%1

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.

North Philadelphia Health System (NPHS), which stopped paying numerous vendors in 2015 and then closed St. Joseph's Hospital last March after state officials halted a long-running subsidy, filed for bankruptcy protection late last week in Philadelphia, Philly.com reported. NPHS said that it will continue to provide drug and alcohol services and psychiatric care at Girard Medical Center, at Eighth Street and Girard Avenue. The tax-exempt organization said it owed $24.8 million to its 30 largest unsecured creditors. Independence Blue Cross topped the list, with $10.87 million owed for employee benefits.

Bonanza Creek Energy Inc. has filed petitions in U.S. Bankruptcy Court to pursue a pre-packaged reorganization, the Denver Business Journal reported today. Denver-based Bonanza Creek announced plans two weeks ago to file for chapter 11 protection. The company said yesterday that its pre-packaged plan is intended to de-leverage its transactions by equitizing about $867 million of its existing unsecured bond obligations. The company will also "substantially bolster its liquidity position through a $200 million rights offering for new equity, to be backstopped by certain unsecured noteholders," according to the filing. Also under the plan, the company's existing shareholders will receive 4.5 percent of the equity of a reorganized Bonanza Creek and three-year warrants to acquire up to 7.5 percent of equity. Read more. 

The featured keynote at ABI's 2017 Annual Spring Meeting will be Spencer Abraham, former U.S. Senator and former U.S. Secretary of Energy. Click here to register! 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

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.) 

Make sure to read the cover article of the January ABI Journal, “Possible Makeover for Make-Wholes After EFH Decision.”

A subsidiary of cocoa-trading house Transmar Group, which supplies Hershey Co., Nestlé SA and other big chocolate makers, has filed for bankruptcy protection, blaming its financial problems partly on the U.K. vote to exit from the European Union, the Wall Street Journal reported today. Transmar Commodity Group Ltd., the company’s U.S. arm, filed for chapter 11 on Saturday to restructure debts of more than $413 million, court papers say. The company’s financial woes flow primarily from wrong-way bets on the price of cocoa made by the Transmar Group’s troubled European operation, Euromar Commodities GmbH, according to Deloitte’s Robert Frezza in a declaration filed with the bankruptcy court. Mr. Frezza was retained by Transmar Commodity Group to serve as the company’s chief restructuring officer.

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.) 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

The featured keynote at ABI's 2017 Annual Spring Meeting will be Spencer Abraham, former U.S. Senator and former U.S. Secretary of Energy. Click here to register! 

Due to a continued decline in personal bankruptcies, total bankruptcy filings for calendar year 2016 will likely approach 794,000, representing a 6 percent decrease from the 844,495 total filings in 2015, according to an analysis from ABI's Ed Flynn. Based on data from the Administrative Office of the U.S. Courts (AOUSC) for the first 9 months and PACER data for the final 3 months of the year, Flynn estimated the following filing totals:

- Chapter 7s: 488,000 (down nearly 9 percent from 2015)

- Chapter 13s: 297,000 (down 1-2 percent from 2015)

- Chapter 12s: 460 (increase of 13 percent from 2015)

- Chapter 11s: 7,300 (nearly the same as in 2014 and 2015)

Gathering data from New Generation Research, Flynn found that there were more than 35 chapter 11 cases with over $1 billion in assets filed in 2016 — the most since 2009. Nearly one-half of these very large cases were oil and gas or energy-related, according to Flynn. Leading filing locations for large chapter 11 cases in 2016 were:

- District of Delaware: 17

- Southern District of Texas: 8

- Southern District of New York : 7

- Eastern District of Missouri: 4

Flynn, who previously worked for more than 30 years for the Executive Office for U.S. Trustees and the AOUSC, is the "Bankruptcy by the Numbers" columnist in ABI Journal. Click here to read his current column, "A Closer Look at State Filing Trends," appearing in the January edition of the Journal. 

Full charts and analysis of the 2016 bankruptcy filings will be available later this week on the Statistics page of the ABI Newsroom.