Daily Archives: May 20, 2017

NEW YORK The U.S. Department of Justice's bankruptcy watchdog said on Friday it plans to appoint a committee of retirees in Puerto Rico's bankruptcy to negotiate for pensioners facing benefit cuts as part of the island's debt restructuring.

Puerto Rico, carrying some $50 billion in unfunded pension liabilities, "clearly needs a retiree committee and sooner rather than later," the office of the U.S. Trustee said in a filing in federal court in San Juan.

Puerto Rico filed the biggest municipal bankruptcy in U.S. history earlier this month. In addition to its pension debt, the U.S. territory has around $70 billion in bond debt it cannot pay.

While retiree committees are common in bankruptcies with big pension debts, the Trustee in Puerto Rico's case took the rare step of announcing intentions to appoint a committee without waiting for a blessing from the judge in the case, U.S. District Judge Laura Taylor Swain.

"The Trustee typically will refrain from exercising his discretion ... to appoint an additional committee until the court has an opportunity to rule," the filing said. "But this case is not like most cases."

Puerto Rico's biggest public pensions are almost 100 percent underfunded, a gap thought to be the largest state-level pension hole in U.S. history.

The federally-appointed board overseeing the island's finances has called for cuts to pension benefits, saying they are necessary to pull the island out of a crisis marked by a 45 percent poverty rate, unemployment more than twice the U.S. average, and near-insolvent public health systems.

The Trustee said it expects to complete the solicitation process for the committee by June 16.

At the island's first bankruptcy hearing this week in San Juan, Robert Gordon, an attorney for an informal group comprising 91,000 retirees, argued "they have earned the right to participate in this process."

The Trustee, however, stressed in its filing that Judge Swain should not grant Gordon's group the right to serve as the official committee. Appointing the committee is the job of the Trustee, the filing argued.

Gordon could not be immediately reached for comment.

(Reporting by Nick Brown; editing by Grant McCool)

RIYADH National oil giant Saudi Aramco expects to sign $50 billion of deals with U.S. companies on Saturday, part of a drive to diversify the kingdom's economy beyond oil exports, Aramco's chief executive Amin Nasser said.

HANOI U.S. President Donald Trump's new trade representative held his first face-to-face meetings with some key partners on Saturday as the United States charts an "America First" policy that has upended the old global order and sparked fears of protectionism.

DUBAI Saudi Arabia's energy minister said on Saturday all oil producers were in agreement to extend crude output cuts by nine months, Bloomberg Television reported.

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Puerto Rico retirees will get bankruptcy committee: US Trustee - Reuters

Lilis Energy CEO Avi Mirman

Lilis Energy CEO Avi Mirman

Q&A: How an energy company dodged bankruptcy in oil bust

In 2015, Lilis Energy cut most of its workers, wrote down the value of its reserves to almost nothing and didn't pay its executives for four months as it wrestled to avoid bankruptcy during the oil bust.

Hundreds of U.S. energy companies filed in bankkruptcy courts, but Lilis Energy CEO Avi Mirman said he and the only other people left at his oil company - a chief financial officer and general counsel - were determined to avoid bankruptcy proceedings, even though it cost them their paychecks. Instead, Mirman invested his own money in the company, and Lilis raised stock-market capital to acquire Brushy Resources, a San Antonio-based driller with property in the prolific Permian Basin in West Texas.

"We were living by the skin of our teeth," Mirman said. "But we refused to go into bankruptcy."

Lilis recently spoke to the Houston Chronicle about how his company came through the downturn without falling into bankruptcy. Edited excerpts:

Lilis Energy

HQ: San Antonio

2016 Revenue: $3.4 million

2015 revenue: $396,000

Head count: 40

Drilling: Planning one well per month in 2017

Q: What happened to Lilis Energy during the downturn?

A: As you know, 2015 was a pretty rough year for most of us in the oil and gas business. We were close to filing for bankruptcy. We got delisted. But none of us wanted to go bankrupt - none of us wanted that to our names. We had to let everybody go except three people in the management team. We didn't take a check for four months. In 2015, the value of company assets were less than the size of the loans.

Q: So what did you do?

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A: We're finance people. My specialty has been in distressed mergers and acquisitions. What better industry to exploit? We found a company in the Permian Basin and agreed to acquire them in December 2015. We raised another $20 million in equity. We also drew $31 million from a new credit facility, and it was a super-friendly loan with minimal covenants, not the kind of loan you'd see an energy company get back then. That helped propel us forward.

(Lilis Energy refinanced its debt by converting some of it to equity, closing its acquisition of Brushy Resources in June 2016 and applying for relisting on the Nasdaq. And oil prices rose.)

Q: What are your plans now?

A: We're substantially bigger now, with some 40 people, including 25 to 30 in San Antonio. And it's a bit different today because the cost to drill a well is substantially lower. We want to drill about a dozen wells in 2017. We expect to drill a well a month, and we expect to deploy a two-rig program in 2018 and drill about 20.

