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Category Archives: Bankruptcy

French oil services firm CGG files for bankruptcy | Reuters – Reuters

Posted: June 16, 2017 at 3:52 pm

PARIS, June 14 French oil services firm CGG said on Wednesday it had filed for bankruptcy in France and the United States as part of financial restructuring to reduce its debt burden.

The company, in which the French state public investment bank Bpifrance Participations owns a 9 percent stake, said the restructuring would eliminate $1.95 billion in debt from its balance sheet.

"CGG will continue normal business operations during this process, and the restructuring transactions will not affect relationships with our clients, business partners, vendors or employees," Chief Executive Jean-Georges Malcor said in a statement.

"We expect that our financial restructuring can move forward quickly to strengthen our balance sheet and to position the company well for the future," he added

With debt in excess of $3 billion, the restructuring could be one of the biggest France has seen in years. It calls for unsecured debt to be converted to equity, maturities on secured debt to be extended and $500 million in new money to be raised.

The company, which specialises in geo-seismic surveys and is listed in Paris and New York, struggled to keep up with payments on its debt as the big oil groups that use its services proved reluctant to lift exploration spending despite rising oil prices. (Reporting by Leigh Thomas; Editing by Bill Rigby)

* Signs contract with Empire State Development Corporation (ESD)and developers Related Companies and Vornado Realty Trust to convert farley post office building into transport hub in NYC, USA.

* U.S. May housing starts weaker than expected * Data compounds doubts over third Fed rate hike in 2017 * Treasuries broadly post weekly declines (Updates prices) By Sam Forgione NEW YORK, June 16 U.S. Treasury yields edged lower on Friday, with all maturities posting weekly declines, after weaker-than-expected U.S. housing data fueled doubts that the Federal Reserve will be able to raise interest rates again this year. U.S. housing starts dropped 5.5 percen

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Lawsuit: Wells Fargo revised mortgages in bankruptcy without permission – USA TODAY

Posted: June 15, 2017 at 9:42 pm

Wells Fargo faces new accusations that it tried to capitalize financially on its customers without their permission this time by allegedly modifying mortgage terms for people who had filed for bankruptcy protection.

With the smoke still lingering from the firestorm that erupted from the bank's opening of fake consumer accounts, Wells was hit with multiple lawsuits alleging that the bank surreptitiously extended loan lengths, potentially costing some homeowners tens of thousands of dollars.

The bank pulled off a "virtual hijacking" with the alleged scam by implementing "illegal stealth modifications" in at least 100 cases across the country, plaintiffs attorneys said in court papers filed June 7 in the U.S. Bankruptcy Court for the Western District of North Carolina, where they are hoping to assemble a class-action group.

Wells Fargospokesman Tom Goyda said the bank "strongly denies the claims" because the company clearly identified "modification offers" in letters to customers, their attorneys and the respective bankruptcy courts.

"In no event would we finalize a modification without receiving signed documents from the customer and, where required, approval from the bankruptcy court," Goyda said in an email.

The latest accusations ensure a fresh round of scrutiny over Wells Fargo's practices, not long after the bank reached a $185 million federal settlement over an acknowledgment that aggressive sales incentives and pressure prompted many branchemployees to open fake accounts to meet their goals. That episode led to the resignation of CEO John Stumpf and the clawback of tens of millions in executive pay.

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To be sure, modifications of loan terms, including extending payment over longer periods and lowering monthly amounts, are often helpful to customers who are seeking short-term breathingroom on their finances. But longer loan periods often involve larger payments over time.

The complaint seeking class-action status was submitted on behalf of North Carolina residents Christopher Dee Cotton and Allison Hedrick Cotton, who filed for Chapter 13 bankruptcy protection in February 2014 with a Wells-serviced mortgage balance of $171,215 at a 20-year interest rate of 4.875%. They remained current on their payments before and during the bankruptcy, according to their lawyers.

But the bank nonetheless submitted routine documentation through the legal system that resulted in an extension of their original 20-year loan to 40 years, with a reduced interest rate of 3.875% ultimately costing them an extra $84,939 in interest over the life of the mortgage, according to the suit.

The accusations come fewer than two years after Wells reached a settlement with the U.S. Justice Departmentin which it agreed to pay $81.6 million over an alleged failure to notify customers of payment changes on a timely basis for more than 68,000 homeowners in bankruptcy from December 2011 through March 2015.

