similarities to 2007 in the credit market today - Yahoo Finance

"A lot of people are suspecting that it won't cover the total cost. They're saying it's going to be about $5 billion in cost to get all these airbags replaced. There's only $2 billion worth of assets," Brauer said. This would leave affected automakers to cover the rest of the recall and replacement costs.

Earlier this year, Takata agreed to pay $1 billion in criminal penalties stemming from its allegedly fraudulent conduct over the sales of defective airbag inflators.

At the time, it announced it would establish two restitution funds: A $125 million fund for individuals physically injured by the faulty airbags who have yet to reach a settlement with Takata, as well as a $850 million fund to shoulder the airbag recall and replacement costs incurred by affected auto manufacturers.

Janet Lewis, head of industrials research in Asia at Macquarie Capital Securities, said that for automakers, it wasn't just about paying for the recall.

They also need to ensure Takata keeps producing the replacement airbags, she told CNBC's "Squawk Box" on Monday.

"The fact that they appear to have reached an agreement to sell the assets to KSS should enable this to continue," she said. "The (automakers) have been expecting that ... Takata was not going to recover sufficiently to pay them back."

"They have provisioned already for the losses related to the recalls," Lewis added.

Honda said in a statement on Monday that it has not reached any agreements with Takata about how much of the recall cost it would bear, but it would continue to seek to recover the costs from the troubled parts-maker.

But it added that it expected it will become difficult to recover the majority of the claims.

Continue reading here:

Takata's woes expected to continue beyond bankruptcy filing amid mounting recall costs - CNBC

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect's individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

More:

Japan press - Takata expected to file for bankruptcy protection in Tokyo - ForexLive

Bankruptcy is a legal process to help debtors (people who owe money) get relief from the debts they cannot pay and, at the same time, help creditors (people who are owed money) get paid from whatever property or assets the debtor has that he or she does not need to live. Deciding to file for bankruptcy is a very tough decision. You may be feeling overwhelmed and bankruptcy seems like the only option. But think about the decision carefully because it can really affect you for a long time. Also, bankruptcy does not remove all debt, and there are certain types of debt that cannot be discharged (eliminated) in bankruptcy.

Bankruptcy may not always work to save your home or property, so you need to get advice from a bankruptcy lawyer about whether or not bankruptcy is a good option for you. Since there are different types of bankruptcy, one may be better for you than another, or bankruptcy may not be a good solution for your type of problems at all.

To decide if you should file for bankruptcy, you need to know:

Bankruptcy is governed by federal law, so it is the same from state to state. But each state may have different exemptions (assets you can keep even when you file for bankruptcy).

There are four common kinds of bankruptcy cases, named by the chapter of the federal Bankruptcy Code that describes them.

A bankruptcy discharge releases a debtor from being personally responsible for certain types of debts. So, after a bankruptcy discharge, the debtor is no longer legally required to pay any debts that are discharged.

The discharge prohibits the creditors of the debtor from collecting on the debts that have been discharged. This means that creditors have to stop all legal action, telephone calls, letters, and other type of contact with the debtor. This prohibition is permanent for the debts that have been discharged by the bankruptcy court.

You cannot discharge all debts in bankruptcy. Some of the most common debts that you cannot get rid of in bankruptcy are debts from child or spousal support, most student loans, most tax debts, wages you owe people who worked for you, damages for personal injury you caused when driving while intoxicated, debts to government agencies for fines or penalties, and more.

For more information, read the Bankruptcy Code section 523(a)

The Bankruptcy Code allows each individual who files for bankruptcy to keep basic assets that are necessary for the debtor's fresh start after bankruptcy. That property is the debtors exempt property.

Each state has its own list of property that can be exempt. California gives debtors a choice between the state law exemptions found in Code of Civil Procedure section 704 and a set of bankruptcy-only exemptions in Code of Civil Procedure section 703.140 that mirror the Bankruptcy Code exemptions that were in the federal law when the California law was adopted.

The length of the bankruptcy case depends on the type of bankruptcy you file. If you file a Chapter 7 bankruptcy, your debts can be discharged in as soon as 4 to 6 months. With a Chapter 11 or 13 bankruptcy, it can take as long as 5 years because you may still be making payments for some of the debts.

Automatic stay When you file for bankruptcy protection, the federal court issues a notice of automatic stay that stops creditors listed in the bankruptcy petition from pursuing you for any debts until the bankruptcy court lifts the stay. Although this may stop an eviction or foreclosure sale for a short time, it will not provide any long-term protection if you do not have any equity in the property. If, for example, you are a tenant with a month-to-month tenancy, you do not have any property interest to protect for the benefit of creditors, so your landlord can get a stay lifted very quickly. The same is true for a lender who is foreclosing on property where the debtor has no equity.

