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Patriot Coal Withdraws Alcoa Deal as Bankruptcy Talks Continue

Submitted by ckanon@abi.org on
A $22 million deal between the Aluminum Company of America and Patriot Coal Corp. has been abandoned as the coal company seeks to finalize its bankruptcy plan, Reuters reported yesterday. Patriot Coal has told a bankruptcy court judge that it is running low on cash and needed court approval for its reorganization plan to avoid a liquidation. As part of that plan, Alcoa Inc. was set to pay Patriot $22 million to dissolve a joint venture called the Squaw Creek Coal Co. A Patriot subsidiary operated the mine and employed those working there, and, in return, Alcoa reimbursed Patriot for some of the workers' benefits. The deal with Alcoa that was withdrawn yesterday is one piece of Patriot's bankruptcy plan, which has also involved auctioning off its assets. 
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Business Reorganization
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Bankruptcy Judge Approves Chemical Spill Company’s Plan

Submitted by ckanon@abi.org on
More than $2 million will be distributed to residents and businesses affected by a 2014 chemical spill in West Virginia under a liquidation plan approved by a bankruptcy judge, The Associated Press reported yesterday. Freedom Industries’ plan also will provide $1.4 million to the West Virginia Department of Environmental Protection and environmental firms for continued cleanup work. Freedom’s parent, Chemstream Holdings, is adding $1.1 million for the cleanup under an agreement with the agency. A $350,000 initial cash payment will be distributed to unsecured claims, plus future payments from potential recovery sources. The plan’s funding sources include about $2.7 million in sale escrow fund proceeds, $300,000 from a settlement with former Freedom President Gary Southern and $3.1 million from a settlement with Freedom’s insurer, AIG.
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Business Reorganization
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Patriot Coal Withdraws Alcoa Deal as Bankruptcy Talks Continue

Submitted by ckanon@abi.org on
A $22 million deal between the Aluminum Company of America and Patriot Coal Corp. has been abandoned as the coal company seeks to finalize its bankruptcy plan, Reuters reported yesterday. Patriot Coal has told a bankruptcy court judge that it is running low on cash and needed court approval for its reorganization plan to avoid a liquidation. As part of that plan, Alcoa Inc. was set to pay Patriot $22 million to dissolve a joint venture called the Squaw Creek Coal Co. A Patriot subsidiary operated the mine and employed those working there, and, in return, Alcoa reimbursed Patriot for some of the workers' benefits. The deal with Alcoa that was withdrawn yesterday is one piece of Patriot's bankruptcy plan, which has also involved auctioning off its assets.
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Business Reorganization
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Patriot Coal Withdraws Alcoa Deal as Bankruptcy Talks Continue

Submitted by ckanon@abi.org on
A $22 million deal between the Aluminum Company of America and Patriot Coal Corp. has been abandoned as the coal company seeks to finalize its bankruptcy plan, Reuters reported yesterday. Patriot Coal has told a bankruptcy court judge that it is running low on cash and needed court approval for its reorganization plan to avoid a liquidation. As part of that plan, Alcoa Inc. was set to pay Patriot $22 million to dissolve a joint venture called the Squaw Creek Coal Co. A Patriot subsidiary operated the mine and employed those working there, and, in return, Alcoa reimbursed Patriot for some of the workers' benefits. The deal with Alcoa that was withdrawn yesterday is one piece of Patriot's bankruptcy plan, which has also involved auctioning off its assets. 
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Business Reorganization
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Bankruptcy Filing Isn't Allowed for Marijuana Businesses — So Now What?

Submitted by ckanon@abi.org on
Frank Arenas operates a marijuana wholesaler — legal under Colorado law — and is fighting the dismissal of his and his wife's chapter 7 filing in the U.S. Bankruptcy Court for the District of Colorado, TheStreet.com reported on Monday. It is a result that even Judge Howard R. Tallman has called "devastating" for the couple in his order throwing it out. Since bankruptcy is a federal process, judges have ruled that the violation of the federal Controlled Substances Act by distributing marijuana makes cannabis-related companies ineligible for bankruptcy. In the Arenases' case, a trio of bankruptcy justices have underscored the point, asserting in an Aug. 21 opinion that "possessing, growing and dispensing marijuana and assisting others to do that are federal offenses…. Can a debtor in the marijuana business obtain relief in the federal bankruptcy court? No." Last month, the appellate panel judges agreed to stay the dismissal of the Arenases' case while the couple appeals the decision to the Tenth Circuit Court of Appeals, making it the first time that this debate will be considered at so high of a judicial level.
 
In related news, in ABI's latest podcast, ABI Executive Director Sam Gerdano talks with Prof. Michael Sousa of the University of Denver Sturm College of Law about the intersection of the pot business and federal law. Sousa examines cases and circumstances surrounding a financially distressed marijuana business in light of pot being an illegal substance under the Controlled Substances Act of 1970. Click here to listen.
 
Also, this year's Winter Leadership Conference (Dec. 3-5, 2015, at the Arizona Biltmore in Phoenix) features a session titled "Selling Unusual Assets in Bankruptcy and Their Tax Aspects (Pot, Porn and Puppies)." Click here for more info and to register.
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Patriot Coal Delays Bankruptcy Plan Hearing for Creditor Talks

Submitted by ckanon@abi.org on
Patriot Coal Corp. continued to negotiate with creditors on Tuesday and postponed a key bankruptcy court hearing until Wednesday to try to reach a deal to end its chapter 11, Reuters reported yesterday. Patriot's lead attorney told Judge Keith L. Phillips that he had reached agreement with all but one key objector to Patriot's chapter 11 plan and was confident an agreement with all the creditors could be reached. The hearing was scheduled to resume at 11:30 a.m ET Wednesday. West Virginia-based Patriot Coal has said that it is running low on cash and needed court approval for its reorganization plan to avoid a liquidation. The plan is centered on selling the bulk of its mines and coal reserves to privately held Blackhawk Mining of Lexington, Ky. Creditors have objected and one group of lenders asked the court to convert the bankruptcy to a chapter 7 liquidation, which could mean shutting down the business and selling it piecemeal.
 
