Landlords are up in arms over grocer Haggen's high-speed retreat from a rapid West Coast expansion that landed the company in bankruptcy, Dow Jones Daily Bankruptcy Review reported today. More than 100 stores will be shut down to pay off lenders that financed the disastrous growth spurt, and landlords say the company is taking inappropriate shortcuts. The decision to close down most of Haggen's stores was announced just weeks into the chapter 11 proceeding, less than a year after a deal that transformed the long-time Pacific Northwest grocery chain into a regional player.
Stock in Republic Airways Holdings Inc. soared 82 percent after the company reached a tentative agreement with its pilots union that eases concerns of a possible bankruptcy filing, Bloomberg News reported today. Terms of the three-year contract weren’t immediately disclosed in yesterday’s statement from the airline and the International Brotherhood of Teamsters. The accord now goes to a ratification vote by Republic’s 2,100 pilots. Republic said in August that it might be forced into court-supervised restructuring because the lack of a contract was contributing to a pilot shortage.
Great Atlantic & Pacific Tea Co. is selling 12 of its stores to Wakefern Food Corp. for $40 million, subject to higher bids at an auction, the Wall Street Journal reported on Saturday. In a Thursday filing with U.S. Bankruptcy Court in White Plains, N.Y., A&P asked for the auction in accordance with “discrete” sales procedures already authorized by a judge for the stores that weren’t part of the initial group to be sold when it entered bankruptcy. If no objection is filed, no hearing will be held. If competing bids emerge, A&P will hold an Oct. 8 auction for the stores. If another bidder wins, that party must pay Wakefern a $1.2 million breakup fee.
Some San Antonio-area energy companies are joining the ranks of firms falling into bankruptcy after more than a year of sinking oil prices, the Houston Chronicle reported on Friday. In the past month, four private companies operating in the oil and gas industry have filed for reorganization or liquidation in the San Antonio division of the U.S. Bankruptcy Court for the Western District of Texas. Nationwide, dozens of oil patch companies have filed for bankruptcy, gone out of business or kept operating with heavy debt since oil prices began falling last year. Most are smaller, privately held companies like the four in San Antonio, but chapter 11 filings also include a handful of publicly traded Houston companies that are continuing to operate during reorganization. "You're seeing the smaller oil field supply companies and services companies' contracts melting away," said San Antonio bankruptcy lawyer Glen Ayers. "There's no new business." Three of the four companies filing in the San Antonio division sought chapter 7 liquidation. They are: JM Oilfield Services, a Gonzales, Texas-based company that operated a fleet of vacuum trucks for saltwater disposal; Hunt, Texas-based BMC Oilfield Supply; and San Antonio, Texas-based operator New Voyage Enterprises. Read more.
Hercules Offshore Inc. may become the first big energy-sector business to exit bankruptcy since the crude slump triggered insolvencies among oil and gas drillers and the companies that serve them, Bloomberg reported yesterday. Hercules, the owner of the largest fleet of shallow-water drilling rigs in the Gulf of Mexico, won court approval of its reorganization plan Thursday, less than two months after it filed chapter 11 to implement a deal with creditors. The Houston-based company should complete all of the necessary paperwork to officially exit bankruptcy by the end of October. The case is In re Hercules Offshore Inc., 15-11685, U.S. Bankruptcy Court, District of Delaware (Wilmington).
The trustee for the bankrupt Montreal, Maine and Atlantic Railway said that he expects a final agreement on Oct. 5 over a settlement to pay victims of the July 2013 oil train derailment that killed 48 people in Lac-Megantic, Quebec, Bangor Daily News reported yesterday. Former ABI President Bob Keach, the trustee for the railroad, and attorneys for Canadian Pacific Railway reached a deal during a hearing that would tweak language in the chapter 11 plan. In return, Canadian Pacific would remove its objections and its rights to appeal the bankruptcy plan. “This is about getting people paid,” Keach said, adding that removing the possibility of an appeal would make certain that settlement fund would not be tied up further in court battles.
The bankruptcy of Walter Energy Inc. may “crash and burn” because of the lack of cooperation among the company, its lenders and its lower-ranking creditors, a judge said and Bloomberg Business reported yesterday. Bankruptcy Judge Tamara O. Mitchell said that she doesn’t see how a 30-day window to foster discussions among the company and the creditors will help, “given the complete lack of success in negotiations.” Lawyers for Birmingham, Ala.-based Walter Energy are seeking approval of a new deal with lenders to use cash representing collateral for its debt over the next 30 days. Lenders said that they would no longer let the company use the cash on the court’s previously approved terms and scrapped a pact to support a restructuring plan. The coal miner filed for bankruptcy in July after reaching an agreement with the lenders to support a reorganization plan that would hand them control in exchange for about $1.9 billion in debt. The case is In re Walter Energy Inc., 15-02741, U.S. Bankruptcy Court, Northern District of Alabama (Birmingham).
An advocacy group within Illinois’s horse-racing industry is fighting to save live racing at the financially struggling Maywood Park track for the rest of the year, the Wall Street Journal reported today. The Illinois Harness Horseman’s Association is fighting a court battle against racetrack officials, who are proposing to cancel harness horse races after Oct. 3, arguing that the closure would unfairly force “an immediate eviction” of more than 100 horses and about 50 people who live in dorms at the track in Chicago’s Melrose Park suburb. In court papers, Maywood Park officials told a bankruptcy judge that closing early would save $165,000 in track maintenance costs, manure removal, security and other operating costs. Displaced horsemen and their families, they added, could move to a nearby sister race track, Balmoral Racing Club, which has stables for more than 1,000 horses.
Forest Park Medical Center in Texas filed for chapter 11 protection on Tuesday, the Dallas Morning News reported today. According to court documents, the hospital was based on an out-of-network model that relied on higher reimbursement rates for its operations. But that model has not generated enough revenue to sustain operations, documents say. So the center shifted and began contracting with insurance providers for in-network procedures, but those reduced rates haven’t been enough to increase the medical center’s overall revenues, documents state. Without more patients, the hospital owes more than $14 million to creditors and cannot generate enough revenue to operate and service its debt, according to the documents. Read more.
New York Military Academy, a 126-year-old preparatory school that counts billionaire Donald Trump among its graduates, faces the prospect of shutting its doors for good unless it can complete a deal to avoid a bankruptcy auction later this month, Reuters reported yesterday. Even though the heavily indebted school failed to open for the fall term, some of its faculty members are holding out hope for the school, located in Cornwall, N.Y., near the U.S. Military Academy at West Point. In recent years, it has fallen victim to the declining popularity of military-oriented secondary education in the United States. The school owes between $10 million and $12 million to creditors, its lawyer Lewis Wrobel told Reuters.
