%1

Alpha Natural Resources Inc. is closing in on a deal to sell a half dozen of its Appalachian mines as the U.S. coal producer negotiates a potential bankruptcy filing amid the industry’s worst downturn in decades, Bloomberg News reported yesterday. Revelation Energy LLC, run by Jeff Hoops, is negotiating a purchase of Alpha Natural’s mines in southwest Virginia and eastern Kentucky, said the person, who asked not to be named because the discussions are private. The cash value of the deal would be low, but Revelation would also assume liabilities associated with cleanup costs, the person said. Alpha is exploring ways to remain financially viable amid a prolonged coal-price slump that has already pushed rivals Walter Energy Inc. and Patriot Coal Corp. into bankruptcy proceedings this year. The Bristol, Va.-based company has been in talks with creditors to restructure its $4 billion of debt. With $109 million owed to junior-ranking bondholders on Aug. 1, the miner is discussing with senior lenders a loan that would finance operations through a bankruptcy court proceeding.

Z’Tejas Southwestern Grill has filed for bankruptcy protection, the Austin (Texas) American-Statesman reported on Saturday. Z’Tejas has a total of nine restaurants, including five locations in Arizona and one in Costa Mesa, Calif., according to the company’s website. After reviewing the “historical performance of the company,” as well as “current and long-term liabilities,” “it is desirable and in the best interests of the company, its creditors, employees, stockholder, and other interested parties that” the bankruptcy petition be filed, according to court documents.

A century-old, family-owned scrap metal company in Watertown, Wis., has filed for receivership amid declining global prices for iron ore, the Milwaukee Journal Sentinel reported on Friday. Loeb-Lorman Metals Inc., which employs about 75 people, has sought protection from creditors in a bankruptcy-like proceeding. The action places the firm, which has been owned by members of the Loeb family since its founding in 1914, in the hands of a court-appointed receiver. The receiver, attorney Ronald M. Carlson, will sell the company's assets to raise money to cover as much of its debt as possible. In a statement, Carlson said he hopes to sell the business in one piece as a going concern — typically the best possible outcome in receivership cases.

The lawyer in charge of Spectrum Analytical Inc. is preparing to sell the Massachusetts-based environmental testing lab's operations at a Aug. 25 bankruptcy auction after a judge announced a sale timeline, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Henry Boroff set an Aug. 20 bid deadline for buyers who want to make an offer for Spectrum Analytical's operations, said Steven Weiss who took over the company earlier this year as chapter 11 trustee. Bidders will have to challenge a $5 million offer in hand from Eurofins Scientific Inc.

Retailer American Apparel is short on cash and faces a hefty bond payment in less than three months — not to mention mounting legal bills from its ouster of former CEO Dov Charney over alleged sexual harassment, the New York Post reported today. American Apparel needs to come up with $15.4 million to make an Oct. 15 debt payment. In April, it had to borrow money from hedge fund backer Standard General to make the twice-a-year bond payment. American Apparel is burning through cash and likely has less than $10 million on hand. The retailer said that it had $21 million at the end of April, but that included the $15 million loan from Standard General to cover the April bond payment.

U.S. energy companies are planning more layoffs, asset sales and financial maneuvers to deal with a recent, sudden drop in U.S. crude-oil prices to under $50 a barrel, the lowest level in four months, the Wall Street Journal reported today. The companies had been banking on a rebound in oil prices in the second half of 2015 after falling sharply late last year. Prices began to regain ground in the spring, rising so quickly that some American producers started hiring back drilling rigs to pump more crude. That speedy return to the oil patch and the threat of new Iranian oil production have pushed down prices more than 20 percent over the past six weeks to $48.14 as of Friday. Oil-field services providers that help drill wells have quietly revealed job cuts that were deeper than initially announced, and warned of more layoffs to come. Halliburton Co. and Baker Hughes Inc., two big service companies that plan to merge, disclosed last week that they had cut 27,000 jobs between them, double the 13,500 they announced in February.

Commodities shipper Trans Coastal Supply Co. Inc. filed for chapter 11, citing more than $28 million in unsecured debt, Reuters reported yesterday. Its trade debt included more than $12.1 million to CHS Inc., the largest U.S. farmer-owned cooperative, and $3 million to grain handler and ethanol maker The Andersons Inc., according to the filing. Other creditors included ethanol company Green Plains Inc. and commodities trader Cargill Inc. The Decatur, Ill.-based company, which ships grain and other agricultural products such as the ethanol byproduct distillers dried grains (DDGS) in containers to overseas buyers, is currently facing civil litigation from two of its creditors in U.S. district courts in Illinois and New York. Evergreen Line is suing Trans Coastal for nearly $460,000 for unpaid ocean freight and other shipping-related charges and JD Heiskell Holdings LLC is suing the company for nearly $1.6 million for failure and refusal to make payment on "tens of thousands of tons of DDGS.”  The case is U.S. Bankruptcy Court, Central District of Illinois, Case No: 15-71147. 

A lawyer for the former RadioShack Corp. said that the company has made significant progress toward wrapping up its bankruptcy case, but a handful of potential roadblocks remain, The Wall Street Journal reported yesterday. During a hearing, lawyers for the electronics retailer told Hon. Brendan L. Shannon that the former RadioShack and its creditors have reached an agreement on the general terms of a settlement that would provide funding for its chapter 11 plan and cover mounting administrative expenses such as legal fees. The agreement resolves a bid by Salus Capital Partners LLC to shut down the electronics retailer’s restructuring efforts in favor of a chapter 7 liquidation. Salus, a hedge fund owed $150 million, had previously said that what remains of RadioShack can be dealt with more efficiently in chapter 7, which would oust teams of expensive lawyers and advisers and replace them with a trustee. Some of the finer points of the settlement haven’t yet been worked out, and any formal deal will be subject to final court approval.

Bondholders that have raised billions to buy Energy Future Holdings Corp.’s prized business, Oncor, will get a shot at pulling off their deal, The Wall Street Journal reported yesterday. Loaded with $42 billion in debt, Energy Future has been looking for a way out of bankruptcy since last year. Energy Future believes a buyout offer for Oncor from junior bondholders, in an alliance with Hunt Consolidated Inc., is “the superior path” to the exit. Besides Hunt, backers of the bondholder buyout include Anchorage Capital Group, Arrowgrass Capital Partners, Centerbridge Partners, the Blackstone Group’s GSO subsidiary, Avenue Capital Group and Teacher Retirement System of Texas. A cash-generating Texas transmissions business, Oncor operates free of the financial troubles that pushed Energy Future into chapter 11 protection. Until recently, it was destined for the bankruptcy auction block. Energy Future scrapped plans to sell Oncor at auction after bondholders campaigned to capture the value for creditors, through an in-bankruptcy buyout. 

A U.S. bankruptcy court has approved a plan that gives Molycorp Inc. enough cash to see it through chapter 11 bankruptcy reorganization, The Denver Post reported yesterday. Oaktree Capital Management will provide $130 million in a debtor-in-possession financing deal. The deal cuts financing costs and gives it additional time to develop a plan to emerge from bankruptcy. Molycorp filed for chapter 11 protection on June 25, dragged down by problems at its rare earths mine and mill, as well as a price drop in the minerals needed for making cellphones, magnets and wind turbines. In its filings, the company said that it was wrestling with $1.7 billion in debt.