The U.S.-based units of a Singaporean hotel real estate trust have obtained bankruptcy court approval of their sale procedures, despite concerns from business partners that the process is being controlled by lenders at the expense of other stakeholders, Reuters reported. Chief U.S. Bankruptcy Judge Christopher Sontchi in Delaware signed off on the sale procedures for Eagle Hospitality Real Estate Investment Trust’s U.S. entities during a remote hearing on Tuesday afternoon, saying he had no evidence that lenders are running an insider deal. The U.S. debtors, represented by Paul Hastings, have lined up a lead bid for their assets from an affiliate of Monarch Alternative Capital LP for $470 million.
Chicago community leaders sought to delay the planned sale of Mercy Hospital and Medical Center to biomedical company Insight, using a virtual state hearing to urge a sale to a partnership formed by a Black physicians’ group and a local hospital, Bloomberg News reported. State representative Lamont Robinson asked the Illinois Health Facilities & Services Review Board to allow a sale to the physicians and Humboldt Park Health, formerly known as Norwegian American Hospital. Humboldt’s population has similar needs and its CEO has transformed it, said Robinson, who represents Mercy’s district. “We need a local organization that understands our community,” he said. At issue is the survival and ownership of Mercy, which filed for bankruptcy last month after the state rejected its plans to shutter. Owner Trinity Health Corp. agreed to sell the facility for $1 to Insight. Alderman Sophia King said that there are a number of interested buyers including local hospitals. Community leaders said they’d met with some prospective buyers. Backers of selling to Insight included officials from the company’s Flint, Mich. hometown and some Mercy physicians, though others were opposed.
Goldman Sachs Group Inc. auctioned off around $53 million of claims it held against a bankrupt Texas power cooperative as distressed debt traders bet the government will foot the bill for the state’s energy crisis, Bloomberg News reported. Goldman sold its claim on Brazos Electric Power Cooperative Inc. this week at 80 to 85 cents on the dollar, said the people, who asked not to be identified because details of the auction are private. The bank is one of Brazos’s largest unsecured creditors. It’s owed the money for interest rate swaps and other power derivatives contracts that its commodities trading unit J. Aron & Co. signed with Brazos before a winter storm in February upended the Texas power market, saddling the electricity provider with billions in liabilities it couldn’t repay.
Intending to reside permanently in the U.S. won’t qualify someone for a Florida homestead exemption unless the debtor is entitled to permanent residency.
HighPoint Resources Corp. filed for bankruptcy, setting in train a process that will result in the Denver-based shale oil producer being acquired by Bonanza Creek Energy Inc., Bloomberg News reported. The driller filed a chapter 11 petition in U.S. Bankruptcy Court in Delaware, indicating its estimated liabilities to be up to $1 billion. Yesterday’s filing comes two days after shareholders of HighPoint and Bonanza approved plans for the companies to merge as part of a prepackaged debt restructuring agreement. Bonanza’s stock tumbled 12% last week, paring its gains this year to 81%. HighPoint operates in the Denver-Julesburg Basin of Colorado and Wyoming, a shale play that has seen more than three-quarters of its drilling rigs idled, according to Baker Hughes Co. Deutsche Bank AG was listed as HighPoint’s largest creditor with claims unsecured by collateral of $641 million.
The bankrupt Fairmont San Jose hotel in Silicon Valley reached a restructuring deal with secured lender Colony Credit Real Estate Inc. and said it hopes to rebrand as a Signia Hilton, JW Marriott or Grand Hyatt, WSJ Pro Bankruptcy reported. A two-tower, 20-story and 805-room luxury hotel that has frequently hosted technology conferences, the Fairmont San Jose is the latest lodging property to file for bankruptcy as a result of a downturn in business during the coronavirus pandemic. The owners of the hotel closed the property earlier this month amid a fight with Fairmont, which managed the hotel. The chapter 11 filing in the U.S. Bankruptcy Court in Wilmington, Del., lists roughly $185 million in debt, nearly all of it owed to publicly traded real-estate investment trust Colony Credit. Colony Credit is managed by publicly traded investment firm Colony Capital Inc., which also owns roughly a third of the REIT. Though normally a profitable property, the privately owned hotel said its average occupancy rate during the pandemic has been 8%. Conventions and other events, usually major revenue generators, currently aren’t being scheduled, it said. Losses last year exceeded $18.6 million and are projected to surpass $18.8 million this year, the hotel said. The business said in a court filing that it asked whether Fairmont was willing to provide financing to help get the hotel through the pandemic. Fairmont declined, but at the same time has fought efforts to end its management contract or take its name off the hotel, which opened in 1987 and was expanded in 2002, the filing said.
Offshore oil-rig operator Seadrill Ltd. is making a last-ditch effort to reach agreement on a balance-sheet reshaping to appease creditors that are clamoring for a sale, WSJ Pro Bankruptcy reported. Over the next 60 days, the twice-bankrupt company will try to persuade warring camps of lenders to agree on a reorganization proposal, Seadrill lawyer Ross Kwasteniet said at a hearing Tuesday in the U.S. Bankruptcy Court in Houston. At that session, Seadrill won approval of an order that represents a temporary truce between lenders that want to sell key parts of the company and other creditors that want to hold it together. Talks that began last year failed to produce an agreed restructuring of the complex business, which has a dozen different debt stacks and operations around the globe. Seadrill’s distress attracted interest among investment funds, which bought its debt, Mr. Kwasteniet said. Some of those investors have stakes in Seadrill competitors and could have ulterior motives in pressing for a sale, the company’s lawyer said. Low prices and depressed demand for oil and gas have rig operators under pressure, and Seadrill’s customers, which include major oil companies, nations and independent operators, are reining in production. When Seadrill filed for bankruptcy in February, most of its 34 rigs were idle and it owed $7.2 billion to lenders and lease counterparties, according to court papers.
Trinity Health Corp. has agreed to sell Chicago’s Mercy Hospital and Medical Center to a Flint, Michigan-based biomedical company that will keep the facility running, Bloomberg News reported. Insight, the potential buyer that intends to operate the facility as a full-service acute care hospital, is filing paperwork for the change of ownership with the Illinois Health Facilities and Services Review Board, according to a statement from the company. The agreement is non-binding and final terms will be negotiated in the coming weeks, according to a statement from Mercy. “If the acquisition meets state regulatory approval, Insight plans to operate a community-based hospital that will serve patients from Bronzeville, Chicago’s South Side and the city of Chicago,” Jawad Shah, chief executive officer of Insight, said in the company’s statement. “We are committed to a thoughtful community engagement process to ensure access to care for Chicago’s diverse populations while achieving financial solvency.” The pandemic has exacerbated the financial struggles of many U.S. hospitals, including Mercy. Costs from treating COVID-19 patients have soared, and hospitals had to curtail profitable elective procedures. The proposed sale comes after Mercy Hospital filed for bankruptcy last month and Illinois health officials rejected plans by Mercy’s owner, Trinity, to close the 258-bed medical center and open an outpatient center on Chicago’s South Side. Read more.
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