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A natural gas-fired power plant in California that earlier this year warned it might need to shut down filed for chapter 11 protection yesterday, blaming "inhospitable" regulations and a shift toward renewable energy for power generation, Reuters reported. La Paloma Generating Co LLC, a 1,200 megawatt combined cycle plant about 110 miles northwest of Los Angeles, filed for chapter 11 in Delaware yesterday citing $524 million of debt. In its filing, La Paloma said market factors including slower-than-expected growth in electricity demand and a rise in renewable generation resources in California were "exacerbated by an inhospitable regulatory environment." La Paloma is owned by Rockland Capital LLC, one of several California plant owners that has asked the state for help in offsetting losses, arguing that it is in the state's interest to support the natural gas plants because they provide stability and reliability to the power grid.

Key Energy Services Inc., an oil-well servicer, yesterday won court approval of its restructuring plan, slightly more than a month after filing for bankruptcy protection, the Wall Street Journal reported today. Bankruptcy Judge Brendan Shannon approved the plan, which is designed to reduce Key’s debt load to $250 million from $1 billion. Key said that it hopes to emerge from bankruptcy this month. Key plans to sell up to $110 million in new stock in a rights offering, the proceeds of which will help it pay down such debts as $290 million owed to term lenders. In addition to a cash payment, these lenders will also get cash new debt. Under the plan, bondholders are slated to receive most of the company’s new shares in exchange for forgiveness of $675 million in debt. Certain bondholders, like Silver Point Capital LP and Soros Fund Management LLC, will pick up additional shares in the rights offering. Read more. (Subscription required.) 

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The Supreme Court will hear arguments today in Czyzewski v. Jevic Holding Corporation, a case that could upend the common practice that ranks lenders, employees and other creditors in order of priority as they try to recover their money when a company files for bankruptcy, the New York Times reported. The case has attracted wide attention from academics, workers’ groups and state tax authorities. Jevic Transportation Company, a New Jersey trucking company, filed for bankruptcy in 2008, two years after a $77.4 million leveraged buyout by the private equity firm Sun Capital Partners, which former employees say heaped too much debt on its books. The bankruptcy put 1,785 drivers and staff members out of work, but they sued for wages under a federal law and state law that requires employers to give 60 days’ notice before mass layoffs. The drivers figured the company owed them approximately $8 million in pay because they were not warned that their jobs were ending. At the same time, the drivers and other creditors filed suit against Sun Capital and Jevic’s main lender, the CIT Group, saying that their buyout had fraudulently pushed Jevic into bankruptcy. Sun and CIT settled with the other unsecured creditors in their fraud case. In exchange for a $3.7 million payment to them, including the lawyers on the case, the creditors agreed to abandon their claim. The drivers were not part of that settlement and were left with nothing. If the Supreme Court sides with Jevic and its owner and chief lender, the decision could upend bankruptcy law by altering the rights and expectations of these various groups. Read more.

ABI’s Bill Rochelle will be covering the oral argument in Jevic today and will provide a video recap on ABI’s social media networks (Twitter, Facebook and Linked In) and a summary in the Rochelle Daily Wire. For more on the Jevic, please click here. 

A leading U.S. subsidiary of Abengoa SA heads to court today to seek approval for a bankruptcy exit plan that opponents argue violates the law by prioritizing the Spanish parent and its international backers ahead of U.S. creditors, Reuters reported yesterday. Abeinsa Holding Inc. is one of dozens of global Abengoa subsidiaries that filed for U.S. chapter 11 and 15 bankruptcy this year while their Seville-based renewable energy parent thrashed out a debt restructuring deal in Spain to avoid its own bankruptcy. The U.S. subsidiaries, which range from small ethanol plants to construction and engineering firms like Abeinsa, were guarantors of $10 billion of debt held by the parent, creating one of the most complex cross-border restructurings of the past decade. A Spanish court approved Abengoa's restructuring agreement last month, giving a group of lenders including Spain's Santander equity in exchange for debt. Now the company needs a U.S. court to approve the plan and repayment terms for creditors of the U.S. subsidiaries. To win U.S. creditor support, Abengoa has proposed investing over $30 million cash in exchange for retaining full control of the U.S. units, allowing the Spanish company to maintain its position in one of its most important markets. Read more.

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Caesars Entertainment Corp. and Caesars Entertainment Operating Company, Inc. (CEOC) and its chapter 11 debtor subsidiaries announced yesterday that substantially all voting creditor classes have voted to accept CEOC's proposed plan of reorganization, according to a press release. The plan was accepted by more than 90 percent of voting creditors. Each of the creditor classes for the debtors' first lien noteholders, first lien bank lenders, second lien noteholders, subsidiary-guaranteed noteholders, and unsecured noteholders voted to accept the plan in numbers well in excess of what is necessary to confirm the plan. The overwhelming support for the plan is an important milestone toward CEOC confirming its plan and emerging from bankruptcy protection in 2017.

Paper packaging supplier Werthan Packaging Inc. filed for bankruptcy protection with a plan to sell itself to a rival company, the Wall Street Journal reported today. Cash-strapped Werthan, based in White House, Tenn., filed for chapter 11 and plans to sell itself to competitor Gateway Packaging Co. LLC for $7.2 million, according to papers filed in U.S. Bankruptcy Court in Nashville, Tenn. The company is asking a bankruptcy judge to sign off on a speedy sale. Court papers say that the sale procedures must be approved within 10 days of the bankruptcy filing, and the sale itself needs to be approved within a month.

The Supreme Court is scheduled to hear oral argument in Czyzewski v. Jevic Holding Corp. (15-649) tomorrow at 10 a.m. ET. ABI’s Bill Rochelle will be covering the oral argument in Jevic tomorrow and will provide a video recap on ABI’s social media networks (Twitter, Facebook and Linked In) and a summary in the Rochelle Daily Wire. For more on the Jevic case, please click here.

Total U.S. commercial bankruptcy filings increased 26 percent in November 2016 over November of last year, according to data provided by Epiq Systems, Inc. Commercial filings totaled 2,908 in November 2016, up from the November 2015 total of 2,311. November is the thirteenth consecutive month with a year-over-year increase in commercial filings. However, total commercial chapter 11 filings decreased in November 2016, as the 385 filings were 2 percent less than the 392 commercial chapter 11 filings registered in November 2015. The total bankruptcy filings of 59,300 in November 2016 represented a 10 percent decrease from the November 2015 total of 65,562. Consumer filings also decreased as the 56,392 filings in November 2016 were down 11 percent from the November 2015 consumer filing total of 63,251.