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The oil price collapse put Swift Energy Co. into bankruptcy in the last hours of 2015, with a deal to sell some assets and an agreement with some bondholders, but no guarantees either will be enough to see the company through tough times, Dow Jones Newswires reported yesterday. The Dec. 31 filing capped months of struggles to address a debt load that tops $1.2 billion in a climate that has lenders retreating from energy companies. It came as the grace period expired on a missed Dec. 1 interest payment with bondholders that had been engaged in talks with Swift, one of dozens of oil industry players trying to survive the oil price crush. Just before the bankruptcy filing, Swift reached a deal to sell some of its Louisiana holdings to Texegy LLC at a "favorable price," but the money won't be enough to get the company through, court papers say. As for the bankruptcy turnaround plan, it has backing from a committee representing holders of about half its bond debt, court papers say. Those papers reveal Swift and the bondholders still have to come to terms on how to pay off $330 million in top-ranking bank debt, court papers say. Read more. 

For background on oil and gas company bankruptcy proceedings, be sure to pick up a copy of ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. 

Morningstar Credit Ratings LLC said that the plunge in oil prices may jeopardize almost $125 million of securitized loans backed by real estate in North Dakota, as drillers in the state scale back operations, Bloomberg News reported yesterday. The rating company said that the debt, which has been put on its watch list in the past 24 months, represents more than a third of almost $340 million of commercial mortgage-backed securities tied to the shale hubs of North Dakota. The loans, created in 2013 and 2014, “have run into trouble as the slump in oil prices weighs on demand for commercial real estate in the oil and gas patch hubs of North Dakota,” Morningstar said in a report issued yesterday. The Williston area of North Dakota commanded some of the highest apartment rents in the country when oil prices were booming, drawing investment in new buildings to accommodate an influx of workers since 2006. The reversal in oil prices has prompted tens of thousands of job cuts, hurting demand for housing and other real estate in energy hubs such as Williston, Houston and Calgary. Read more. 

For further analysis on oil and gas company bankruptcies, be sure to pick up a copy of ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. 

Centennial, Colo.-based convenience store and gas station chain Western Convenience Stores Inc. has filed for chapter 11 protection, the Denver Business Journal reported yesterday. The company operates 43 locations throughout Colorado and Nebraska, and its bankruptcy filing stems in part from a dispute between Western and Kansas City-based Suncor Energy Inc., according to attorney Lee Kutner, of Kutner Brinen Garber, who is representing Western in its bankruptcy proceedings. Western owes Suncor $7 million, according to the bankruptcy documents, making Suncor Western's largest creditor. Other creditors include Offen Petroleum, owed $2.3 million, and High Plains Bank, owed $1.6 million.

Caesars Entertainment Corp. defeated bondholder demands for an early resolution of a lawsuit alleging the casino company failed to honor guarantees of bonds issued by its bankrupt subsidiary, sending the case to trial, Reuters reported yesterday. U.S. District Judge Shira Scheindlin said yesterday that there were material disputes regarding a May 2014 stock sale and its impact on the guarantees on $750 million of unsecured bonds. Those disputes would have to be resolved by a trial, the judge said in a 31-page opinion that denied the bondholders' request for a quick ruling. Bondholders MeehanCombs Global Credit Opportunities Funds and Frederick Barton Danner alleged that Caesars violated the Trust Indenture Act, or TIA, by unilaterally releasing consent guarantees of bonds issued by its bankrupt operating unit. Scheindlin's ruling on Tuesday follows a similar decision in August in a case brought by representatives of other bondholders suing Caesars over similar violations of the TIA, a Great Depression-era law meant to protect bondholders. Caesars has said that if it loses the TIA cases it would likely be forced to join its operating unit in bankruptcy. Caesars said in court papers filed on Monday it would seek an injunction staying the case until 60 days after an independent examiner, Richard Davis, completed his investigation of alleged fraudulent transfers of the casino company's assets. The examiner was ordered by U.S. Bankruptcy Judge Benjamin Goldgar and the examiner's report is expected in early 2016.

A golf channel that briefly aired to DirecTV subscribers before shutting down in February has filed for bankruptcy with a $2 million offer for a small piece of its operations: a smartphone app that mapped out more than 35,000 golf courses around the world, the Wall Street Journal reported today. Officials who put Hartford, Conn.-based Back9Network Inc., into bankruptcy on Dec. 23 said that a handful of investors want to save the app and repay some of the channel’s debts, including a $4.75 million loan from Connecticut’s economic development agency. The channel, which aired briefly on DirecTV satellite network’s channel 262, said that it didn’t have enough money to get off the ground since its 2010 founding despite investors putting than $38 million to the company.

More U.S. companies have defaulted on their debt this year than issuers from any other country or region, S&P analysts led by Diane Vazza wrote in a Dec. 24 report, according to Bloomberg News yesterday. As of last week, 111 companies worldwide had defaulted on their obligations, the highest tally since 2009 when the the figure hit 242 for the same period. About 60 percent of this year’s global defaults have come from U.S. borrowers, Vazza wrote, up from 55 percent a year ago, when 33 of 60 defaulters were American. After the U.S., companies from emerging markets were the second-largest defaulters, accounting for 23 percent of the pool, which is a smaller share than last year, according to S&P data.

Molycorp Inc. laid out the financial facts that it says justifies allowing it to exit chapter 11 bankruptcy in trimmed-down form as opposed to being pushed into a liquidation, the Wall Street Journal reported today. The rare-earths company says it would be valued at $252 million at most in a liquidation scenario, far from enough to cover more than $2 billion in debts. Oaktree Capital Group, a major lender, would collect, at most, about half of what it is owed if Molycorp’s bid to exit bankruptcy whole fails, according to estimates in new bankruptcy-court documents. The estimates are to be included with voting materials to be sent to creditors asked to vote on the distressed company’s fate. Set for court review in January, the voting materials set out Molycorp’s case for confirmation of its chapter 11 plan. Read more. (Subscription required.) 

Explore the latest issues and strategies surrounding valuation in bankruptcy at ABI’s VALCON 2016: Emerging Valuation Issues in Bankruptcy and Beyond on March 14-16. Register here. 

Learn more about valuation strategies with ABI’s A Practical Guide to Bankruptcy Valuation. 

The Federal Reserve Bank of Dallas reported that bankruptcies among oil and gas companies have reached quarterly levels last seen in the Great Recession, according to Bloomberg News on Thursday. At least nine U.S. oil and gas companies that accounted for more than $2 billion in debt have filed for bankruptcy in the fourth quarter, the bank said on Wednesday in its energy economic update for the final three months of the year. "Lower oil prices have taken a significant financial toll on U.S. oil and gas producers, in part because many face higher costs of production than their international counterparts do," according to the note written by Navi Dhaliwal, a research assistant, and Martin Stuermer, a research economist. "If bankruptcies continue at this rate, more may follow in 2016." Since peaking in October 2014, U.S. oil and gas employment has fallen by 70,000 jobs, the analysts wrote in the report. Read more. 

For more information about oil and gas bankruptcies, be sure to pick up a copy of ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy.