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Long before Triple Crown winner American Pharoah was born, he was almost repossessed, Bloomberg News reported on Saturday. This year’s Kentucky Derby, Preakness Stakes and Belmont Stakes winner came from a pair of racehorses whose unborn foals were collateral for a loan that went bad in 2010. By putting his stables into bankruptcy, owner Ahmed Zayat shielded the thoroughbreds from creditors, giving him the chance to keep the first horse since 1978 to win the premier U.S. horse racing series. Before it filed for bankruptcy in 2010, Zayat Stables LLC had run up more than $38 million in debts, mostly to Fifth Third Bank, which accused Zayat of trying to dodge a requirement that he personally repay a loan if his company couldn’t. He also owed a thoroughbred auction house, Keeneland Association Inc., almost $2.4 million for horses, according to bankruptcy court papers. In the run-up to the stables’ February 2010 bankruptcy filing, Zayat traded allegations of unfair business dealings and improper conduct with his creditors. The chapter 11 case temporarily halted Fifth Third Bank’s effort to repossess $37 million worth of horses, including American Pharoah’s parents, Pioneerof the Nile and Littleprincessemma.

Home goods retailer Anna's Linens Inc. has hired restructuring advisers and is planning to file for bankruptcy in the coming weeks, Dow Jones Daily Bankruptcy Review reported today. The California-based retailer of bed linens and towels is in the process of selecting a lead bidder for some or all its stores in a court-supervised auction, though it's possible that at least some of the stores will be liquidated. The company has hired the law firm Levene, Neale, Bender, Yoo & Brill LLP to assist in preparing the filing. Anna's Linens operates more than 300 stores with some 3,200 employees. Read more.

Tumbling oil prices have helped put asset-based senior lenders in the driver’s seat when it comes to restructuring distressed energy companies, Bloomberg News reported on Friday. A slew of energy bonds have lost value as crude tumbled 44 percent in the past year. Since senior lenders are most likely the first creditors that would see losses on the debt, that has given them a leading role in driving the bankruptcy process to potentially own the distressed businesses, said panelists at the 31st Annual Bankruptcy & Restructuring Conference of the Association of Insolvency and Restructuring Advisors in Philadelphia on Friday. “We are seeing many asset-based loans are bigger than the value of the assets,” said Jonathan M. Landers, a restructuring attorney at New York-based Scarola Malone & Zubatov LLP. “That gives a secured lender a much better shot to drive the restructuring process, because the junior creditors don’t really have practical interest anymore.”

Walter Energy Inc. is negotiating a debt restructuring with senior lenders that may put the unprofitable coal producer into bankruptcy as soon as this month, Bloomberg News reported on Friday. The coal miner, which rejected earlier proposals sent by creditors, is expected to send a revised plan to first-lien lenders, including Blackstone Group LP’s credit arm, Franklin Resources Inc. and Cyrus Capital Partners, that includes a request for a debtor-in-possession loan that would allow the company to operate while in bankruptcy. Walter, which last generated an annual profit in 2011, has been in talks with lenders for almost two months on a reorganization as it struggles amid the worst downturn for coal in decades. Prices of metallurgical coal have been undermined by excess supply and slowing demand from China.

Chemtura Corp., a U.S. chemical maker that emerged from bankruptcy four years ago, said it’s more likely to sell itself than make a major acquisition as it evaluates its strategic options, Bloomberg News reported today. “There is a lot of interest in the company and the portfolio,” Chairman and Chief Executive Officer Craig Rogerson said in an interview. “The reality is you create value on a higher probability basis selling than buying right now with the multiples that are out in the marketplace.” Chemtura is weighing a sale amid a jump in the volume of diversified-chemical deals in the U.S., which stands at $21.1 billion so far in 2015. That puts the industry on course for its busiest year of dealmaking since 2007, according to data compiled by Bloomberg.

Birmingham Coal & Coke Co. has filed chapter 11 bankruptcy in the face of a struggling coal market, the Birmingham (Ala.) Business Journal reported today. Cahaba Contracting & Reclamation LLC and RAC Mining LLC, two related companies, also filed for chapter 11 protection reorganization this week. Birmingham Coal and Cahaba Contracting & Reclamation are subsidiaries of Calgary-based CanAm Coal Corp. The companies plan to continue operations as they restructure their debts, according to court filings. The companies have 128 employees and have asked for court permission to continue paying them moving forward.

Molycorp Inc., the only U.S. miner and processor of rare-earths elements, plans to file for chapter 11 protection as soon as this month to cut its $1.7 billion debt load, the Denver Post reported yesterday. The Greenwood Village, Colo.-based company is completing a plan that would involve senior bondholders exchanging some or all of their debt for ownership of the company, some of the people said. It is exploring options such as an equity sale to junior creditors and shareholders to ensure the company would emerge in sound financial health. Molycorp is also weighing an offer from the senior bondholders for a loan that would fund its operations during bankruptcy. Senior lender Oaktree Capital Management LP may also participate in that loan.

Former Apple Inc. supplier GT Advanced Technologies Inc. wants more time in chapter 11, Dow Jones Daily Bankruptcy Review reported today. This week, GT asked a court to push back until Sept. 30 the deadline by which it's to file a chapter 11 plan setting out how it will pay creditors. Talks to resolve an intercreditor dispute "have been fruitful," GT said in papers filed in the U.S. Bankruptcy Court in New Hampshire. Time officially ran out Wednesday for GT to file its chapter 11 plan. However, the company filed papers that automatically extended the chapter 11 plan filing deadline until a judge can review the issue.

Caesars Entertainment Operating Co.’s restructuring chief said yesterday that he thinks the company has “set the table” for a successful reorganization, but lawsuits against the casino giant’s parent could hamper the progress made in the company’s bankruptcy case, the Wall Street Journal reported today. Testifying at day two of a trial to decide whether lawsuits filed against CEOC’s non-bankrupt parent, Caesars Entertainment Corp., can move forward, Randall S. Eisenberg said the market would gain confidence if it knew CEC wasn’t potentially on the hook — at least immediately — for billions of dollars related to prebankruptcy asset transfers between itself and CEOC. A $1.5 billion contribution by CEC is a lynchpin of CEOC’s current restructuring plan, and it wouldn’t have that money if it lost the suits, both Caesars entities have said. Read more. (Subscription required.) 

In related news, prepetition lender Salus Capital Partners LLC wants to convert the bankruptcy case of RadioShack Corp. to chapter 7 to preserve any remaining value of the estate, The Deal reported today. Salus on June 2 filed a motion in the U.S. Bankruptcy Court for the District of Delaware in Wilmington to convert the proceedings from chapter 11, asserting the company no longer has a viable business to reorganize. Salus also said there is no advantage to liquidating the debtor's remaining assets, which primarily consist of potential litigation claims, in chapter 11. Bankruptcy Judge Brendan Linehan Shannon has scheduled a hearing on the motion for June 25. Read more.

A quick exit from bankruptcy court may be the surest way back in for distressed companies, according to restructuring professionals at the 31st Annual Bankruptcy & Restructuring Conference of the Association of Insolvency & Restructuring Advisors, Bloomberg News reported yesterday. The professionals cited an increase in hedge funds and other alternative investors in the distressed-investing business for shortening the average length of time companies spend in court to less than a year in 2014. That compares with an average of nearly two years a decade ago, they said. “You saw some of the fast Chapter 11s coming out of bankruptcy with relatively high leverage recently, and some of them had to go back in again,” said Ronen Bojmel, head of restructuring at Guggenheim Securities LLC. The most significant driver of quick bankruptcy exits may be the move to alternative distressed investors due to an exit from the business by traditional banks because of regulatory tightening to curtail risk-taking, said panelists. They suggested that, because of the change in lenders, less operational restructuring work to make a company’s business more feasible in a long term is getting done in chapter 11. “They are not necessarily long-term investors,” Alan Holtz, managing director at AlixPartner’s turnaround and restructuring services group, said at the conference. “They want to move fast, clean up the balance sheet and move on.”