Bankruptcy is a specialized area of law that is very complex. And the issues are not always apparent or simple. The bankruptcy laws changed in October 2005 to discourage many people from filing for bankruptcy. So the law became more complicated. And there are more situations where a mistake can result in your case getting dismissed. If your case is dismissed, the bankruptcy court often imposes a penalty of 180 days before you can refile, and in this time period a lot can happen. This is why it is so important to have a lawyer advise you and help you with your bankruptcy.

Find a lawyer who can help you work through the issues, alternatives you may have, and consequences of your choices.

If you decide to represent yourself in bankruptcy court, read a guide for Filing for Bankruptcy Without an Attorney.

To find a good bankruptcy lawyer:

Bankruptcy Basics This pamphlet was created by the Administrative Office of the U.S. Courts. You can download it in PDF format. You can also watch a series of videos about bankruptcy.

LawHelpCalifornia Bankruptcy Links to information on what to do if you can't pay your debts, rebuilding good credit and more. (Select your county or enter your zip code for information specific to the area that you live in.)

LawHelpCalifornia Debt Collection, Garnishment, Repossession Links to information on collecting your judgment, what to do if you can't pay your debts, rebuilding good credit and more. (Select your county or enter your zip code for information specific to the area that you live in.)

Official Bankruptcy Forms These bankruptcy court forms are posted by the Administrative Office of the U.S. Courts.

San Francisco Law Library's Student Loans and BankruptcyIssues This guidecan help you find books about student loans and bankruptcy options.

What Can I Do If I Can't Pay My Debts? A State Bar of California pamphlet. Also available in Spanish and Chinese.

Facts for Consumers Consumer Protection Information posted by the Federal Trade Commission.

Bankruptcy FAQs Find answers to frequently asked questions about bankruptcy.

Read the rest here:

Bankruptcy - money_selfhelp

Kazuhiro Nogi | AFP | Getty Images

The logo of the Japanese auto parts maker Takata is displayed at a car showroom in Tokyo on January 13, 2017.

Takata's board is convening to review bankruptcy plans over the weekend, The Wall Street Journal reported, citing sources.

The company is planning bankruptcy filings in both the U.S. and Japan, and has tentative plans to sell operations to rival firm Key Safety Systems for $1.6 billion, sources told the Journal.

Sumitomo Mitsui Banking is reportedly providing the company with bankruptcy financing, the report said.

The auto parts supplier made the airbag components that spawned lawsuits against several major automakers after the devices were linked to deaths and injuries. The company pleaded guilty to criminal wrongdoing and was told to pay $1 billion in penalties for giving automakers misleading safety reports on the airbag systems.

In the U.S., 19 automakers are still recalling the 42 million vehicles outfitted with Takata airbags, the Journal said.

In May, Toyota, Subaru, Mazda and BMW all settled with plaintiffs for more than $550 million.

Read the full story in The Wall Street Journal

Go here to read the rest:

Takata reportedly planning to file for bankruptcy - CNBC

On Michele Kims first day clerking for U.S. Bankruptcy Court Judge John S. Dalis, he told her he had the best job in the world, she later said. Kim is about to find out for herself.

On Friday afternoon in the historic federal courthouse in Augusta, Kim was sworn in as the newest Bankruptcy Court judge in the Southern District of Georgia.

An Augusta native, Kim graduated from the University of Georgia School of Law with honors in 2006 and was admitted to the bar the next year. In addition to clerking for Dalis, Kim clerked for Judge Anthony Alaimo. She worked for the King & Spalding law firm in its Atlanta office specializing in financial restructuring and bankruptcy law.

Get used to the view, District Court Chief Judge J. Randal Hall told Kim as she took a seat on the judges bench with Hall and Chief Bankruptcy Court Judge Susan D. Barrett.

Its important for a judge to have good character, integrity and ability, Hall said. Kim has all of those qualities and more, he added.

Dalis, who retired Jan. 31 after nearly 30 years on the bench, said Friday that he and his wife were as proud as parents. He has known Kim for more than 30 years and knows she will serve with honor.

With assistance from her husband, Ryan Babcock, and mother, Hyun-Sook Kim, Kim donned the black robe she will wear for her judicial career.

She will serve as the Bankruptcy Court judge in the Brunswick courthouse.

Reach Sandy Hodson at (706) 823-3226or sandy.hodson@augustachroncile.com.