Q: What's happening in the oil patch now?

A: I do expect service prices to go up. Frac sand prices have gone up dramatically higher than it was six months ago. It affects your economics. But I'd like to think we can somehow do some cost containment.

Q: After all these bankruptcies, is the industry any better for it?

A: OPEC's first goal was to flood the market and get prices to the point where they put a lot of us out of business. But lower prices backfired on OPEC. The assets that were in the hands of the weak are now in the hands of the strong. They're not going to be able to smoke U.S. producers out.

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Q&A: How an energy company dodged bankruptcy in oil bust - Houston Chronicle

Forbes

Can Student Loans Be Discharged In Bankruptcy? Forbes One facet of higher education finance has not changed, however: the inability to discharge your student loans in bankruptcy. I interviewed Josh Cohen, a Vermont-based attorney who specializes in student loans, to share his perspectives. Zack Friedman ... Trump's first full education budget: Deep cuts to public school programs in pursuit of school choiceWashington Post all 76 news articles »

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Can Student Loans Be Discharged In Bankruptcy? - Forbes

(Bloomberg) Caesars Entertainment Corp. Chief Executive Officer Mark Frissora wants to develop more than 90 acres the company owns in Las Vegas, including land right in front of Caesars Palace, after its largest unit emerges from bankruptcy later this year.

We have a lot of real estate thats underutilized, Frissora said in an interview with Bloomberg TV Thursday. We have plans to basically develop all of that very valuable center-strip property as soon as we emerge. Those assets will have a very high-return, low-risk profile.

Caesars, the largest owner of casinos in the U.S., has struggled under a mountain of debt since a $30 billion leveraged buyout in 2008. In January of 2015, the company put its largest division, Caesars Entertainment Operating Co., into bankruptcy. Its expected to exit in the third quarter.

The Las Vegas-based company has enjoyed growth in sales and profit over the past two years, due in part to a strategy of renovating hotel rooms and searching for cost savings in places ranging from parking lots to guest check-in. Caesars hosted a nearly three-hour-long presentation for analysts in Las Vegas Thursday.

As part of the bankruptcy restructuring, Caesars is creating a real estate investment trust that will own many of the companys casinos, including the flagship Caesars Palace in Las Vegas. Debt and other obligations will be reduced to $14.6 billion from $23.5 billion in 2014, the company said. Fixed costs, including interest expense and rent, will decline to $1.28 billion annually from $2.67 billion three years ago.

Caesars has reduced promotional costs, like the amount of free casino chips it gives customers, while maintaining its market share in key cities, Chief Financial Officer Eric Hession said in the presentation. The company has cut $800 million in annual expenses over the past two years.

With its balance sheet repaired, Caesars is looking at new markets for expansion, including Japan, South Korea, Canada and Brazil. The company wants to hire more people in mergers and acquisitions and in casino development, Frissora said during the investor day.

Hotel revenue has been a source of growth. Average room rates in Las Vegas have risen to $140 a night last year from $92 in 2012, the company said. About 56 percent of the companys Las Vegas rooms will be remodeled by the end of the year. All of the companys Las Vegas hotels will be charging for parking by the end of June.

Almost one third of the companys guests in Las Vegas now use self-service kiosks to check-in to the hotels, technology that frees up hotel staff. The land Frissora wants to develop includes 50 acres behind the Ballys resort, almost 40 acres behind the Linq and seven acres in front of Caesars Palace.

Competitors including MGM Resorts International and Wynn Resorts Ltd. have also been remodeling their properties and adding pedestrian-friendly features that emphasize shopping, entertainment and dining more than gambling.

We are excited because we have a lot of growth plans weve not been able to act on because of the complicated structure of Caesars, Frissora said. Once we emerge, we will be able to do a lot of development projects around the world as well as M&A activity.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at [emailprotected] To contact the editors responsible for this story: Crayton Harrison at [emailprotected] Rob Golum, Paul Barbagallo

2017 Bloomberg L.P

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Caesars Plans New Las Vegas Developments After Bankruptcy Exit - National Real Estate Investor

Jim Mone, Associated Press Two victim compensation plans are before the court, one from the Archdiocese of St. Paul and Minneapolis and one from the committee representing 400-some victims of clergy sexual abuse. The St. Paul Cathedral is pictured in 2016.

The judge overseeing the bankruptcy of the Archdiocese of St. Paul and Minneapolis expressed concern Thursday over the legal fees being racked up in the case about $15 million to date.

It bothers me so much that all these attorney fees are being run up, U.S. Bankruptcy Judge Robert Kressel said at a hearing Thursday, adding that legal fees are consuming funds that could be directed to survivors of archdiocese clergy sex abuse.

In an attempt to curb the spending, Kressel ordered that no expert witnesses be hired for the time being. He also ordered a tighter schedule for both parties to argue their legal objections to each others compensation plans.

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Judge laments $15M in legal fees in St. Paul-Minneapolis archdiocese bankruptcy - Minneapolis Star Tribune