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A group of Peabody Energy Corp.’s senior lenders hired law firm Davis Polk & Wardwell LLP to help protect the value of their assets as they anticipate the company will begin talks to restructure its $6.3 billion of debt, Bloomberg News reported yesterday. The creditors, who hold the troubled miner’s $1.17 billion first-lien term loan, are concerned that any proposal from the company would potentially dilute the value of the assets securing the debt. The lenders hired the firm after Peabody rival Arch Coal Inc. attempted a debt-exchange deal that would have helped cut its $5.1 billion of obligations while also diluting the assets of its backers. Arch Coal’s lenders objected to the plan because they would have had to share their assets with a new group of creditors. Peabody’s management told investors in a Sept. 10 presentation that the company is focusing on deleveraging “through potential avenues including debt exchanges.” 

The high bid in a bankruptcy auction yesterday for Renault Winery Resort and Golf came from the property’s mortgagee, OceanFirst Bank, which made a credit bid on the still-open resort, the Press of Atlantic City (N.J.) reported today. The Toms River, N.J.-based bank obtained a $7.7 million mortgage foreclosure judgment against Renault last summer. The property was on the verge of going to a sheriff’s sale before the 150-year-old vineyard filed for chapter 11 bankruptcy protection in November. A hearing for a federal judge to approve a sale is scheduled for Thursday in Camden, N.J. Read more. 

For further analysis of issues surrounding credit bidding, be sure to pick up a copy of ABI’s Credit Bidding in Bankruptcy Sales: A Guide for Lenders, Creditors, and Distressed-Debt Investors. 

Quirky, the New York-based developer of crowd-sourced inventions and parent company of the Wink smart home platform, is filing for chapter 11 bankruptcy to restructure its debts, CNET.com reported yesterday. The news comes seven weeks after the departure of Quirky founder and CEO Ben Kaufman, who stepped down from his role at the head of the company at the start of August. Kaufman's exit followed a tumultuous year that included financial difficulties, key product flops, and a botched security update for the Wink Hub, the control device at the center of Wink's smart home platform. Kaufman was replaced with Quirky Chief Financial Officer Ed Kremer. Originally launched in 2009, Quirky made a name for itself by developing product ideas from an open pool of independent and amateur inventors, rewarding the community with profit shares. 

After a string of smaller bankruptcies in the depressed coal sector, the second-largest U.S. coal miner, lawyers and analysts said that Arch Coal Inc., could be next to file for chapter 11 protection if it fails to seal a crucial debt swap this week, Reuters reported. Miners are suffering from stricter regulation and sinking coal prices as energy companies seek cheaper and cleaner generation sources, leading to mine closures and extensive job losses, particularly in Central Appalachia. Arch Coal, with 5,500 employees in nine states, is heavily indebted after buying International Coal Group during a coal price peak in 2011. The $3.4 billion deal transformed Arch into one of the world's largest producers, but also saddled it with costly assets that are hampering its ability to restore its balance sheet.

Booth Energy Group’s Cambrian Coal Corp. paid nothing up front for a Teco Energy Inc. unit that controls a collection of surface and underground mines, Bloomberg News reported yesterday. Teco said that it may receive $60 million should coal prices reach “certain levels” over the next five years. Bargain-basement coal deals are proliferating as producers bail out of an industry stuck in its worst downturn in decades. Miners are facing a slowing global economy, escalating competition from cheap natural gas and mounting environmental and mining regulations. In February, West Virginia businessman Jim Justice paid Russia’s OAO Mechel $5 million and assumed some debt to buy back operations that he had sold to the company in 2009 for $568 million.

The natural gas drilling industry's HII Technologies Inc. filed for bankruptcy protection after closing down its Houston operations, which handled the watery solution used in hydraulic fracturing to extract natural gas trapped in rocks below the earth's surface, Dow Jones Daily Bankruptcy Review reported today. Officials who put HII Technologies into chapter 11 protection on Friday said that they plan to look for buyers for its equipment, which helped extract oil and natural gas in Texas, Oklahoma, Ohio and West Virginia. Potential buyers could also recapitalize the company in a way that "preserve[s] the public status of the company and its tax losses," according to court papers filed in U.S. Bankruptcy Court in Victoria, Texas.

The operator of the A&P supermarket chain won bankruptcy court approval to sell 95 of its stores for $370 million, Bloomberg News reported yesterday. Acme Markets Inc. is buying 71 stores from Great Atlantic & Pacific Tea Co. for $246 million, while Stop & Shop Supermarket Co. is taking on 24 locations for $124 million. Bankruptcy Judge Robert Drain approved the sales at a hearing yesterday. The deals will keep more than 10,750 people employed. Acme and Stop & Shop expect to reach labor agreements with the union representing workers at those stores, Ray Schrock, a lawyer for A&P, said at the hearing. An auction will be held on Oct. 1 and 2 for other company assets. About 128 bids have been received and an additional auction may be necessary, Schrock said.

A judge yesterday cleared the way for Energy Future Holding Corp. to begin seeking creditor approval for a plan to end its massive bankruptcy, but also warned Texas's biggest power company that last-minute changes may endanger its chapter 11 exit, Reuters reported. The company has spent 18 months hammering out deals with its complicated web of creditors to reduce its $42 billion of debt. On Friday, Energy Future made last-minute changes to its plan to appease more creditors. However, the changes included dropping a proposal to pay cash to holders of some $1.9 billion in bonds, and instead reinstate some of the bonds. The plan also transferred the obligation for the bonds from the corporate parent to the company's power generation business. "The debtors are putting all their eggs in the basket that these creditors are unimpaired," Bankruptcy Judge Christopher Sontchi said yesterday. Hearings to confirm Energy Future's bankruptcy exit plan begin on Nov. 3.

Oil and gas driller Samson Resources Corp. filed for bankruptcy yesterday undone by a collapse in energy prices and billions in debt that KKR & Co. and other investors piled on to fund a 2011 takeover, Bloomberg News reported yesterday. Tulsa, Okla.-based Samson and its owners were stung by the price drop that put money into the pockets of consumers through lower gasoline and heating costs, while driving other producers, such as Sabine Oil & Gas Corp. and Quicksilver Resources Inc., into chapter 11. Samson’s filing is among the biggest energy bankruptcies in the U.S. this year, but it probably won’t be the last. The shale-oil driller is, in a way, a victim of its own success. Samson and other producers have rushed to use hydraulic fracturing and horizontal drilling to tap previously hard-to-reach oil and gas deposits in shale formations, triggering a production boom that helped send prices tumbling. Samson has said it will use the chapter 11 process to try to shrink its $4.2 billion debt load. Read more. 

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

The owner of a mothballed refinery on St. Croix in the U.S. Virgin Islands filed for chapter 11 yesterday as part of a plan to sell its assets for $184 million to an affiliate of Boston private-equity firm ArcLight Capital Partners LLC, Dow Jones Newswires reported yesterday. The refinery, known as Hovensa LLC, is a joint venture formed by Hess Corp. and Petróleos de Venezuela, the national oil company of Venezuela. It had warned of the bankruptcy on Monday, the same day half-owner Hess was sued over the shuttering of the refinery. The company said then that the sale and bankruptcy filing would allow the refinery to reopen "under the ownership of a proven and well-capitalized operator."