Read the rest here:

Augusta native sworn in as newest Bankruptcy Court judge - The Augusta Chronicle

Sears Canada Inc. (NASDAQ:SRSC) filed for bankruptcy on June 22 in Canada under the Companies' Creditors Arrangement Act (CCAA). While this has only a minor direct impact on Sears Holdings Corp. (NASDAQ:SHLD), the indirect impact is significant. If Eddie Lampert is willing to throw in the towel on his equity investment in SRSC, it could indicate that he is not willing to pour more of his cash into propping up SHLD. In addition, vendors who were already nervous about dealing with Sears may stop shipping goods for the critical Back to School and Fall shopping season. In my opinion, SRSC's bankruptcy filing is just a dress rehearsal for a Chapter 11 filing by SHLD in July.

Canadian Bankruptcy Laws

Sears Canada filed under the CCAA instead of the Bankruptcy and Insolvency Act (BIA), which would have resulted in complete liquidation. There are two critical points in the CCAA that differ from Chapter 11 bankruptcy in the U.S. A monitor, in this case FTI Consulting, is appointed by the court, who has oversight authority but does not control day-to-day operations. The first critical point is that the monitor has supervision over the sale of assets, and not Eddie Lampert. The second point is that the monitor is required to report to the Superintendent of Bankruptcy when they feel creditors would be better off if the case was switched to BIA, which would mean total liquidation.

A June 22 Pre-Filing Report prepared by FTI Consulting contains a large amount of useful information. According to the report, SRSC had cash outflows of C$30-100 million per month over the last 5 months, and in May was burning C$20 million a week. The company only had C$139 million on June 19. Without new sources for cash, it was forced to file.

Its current plan entails: closing 59 stores and laying off 2,900 employees; getting a C$300 million DIP revolving loan at LIBOR+4.5% and a $150 USD equivalent term loan at LIBOR+11% which mature on December 20, 2017; trying to get the authority to suspend certain pension and retiree benefit payments; creating a C$9.2 million key employee retention plan.

A key item mentioned in the report was that the company would try to get "interest in a range of potential transactions involving all or part of the assets or businesses of Sears Canada Group". It is critical to remember that this will be done "under the supervision of the monitor", and not by Lampert.

Below are the cash flow and operational projections until September 16. According to FTI Consulting's forecast, SRSC will only have a negative C$25.7 million operating cash outflow during the 13-week period. It is only closing 59 stores, and it would seem unrealistic to expect that the current burn rate of cash would improve so significantly.

Cash Flow Forecast Until September 16, 2017

13-Week Operating Forecast

Impact on Sears Holdings Corp.

To many SHLD shareholders this information about SRSC may be interesting, but they feel it has little impact on SHLD because SHLD only owns 12% of SRSC and a loss of a few million dollars will not kill SHLD. Correct, but the indirect impact will most likely have a very significant negative impact on SHLD shareholders.

Prior to the filing, SRSC was able to arrange for about C$109 million in financing, but it needed C$175 million. Lampert did not step up and loan the company the other C$68 million. Does this indicate he will no longer be ready to step up and loan SHLD when other financing sources are not? Lampert also owns about 45% of SRSC, and there is a very real possibility that he will get no recovery.

Unlike Chapter 11 bankruptcy in the U.S., where the company/management still has almost complete control of the bankrupt company, in Canada the monitor has a major voice in the bankruptcy process. One can only speculate to conclude that Lampert has finally decided an in-court process is the better way to deal with operations that burn cash, especially since in Chapter 11 he is able wipe out unsecured creditors, shareholders, and certain pension liabilities, while using his and Bruce Berkowitz's secured debt as means to own a large portion of a "new" Sears Holdings.

Some investors are taking the opposite opinion on the SRSC filing. They assert that not proposing to liquidate, but instead to continue operating and selling just some stores, demonstrates Lampert's willingness to pursue his turnaround plans. This could explain the pop in SHLD shares on the day SRSC filed. The reality is that the above extremely low cash burn projections are unrealistic. The company was burning C$20 million per week, but now, all of sudden, this is forecast to improve. This is just another example of Lampert's unrealistic retail expectations. FTI Consulting, as monitor, decides if the operations continue or if the company liquidates going forward, and not Lampert. FTI was retained by Sears Canada last November as consultant, and its reputation as Licensed Insolvency Trustee now as appointed court monitor would dictate its need to be prudent in supervising the cash flow, and it would be quick to inform the Superintendent of Bankruptcy that a liquidation of assets is necessary to protect creditors instead of continuing to operate.

Vendors are the Achilles' Heel for SHLD. The SRSC bankruptcy filing tore this tendon. There is a very real possibility that vendors will now be even less likely to deal with SHLD after SRSC filed for protection. I would assume that many vendors supply both companies, and now they are not getting paid for goods they delivered to SRSC that were not paid for prior to June 22, because the CCAA prohibits the payment for any goods or services provided before the filing date. The unpaid vendors now need to file a claim and may get less than the full amount. Those goods delivered after the bankruptcy filing will, however, be paid (This is the same as under Chapter 11 in the U.S.)

