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A planned 900-foot-high condominium tower, a modernist showpiece designed to rival the tallest new Midtown Manhattan residential skyscrapers, landed in bankruptcy court yesterday amid a slowing luxury market, the Wall Street Journal reported today. Developer Joseph Beninati’s Bauhouse Group put the project into chapter 11 protection on Wednesday to try to halt a foreclosure after he was unable to find lenders to refinance short-term loans the group used to acquire land and air rights for the tower on East 58th Street near Sutton Place. Construction has not started. The developer was seeking to block an effort by an investment firm controlled by real-estate investor N. Richard Kalikow from foreclosing on the development. The project faced opposition by local officials and worries by lenders about the increasing risk in financing high-end residential towers. The bankruptcy of the Sutton Place project, and the slowing demand for condos in super-tall Midtown towers on and around West 57th Street, signals a broader unease among banks and other lenders about financing luxury development. The Midtown area has set new benchmarks for Manhattan real estate, including a $100.5 million sale on West 57th Street, sometimes known as Billionaire’s Row. But during the second half of 2015, this portion of the market began to cool as the number of slender towers on the market rose and economic turbulence in much of the world made wealthy international buyers wary.

Bankrupt energy producer Quicksilver Resources Inc. has sold its U.S. assets to private equity firm BlueStone Natural Resources II, after the buyer struck a new contract for transporting Quicksilver's gas, Reuters reported yesterday. Midstream companies that gather and process natural gas have been watching the case over fears of a precedent-setting court ruling that would allow bankrupt producers to shed unwanted contracts with pipeline operators. Wednesday's agreement removes that threat, and clears the way for Tulsa, Oklahoma-based Bluestone to acquire Quicksilver's assets for $245 million. BlueStone, an affiliate of Natural Gas Partners, had said it would only close the deal if Quicksilver obtained a court order ending its "very above-market" gathering contract with midstream operator Crestwood Equity Partners. Read more. 

Has the final shoe dropped for the E&P industry? A session at ABI's 34th Annual Spring Meeting features experts discussing energy industry distress. Click here to register. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Pre-order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

PacSun has become the latest retailer to file for Chapter 11 seeking to pull off the herculean task of a quick reorganization, but experts say changes to the Bankruptcy Code have made the prospect more challenging than ever as the retailer and others in the industry continue to reel from structural shifts in the economy, Law360 reported today. Although amendments to the code in 2005, chiefly those that bolstered vendor rights and set stricter timelines on dealing with landlords and leases, are not new, they were enacted during a time when business was relatively good for the retail sector. Fast-forward 10 years and the retail industry is on the ropes, scrambling to deal with an unrelenting migration of consumers to online shopping as well as stubborn weakness in the general economy. While Pacific Sunware of California Inc. appears to be making the proper preparations to deal with retail bankruptcy's changed landscape, the Code amendments mean that the details of any retail restructuring have to be decided on such a quick timeline that they can often turn into chaotic scrums, swelling professional fee bills in the process, practitioners say. “Those changes are the things that killed retail reorganization forever and ever,” said Edward T. Gavin IV of corporate restructuring firm Gavin/Solmonese. “With the time frame and other constraints there is simply less time for herding cats and getting everyone organized.” Read more. (Subscription required.) 

ABI’s Chapter 11 Reform Commission final report contains recommendations to modernize the Code to help struggling businesses, such as retailers, reorganize in today’s business environment. Click here to read more on the recommendations. 

IHeartMedia Inc. won more time to try to convince a Texas judge that the company properly shifted shares valued at more than $500 million into a subsidiary beyond some creditors’ reach, Bloomberg News reported yesterday. Andrew Entwistle, a lawyer representing Gamco Investors Inc., an intervenor in the case on the company’s side, said that a temporary restraining order prohibiting debtholders from issuing default notices on the company was extended on Wednesday by agreement among the parties. A trial over the asset shift will be held in San Antonio on May 16. The extension means holders of the company’s priority guarantee notes can’t immediately issue notices of default that might have triggered calls on more than $12 billion of debt and must wait until the judge rules whether the company’s asset transfer was valid.

Valeant Pharmaceuticals International Inc. yesterday secured a commitment from loan holders to amend terms of its debt, buying time as the drugmaker attempts to resuscitate itself, the Wall Street Journal reported today. Valeant convinced holders of more than half of its loans, by principal amount, to push back regulatory filing deadlines and loosen financial conditions on the loans. Valeant agreed to pay a fee of $50,000 per $10 million of loans to lenders for the amendment and to boost interest rates on the debt by 1 percentage point, though the rate could drop back if Valeant achieves certain financial targets.

Pacific Sunwear of California Inc. filed for chapter 11 protection, the latest youth-oriented clothing chain to falter in an increasingly cut-throat retail environment, Bloomberg News reported today. Golden Gate Capital, a private equity firm that loaned $60 million to the retailer in 2011, has worked out a deal that will help PacSun avoid liquidation. The pre-packaged bankruptcy agreement involves swapping debt for equity after the retailer emerges from chapter 11. PacSun also will get financing to continue operating during the restructuring process. Without the deal, PacSun might have faced a total shutdown of the surfwear chain, which has struggled to adapt to shifting consumer tastes.