Category Archives: Bankruptcy

New York Times

Curtains for the Pearl, as the Theater Company Files for Bankruptcy New York Times The Pearl Theater Company, which took the old-fashioned approach of assembling a resident acting company to mount classic plays in increasingly expensive spaces in Manhattan, announced Wednesday that it had filed for bankruptcy and was closing after ...

View post:

Curtains for the Pearl, as the Theater Company Files for Bankruptcy - New York Times

International Shipholding Corp. (ISH) expects to emerge from bankruptcy as a Seacor Holdings Inc. subsidiary by July 3.

ISH said it has received the OKs from the U.S. Maritime Administration required under its reorganization plan.

This has been a long and challenging process, said ISH CEO Erik Johnsen, noting his company would exit Chapter 11 as a stable, well-capitalized business with a bright future.

The combination of ISHs longstanding history of excellent customer service and Seacors financial resources will ensure continued growth and success at ISH, said Eric Fabrikant, chief operating officer of Seacor, which just spun off Houma, La.-based Seacor Marine Holdings Inc., its OSV fleet trading under SMHI.

ISHs restructuring includes the issuance of new equity to Fort Lauderdale, Fla.-based Seacor in exchange for $10.5 million cash and the conversion of $18.1 million in outstanding debtor-in-possession financing claims to equity. In addition, theres $25 million in a new senior debt exit facility, much of which will be used to satisfy creditor claims, and the sale of its pure car/truck carriers to NYK Group Americas Inc.

New Orleans-based ISH, founded in 1947 as Central Gulf Steamship Corp., filed for bankruptcy protection Aug. 1, 2016 after trying to shed assets and negotiate with lenders. The company, which operated 21 U.S. and foreign-flag vessels, listed assets of $305.1 million and total debts of $226.8 million.

View post:

ISH to emerge from bankruptcy as Seacor subsidiary - WorkBoat (blog)

Wall Street Journal (subscription)

Bebe Avoids Bankruptcy Filing With Real-Estate Deals Wall Street Journal (subscription) Bebe Stores Inc. has done what few other retailers have been able to do recentlyclose all of its stores without seeking bankruptcy protection. The mall-based retailer, which announced in April it would be closing all of its roughly 180 locations, was ...

See more here:

Bebe Avoids Bankruptcy Filing With Real-Estate Deals - Wall Street Journal (subscription)

A panel that reviews the national security implications of overseas entities doing business in the United States said it might investigate potential transactions in a bankruptcy that has put the $14 billion expansion of the V.C. Summer Nuclear Station project in doubt.

The federal Committee on Foreign Investment in the United States filed a letter late Monday with the U.S. bankruptcy court in New York stating that it could conduct an investigation into the possible sale of Westinghouse Electric Co. assets to foreign businesses. That investigation ultimately could be forwarded to President Donald Trump for further action, the letter states.

Westinghouse sought protection from creditors in March.

There are concerns that Chinese investors might make a play for the company's assets through the bankruptcy process, according to news reports. Westinghouse is a subsidiary of Japan-based Toshiba Corp., which has not announced any plans to sell its U.S. nuclear business.

Mollie Gore, spokeswoman for V.C. Summer co-owner Santee Cooper, said the state-owned utility would not be surprised by such a review, but it doesn't expect that to affect an ongoing analysis of the nuclear plant's future. A spokeswoman with SCANA Corp., parent of South Carolina Electric & Gas and the majority owner of V.C. Summer, did not respond to a request for comment.

Meanwhile, a report filed with the S.C. Office of Regulatory Staff says it could be months before Westinghouse makes a formal decision on whether to honor its contract with SCANA and Santee Cooper to add a pair of reactors at the Midlands nuclear plant. The two South Carolina utilities are paying to keep construction on track under an interim agreement that expires later this month.

Southern Co. has a similar arrangement at Plant Vogtle in Georgia, where Westinghouse was hired to build two reactors. That agreement expires Friday.

If Westinghouse rejects the V.C. Summer contract as part of its bankruptcy reorganization, SCE&G and Santee Cooper would have to find a replacement contractor or build the reactors themselves. The utilities could try to recover financial damages from Westinghouse in court, but that would be costly and time-consuming.

Santee Cooper's board of directors has called a special meeting to be held in closed session Wednesday to get legal advice related to the nuclear project.

Several V.C. Summer contractors and vendors have filed liens against Westinghouse with the bankruptcy court. The Office of Regulatory Staff said there is no timeline for when creditors will be paid because there is no current deadline for Westinghouse to file a reorganization plan.