Why would vendors deliver goods now and risk getting only partial payment under the Chapter 11 claims procedure? Why not wait until after SHLD files for Chapter 11 and get paid the full amount as a priority claim under Chapter 11. After SHLD files for Chapter 11, many vendors will be eager to do business with the company again because they know they will be paid in full.

Other Recent News

Sears is closing 20 more stores. Some view this as a positive move to reduce negative cash flow. Others view it as a negative because there are fewer stores trying to support the same amount of debt. Barron's posted an article with an interesting title: "Fraudulent Conveyance Rules May Pave Way for Sears Bankruptcy in July". An article I wrote about Sears in April had the same idea.

Conclusion

Eddie Lampert's unwillingness to lend SRSC cash as the "lender of last resort" and the bankruptcy filing of SRSC could signal that he finally realizes SHLD also needs court protection to stop the cash bleeding. At least in the U.S. under Chapter 11, he does not have to cede power to a court-appointed monitor, which will mostly likely not be easy for his ego to accept. While the current plan is for the Canadian operations to continue with a modest reduction in number of stores, continued cash flow issues could force SRSC into a formal liquidation.

Sears's real problem in the near future is vendors, and this filing has made that problem acute. The reality is that the best way to deal with these issues is to file for Chapter 11 bankruptcy in early July, so that vendors will deliver the needed Back to School and Fall merchandise. I still expect to see a Chapter 11 filing, and therefore, rate all SHLD securities a Sell.

Disclosure: I am/we are short SHLD.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am naked SHLD call options.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Read the original post:

How Sears Canada's Bankruptcy Impacts Sears Holdings Corp. - Seeking Alpha

Buddhika Weerasinghe | Bloomberg | Getty Images

Signage for Takata are displayed at the company's Echigawa plant in Echigawa, Shiga, Japan, on Friday, Nov. 25, 2016.

The firm, whose defective air-bag inflators have been blamed for at least 16 deaths and more than 150 injuries worldwide, will file for protection in Tokyo District Court under the Civil Rehabilitation Act, Japan's version of U.S. Chapter 11 bankruptcy, said the sources, one of whom has direct knowledge of the matter and one who was briefed on the process.

Takata will then seek bridge loans from the core banking unit of Sumitomo Mitsui Financial Group, which will provide tens of billions of yen (hundreds of millions of dollars) in bridge loans, one source said.

Takata spokesman Toyohiro Hishikawa said nothing had been decided regarding any filing or financing.

Shares in Takata changed hands for the first time since sources said last week that the struggling airbag maker was preparing to file for bankruptcy.

By mid-afternoon shares had more than halved in value to 116 yen, eroding Takata's market capitalization by about 75 percent from a week ago to nearly $86 million now.

Any filing would coincide with a deal for financial backing from U.S. auto parts maker Key Safety Systems Inc. Key is expected to acquire Takata assets as part of a restructuring in bankruptcy, a source told Reuters.

Takata would stop making air-bag inflators after completing a global recall as part of the restructuring plan with Key, separate sources said.

Takata plans to begin bankruptcy proceedings in both the United States and Japan, sources have said. Such moves would culminate a long, tumultuous fall for the family-controlled company that grew to become a global supplier to most of the world's major automakers.

View post:

Takata to file for bankruptcy Monday, SMBC to provide bridge loan: Sources - CNBC

Retail's bloodbath has spread north of the border.

Sears Canada announced on Thursday it has entered bankruptcy protection in the Great White North and will close 59 stores and slash nearly 3,000 jobs while it tries to get back on its back after a years-long slump.

The retailer, which was spun off from Sears Holdings ( shld ) in 2012, won protection from creditors under Canada's equivalent to a Chapter 11 knowns as "Companies Creditors Arrangement Act" and said it plans to exit bankruptcy "protection as soon as possible in 2017, better positioned" to executive a turnaround.

Sears Canada, which is independent of its U.S. namesake, will close 20 of its 94 full-service locations, 15 home stores, 10 outlet stores and 14 hometown locations and will cut 2,900 positions across its store fleet and at its Toronto headquarters.

The spin off in 2012 was one move made by Sears Holdings CEO and top investor Eddie Lampert to raise urgently needed cash will inflict pain on Sears Holdings: the U.S. namesake company still owns 12% of Sears Canada, and Lampert and his investment vehicles still own about 45% of its shares. Sears Holdings has also been closing stores and failing to hang on to shoppers: last week, the retailer, which also operates the Kmart discount chain, said it was cutting 400 jobs at its Chicago area headquarters in addition to a previously announced $1.25 billion cost restructuring of the company.

