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Paper manufacturer Verso Corp. filed for chapter 11 bankruptcy protection on Tuesday, its business battered by the turn to online channels that drove down demand for its products, the Wall Street Journal reported today. Verso President and Chief Executive David J. Paterson said that the company has worked “to develop a restructuring plan to eliminate $2.4 billion of our outstanding debt” and exit bankruptcy proceedings “in a short time frame.” Memphis, Tenn.-based Verso has been trying to work out a restructuring of its overloaded balance sheet. The maker of coated paper used in magazines and catalogs is carrying more than $2.8 billion in debt and paying interest of more than $270 million annually.

Samson Resources Corp.'s interim chief executive and chief operating officer will resign next month, continuing a wave of leadership departures at the bankrupt oil and gas producer, Dow Jones Newswires reported yesterday. Richard Fraley, who took on the job of interim CEO in addition to his COO duties following last month's resignation of CEO Randy Limbacher, will depart on Feb. 15, according to a Monday filing in Samson's chapter 11 case. Three vice presidents have also announced their resignation, court papers say, and the attrition rate of Samson's general workforce "has significantly accelerated since the end of 2015." Read more. 

Listen to a podcast featuring Deborah D. Williamson, a co-author of ABI's When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, discussing current distress in the oil and gas industry, and providing an outlook for 2016. 

To purchase a copy of When Gushers Go Dry from the ABI Bookstore, please click here. 

Be sure to attend ABI’s Annual Spring Meeting in Washington, D.C., from April 14-17, as a panel of experts will further addressing bankruptcies in the oil industry. Register here. 

Defaults in the U.S. are going to rise in 2016 and volatility in the credit markets could increase the likelihood of a recession, according to New York University Prof. Edward Altman, developer of the “Z-Score” method for predicting bankruptcies, Bloomberg News reported yesterday. “There is no question in my mind this year default rates will go beyond the average rates, maybe a lot more,” said Altman. The default rate on high-yield bonds was 2.8 percent in 2015, compared with a weighted average of 3.7 percent, according to Altman. “The high-yield markets have grown so big, you don’t need to have a large default rate to have tons of debt in trouble,” said Altman. At a 2.8 percent rate, as much as $45 billion of U.S. debt defaulted last year. This year, he expects chapter 11 filings to rise led by companies in energy, coal and metals and mining.

A Tulsa-based firm that has been actively investing in Texas oil and gas fields has agreed to pay $245 million to buy the U.S. assets of Quicksilver Resources, a Fort Worth energy company that became one of the more prominent companies in the Barnett Shale before falling into bankruptcy last year, the Dallas Morning News reported today. BlueStone Natural Resources II emerged as the buyer from a bankruptcy auction last week. BlueStone’s purchase is being backed by Natural Gas Partners, a private-equity firm in Irving that was founded by the late Fort Worth financier Richard Rainwater. Quicksilver announced the sale to its employees on Friday and filed documents in bankruptcy court early Saturday. Quicksilver is selling its assets to help pay off more than $2.35 billion in debt. When Quicksilver filed for bankruptcy in March 2015, it stated that its assets in the United States were valued at $1.21 billion. But volatility in the oil and gas markets in recent months have led energy companies to write down values. The proposed sale will go before a bankruptcy judge in Delaware for approval during a hearing set for tomorrow. Read more. 

Listen to a podcast featuring Deborah D. Williamson, a co-author of ABI's When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, discussing current distress in the oil and gas industry, and providing an outlook for 2016. 

To purchase a copy of When Gushers Go Dry from the ABI Bookstore, please click here. 

Be sure to attend ABI’s Annual Spring Meeting in Washington, D.C., from April 14-17, as a panel of experts will further addressing bankruptcies in the oil industry. Register here. 

Yellow Cab Cooperative Inc., San Francisco’s largest taxi company, filed for bankruptcy protection Friday, the latest in string of traditional taxi companies to turn to chapter 11 amid the rapid rise of ride-hailing rivals like Uber Technologies Inc. and Lyft Inc., the Wall Street Journal reported today. Pamela Martinez, the co-op’s president, said in court papers that her company faced a host of challenges, including a high number of accidents-related claims and liabilities, a steep decline in ridership and competition from newer app-based ride-sharing services, namely Uber and Lyft, which have also increasingly poached Yellow Cab drivers. In June, a jury awarded $8.1 million to a woman who was partially paralyzed in a Yellow Cab accident, court paper show, and the company said it faces some 150 open claims valued as high as $10 million.