Westinghouse recently filed thousands of pages of documents outlining its financial condition. They show an estimated $5 billion in assets and $618 million in known liabilities. Breaking the construction contracts at V.C. Summer and Vogtle could cost Westinghouse billions of dollars, according to a report in the Pittsburgh Post-Gazette. The newspaper said Fluor Corp. and Bechtel Corp., among the nation's largest engineering and construction firms, might be preparing bids to take over the projects.

The federal committee looking into a potential foreign buyer of Westinghouse assets said in its letter that an investigation could delay the bankruptcy case. Its investigations can take up to 75 days, according to the letter.

"If (the committee) determines that the transaction poses national security concerns that cannot be resolved, it will refer the transaction to the president unless the parties choose to abandon the transaction," the letter states. "The president may suspend or prohibit the transaction."

The president's decision would not be subject to judicial review, according to the letter.

The committee is an inter-governmental agency that includes representatives from U.S. Treasury, Homeland Security, the Attorney General's office, the departments of defense, commerce, energy and other agencies.

The nearly decade-long V.C. Summer project has been beset by financial and construction problems. The current cost estimate for the new reactors is 21.6 percent higher than an original $11.4 billion price. According to one projection, the eventual cost could balloon to $19 billion if both reactors are built.

The construction contract between Westinghouse and the South Carolina utilities was made public in late May. It sheds little light on the cost overruns, showing nearly three dozen change orders totaling about $325 million a fraction of the $2.6 billion in overruns since the project was announced in 2008.

Construction also is years behind schedule. The latest estimate puts the first reactor online in April 2020 and completion of the second unit delayed to December 2020. They have to be in service by the end of 2020 to qualify for federal tax credits that could offset about $2.2 billion of construction costs that utility customers have been paying.

Cayce-based SCANA owns 55 percent of the V.C. Summer project. Moncks Corner-based Santee Cooper owns the rest.

Under an agreement with Westinghouse, the utilities are expected to decide by June 26 whether to complete one or both reactors or abandon the project entirely. If the expansion is scrapped, some other type of power plant would have to be built to meet South Carolina's future electricity needs.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

Read more from the original source:

Westinghouse bankruptcy draws federal scrutiny as VC Summer nuclear project's future remains unclear - Charleston Post Courier

Phillips Edison & Company, Ramco-Gershenson Properties filed with the U.S. Bankruptcy Court an objection to rue21s motion for entry of final order authorizing the Debtors to assume the consulting agreement and approving procedures for store closing sales.

The objection asserts, There should be a finite period of time within which Debtors may conduct the GOB Sales. The Motion sets for an approximate end-date. This date should be firm. The GOB Sale should be conducted within the normal operating hours of the mall or shopping center. The GOB Sale should comply with the mall or shopping center regulations or guidelines concerning security, maintenance, trash removal or any other pertinent guidelines.

Separately, multiple parties including Phillips Edison & Company, Ramco-Gershenson Properties; ARC NPHUBOH001, Aronov Realty Management, Brixmor Property Group, Centennial Real Estate Company filed with the U.S. Bankruptcy Court separate objections to rue21s emergency financing motion. Phillips Edison & Company, Ramco-Gershenson Properties asserts, Debtors continuing use and occupancy of the Premises is critical to Debtors ongoing operations including store closing sales. The use and occupancy of the Premises provides an actual, necessary, and ongoing benefit to Debtors, and the Court should require Debtors to pay Landlords Stub Rent. Authorizing use of the Premises for the benefit of the DIP and Pre-Petition Secured Lenders without payment of Stub Rent is not supported by applicable law.Landlords should not be forced to bear the risk of administrative insolvency, while all other parties in interest benefit from the ongoing sales process.

Read more retail bankruptcy news.

Go here to see the original:

rue21 Bankruptcy Objections Filed - Bankrupt Company News (press release) (blog)

The Capitol building is seen in San Juan, Puerto Rico May 4, 2017. ALVIN BAEZ / Reuters

Puerto Rico has been under an economic recession for over 10 years, which has prompted more than 10 percent of its residents to move to the U.S. It's expected the islands recession will continue, given that the Boards fiscal plan expects to shrink the island's economy, at least for the next 2 years. This will most likely result in more Puerto Ricans continuing to migrate to the continental U.S.

There are now over 1 million Puerto Ricans living in the state of Florida alone, and it is almost certain that Florida and other states will see many more residents from the island arriving to their jurisdictions in search of work and a fresh start.