The company agreed as part of that process to overhaul its operations and accept oversight from an independent reviewer.

It was not immediately clear whether the latest accusations would carry implications forthe Nov. 5, 2015 Justice settlement.

Contributing: Kevin McCoy

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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The Seinfeld-Inspired ‘Soup Nazi’ Company Has Filed for Bankruptcy – PEOPLE.com

Posted: at 9:42 pm


PEOPLE.com
The Seinfeld-Inspired 'Soup Nazi' Company Has Filed for Bankruptcy
PEOPLE.com
Cue the no soup for you jokes. Soupman Inc., the Staten Island-based chain of soup restaurants that sprung from the famous 1995 Seinfeld Soup Nazi episode, has filed for Chapter 11 bankruptcy. This news comes less than a month after the company's ...
Company inspired by real 'Soup Nazi' files for bankruptcyWJXT Jacksonville
Soupman of 'Seinfeld' Soup Nazi fame files for bankruptcy protectionUSA TODAY
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France’s CGG files for bankruptcy protection – MarketWatch

Posted: at 7:50 am

Oil-services company CGG Group filed for bankruptcy protection Wednesday in the U.S. and France after reaching a restructuring deal with lenders and bondholders that will eliminate about $2 billion in debt from the company's books.

Under the deal, bondholders will swap nearly $2 billion in debt for most of the equity in a reorganized CGG, the company said. The restructuring plan calls for up to $500 million of new money to be raised from a $125 million rights offering and the issuance of $375 million in new debt.

CGG's senior lenders, owed about $800 million, will extend the maturity on their loans in return for $150 million payment from the proceeds of the new money investment. Existing shareholders, who will be able to participate in the rights offering, will see their investments reduced to a 4.5% stake in the restructured CGG following completion of the debt swap, according to filings in U.S. Bankruptcy Court.

Beatrice Place-Faget, general counsel of parent company CGG SA, said in court papers the prolonged downturn in oil and natural gas prices left the company unable to pay its debts.

CGG's 2016 annual revenue was roughly one-third of what it was before the current downturn began, she said. In 2012, before oil prices dropped, the company had total operating revenues of more than $3.41 billion. By 2016, that number was $1.195 billion.

In addition, the company has been losing money for years, including losses of $1.14 billion in 2015 and another $404.7 million last year.

CGG was founded in 1931 as " Compagnie Gnrale de Gophysique" and focuses on seismic surveys and other techniques to help energy companies locate oil and natural-gas reserves. The company also makes geophysical equipment under the Sercel brand name.

CGG launched its court-supervised restructuring bid in Paris on Wednesday by opening a "sauvegarde" proceeding, the French equivalent of a chapter 11 bankruptcy filing. Fourteen CGG subsidiaries filed for chapter 11 in U.S. Bankruptcy Court in New York and the parent intends to seek U.S. court recognition of the Paris case under chapter 15, the section of U.S. bankruptcy law dealing with international insolvencies.

CGG's legal advisers are Linklaters LLP and Weil Gotshal & Manges LLP for the sauvegarde and chapter 15 case, and Paul, Weiss, Rifkind, Wharton & Garrison LLP for the chapter 11 cases. The company's financial advisers are Lazard and Morgan Stanley, and its restructuring adviser is Alix Partners LLP. Judge Martin Glenn has been assigned the case.

Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com

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France’s CGG Group Files for Bankruptcy Protection – Wall Street Journal (subscription)

Posted: at 7:50 am


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France's CGG Group Files for Bankruptcy Protection
Wall Street Journal (subscription)
Oil-services company CGG Group filed for bankruptcy protection Wednesday in the U.S. and France after reaching a restructuring deal with lenders and bondholders that will eliminate about $2 billion in debt from the company's books. Under the deal ...
French oil services firm CGG files for bankruptcyReuters

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Bankruptcy cases show we’ve become a nation of selective justice – New York Daily News

Posted: at 7:50 am

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Bankruptcy cases show we've become a nation of selective justice - New York Daily News

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Soupman of ‘Seinfeld’ Soup Nazi fame files for bankruptcy protection – USA TODAY

Posted: at 7:50 am

File photo taken in 2010 shows people standing in line for the reopening of the Original SoupMan gourmet takeout shop that inspired the Soup Nazi character on "Seinfeld."(Photo: BEBETO MATTHEWS, AP)

Soupman, the New York City food company made famousby the popularSeinfeld TV sitcom, has sought bankruptcy court protection, weeks after its chief financial officer was indicted on federal tax evasion charges.

