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Dry bulk shipper DryShips Inc. raised "substantial doubt" about its ability to stay in business after it defaulted on three bank facilities, hit by a prolonged downturn in commodity prices and low charter rates, Reuters reported yesterday. The company's shares fell as much as 26 percent to $1.75 in extended trading on Monday. DryShips, which had total liabilities of $280 million as of March 31, said that it was in breach of financial covenants and has elected to suspend principal repayments and interest payments for the remaining bank facilities. Shippers that transport commodities such as coal, iron ore and grain have been hurt by tepid demand, especially in China, and a surplus of vessels for hire. The company had reported a near 98 percent fall in revenue for the quarter ended March 31 as time charter equivalent, the average daily revenue performance of a vessel on a per voyage basis fell more than 99 percent.

Chemical company Vertellus Specialties Inc. says that “macroeconomic challenges,” including increased competition from China, are behind its decision to declare bankruptcy and put itself up for sale, the Indianapolis Business Journal reported yesterday. Vertellus, which logged $596 million in revenue in 2015, filed for chapter 11 protection and in its initial filing, the company estimated assets of $100 million to $500 million and liabilities of $500 million to $1 billion. One of the world's largest makers of Deet insect repellent, Vertellus produces specialty chemicals for a variety of uses, including agriculture, nutritional, pharmaceutical, medical and personal care. Its owner is Wind Point Partners, a private-equity firm. The company resulted from the 2006 merger of longtime local chemical maker Reilly Industries Inc. and Rutherford Chemicals. The buyer, Arsenal Capital Partners, sold it to Wind Point in 2007. The bankruptcy does not include the company’s international entities in Belgium, the U.K., India and China, though these entities are included in the sale. The company’s Vertellus Performance Chemicals, based in Elma, Wash., is excluded from both the sale and the bankruptcy and will remain under the ownership of Wind Point Partners.

Sixteen months after entering chapter 11, the Archdiocese of St. Paul and Minneapolis filed a plan for reorganization May 26 as part of the bankruptcy process, Catholic News Service reported today. The plan identifies more than $65 million in assets the archdiocese anticipates will be available to compensate victims of clergy sexual abuse, with the potential for that amount to grow. The plan outlines specific sources for funds available for victim remuneration, including at least $8.7 million from the sale of archdiocesan properties, as well as more than $33 million from insurance settlements. It establishes a trust for victim remuneration funds, with a court-approved allocation protocol. The plan filing came a day after the deadline for decades-old sexual abuse claims to be filed under the Minnesota Child Victims Act. The law lifted for three years the statute of limitations for child sexual abuse civil suits.

Regulators are wrangling with bankrupt coal companies to set aside enough money to clean up Appalachia’s polluted rivers and mountains so that taxpayers are not stuck with the $1 billion bill, The New York Times reported yesterday. The regulators worry that coal companies will use the bankruptcy courts to pay off their debts to banks and hedge funds, while leaving behind some of their environmental cleanup obligations. The industry asserts that its cleanup plans are comprehensive and well funded. But some officials say those plans could prove unrealistic and falter as demand for coal remains weak. The latest battle is over Alpha Natural Resources, once a high-flying coal company that borrowed hundreds of millions when the coal market was booming but imploded in the face of competition from cheaper natural gas and tougher environmental regulations. West Virginia faces perhaps the greatest fallout from the flood of coal bankruptcies that have hit the courts in the last year because many of its mines are scheduled to close and will require extensive cleanup. Regulators and environmental groups in Appalachia have tangled with coal companies for decades over their mining practices, particularly mountaintop removal mining, which involves removing mountain summits to extract coal.

The company that was spun off from DuPont is a “bankruptcy waiting to happen” because of liabilities related to lawsuits and cleanups related to the toxic chemical C8, according to a new report from a firm that tracks financially troubled companies, the Charleston (W.Va.) Gazette-Mail reported on Saturday. Citron Research said in its report released late last week that the spin-off company — Chemours — is “the most morally and financially bankrupt company that we have ever witnessed.” Chemours was formed last July, creating what company officials said was a new firm with thousands of employees around the world and businesses that generated sales of about $6 billion in 2014. Chemours was to operate 37 production facilities in a dozen countries. Activist groups and lawyers for local residents in Wood County have remained greatly skeptical about the spinoff. They are worried that Chemours does not have the resources to cover a variety of liabilities it is inheriting from DuPont, especially those related to the toxic chemical C8, which DuPont made and used for years at its Washington Works facility.