The U.S. Virgin Islands, another U.S. territory with just over 100,000 residents, is under a $2 billion debt. Consequently, they will be watching how Puerto Ricos court process unfolds to determine if it is in their interests to seek Congressional protection. Furthermore, states with high debt or pension obligations might look to Puerto Ricos Title III process to see if they can eventually have a similar remedy made available to them.

May 17 was a historic day for both Puerto Rico and the United States, as the U.S. District Court there held its first hearing on the island's bankruptcy, thus officially starting the first case under the

This law created a process combining elements of traditional Chapter 9 and 11 bankruptcies that will permit U.S. owned territories to adjust their debts. Previously, U.S. law did not give territories the remedy used by state municipalities such as Detroit to restructure their debts.

Puerto Rico, an island obtained by the United States after the 1898 Spanish American War, is the first territory to use this process, expected to have far reaching implications not only for the island and its inhabitants, but also across the U.S. financial markets and pension systems.

This process is regulated in Title III of PROMESA, and it's presided by New York district judge Laura Taylor Swain. She was appointed to the case by Supreme Court Chief Justice John Roberts, who, under PROMESA, is the person authorized to select the Judge.

The Title III process differs from a traditional bankruptcy case in several aspects. PROMESA establishes that a 7-person Oversight Board, whose members were recommended by Congress and officially selected by President Obama in 2016, will act as the islands representative.

However, this does not mean that the Board is required to act in the islands best interests, as PROMESA does not impose any fiduciary duties to it. It mainly requires the Board to develop a plan that helps Puerto Rico achieve fiscal responsibility and eventually regain access to capital markets.

Furthermore, PROMESA gave the Boards members immunity for all actions they carry under the Act, and they can override Puerto Ricos laws and elected officials.

Under Title III, the Board will work with Puerto Ricos creditors to renegotiate the islands debts. Once this is done, they will present a Debt Adjustment Plan to the court for approval. This Plan will be approved if it complies with the requirements set in Section 314 of PROMESA.

One requirement of note is the one in Section 314(b)(6), which establishes that the plan will be approved if it is feasible and in the best interests of creditors, which shall require the court to consider whether available remedies under the non-bankruptcy laws and constitution of the territory would result in a greater recovery for the creditors than is provided by such plan.

This section is likely to give Judge Taylor Swain more power over Puerto Rico than she would have in a traditional Chapter 9 bankruptcy process, under which a similar plan would be approved if it is in the best interests of creditors and is feasible. It is unknown why this additional requirement was added to Title III.

In order to protect the best interests of the creditors, the Court is authorized to allow the Oversight Board to interfere with Puerto Ricos political or governmental powers and alter its properties, revenues or the use of its income producing properties.

This Section gives powers to the Board that are unique in U.S. law, as, they appear to give it the ability to, for example, potentially dispose of Puerto Ricos assets and properties and have a say in the way the island government provides basic services to its 3.5 million residents, even though it was not elected to do so by the Puerto Rican people. Judge Swain seemed to be aware of this power during the hearing, when she remarked that this case must lead to a better future for Puerto Rico.

Judge Swain scheduled hearings through December. In addition, the Judge issued an order yesterday requiring Puerto Rico to file a Creditor Matrix by June 30, 2017, and to file a list of all its creditors by August 30, 2017.

However, this process is expected to last several years and become the largest municipal bankruptcy in U.S. history, easily surpassing Detroits $20 billion dollar default, and perhaps come close to matching Argentinas historic 2001 default of over $150 billion dollars.

Who will pay for this bankruptcy process estimated to cost tens of millions of dollars? It will come out of Puerto Rico's pockets, in a process that will fundamentally transform the future of the island, its obligations towards its residents and its relationship to the United States.

In sum, Puerto Rico finds itself in uncharted legal waters. As this case unfolds, it will be important to see how Judge Swain and the Board protect the islands residents and ensure that Puerto Rico can develop a sustainable economic plan to transform and grow its economy without jeopardizing its residents.

Furthermore, it will be essential that Judge Swain orders a full audit of the debt as part of this process, so there can be a clear understanding of which individuals, elected officials and businesses were responsible for this financial catastrophe so they can be held accountable.

Finally, in order to protect the best interests of both Puerto Ricos and US residents, it's vital that this process and the audit of the debt moves authorities to enact legal reforms that end any unscrupulous, unethical or illegal financial practices that led to this tragic situation.

