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Eastern Outfitters LLC, the parent of discount chain Bob's Stores and outdoor retailer Eastern Mountain Sports, filed for bankruptcy protection on Sunday, the latest U.S. retailer to do so amid increased competitive pressure facing the sector, Reuters reported today. British sportswear retailer Sports Direct International Plc. has engaged in extensive talks with Eastern Outfitters to become a stalking-horse bidder in a bankruptcy auction, the chapter 11 filing showed. Eastern Outfitters listed assets and liabilities in the range of $100 million to $500 million, according to court documents filed in the U.S. Bankruptcy Court for the District of Delaware. Eastern Outfitters is owned by private equity firm Versa Capital Management LLC, which acquired Bob's and Eastern Mountain Sports through the bankruptcy last year of Vestis Retail Group LLC, the previous owner of the store chains. Versa said at the time that Eastern Outfitters had more than $400 million in annual revenue.

Coal-mining companies shut out of the capital markets last year may soon see a reversal of fortunes, the Wall Street Journal reported on Saturday. Peabody Energy Corp., which is making its way through chapter 11, and Blackhawk Mining LLC, a smaller, privately held coal miner, tapped the high-yield loan and bond markets this week aiming to raise more than $2 billion in total debt. Two other mining companies that have recently gone through restructurings are looking to seize the opportunity to refinance. Encouraging the companies’ hopes of fresh financing is improved pricing for coal after several years of falling demand, as well as President Donald Trump’s campaign pledges to stand behind coal miners and roll back environmental regulations. The U.S.-based coal companies’ ability to tap the debt markets is a major turnaround from last year, when investors shunned coal issuers. The dramatic rally in coal prices, particularly metallurgical coal used for steel making, has fueled demand for coal companies’ debt. Prices for export-oriented coal used in smelting tripled in the second half of 2016 to $300 a metric ton. Although prices have since fallen to $200 a ton, they remain double what they were a year ago.

Total U.S. bankruptcy filings increased 5 percent in January 2017 from the same period last year, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 55,212 in January 2017, up from the January 2016 total of 52,560. With the total filings in both December 2016 and January 2017 increasing 5 percent over the previous year, total bankruptcies registered back-to-back monthly gains for the first time since 2010. Consumer filings also increased 5 percent in January 2017 to 52,421 from the January 2016 consumer filing total of 49,733. Total commercial filings decreased slightly in January 2017 to 2,791, representing a 1 percent decrease from the 2,827 business filings recorded in January 2016. The 398 total commercial chapter 11 filings in January 2017 represented a decrease of 19 percent from January 2016’s total of 494.

Wet Seal LLC filed for bankruptcy protection yesterday following reports last week that the struggling teen apparel retailer had closed all its stores after it was unable to find a buyer, Reuters reported. The Irving, Calif.-based company listed assets of $10 million-$50 million and liabilities of $50 million-$100 million in a filing with the U.S. bankruptcy court in Delaware. Thursday's bankruptcy filing is Wet Seal's second, following a Chapter 11 filing in 2015. The difficult market for teen apparel has triggered bankruptcy filings by high-profile retailers such as American Apparel LLC and Aeropostale Inc. in recent years as they struggle to cope with competition, declining mall traffic as well as changing spending habits of young people.

Although energy companies grabbed the biggest bankruptcy headlines in 2016, the number of bankruptcy filings by U.S. retailers nearly doubled, and 2017 looks bleak for the industry, according to The Deal yesterday. The number of bankruptcy filings by U.S. retailers with at least $250 million in liabilities nearly doubled in 2016 (7 from 4). Of the seven big retail filings in 2016, three chains suffered through large-scale closures (golf retailer Golfsmith International Holdings Inc., mall-based clothing retailer Aeropostale Inc. and casual dining chain Roadhouse Holdings Inc.). A fourth, clothing retailer Pacific Sunwear of California Inc., closed hundreds of stores in the months before its bankruptcy, but only shuttered 10 while in chapter 11. A fifth, Sports Authority Holdings Inc., liquidated everything and a sixth, American Apparel LLC, will likely suffer the same fate after it failed to find a buyer for its retail business at auction.

This week, President Trump, in signing another in a seemingly endless parade of executive orders, vowed to “do a big number” on Dodd-Frank, the 2010 law enacted in response to the financial crisis. Prof. Stephen Lubben, in a commentary on the New York Times DealBook blog yesterday, thinks that the effort to dismantle Dodd-Frank will start in earnest with the Orderly Liquidation Authority. Lubben wonders who is going to stand up for an obscure piece of insolvency law that is easily painted as a bailout tool by critics. Moreover, because the Orderly Liquidation Authority includes a line of credit for the Federal Deposit Insurance Corp. when it conducts liquidations under the law, any changes to this provision of Dodd-Frank, known as Title II, can happen through the budget reconciliation process, which is entirely immune from filibusters. And once Title II is gone, other pieces of Dodd-Frank may follow, according to Lubben.

Oil and natural gas explorer Vanguard Natural Resources LLC filed for bankruptcy protection, adding to a long list of energy firms that have succumbed to weak oil prices, Reuters reported yesterday. The company said that it signed an agreement with certain bondholders that includes a $19.25 million equity investment, with some debtors backing a $255.75 million rights offering. Vanguard also said it had obtained a $50 million debtor-in-possession financing facility, underwritten by Citibank NA, JPMorgan Securities LLC and Wells Fargo Bank NA. The financing, which is subject to court approval, combined with Vanguard's cash from operations, is expected to give the company sufficient liquidity during the chapter 11 process. Read more. 

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