Its Canadian siblings said in its statement that "the continued liquidity pressures facing the company as well as legacy components of its business are preventing it from making further progress." Last week, it issued a warning that it might not be able to generate enough cash to meet debt payments and other obligations in the next year. Sears Canada has posted losses in its last three fiscal years. (Sears Holdings, which is run entirely independently, stoked its own bankruptcy chatter when it acknowledged fears in the marketplace about its longer-term viability in its annual report released in March.)

As for Sears Canada, its much-hoped for comeback involves selling more discounted designer fashions and its own house brands while also improving its e-commerce, things its rivals have been doing for years.

Go here to read the rest:

Sears Canada Closing 59 Stores as It Seeks Bankruptcy Protection - Fortune

Puerto Rico opened a new "chapter" in distressed securities investing when it filed for court protection in early May. However, in this case, it is not a chapter of the bankruptcy code, such as Chapter 11 (which generally applies to companies) or Chapter 9 (which applies to municipalities). Because Puerto Rico is an unincorporated territory of the U.S., it was not eligible for traditional bankruptcy protection. Instead, it filed under a new statute that was passed last year by Congress primarily to deal with the island's problems.

After years of economic decline, Puerto Rico is now in default on an estimated $74 billion of bond debt. On top of that, the Commonwealth has approximately $49 billion of pension obligations and an ongoing need for funds to provide basic government services. Because of special tax law provisions that exempt the territory's debt from not only federal taxes but also state taxes in every state, the bonds are widely held by investors across the country. Since the legal action is under a new law that has never been tested, there is tremendous uncertainty about how much creditors will recover and how long the process will take.

Distressed bond investors seem to be favoring either the territory's general obligation (or "GO") bonds or its bonds backed by sales tax revenues (known as "COFINAs"), both currently trading around 50 cents on the dollar, and there are many other Puerto Rican bonds trading at even lower levels. But there may be opportunities for stock investors to profit from the island's restructuring as well, perhaps with less downside risk than in many of the bonds.

Our most recent newsletter details four public companies based in Puerto Rico that could benefit from stabilization in the island's finances. Those companies are detailed below, and an additional three major insurance companies with exposure to Puerto Rican debt can be found in The Turnaround Letter. Learn more about these contrarian Puerto Rico investing opportunities.

Closing prices on May 31, 2017

Ambac (NASDAQ:AMBC) - At the most strategic level, the Ambac story is straightforward: an insurer of municipal bonds with an impressive new CEO who is strengthening the company's balance sheet, working off its obligations following its 2010 bankruptcy, reducing risks and building book value. Underneath is a highly complicated financial and legal structure that even most of Wall Street avoids, as only a few analysts cover the stock. The shares trade at 63% of adjusted book value and near their post-emergence lows. Much of the concern is related to Ambac's $276 million of exposure to the Puerto Rico General Fund debt and $2.1 billion in current exposure to Puerto Rican municipal debt. While the eventual costs to Ambac are unknowable, the company has established reserves that would cover the most likely outcomes. There could be an interesting opportunity developing in Ambac.

Assured Guaranty (NYSE:AGO) - Assured Guaranty is probably the strongest player in the bond insurance business. Its exposure to Puerto Rico is relatively modest, and it could buy up competitors if they falter. Management has been aggressively working to boost shareholder value through stock buybacks. The stock has performed well over the past few years, but it could rise a lot further.

EVERTEC (NYSE:EVTC) - EVERTEC, with sales of nearly $400 million, is a full-service transaction processing business similar to The Turnaround Letter recommendation First Data Corporation (NYSE:FDC), with operations in 18 countries across Latin America. The company was created in 2004 as a unit inside of Popular, Inc. (NASDAQ:BPOP) (the Puerto Rico bank), which still owns a 16% stake. Apollo Management bought a 51% stake in 2010 and then exited following EVERTEC's IPO in 2013. Despite the weak local economy, EVERTEC continues to grow its revenues and profits through both organic expansion and acquisitions. The company's debt is moderately elevated at 3.3x EBITDA, but management is committed to reducing this. Management appears capable and brings considerable experience from larger industry peers. At an attractive 9.7x EBITDA, this underfollowed stock is worth a closer look.

First Bancorp (NYSE:FBP) - With $12 billion in assets, First Bancorp is Puerto Rico's second-largest local bank. Loan quality is a struggle, as nonperforming loans are over 5% of its loan book, but this is largely offset by a high level of capital (its Tier 1 common equity ratio is 18.2%). First Bancorp's net interest margin is wide, at nearly 4.5%, compared to less than 2.5% at most U.S. banks. Several major shareholders have been selling, including the U.S. Treasury, which completed its sale under the TARP program, as well as private equity firms Oaktree and Thomas H. Lee, and this has been weighing on the stock price. While there are definitely risks here, the stock's valuation at 67% of tangible book value (many banks trade at 100-200%) and 11.9x this year's expected earnings appears to be a bargain.