Lawyers who put oil and gas producer Warren Resources Inc. into bankruptcy proceedings laid out plans for the company to get a fresh financial start, The Wall Street Journal reported on Friday. The Houston-based company said that its executives have negotiated a $20 million bankruptcy loan so it can continue pulling natural gas from underground deposits in Pennsylvania and crude oil from the Los Angeles basin for Phillips 66 Co.’s refinery in Carson, Calif. Warren also drills for gas in Wyoming. The company faces $545.2 million in debt, according to documents filed in U.S. Bankruptcy Court in Houston. Warren Resources, however, won’t need to spend that loan money right away because it negotiated to spend $10 million of cash in an otherwise-restricted bank account. The consent to spend that restricted cash came from Blackstone Group’s GSO Capital Partners, which would forgive $248 million it is owed for 82.5 percent ownership in Warren Resources under a restructuring proposal. Warren Resources would also emerge with a fresh $130 million loan from GSO Capital.The bankruptcy proceedings could wrap up by mid-September under the restructuring proposal, which still needs to be approved.

One of North America's largest renewable energy companies, SunEdison, filed for bankruptcy last month, with debts totaling roughly $16.1 billion, Fox Business reported yesterday. The company's demise — it once attracted the interest of major hedge funds, such as David Einhorn's Greenlight Capital, Daniel Loeb's Third Point Management, and Larry Robbins' Glenview Management — represents yet another dramatic failure in the solar industry. The company's fall from grace also casts severe doubts on two of its spin-off companies: Terraform Power and Terraform Global. These sister companies allowed SunEdison to acquire solar and wind assets at a lower cost of capital. Because they shared interests in similar projects, the companies were disproportionately reliant on each other's success. Now that SunEdison has declared bankruptcy, what does the future hold for Terraform Power and Terraform Global?

A coalition of U.S. environmental groups said that Arch Coal's plan to emerge from bankruptcy fails to describe how the coal producer would finance its mine clean-up obligations, Reuters reported on Friday. Coal companies are required to provide bonds on future cleanup costs but during decades of strength in the coal sector many were allowed to self-bond, a federal program that accepted companies' own balance sheets as collateral. That has become a concern since chapter 11 filings by some of the biggest coal companies in the U.S. The self-bond program is now under federal review. In states where regulators do not allow self-bonding, mining companies have to pay for a form of insurance known as a surety or collateral bond. Arch Coal, the second largest U.S. coal miner, has self-bonded for $485.5 million in estimated cleanup costs, but has said that it expects its final clean-up costs to be significantly less than that amount. A hearing to approve Arch's disclosure statement is scheduled for June 9 in St. Louis. The company filed for bankruptcy protection in January with $6 billion of debt.

A federal judge overseeing the Archdiocese of St. Paul and Minneapolis’s bankruptcy said that clergy sexual abuse victims seeking greater access to the archdiocese’s assets may have to clear a number of potentially high legal hurdles, including the First Amendment, The Wall Street Journal reported on Friday. During a hearing at the U.S. Bankruptcy Court in Minneapolis, Judge Robert Kressel questioned whether victims’ recent request to force the archdiocese to pool assets from hundreds of related — but legally distinct — affiliates is inconsistent with the protections of religious freedom enshrined in the Constitution. Lawyers representing hundreds of victims filed court papers last month claiming that the archdiocese has significantly undervalued its assets, which they peg at about $1.7 billion. Victims say those assets, which are under the control of separately incorporated entities and typically are protected from being included in the bankruptcy, are effectively controlled by the archbishop and should be consolidated. If a judge approves their request, it could force the archdiocese to significantly increase victim compensation. The archdiocese is proposing a plan that sets aside at least $65 million from the archdiocese, parishes and insurance companies to help compensate about 450 victims. However, victims say the archdiocese’s contribution to that plan amounts to only a tiny fraction of its total assets.