In related news, Patriot Coal Corp. has issued a new Worker Adjustment and Retraining Notification (WARN) Act notice to its employees, Reuters reported yesterday. Patriot Coal expects to lay off more than 2,000 workers in West Virginia and the notice from Patriot Coal extended the period from the original WARN notice issued on Aug. 3, 2015, because of a delay in Patriot's bankruptcy case. The company has also asked the judge to allow it to reject its collective bargaining agreement with the United Mine Workers of America, which has been negotiating with Blackhawk to maintain some benefits. The case is Patriot Coal Corp., U.S. Bankruptcy Court, Eastern District of Virginia, No. 15-32450. Read more.
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Plan Confirmation
Business Reorganization
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Athletic Retailer City Sports Files for Bankruptcy

Submitted by jhartgen@abi.org on

Boston-based athletic gear retailer City Sports Inc. filed for chapter 11 protection yesterday in order to liquidate at least a quarter of its stores, the Wall Street Journal reported today. City Sports said that it has a deal with liquidators Tiger Capital Group to hold going-out-of-business sales at eight of the company’s 26 stores, which are scattered throughout the Northeast from Massachusetts to Washington, D.C. For the remaining 18 stores, City Sports is working to locate a buyer during its bankruptcy case that would either continue operating the stores or liquidate them, the company said in court documents.

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Corporate Governance
Court Administration
Creditors' Committee
Business Reorganization
First-day Motions
Retail
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Bankruptcy Filings Through First Three Quarters of 2015 Fall 11 Percent from 2014; Commercial Filings Fall 17 Percent

Submitted by jhartgen@abi.org on

Alexandria, Va.— U.S. bankruptcy filings totaled 629,570 during the first nine months of 2015 (Jan. 1-September 30), an 11 percent decrease from the 705,728 total filings during the same period a year ago, according to data provided by Epiq Systems, Inc. The 607,182 total noncommercial filings through three quarters of 2015 represented an 11 percent drop from the noncommercial filing total of 678,804 through the first three quarters of 2014. Total commercial filings during the first nine months of the year were 22,388, representing a 17 percent decrease from the 26,924 filings during the same period in 2014. Chapter 11 filings fell slightly during the first nine months of 2015 as the 4,091 filings represented a 1 percent decrease from the 4,142 chapter 11 filings during the first nine months of 2014.

 

“The new normal of persistent low interest rates and high filing costs continue to steer distressed households and businesses away from the financial relief of bankruptcy,” said ABI Executive Director Samuel J. Gerdano. “Filings remain on track for the second-lowest total since changes to the bankruptcy law were implemented 10 years ago.”

 

ABI will be holding two media webinars this week presenting experts exploring trends in both business and consumer bankruptcies since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was implemented on Oct. 17, 2005. Please find the date, time and registration links to both BAPCPA webinars below:

 

1) Tuesday, October 6 at 1 p.m. ET- BAPCPA at 10: Consumer Bankruptcy Media Webinar. Click here to register.

 

2) Thursday, October 8 at 10:30 a.m. ET- BAPCPA at 10: Business Bankruptcy Media Webinar. Click here to register.

 

The 67,116 total bankruptcy filings for the month of September represented an 8.5 percent decrease compared to the 73,352 filings in September 2014. The 64,920 total noncommercial filings for September also represented an 8 percent drop from the September 2014 noncommercial filing total of 70,699. Total commercial filings for September 2015 were 2,196, representing a 17 percent decrease from the 2,653 filings during the same period in 2014. Chapter 11 filings registered an 11 percent drop as the 377 chapter 11 filings in September 2014 fell to 335 in September 2015.

 

The average nationwide per capita bankruptcy filing rate for the first nine calendar months of 2015 (Jan. 1-Sept. 30) decreased slightly to 2.70 (total filings per 1,000 population) from the 2.71 rate for the first eight months of the year. The average daily filing total in September 2015 was 2,237, an 8.5 percent decrease from the 2,445 total daily filings registered in September 2014. States with the highest per capita filing rate (total filings per 1,000 population) through the first nine months of 2015 were:

 

1. Tennessee (5.81)

2. Alabama (5.41)

3. Georgia (5.08)

4. Illinois (4.43)

5. Utah (4.41)

 

ABI has partnered with Epiq Systems, Inc. in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media. Epiq Systems is a leading provider of managed technology for the global legal profession. 

 

 

For further information about the statistics or additional requests, please contact ABI Public Affairs Manager John Hartgen at 703-894-5935 or jhartgen@abiworld.org.

 

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events.

 

Epiq Systems is a leading provider of managed technology for the global legal profession.  Epiq Systems offers innovative technology solutions for electronic discovery, document review, legal notification, claims administration and controlled disbursement of funds.  Epiq System’s clients include leading law firms, corporate legal departments, bankruptcy trustees, government agencies, mortgage processors, financial institutions, and other professional advisors who require innovative technology, responsive service and deep subject-matter expertise. For more information on Epiq Systems, Inc., please visit http://www.epiqsystems.com.

Article Tags
Consumer Bankruptcy
Business Reorganization
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