%1

Sbarro LLC, the chain of Italian eateries that emerged from its second bankruptcy last year, is betting that it can build a comeback by opening stand-alone pizzerias and reducing its reliance on declining mall traffic, which it blames for its chapter 11 filings, the Wall Street Journal reported on Saturday. The goal is to return the 59-year-old brand to its roots as a maker of New York-style pizza, said Sbarro Chief Executive David Karam, positioning it to compete with much larger pizza chains such as Domino’s Pizza Inc. and Yum Brands Inc.’s Pizza Hut. The company plans to open the first four neighborhood pizza shops in the next few weeks in its home town of Columbus, Ohio. It plans possibly an additional hundred stand-alone Sbarros elsewhere in the next year or two, Karam said. The neighborhood shops will offer delivery and take-out in addition to dine-in seating. They will feature new menus that are similar to the ones that already have been rolled out at existing mall locations, which are now free of the lasagna, chicken parmesan and vegetable dishes executives say distracted from Sbarro’s pizza heritage.

Less than one year after Milwaukee entrepreneur Bobby Kraft led a group that bought World Marketing Inc. from Warren Buffett’s Berkshire Hathaway Inc., World Marketing’s operating companies have filed for chapter 11 reorganization and idled about 400 employees, the Milwaukee Business Journal reported yesterday. Three World Marketing limited liability companies on Monday filed separate chapter 11 petitions in U.S. Bankruptcy Court in Chicago. In a related matter, the chapter 11 filings scuttle plans for a Milwaukee investment group that was described in August as “an affiliate of World Marketing Inc.” to buy Bobby Kraft’s First Edge Solutions out of receivership, said First Edge and World Marketing spokesman Josh Morby.

Investors including Ryan Kavanaugh, Relativity Media LLC 's embattled founder and chief executive, have reached a deal to retake his bankrupt Hollywood studio, leaving the troubled company's TV unit in the hands of senior lenders, Dow Jones Daily Bankruptcy Review reported today. Kavanaugh' s investor group, which also includes supermarket mogul Ron Burkle, is getting Relativity's film and music units and its stakes in its sports and education divisions. The company intends to reorganize around its remaining holdings and hopes to emerge from bankruptcy by Oct. 20. Kavanaugh will retain his position as chairman and chief executive.

American Apparel Inc. filed for bankruptcy protection after posting years of losses as the clothing retailer, which fired controversial founder Dov Charney last year, seeks to reorganize debts that have ballooned to levels exceeding its assets, Bloomberg News reported today. As part of a pre-packaged chapter 11 restructuring, more than $200 million of bonds will be exchanged for stock in the reorganized company and the clothing retailer will have access to financing after its restructuring, American Apparel said in a statement. Business will continue throughout the reorganization, which was supported by 95 percent of secured lenders and may last about six months, it said. Though American Apparel has been in disarray since Charney was suspended and then fired as chief executive officer last December for alleged misconduct — claims he says are baseless — American Apparel’s financial woes stretch back longer. The chain has posted losses every year since since 2010.

Miller Energy Resources Inc., a Texas-based oil and gas driller that operates in Alaska, filed for bankruptcy protection on Thursday with a plan to hand control of the company to an affiliate of private-equity firm Apollo Global Management LLC and hedge fund Highbridge Capital Management LLC, the Wall Street Journal reported on Saturday. Miller Energy filed for chapter 11 protection in U.S. Bankruptcy Court in Anchorage and has a deal in place with junior lenders Apollo Investment Corp., part of private-equity giant Apollo, and Highbridge, the investment management arm of JPMorgan Chase & Co. Like a number of other independent oil-company executives who have been forced to put their companies into bankruptcy in recent month, Miller Chief Executive Carl Giesler blamed his company’s financial woes in part on plummeting oil prices. The price of global benchmark Brent crude fell to less than $45 a barrel this summer from more than $100 a barrel a year ago. Miller Energy, a former Tennessee company that shifted its oil and gas drilling to Alaska in recent years, has also been beset by other problems. The Securities and Exchange Commission has accused the company of accounting fraud and in August, a group of companies that said they were owed millions from Miller’s Alaska subsidiary moved to push the unit into bankruptcy. Read more. (Subscription required.) 

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

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. Read more. 

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. The date, time and registration links to both BAPCPA webinars are listed 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 company that designs watches for Kenneth Cole, Tommy Bahama, Ted Baker and others has filed for bankruptcy with plans to sell itself to the highest bidder at a court-supervised auction, Dow Jones Daily Bankruptcy Review reported today. Geneva Watch Group filed for chapter 11 protection at the U.S. Bankruptcy Court in Manhattan Wednesday. The company has already lined up a $15 million lead bid for its assets from an affiliate of China's Time Watch Investments Ltd., according to Jeffrey Gregg, Geneva's chief restructuring officer. In court papers filed on Thursday, Geneva asked Judge Martin Glenn to sign off on an $18.5 million bankruptcy financing package from lenders led by Wells Fargo, which is intended to fund its operations while in chapter 11.

Millennium Health LLC is struggling to wrangle enough support for a debt restructuring plan that would allow it to settle a federal billing probe by a deadline this week, Bloomberg News reported yesterday. Some lenders that bought the biggest U.S. drug-testing lab’s $1.8 billion loan at or near face value are demanding a bigger payout from shareholders, which include private-equity firm TA Associates. They want to extract more while other lenders who purchased the debt at deeply discounted levels are willing to accept less. Millennium is negotiating the terms for a bankruptcy filing at the same time that it’s finalizing a $275 million settlement of a federal investigation into its billing practices. The U.S. Department of Justice has said that it must have a plan to pay the sum by the end of this week. Read more.

For more on health care and medical company bankruptcy issues, pick up a copy of the ABI Health Care Insolvency Manual, Third Edition. 

Lincoln Paper and Tissue has filed for chapter 11 protection and intends to seek a buyer, the Associated Press reported yesterday. President and CEO Keith Van Scotter said on Monday that the company has financing in place to continue operations while it seeks bids for the Maine paper and tissue-making mill. He said that he anticipates an auction within 45 days. The mill furloughed 200 workers on the paper-making side of the plant after a boiler explosion in November 2013. The company still has about 170 workers making tissue paper. Van Scotter said the goal is to find a buyer who'll keep the operations going. The company said in court papers that it owes more than $10 million to more than 200 creditors.