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U.S. teen retailer Aeropostale Inc. plans to challenge in court private equity firm Sycamore Partners' claims as a creditor in its bankruptcy, Reuters reported yesterday. The fight between Aeropostale and Sycamore stands out from other bankruptcy cases of U.S. teen retailers, because very few of them triggered litigation. It could also complicate any effort by Sycamore to take over the retailer. The lawsuit, expected to be filed today, would follow an investigation by Aeropostale over the past several weeks into whether Sycamore drove the company into bankruptcy, in part by making the terms of its debt investment in the company in 2014 deliberately onerous. Sycamore affiliates loaned Aeropostale $150 million in 2014, and, as part of the deal, required that the chain make merchandise purchases from one of Sycamore's companies, MGF Sourcing. Aeropostale has said that MGF imposed new, burdensome terms on the retailer that precipitated its bankruptcy.

A judge has allowed Peabody Energy to pay nearly $30 million in property taxes in four states while the coal company goes through bankruptcy reorganization, the Casper (Wyo.) Star Tribune reported today. The decision yesterday in federal court in St. Louis should end uncertainty for a Colorado school district that began when Peabody missed a property tax payment in June. The state of Colorado has fronted the South Routt School District some $1 million in state funding because of the crisis. In Campbell County, Wyo., Peabody has three open-pit mines and owes about $1.8 million in property and land taxes for 2015. About 54 percent of that goes to the Campbell County School District.

C&J Energy Services Ltd. filed for chapter 11 protection yesterday with an agreement with its lenders to swap $1.4 billion in debt for ownership of the reorganized company, Reuters reported. Hamilton, Bermuda-based C&J drills wells and provides related services, and the filing comes four months after founder and Chief Executive Officer Josh Comstock died unexpectedly at age 46. C&J joins more than 100 energy producers and service companies that have filed for bankruptcy in the past two years after a debt-funded boom turned to bust when oil prices collapsed. The company filed for bankruptcy in Houston to implement an agreement reached with lenders who hold 83 percent of its credit facility debt, according to a company statement. Under a previously disclosed plan, lenders will receive all the stock in a reorganized C&J, subject to dilution for management incentive awards. Read more. 

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Murray Energy Corp., one of the largest privately held U.S. coal miners, is working with investment banks to renegotiate terms of its credit agreements in a bid to stave off bankruptcy, Reuters reported yesterday. Murray Energy, based in St. Clairsville, Ohio, is working with Goldman Sachs Group Inc and Deutsche Bank AG on negotiating relief from creditors. Murray Energy, which has about $3 billion of debt, is urging lenders to loosen a rule in their credit agreements concerning the amount of debt the company owes as a function of its profits. Covenants under some of the agreements became more restrictive in the third quarter this year, Standard & Poor's Ratings Services said in an April research note.

Verso Corp., the papermaker that employs more than 560 at its mill in Jay, Maine, has emerged from bankruptcy, the Portland Press Herald reported on Saturday. The Tennessee-based company filed for Chapter 11 protection in January to clear $2.4 billion in debt. On Friday, it filed documents with the Securities and Exchange Commission to implement its reorganization plan and issue 34.4 million shares of new stock. While complex, the bankruptcy plan’s centerpiece is to issue shares of stock to creditors in lieu of cash repayment. The new common stock will be issued to creditors that were owed money by Verso and its NewPage subsidiary before the bankruptcy. As part of Friday’s filing, the company said that it has taken the necessary steps to have its shares once again listed on the New York Stock Exchange under the ticker VRS. Trading will begin today. Verso’s stock was delisted in September because its share price fell below the required $1 minimum.

Yellow-pages company Dex Media Inc. won court approval for a plan to restructure a debt load totaling $2.4 billion and wrap up yet another bankruptcy case, Dow Jones Newswires reported yesterday. Bankruptcy Judge Kevin Gross on Friday confirmed Dex's chapter 11 plan, which aims to slash more than $1.8 billion in debt off Dex's books. Dex lawyer Brad Giordano said on Friday that the chapter 11 plan not only slashes the company's debts but also includes $600 million in new financing to fund the company's operations going forward. Under Dex's chapter 11 plan, senior lenders will swap approximately $2.1 billion in debt for all of the equity in the restructured company, cash and $600 million in bankruptcy-exit financing. Unsecured bondholders owed about $270 million will receive $5 million in cash under the plan, as well as warrants to buy up to 10 percent of the company's new equity. Court papers show their estimated recovery to be four to six cents of every dollar they are owed.