Based on Staten Island, the company licenses the name and recipes of Al Yeganeh, the model for the gruff "Soup Nazi" character in the popular 1989-1998 series that starred comedian Jerry Seinfeld.The characterfocused fanatically on his culinary creationsand refused to serve some would-be customers, barking what became a much-repeatedcatchphrase:"No soup for you!"

A Chapter 11 bankruptcy petition filed Tuesday in Delawarestated that Soupmanhad estimated assets between just over $1 million and $10 million, and estimated debts ranging from just over $10 million to $50 million.

The company said in a news release that it has secured a new $2 million debtor-in-possession credit facility from an independent private investment firm to fund working capital needs "and allow businessoperations to continue as usual."

However, the business was jolted in late May when federal prosecutors in Brooklyn announced an indictment that accusedSoupman CFO Robert Bertrand of failure to payMedicare, Social Security, and federal income taxes.

Hisjob included collecting, accounting for and paying the taxes for Soupman's employees. However, the indictment alleged that between 2010 and 2014Bertrand instead paid Soupmanemployees with unreported cash, and compensated certain workers with unreported stock awards.

As a result, the federal government lost $593,971 in total tax paymentsthat should have been paid by the company, prosecutors charged.

Bertrand, who has pleaded not guilty, was released on $50,000 bond, pending a scheduled July 18 legal hearing, court records show.

"The combinationof legacy liabilities and recent company developments have made it necessary to seek bankruptcy protection," Soupman CEO Jamie Karson said in a statement announcing the court filing. "This will ensure that our delicious soups remain on grocery shelves throughout the country, which is in the best interests of all our stakeholders and customers."

Julia Louis-Dreyfus in a scene from Seinfeld's "Soup Nazi" episode.(Photo: Castle Rock Entertainment)

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc

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Soupman of 'Seinfeld' Soup Nazi fame files for bankruptcy protection - USA TODAY

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Homer City power plant, out of bankruptcy, still needs an overhaul – Pittsburgh Post-Gazette

Posted: at 7:50 am

Its a nice hot week, and all three generating units at the Homer City coal-fired power plant are running around the clock.

Thats as far into the future as William Wexler can see.

Mr. Wexler, who is charged with restructuring the Indiana County plant to make it more attractive to a potential buyer, said the underlying conditions that forced the facility into bankruptcy in January havent changed. So the plant must.

The situation here at the moment, while its not dire, it certainly needs to improve fairly quickly, Mr. Wexler said.

When asked to clarify a timeline, he said, sooner than later.

In April, Homer City emerged from its second bankruptcy in five years. Formerly owned by a joint-venture headed by GE Capital, the plant is now largely the property of bondholders who swapped some $606 million in debt for equity in the new company, Homer City Holdings LLC. Mr. Wexler is its board chairman.

The current owners of Homer City are hedge funds and private equity firms, Mr. Wexler said, who arent interested in owning a coal plant for a long period of time.

Ive spoken to all the employees, and I explained who we are and what were here to do, he said. That is: to get this plant to be a far more profitable member of the community and to sell it.

Mr. Wexler was recruited for this effort fresh off another coal power plant restructuring in New York, where he oversaw two facilities that were sold last year.

There isnt much he can do about revenue, he said.

Thats a function of the market, which hasnt been kind to Homer City. Competition from cheap natural gas, falling demand and warmer winters has turned this once round-the-clock workhouse into a more sporadic resource.

But we can do a lot to engage on the expense side, he said. Fuel, employees and maintenance all of those are currently being attacked.

The 1,884-megawatt plant employs 240 workers. Its biggest expense is the coal it burns, so getting that more cheaply is a top priority.

The facilitys previous efforts to wiggle out of more expensive coal contracts landed it in court with its largest supplier, Cecil-based Consol Energy Inc. The two parties reached a resolution that maintains Consol as a coal provider for about 30 percent of the plants needs.

The facility is also in the process of selecting a company to operate the plant. It is currently run by NRG Energy, which is among the bidders being considered, Mr. Wexler said.