Disclosure: I am/we are long AMBC.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Continued here:

Puerto Rico Bankruptcy: Uncertainty, But Also Stock Profit Opportunity - Seeking Alpha

Please enable Javascript to watch this video

LAKELAND, Tenn. Some parents and employees are upset after a day care abruptly closed its doors and filed bankruptcy on payday.

"The person who is most heartbroken is me because not only did I lose my business my job, I lost people who I thought were my friends," owner Lisa Naquin said.

She said overnight her dream went up in smoke she was forced to close the doors at the business she built, turning clients and workers away.

She said she filed for Chapter 7 Monday but kept the center open and continued to take tuition payments up until Wednesday.

"We found out we were going to be filing on Sunday night around 9:30," said Naquin.

Naquin claims she was hoping to sell the day care and kept that quiet because she did not want to alarm anyone, but she says that deal fell through.

"We had to make the hard decision to just let it go and file bankruptcy."

Sandra Mays worked at the day care just over a year and says the closing came just as they were supposed to get paid.

"If you knew this you could have let us know, told us we are going through changes but trying to work it out so we could have been prepared," she said.

She said filing for bankruptcy on payday without letting anyone know about financial problems just doesn't sit well with her.

"We expected to work and get paid and we did neither."

Naquin showed WREG a text message explaining why she didn't pay her workers, saying her attorney advised her giving out paychecks without the funds could land her in trouble. That has left some workers feeling taken advantage of.

"That's not how the process works, it's like she tricked us, and knowing she may never see the fruits her labor really strikes a nerve."

Through the liquidation process, the employees could get paid, but may not.

Continued here:

Lakeland day care files for bankruptcy without paying workers - wreg.com

Implant Sciences and the U.S. Trustee assigned to the case filed with the U.S. Bankruptcy Court separate objections to the official committee of equity security holders motion to retain D.F. King & Co. to provide plan solicitation services.

The Company asserts, Simply put, the retention of D.F. King & Co. is unnecessary and not in the best of the Debtors estates, shareholders or other parties in interest.Prior to this (self-created and purported) emergency filing, the Equity Committee made no effort to discuss with the Debtors either the necessity of D.F. Kings proposed retention, or the nature and scope of services it seeks to have D.F. King provide in light of the services that KCC, who is the Debtors previously engaged noticing and claims agent, would be providing in connection with solicitation of the Plan.

In addition, The Application lays bare the fallacy of the Equity Committees supposed concern for the administrative burn in these chapter 11 cases it proposes an entirely unnecessary and unreasonable expense to be borne by the Debtors estates and ultimately the common shareholders, which is fraught with the potential to create even more unnecessary costs in the future. The Debtors cannot agree to for the needless expenditure of estate resources for a superfluous, targeted campaign that, as demonstrated by the Equity Committees proposed Plan Support Letter, could potentially be rife with misstatements and mischaracterizations of fact, as well as unfounded, irresponsible personal attacks against the Debtors management team.

Read more bankruptcy news.

See the article here:

Implant Sciences Bankruptcy Objections Filed - Bankrupt Company News (press release) (blog)

Foundation Healthcare (f/k/a Graymark Healthcare) and subsidiary University General Hospital (UGH) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Northern District of Texas, lead case number 17-42571. The Company, which owns and operates surgical hospitals, is represented by Vickie L. Driver of Husch Blackwell.

According to documents filed with the Court, As of June 30, 2016, FHI had extensive accumulated and working capital deficits.FHI was unable to address the cash flow shortage either through the sale of assets, increase in revenues, decrease in expenses, or by reaching additional modifications or extension agreements with the Senior Lenders.

The Company also notes, Without access to the funds provided for in the proposed cash collateral and DIP budget, the Debtors will be unable to continue with the orderly wind-down and liquidation process, including the Debtors proposed joint liquidating plan, which seeks to appoint a liquidating trustee to administer various assets to creditors as appropriate through a liquidating trust.

Read more medical bankruptcy news.

Continue reading here:

Foundation Healthcare Chapter 11 Bankruptcy - Bankrupt Company News (press release) (blog)

Sears Canada, which has more than 200 stores and about 17,000 employees, was spun-off as an independent company in 2012. But the filing is still bad news for Sears Holdings (SHLD), which owns both the Sears and Kmart brands in the United States. Sears Holdings still owns 12% of its shares.

Sears Holdings CEO and principal shareholder Eddie Lampert, who has been struggling to keep the company afloat amid its own mounting losses, owns a total of 45% of Sears Canada both personally and through his hedge fund.

