Bankrupt renewable energy company SunEdison Inc. has reached a deal with a spinoff company that helps clear the way for a $150 million sale of its solar materials business to a Chinese buyer, Reuters reported yesterday. Chinese solar equipment maker GCL-Poly Energy Holdings Ltd agreed to buy the business in August, part of SunEdison's drive to shed assets to raise money to repay its creditors. The sale ran into trouble due to an objection from SunEdison Semiconductor, which was spun off by SunEdison in 2014. The spin-off company argued in an October court filing that it had not consented to transfer of intellectual property licenses as part of the deal. SunEdison has resolved that objection to help close the sale and will extend a services agreement with its affiliate through September at reduced rates.
The clock is ticking on a lucrative piece of work for lawyers at Jones Day, Kirkland & Ellis and Proskauer Rose as the $18 billion bankruptcy of Caesars Entertainment Corp.’s operating arm approaches a possible end, American Lawyer reported today. Combined with Winston & Strawn, whose work for a court-appointed examiner in the case is finished, those four firms have already billed $150 million for their time through September, the latest available report in the U.S. bankruptcy court docket in Chicago. All told, Las Vegas-based Caesars has spent more than $354 million on restructuring professionals and law firms from January 2015 through November 2016. By law, the debtor also pays the legal bills for most of its creditors. Kirkland & Ellis, which represents Caesars Entertainment Operating Co., has billed more than $70 million in the case. Winston & Strawn charged nearly $32 million for its work. Proskauer, which represented a group of unsecured creditors, has billed around $25 million. And Jones Day, going to bat for a group of second-lien junior bondholders, has a tab of roughly $24 million, according to court filings.
A bankruptcy judge yesterday authorized creditors to begin voting on Energy Future Holdings Corp.’s chapter 11 exit plan after the Texas power giant flip-flopped on a deal with senior lenders, the Wall Street Journal reported today. In a flurry of action in the final days of 2016, Energy Future walked away from a peace pact with its top-ranking lenders and cut a new deal with junior bondholders York Capital Management Global Advisors LLC, GSO Capital Partners LP, Avenue Capital Management and Angelo Gordon & Co. The new deal is supposed to ensure Energy Future gets out of bankruptcy quickly. However, it raised hackles in the ranks of senior lenders, major investment funds that had expected to collect nearly $800 million in premiums in addition to payment in full on their loans under a litigation settlement. Instead, they will get what they are owed on the loans but have to continue a court fight if they want to collect the premiums. Bankruptcy Judge Christopher Sontchi yesterday found that Energy Future had given voting creditors enough information to make up their minds on whether to support the latest version of its often-revised chapter 11 plan. Read more. (Subscription required.)
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A branch of one of the nation’s largest unions says a Houston janitorial firm that has long been embroiled in a legal battle with local organizers is trying to force the union out of Texas, the Wall Street Journal reported today. In court papers filed on Friday with the U.S. Bankruptcy Court in Corpus Christi, the Texas branch of the Service Employees International Union asked a judge to reject a bid by the company, Professional Janitorial Service of Houston Inc., to have the Texas arm of the union liquidated or tossed out of bankruptcy altogether. Dismissal of the union’s chapter 11 case, filed last month, would lift legal protections that are preventing PJS from collecting a $7.8 million defamation verdict it won against SEIU Texas last year.
Samson Resources Corp. has given junior creditors until Friday to stand down from a bankruptcy court confrontation over the oil-and-gas company’s future, warning that the $168.5 million junior creditors are being offered will decline if the creditors press ahead with a rival chapter 11 exit plan, the Wall Street Journal reported today. Talks that took place in the waning days of 2016 brought the Oklahoma company and the official committee representing Samson’s unsecured creditors close to a deal that would allow the company to exit bankruptcy peacefully, ending a contentious chapter 11 proceeding. Instead of an all-out liquidation of the company, Samson’s creditors committee agreed to take the cash and allow Samson to reorganize. However, Samson and the committee are still at odds over provisions that could trigger a forced sale of remaining assets, Samson’s lawyers said in court papers. Read more. (Subscription required.)
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A group of former students at ITT Technical Institutes yesterday filed a lawsuit against the parent company to ensure participation in bankruptcy proceedings, the Washington Post reported today. The group is asserting claims against the company of consumer protection violations and breach of contract, and asks for class-wide status to cover anyone who attended ITT Tech in the past 10 years. The group is also seeking an injunction to stop the collection of private loans administered by ITT, which ran an in-house lending program that is at the center of two federal lawsuits. Eileen Connor, counsel for the students, estimates the students’ claims at $7.3 billion, roughly the amount of student loan revenue ITT Tech took in over the past 10 years. Connor, who is also an attorney at the Project on Predatory Student Lending at Harvard Law School, said that it was critical to file the lawsuit now because the claim deadline is at the end of the month. https://www.washingtonpost.com/news/grade-point/wp/2017/01/03/former-students-fight-for-a-stake-in-itt-educational-services-bankruptcy/?utm_term=.4f3d8559d127
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Peabody Energy Corp. said yesterday that it extended a deadline for creditors to join financing deals aimed at bringing the largest U.S. coal miner out of bankruptcy amid growing creditor support for its plan of reorganization, Reuters reported. Last week, Peabody unveiled its plan to eliminate more than $5 billion of debt and raise capital from creditors with a $750 million private placement and a $750 million rights offering. The financing agreements were funded by key creditors that signed on to a plan support agreement with Peabody, although a portion of those deals were reserved for other noteholders if they agreed to back Peabody's plan by Wednesday. Peabody said in a statement the deadline was extended to today for Peabody noteholders to join the financing deals, which offer an opportunity to receive financial incentives. Peabody said a judge on Wednesday extended the deadline to Jan. 6 for a group of large investors holding about $444 million of the company's securities who had filed a lawsuit to halt the financing process.