As for a speedy sale, he said its not imminent.

While some would-be suitors have expressed interest, Mr. Wexler said that people interested in energy assets right now are looking for bargain basement prices. Homer City commands more, Mr. Wexler believes.

GE Capital tried to find a buyer for Homer City last year and received bids ranging in value between $230 million and $535 million, but debt holders rejected them.

The companys advisers determined that the value maximizing path was to pursue a Chapter 11 restructuring, bankruptcy documents state.

Anya Litvak: alitvak@post-gazette.com or 412-263-1445.

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Homer City power plant, out of bankruptcy, still needs an overhaul - Pittsburgh Post-Gazette

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NRG Energy’s GenOn unit files for bankruptcy | Reuters – Reuters

Posted: at 7:50 am

By Tom Hals | WILMINGTON, Del.

WILMINGTON, Del. NRG Energy Inc's (NRG.N) GenOn business filed for bankruptcy on Wednesday with an agreement with bondholders to cut $1.75 billion of its debt and restructure the power generator as a standalone business, according to a securities filing.

The filing, which follows a debt restructuring agreement reached in May, comes as wholesale power companies struggle with weak electricity prices.

NRG, the largest independent U.S. power producer, appointed two directors in February and agreed to cut costs and sell assets in a deal with activist investors Elliott Management and Bluescape Energy Partners. The funds acquired a 9.4 percent stake in NRG early in 2017.

Shares of NRG were down 2.9 percent at $16.44 in late morning trade on the New York Stock Exchange.

The bankruptcy will transfer ownership of GenOn, which operates 32 power plants in eight states, to its senior noteholders. GenOn's plants, mostly in the Mid-Atlantic, have a total production capacity of approximately 15,394 megawatts. The company generates nearly two-thirds of its electricity from natural gas.

Holders of notes issued by affiliate GenOn Americas Generation will receive in cash 92 percent of the principal of the $695 million outstanding, plus accrued interest.

As part of the debt-cutting agreement, GenOn and NRG agreed to transition shared services to a third party and NRG will also pay a settlement of $261.3 million in cash to GenOn.

NRG will also provide a $330 million letter of credit to GenOn.

NRG acquired GenOn in 2012 for $1.7 billion.

Mauricio Gutierrez, the president and chief executive of NRG, said in an emailed statement that the bankruptcy will help simplify NRG while maintaining a strong balance sheet.

The senior noteholders will also receive the right to participate in an offering of $700 million of new notes to refinance the company when it emerges from Chapter 11.

Cheap natural gas flowing from shale fields has brought down electricity prices in recent years, squeezing margins for wholesale power generation companies.

Exelon Corp (EXC.N) has hired a debt restructuring adviser and said it plans to close its Three Mile Island nuclear power plant ahead of schedule. FirstEnergy Corp (FE.N) has said it plans to exit its merchant business by mid-2018.

Energy Future Holdings Corp, the largest power generation company in Texas, filed for bankruptcy in 2014 and Panda Temple Power LLC filed earlier this year.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Phil Berlowitz)

TORONTO Freeport-McMoRan Inc , the world's biggest publicly traded copper miner, and China Molybdenum Co Ltd (CMOC) have agreed to terminate discussions on CMOC's acquisition of Freeport's cobalt assets, Freeport said on Wednesday.

Saudi Aramco's planned 2018 public share offering is being slowed down by a divide between Saudi Arabia's ruling family and executives of the kingdom's state oil company over where to list its shares, the Wall Street Journal reported on Wednesday.

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Gymboree Files For Bankruptcy, Plans To Close At Least 375 Stores – Forbes

Posted: June 14, 2017 at 4:46 am


Forbes
Gymboree Files For Bankruptcy, Plans To Close At Least 375 Stores
Forbes
Children's clothing retailer Gymboree filed for Chapter 11 bankruptcy protection on Sunday evening as it attempts to escape from a crushing amount of debt. The retailer will seek to eliminate more than $900 million of debt from its balance sheet ...
Gymboree files for bankruptcySFGate
In the wake of Gymboree's bankruptcy filing, here are the retailers that could be nextCNBC
Gymboree files bankruptcy, closing up to 450 storesUSA TODAY

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Gymboree Files For Bankruptcy, Plans To Close At Least 375 Stores - Forbes

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