SandRidge Energy Inc. is exploring debt restructuring options, according to people familiar with the matter, as the heavily indebted U.S. oil and gas exploration and production company struggles with the fallout from plunging energy prices, Reuters reported today. SandRidge has been in talks with investment banks and law firms about hiring restructuring advisors, and could make an announcement on their appointment as early as this week. Oklahoma City-based SandRidge, which has a debt burden of around $4 billion, has already been reaching out to some of its creditors to inform them that they should work together to prepare for likely negotiations. The vast majority of the company's debt is in the form of bonds owned by a plethora of mutual funds, hedge funds, and other institutional investors. Read more. 

Will oil exploration and production hit bottom in 2016? Be sure to attend ABI’s Annual Spring Meeting in Washington, D.C., from April 14-17, as a panel of experts will be addressing this topic. Register here. 

For further insight into struggling oil and gas companies and bankruptcy, be sure to pick up a copy of ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. 

Plummeting coal prices have pushed almost half the debt issued by U.S. coal companies into default, and for miners and their investors there’s no end in sight, according to a Bloomberg News commentary yesterday. Patriot Coal Corp., Walter Energy Inc. and Alpha Natural Resources Inc. have all filed for bankruptcy in the past year. Now that Arch Coal Inc., the second largest coal miner in the U.S., has joined their ranks, investors are wondering if the biggest, Peabody Energy Corp., could be next. Peabody’s shares have been sliced roughly in half since Arch filed for chapter 11 on Jan. 11, closing at $3.38 on Wednesday. The company’s 6.5 percent unsecured bonds have lost 27 percent, or 3.1 cents on the dollar, over the same period, most recently trading on Jan. 14 at 8.6 cents and yielding 99 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Verso Corp. is preparing to file for bankruptcy protection as a grace period on a missed interest payment nears expiration, the Memphis (Tenn.) Commercial Appeal reported today. The Memphis paper maker, which is backed by Apollo Global Management LLC, missed payments owed to two sets of creditors earlier this month. The five-day grace period for skipping the amount owed to some lenders expires today. Verso is seeking approval from the creditors on a bankruptcy plan that would convert almost all of the company's $2.8 billion of debt into equity, cutting the company's debt load.

American Apparel's chief executive told a bankruptcy judge yesterday the retailer could become embroiled in drawn-out litigation if it accepted a takeover bid being championed by its founder and former CEO Dov Charney, Reuters reported yesterday. Los Angeles-based American Apparel Inc., known for its "Made in the U.S.A.” fashion and sexually charged advertising, joined other teen-focused retailers by filing for bankruptcy in October due to changing shopping habits. The company is seeking court approval of a bankruptcy exit plan backed by a group of hedge funds. Charney has objected and is trying to convince the judge to allow a takeover backed by competing investment funds, Hagan Capital Group and Silver Creek Capital Partners, is a better deal. Last week, the company's board rejected the $300 million takeover bid involving Charney. Bankruptcy Judge Brendan Shannon must decide if the hedge fund-backed plan, which has the support of a committee of the company's creditors, is fair and feasible.

American Apparel's former chief executive officer Dov Charney will take the stand in Bankruptcy Court today in a last-ditch effort to wrest control of the ailing teen retailer from a group of hedge funds, Reuters reported yesterday. Los Angeles-based American Apparel Inc, known for its "Made in the U.S.A." fashion, filed for bankruptcy in October, saddled by debt, excess inventory and millions of dollars in legal claims tied to Charney. American Apparel wants approval for a plan that will bring the company out of bankruptcy under the control of hedge fund investors, including Standard General and Monarch Alternative Capital. Last week the company's board rejected a $300 million takeover bid involving Charney. Bankruptcy Judge Brendan Shannon must decide if the hedge fund-backed plan, which has the backing of a committee of the company's creditors, is fair and feasible.