Follow NBC News Latino on

More:

4 Reasons Why Puerto Rico's 'Bankruptcy' Process Matters to U.S. ... - NBCNews.com

Rooster Energy Seeks Bankruptcy Protection Amid Lender Fight Wall Street Journal (subscription) Rooster Energy LLC, embroiled in a squabble with one of its lenders, has sought bankruptcy protection. The oil-and-gas company said in court papers filed Friday that it is in the midst of liquidity crises caused by plummeting commodities prices and ...

Go here to see the original:

Rooster Energy Seeks Bankruptcy Protection Amid Lender Fight - Wall Street Journal (subscription)

An earlier version of this article had an incorrect grace period for Gymboree to be in default in the second paragraph. It has been corrected.

Childrens clothing retailer Gymboree is expected to file for bankruptcy in the coming weeks or even days, after it elected not to make an interest payment on $171 million of bonds that was due on Thursday.

The troubled company, which has been in talks with investment banks and advisers on ways to repair its balance sheet since January, has a 30-day grace period before it is officially in default. But its expected to announce some kind of prearranged or prepackaged filing in the near term that will allow it to proceed in an orderly fashion, said Reshmi Basu, associate editor of restructuring at Debtwire.

Its a story that has been playing out for some time, she told MarketWatch. Now, well see the lenders take control, they will reset the footprint and work with advisers on which unprofitable locations should be closed down.

Like rivals, Gymboree has been suffering from the many factors currently clobbering the retail sector, from weak mall traffic trends to changing consumer behavior to the onslaught from Amazon.com Inc AMZN, +0.46% The rise of e-commerce is forcing many to invest heavily in their own online and delivery technology, at a time when sales are under pressure.

Gymboree is expected to keep its Janie & Jack line, which is still successful, but to ditch its Crazy 8 brand, which is flailing, said Basu. The company is in talks to retain Great American Group and Tiger Group, two companies that specialize in asset appraisals, liquidations and inventory auctions, she said.

In case you missed it: Stressed retailers like J. Crew and Neiman Marcus are doing something unusual to manage debt

Related: J.C. Penney, Gymboree and J. Crew at risk -- and its not all Amazons fault

They will probably liquidate unprofitable brands and leverage the Janie & Jack line and beef up their e-commerce, she said.

Gymboree is another retailer that is saddled with debt taken on in a leveraged buyout. The company was acquired by Mitt Romneys former firm Bain Capital in 2010 for $1.8 billion. Today, the company has $1.043 billion of debt, split between a $769 million term loan, the $171 million of 9125% senior secured notes due December of 2018, an $80 million ABL revolving credit facility and a $49 million first-lien ABL term loan.

It had $22 million cash and cash equivalents as of Jan. 28, plus $73 million of restricted cash, according to a regulatory filing. Its leverage is more than 12 times, which is hard to sustain, said Basu.

Dont miss: Retail carnage continues as sectors job growth falls for fourth straight month

The companys bonds were last trading at 8.729 cents on the dollar, according to MarketAxess, deep into distressed territory. Its term loan was quoted at 44 cents to 46 cents on the dollar, according to Debtwire.

See also: Neiman Marcus is now borrowing money to make interest payments on its debt

Gymboree is one of the companies on Fitch Ratings list of loans and bonds of concern, which features those issuers with a significant risk of defaulting on their borrowings within the next 12 months.

In March, the company posted a $324.9 million loss for its fiscal second quarter, which included a $368.1 million noncash goodwill and intangible asset impairment charge and an $11.6 million charge related to excess inventories. Same-store sales fell 5% in the period.

But same-store sales for the Janie and Jack brand alone rose 11%, while same-store sales at Crazy 8 fell 6%.

The SPDR S&P Retail exchange-traded fund XRT, -0.02% has fallen 6% in 2017 so far while the S&P 500 SPX, -0.12% has gained 9%.

See also: From a risk-of-bankruptcy standpoint, the retail business is the new oil and gas

Read the original post:

Gymboree is one step closer to bankruptcy - MarketWatch - MarketWatch

|

Posted: Jun 05, 2017 11:15 AM

The Financial Oversight and Management Board for Puerto Rico, a federal board tasked with managing the island commonwealths course out of fiscal emergency, declared failure onMay 3, filing paperwork to begin court proceedings restructuring the government debt.

Territory government agencies, such as the Puerto Rico Electric Power Authority, are likely to follow the government into bankruptcy court,leaving investors to potentially lose as much as 65 percent of their original investments.