The bankruptcy filing was not a surprise. Sears Canada said a week ago that it was in danger of running out of the cash it needed to fund operations. Thursday's filing said that it expects to remain in business.

Related: Retail bloodbath - Bankruptcy filings are up

Sears Canada said that recent changes to its stores are starting to resonate with consumers, but it had to file for bankruptcy to give it the time it needed to let those changes take hold. In the last quarter alone, Sears Canada burned through about 30% of its cash and maxed out its existing credit lines. It said it had planned to borrow 175 million Canadian dollars to fund operations, but after negotiations with lenders it found it could only secure only C$109 million in additional loans.

Sears Canada said it hoped to be able to restructure and emerge from bankruptcy later this year. It did not give any details about store closing plans or staff cuts it might make as part of its restructuring.

In March, Sears Holdings also issued a warning about there being "substantial doubt" it could stay in business. But that warning, as serious as it was, did not paint the dire picture of a company running out of cash in the near term as did Sears Canada's warning last week.

Sears and Sears Canada are hardly the only struggling retailers. In the United States, retail bankruptcies are up about 30% so far this year, according to BankruptcyData.com. Well known names including RadioShack, Gymboree, Sports Authority and Payless Shoes have all filed for bankruptcy within the last year. Total store closings across the U.S. are likely to reach record levels this year.

By some estimates, 25% of U.S. malls could close within the next five years. Department stores have shed 46% of their workers since 2001, a greater percentage of their jobs than coal mines or factories have lost over the same period.

CNNMoney (New York) First published June 22, 2017: 8:41 AM ET

Continued here:

Sears Canada files for bankruptcy - CNNMoney

TOKYO Takata Corp (7312.T) will seek bankruptcy protection from creditors on Monday, two sources said, as the Japanese company faces billions of dollars in liabilities stemming from the biggest recall in automotive history.

The firm, whose defective air-bag inflators have been blamed for at least 16 deaths and more than 150 injuries worldwide, will file for protection in Tokyo District Court under the Civil Rehabilitation Act, Japan's version of U.S. Chapter 11 bankruptcy, said the sources, one of whom has direct knowledge of the matter and one who was briefed on the process.

Takata will then seek bridge loans from the core banking unit of Sumitomo Mitsui Financial Group Inc (8316.T), which will provide tens of billions of yen (hundreds of millions of dollars) in bridge loans, one source said.

Takata spokesman Toyohiro Hishikawa said nothing had been decided regarding any filing or financing.

Shares in Takata changed hands for the first time since sources said last week that the struggling airbag maker was preparing to file for bankruptcy.

By mid-afternoon shares had more than halved in value to 116 yen, eroding Takata's market capitalization by about 75 percent from a week ago to nearly $86 million now.

Any filing would coincide with a deal for financial backing from U.S. auto parts maker Key Safety Systems Inc. Key is expected to acquire Takata assets as part of a restructuring in bankruptcy, a source told Reuters.

Takata would stop making air-bag inflators after completing a global recall as part of the restructuring plan with Key, separate sources said.

Takata plans to begin bankruptcy proceedings in both the United States and Japan, sources have said. Such moves would culminate a long, tumultuous fall for the family-controlled company that grew to become a global supplier to most of the world's major automakers.

(Reporting by Taro Fuse and Maki Shiraki, writing by Thomas Wilson; Editing by Himani Sarkar)

American Airlines' chief executive said on Thursday the company is not "particularly excited" about Qatar Airway's interest in buying up to 10 percent of the U.S. carrier's shares, in a letter to employees following disclosure of the state-owned Gulf airline's overture.

WASHINGTON The new U.S. Securities and Exchange Commission chairman wants to reverse the steep decline in initial public offerings and give individual investors more access to smaller, successful companies, according to a speech he is scheduled to deliver on Thursday.

Read the original here:

Takata to file for bankruptcy Monday, SMFG to provide bridge loan: sources - Reuters

After five years that brought major changes to San Bernardino, the struggling city is officially out of bankruptcy.

The citys plan for emerging from bankruptcy which was approved earlier this year by U.S. Bankruptcy Judge Meredith Jury became effective June 15, officials said this week. The city, facing a $45-million budget shortfall, had declared bankruptcy in August 2012.

In the years-long process since, San Bernardino has seen its fire department and other services outsourced, its staff cut by hundreds and its public services neglected. Meanwhile, it has struggled to cope with increased violence that officials have attributed in part to an under-resourced police department.

Here are some things to know about the end of the bankruptcy process, what it means for the city and what might be next.

The citys plan of adjustment became effective June 15. That means the city can begin paying its creditors under the terms outlined in that plan, which was negotiated over several years.

Its details have been known for some time.

Most significantly, the plan preserves pension benefits for employees and retirees, though employees will have to contribute more to their pension plans, benefits were modified for new employees and retirees will lose some health benefits they were promised.

