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Nine West, the footwear chain owned by Sycamore Partners LLC, is stumbling toward a financial reckoning as shifting fashions and weak earnings leave the company mired in debt, Bloomberg News reported yesterday. With Nine West’s debt ratios hitting levels that rating firms consider unsustainable, lenders and advisers are looking to capitalize on the fallout. Restructuring firms have approached the company and its creditors with proposals to reduce the debt burden. “The company’s leading position in the U.S. footwear and accessories market is eroding, given the marketing missteps and the quality and fit issues with some of its key brands,” Suyun Qu, an analyst at S&P Global Ratings, said in a report last week. The high debt ratio and money-losing operations are “likely to drive Nine West toward a debt restructuring or exchange over the next year,” she said. Nine West’s situation is compounded by about $1.7 billion of debt lingering after a $2.2 billion buyout two years ago by Sycamore, a private equity firm tied to several distressed retailers.

A group of SandRidge Energy Inc. shareholders is accusing the oil and gas producer of grossly understating its value, threatening to derail a prepackaged bankruptcy agreement with its lenders, Reuters reported yesterday. The shareholders' court filing on Wednesday comes before a hearing next week, when the company will ask a judge to approve the Oklahoma City company's reorganization plan. Shareholders are hoping to prove SandRidge may be the rare bankruptcy where a company's assets are valuable enough to repay creditors and have money left over for stockholders, according to their bankruptcy court filing. SandRidge filed the pre-packaged bankruptcy pact in May to restructure roughly $4 billion of debt, joining a long list of oil-and-gas producers hit by a deep crash in U.S. energy prices. The company's financial adviser, Houlihan Lokey, estimated the reorganized company's enterprise value, generally a measure of market capitalization plus debt minus cash, at $1.0 billion to $1.3 billion. The shareholders said that an analysis by energy consultant SSR put the value at almost three times that amount.

PetroQuest Energy Inc. fell almost 9 percent in late trading after skipping an interest payment and saying it could face bankruptcy, joining energy companies whose flow of cash has been cut to a trickle by the industry’s prolonged slump, Bloomberg News reported yesterday. The oil and gas producer may consider new financing arrangements, “joint ventures, asset sales, exchange offers and a filing under chapter 11 of the U.S. Bankruptcy Code,” PetroQuest said in a regulatory filing. The company invoked a 30-day grace period on a payment that was due yesterday on its 10 percent senior notes maturing in 2017, according to the filing. At least 90 North American oil and gas producers have filed for bankruptcy since the start of 2015, according to data from Haynes and Boone LLP. S&P Global Ratings counts 65 defaults by energy companies this year, according to a report last month. PetroQuest, which operates mainly in the Texas, Gulf Coast Basin and Oklahoma regions, said that it “believes that it has current liquidity sufficient to make the approximately $6.8 million semi-annual interest payment,” but declined to do so pending the outcome of debt exchange offers under way. Read more. 

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A bankruptcy trustee has scraped up the money to keep the sole U.S. source of rare earths safely in mothballs as its former owner, Molycorp Inc., exits chapter 11, Dow Jones Newswires reported yesterday. Molycorp failed to sell the Mountain Pass mine in San Bernardino County, Calif., as part of its bankruptcy case. Molycorp is morphing into a new company today, exiting bankruptcy and leaving Mountain Pass mine behind. Trustee Paul E. Harner asked a judge to shut down the bankruptcy owing to lack of funding. Harner revealed on Tuesday that Lexon Insurance Co. has offered to lend the estate $4.2 million to maintain the mine and continue the search for a buyer. Long idle, Mountain Pass still costs money to keep in a safe condition and California environmental authorities are watching. "At the minimum, we want to make sure they keep the lights on, the gates locked and the pump running," said Patty Kouyoumdjian, executive officer at the Lahontan Regional Water Quality Control Board, part of California's network of water safety overseers.

Aeropostale Inc., the bankrupt teen clothing chain, says a group including mall operators General Growth Properties Inc. and Simon Property Group Inc. has bid for “substantially all” its assets with an eye toward keeping at least 229 stores open, Bloomberg News reported yesterday. The going-concern bid would also cover expenses including Aeropostale’s bankruptcy financing, the company said in a filing on Tuesday. The amount of the bid wasn’t disclosed. Lawyers for Aeropostale updated the bankruptcy judge on the auction yesterday, saying that they were working on documentation for the group’s offer, while also evaluating other bids. The auction should conclude today, attorney Ray Schrock told U.S. Bankruptcy Judge Sean Lane.

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