In 2015, Puerto Rico Gov. Garca Padilla warned of an impending death spiral if territory lawmakers did not make pro-growth reforms. They did not, and Padillas warning has come to pass.

Puerto Rico is circling the drain, financially speaking, but its not too late for mainland lawmakers to learn from the islands mistakes.

Puerto Rico owes creditors about $70 billionabout $19,729 per residentin debt to creditors and investors, more than five times larger than the 2013 Detroit, Michigan bankruptcy filing.

Over the past 10 years, people have been exiting Puerto Rico in droves, leaving rock-bottom economic prospects behind for more opportunities and lower taxes in the mainland.Between 2004 and 2016, the islands population declined by about 400,000, or about 11 percent.

Its easy to see why: Prospects for prosperity on the island are dismal. In March,115 out of every 1,000 Puerto Rican adults were unemployed, an unemployment rate of 11.5 percent, according to the U.S. Department of Labors Bureau of Labor Statistics. Of the 880,800 Puerto Ricans who had jobs, about one out of every four individuals were employed by the government, and about 1.37 million people receive food stamps from the federal government.

In other words, there are many more takers than makers on the island.

One of the causes of Puerto Ricos meltdown is the excessive cost of doing business in the territory, leading to crippling dependency on government handouts.

The litany of mandatory fringe benefits for employees, treated as bonuses elsewhere in the United States, encourages businesses to relocate to other states, because labor costs exceed the value of employees productivity.

Puerto Rico is a precautionary lesson for states that are pursuing similar policies. States such as Connecticut have taken on a massive amount of public debt. Adding up the cost of postponed payments to pension and health care programs, public bonds, government deficits, and spending liabilities, Constitution State lawmakers have racked up about $36 billion in debt, or about $10,025 per person in the state.

Unsurprisingly, many Connecticut residents are deciding to become ex-residents, moving to regions with friendlier tax policies. Between July 2015 and July 2016, 29,880 more people packed up and left the state than moved in.

As demonstrated by Puerto Rico and Connecticut, higher taxes chase away new business investments and encourage companies and entrepreneurs to leave. They also incentivize other people to move to states with a better tax environment, because of the lack of available jobs and high levels of public debt.

It may be too late for the Island of Enchantment, but it is not too late for states to stop treating taxpayers like ATMs and to start enacting pro-taxpayer, pro-growth reforms that encourage in-migration and economic prosperity.

View original post here:

Puerto Rico Bankruptcy Storm Heading for Mainland America ... - Townhall

Childrens apparel retailer Gymboree is expected to file for bankruptcy in the coming weeks after missing a $171 million interest payment due June 1. As of June 2, Gymboree has a 30-day grace period to make a belated payment, according to an SEC filing.

The retailer has been in talks with investment banks and advisors on ways to repair its balance sheet since January 2017. With the missed payment, valued at a 9.125% rate through 2018, S&P Global Ratings lowered the companys debt rating to "D" for default. Roughly $872 million of the company's roughly $1.1 billion total debt is due within 12 months, with S&P noting that operating trends continue to deteriorate.

The combination of massive debt and weak financial results has made Gymboree a prime candidate for bankruptcy. In February 2017, Moodys Investors Service named Gymboree asone of 19 retailers with a very high credit risk. Recently bankrupt Rue21 made the list, as well as troubled brands such as Sears Holdings, Bon-Ton Stores, J.Crew and Claires Stores.

If it is unable to make the payment, Gymboree would join a long list of other retailers that have filed for bankruptcy in 2017, includingPayless ShoeSource, Rue21,BCBG Max Azria, hhgregg,The Limited,RadioShack,Wet Seal,Eastern Outfitters,Gordmans,Gander MountainandMC Sports.

Gymboree operates approximately 1,300 stores under three brands: Gymboree, Janie & Jack and Crazy 8. The retailer has posted losses for the last several years amid increased competition from online retailers and discount/off-price brands. In Q2, the company posted a 5% decline in same-store sales. Net sales declined 6.4% to $356.8 million, while the brand took a$368.1 million goodwill and intangible asset impairment charge and an $11.6 million charge related to excess inventories.

In May, Gymboree appointed a new CEO, Daniel Griesemer, who had run teen apparel retailer Tillys for approximately five years until 2015. Griesemer will have the difficult position of restructuring the retailer out of its debt, which may or may not include a decision to file for bankruptcy protection.

Read more:

Gymboree Misses $171 Million Interest PaymentBankruptcy Next? - Retail TouchPoints