Some bondholders and unsecured creditors will be paid only 1% of what they were owed.

In a memorandum on the citys most recent proposed budget, City Manager Mark Scott put it this way: While the citys momentum has improved significantly, it would be overly optimistic to suggest that decades of decline can be reversed overnight.

The bankruptcy plan, Scott noted, is very realistic in showing only modest budgetary growth over a 20-year period.

The citys poverty rate is high about 33% of its residents live in poverty and its average household income is low, making it difficult for San Bernardino to generate the revenue it needs to pay for years of backlogged services.

But city officials say they are slowly making progress toward some of their goals.

The City Council is expected to approve a $160-million operating budget for the coming fiscal year at its meeting Wednesday evening, along with a $22.6-million capital improvement budget, which will help with street repairs, city park improvements and other much-needed projects.

The operating budget also allows for some additional staff in various departments.

San Bernardino has long been affected by high levels of violence, and last year it recorded its worst homicide rate in decades. So officials have focused on boosting the police department, which saw significant staffing cuts in recent years.

Under the citys proposed budget, about $76 million has been dedicated to funding the department up from about $70 million last year.

Were gearing up to have a police department thats better resourced, Scott said in an interview Wednesday.

The city is in the process of replacing about one-quarter of an aging fleet of police vehicles, Scott said. And it is hoping to fill a large number of vacant officer positions but that is no easy goal, given the time and resources it takes to recruit and train new police officers.

The departments resources have been boosted by a number of grants, including a federal grant announced late last year to offset the cost of hiring 11 officers.

The city is also in the process of implementing a new violence reduction program, and officials are in the late stages of recruiting someone to administer it, Scott said.

City officials would like people outside the city to see its potential rather than its troubles. They tout the the fact that it is home to Cal State San Bernardino and San Bernardino Valley Community College, its relatively low-cost housing and lower costs of doing business.

As the citys proposed budget this year stated:

Opportunities for first-time home buyers, entrepreneurs, investors and employers are vast; one only needs to see the potential.

But bankruptcy has cast a cloud over many of the citys aspirations. Now that its lifted, officials are hoping outsiders will take a new look at the city.

The thing Ive run into is that people have not understood how they are going to do business with a city in bankruptcy, Scott said. They ask, Will you keep your staff? Will you be able to follow through on your obligations?

Now, he said, were able to say to people, Were like any other city.

He added: Its time for us to show off that we can be a reliable place to do business. Its up to us now to perform.

paloma.esquivel@latimes.com

Twitter: @palomaesquivel

Read the original post:

After five long years, San Bernardino is officially out of bankruptcy. What's next? - Los Angeles Times

(WEAR)

This number might surprise you: Personal bankruptcy filings are down 50-percent over the past six years. Some of that decline is due to the Affordable Care Act. Consumer Reports is out with a new analysis that looks at how the ACA may have helped millions of Americans from taking the extreme step of filing for bankruptcy.

Courts never ask people why they are filing, but many bankruptcy and legal experts Consumer Reports spoke with agree on this: Medical bills had been a leading cause of personal bankruptcy before health insurance expanded under the ACA. Medical bills are often unexpected and large and unavoidable, so people who dont have insurance can run up massive debt in a relatively short period of time.

Since 2010, personal bankruptcy filings have dropped by about 50%. Experts say some of that is due to an improved economy and laws passed in 2005 that make it harder to declare bankruptcy. But nearly all the experts CR interviewed also point to expanded health insurance as a major driver of the decline.

CRs reporting found that the ACAs provisions for mandatory coverage of pre-existing conditions and against annual and lifetime payout caps has helped consumers especially Americans with serious medical issues avoid bankruptcy.

Go here to read the rest:

Medical bankruptcies - WEAR

Fourteen retailers are on the brink of bankruptcy, according to a recent report from Moodys Investor Service, putting thousands at risk of losing their jobs.

As more people turn to online shopping, traditional brick-and-mortar retailers are at risk of having to close their doors. While 1.5 million jobs have been created in retail since 2010, most of these are on the web, according to the National Retail Federation.

"We believe the kind of competitive challenges that have weighed on the recent earnings performance of the bigger retailers such as Amazon, Walmart, Best Buy, and Target will have potentially devastating ripple effects for the smaller, more challenged retailers the next several quarters," the Moody's report stated. "That doesn't mean all of retail is under siege, however. Distressed issuers make up around 15 percent of the 148 rated issuers in our industry group. In other words, the majority of the industry remains fundamentally healthy.

Take a look at these stores that could be on the brink of bankruptcy.

Follow this link:

These 14 Stores May Be on the Brink of Bankruptcy | NBC Southern ... - NBC Southern California