A bankruptcy judge yesterday granted Sports Authority until Sept. 28 to file a chapter 11 plan that outlines financial distributions to its creditors, the Denver Post reported today. The bankrupt sporting goods retailer previously had until June 30 — one day after the scheduled auction of its remaining leases. In addition to the auction process, Sports Authority has enlisted Hilco Streambank to market assets such as its intellectual property, trademarks and the Sports Authority Field at Mile High Stadium naming rights. Sports Authority also is in discussions with Modell’s and Sports Direct for the sale of as many as 200 stores.
Bankruptcy Judge Benjamin Goldgar allowed the casino operating unit of Caesars Entertainment Corp. to begin seeking creditor votes for a plan to exit its long and contentious $18 billion bankruptcy, Reuters reported yesterday. A confirmation hearing will begin on January 17, 2017, two years after the company filed for chapter 11 protection. The bankruptcy of Caesars Entertainment Operating Co. (CEOC) has been rocked by creditor accusations that the nonbankrupt Caesars parent looted its operating unit of choice hotel and casino assets before the latter's January 2015 filing for chapter 11 protection. Caesars has denied wrongdoing. It offered to contribute roughly $4 billion to CEOC's bankruptcy plan to settle the allegations after an independent examiner said it could be on the hook for up to $5.1 billion. Following intense negotiations with creditors, CEOC lawyers said yesterday that they have made "significant progress" in obtaining pledges of support for the reorganization plan, which will slash $10 billion of debt and split the unit into a new operating company and a real estate investment trust.
The bankruptcy auction for assets of Pacific Sunwear of California Inc. in Anaheim has been canceled, with San Francisco-based private equity firm Golden Gate Capital now set to acquire all of the retailer’s assets, the Orange County Business Journal reported yesterday. The auction had been scheduled for June 22, but no bids were submitted by June 15 deadline, according to the documents filed with the U.S. Bankruptcy Court in Wilmington, Del. The 593-store chain filed for bankruptcy in April and was looking for “a higher and better offer than that contained in the currently-filed plan of reorganization” with Golden Gate Capital, which will write off $58 million in debt in exchange for a 100 percent stake in the company. The private equity firm is holding an additional $30 million in PacSun’s debt and has offered another $20 million upon its emergence from chapter 11 to “support its long-term growth objectives.” Wells Fargo Bank is providing $100 million in “debtor-in-possession” financing, which comes on top of $41 million PacSun already owes it. The retailer, meanwhile, is looking to reduce its costs on store leases, which currently total about $140 million a year.
Zelenka Farms, a plant grower for big-box retailers including Lowe's Cos., Kmart, Shopko and Home Depot Inc., has filed for bankruptcy protection, blaming an unusually wet spring, Dow Jones Newswires reported yesterday. Lawyers who put Zelenka Farms into chapter 11 protection on Friday told a judge that they are looking for buyers to take over the Irving, Texas-based company's six farms, which employ 1,519 people located in Tennessee, Oregon and other states. During a court hearing on Monday, Zelenka Farms bankruptcy lawyer Holland O'Neil said the company's financial troubles began in 2014 but worsened dramatically after an unexpectedly rainy April and May, leaving it without enough money to pay down part of a loan before a June 3 deadline.
SFX Entertainment Inc.’s bondholder-supported restructuring agreement has fallen apart, a plan that looked to eliminate $300 million in debt and provide the electronic-music concert producer with a quick path out of bankruptcy, the Wall Street Journal reported today. The company announced on Friday that its agreement had terminated and added that the development allows it to pursue “more comprehensive negotiations with all of its constituents with the goal of developing a consensual Plan of Reorganization.” The supporting bondholder group will continue to work with SFX and the committee representing unsecured creditors, SFX said. Originally, SFX said it hoped to complete its chapter 11 case within six months. However, in its announcement Friday, it said there is no timeline for negotiations but that it hopes to work quickly. SFX filed for chapter 11 protection in February with a plan to eliminate $300 million in debt from its balance sheet.
A report from the American Action Forum says that just five years ago the market value of the four biggest coal companies was more than $35 billion, but that has plunged 99 percent and some of the biggest producers have filed for bankruptcy amid the "War on Coal.” However, a Bloomberg commentary on Friday said that there's more to it than regulation and takes closer look at what factors might be behind the demise of the coal companies. Among the reasons for coal’s decline are:
Cheap natural gas: Coal-fired plants have been the workhorses of U.S. electrical generation for the better part of a century. But many utilities are switching from coal to natural gas as an energy source.
Debt: Peabody Coal, the nation's largest coal producer with 19 percent of the market, filed for chapter 11 protection earlier this year. The bankruptcy affects about $8.4 billion in loan and bond debt. Arch Coal, the No. 2 U.S. coal producer with 13.6 percent of the market, also filed for Chapter 11 with $4.5 billion in debt.
Clean Energy: Coal is a dirty energy source. It fouls the air and leaves behind abandoned mines that double as hazardous waste sites that need to be cleaned up, often at taxpayer expense.
Arguing that it is losing key employees wary of their future at the bankrupt coal company, Peabody Energy won approval for a bonus plan for nonexecutives that it says will help retain “mission critical” employees, the St. Louis Post-Dispatch reported yesterday. Bankruptcy Judge Barry Schermer said that Peabody’s plan “targets those that are in a position to help guide this reorganization.” Peabody asked for the authority to pay out as much as $3.24 million in bonuses to keep workers in its several departments from jumping ship as the company moves through bankruptcy. The largest coal company in the country filed for chapter 11 in April due to a high debt load and a sharp drop in coal demand in the face of low natural gas prices and tightening environmental regulations. Objections to the program came from United Mine Workers of America pension and health care funds, which argued the payments could come at the expense of money apportioned for retiree benefits. Peabody already reduced payments to one of the retiree health funds by $70 million in a deal struck prior to its bankruptcy. The employee bonus plan will first offer $2.74 million to 42 employees who remain with the company through bankruptcy, or roughly $65,000 a person. The bonuses are based on existing salary and the highest bonus won’t exceed $134,000. Peabody’s plan also calls for a $500,000 pool for discretionary bonuses it says will be paid to workers who become key employees. Such bonuses would be subject to bankruptcy court approval.
