Chesapeake Energy Corp’s value has soared since its June bankruptcy filing, the U.S. judge overseeing the natural gas producer’s trial indicated, and is worth $5.13 billion, far above the shale gas pioneer’s estimate, Reuters reported. Creditors have offered sharply different estimates of the firm’s enterprise value during its trial in U.S. bankruptcy court in Houston. Judge David Jones’s figure was $1 billion higher than the mid-point of the range recently offered by the Oklahoma company.
Ferrellgas Partners LP, whose Blue Rhino propane tank exchange network serves backyard barbecuers across the U.S., filed for bankruptcy to unload debts left over from a failed expansion, Bloomberg News reported. The company sought federal court protection from creditors in Delaware with assets and liabilities of $100 million to $500 million, according to its chapter 11 petition. The debtor is a holding company, but the operating company, Ferrellgas LP, isn’t part of the bankruptcy and will continue to run without interruption. Ferrellgas will remain an employee-owned business and there will be no impact on customers, employees, vendors, suppliers or distributors, according to a spokeswoman. The company has almost 800,000 customers across the U.S. and Puerto Rico and a staff of nearly 5,000 people, according to a Ferrellgas statement. Overland Park, Kansas-based Ferrellgas, burdened with a turbulent propane business and a high debt load, previously said it intended to file for bankruptcy. The holding company debt will be eliminated, more than $1.5 billion of operating company debt will be refinanced, and more than $1 billion of new capital will be raised at the operating company level.
Toronto-Dominion Bank will defend itself in a trial starting in a Canadian court on Monday in which liquidators of the collapsed Antigua bank of former Texas financier Robert Allen Stanford are seeking $5.5 billion in damages, Reuters reported. The joint liquidators of Stanford International Bank (SIB) allege “negligence and knowing assistance” by TD, Canada’s second-biggest lender, in allowing SIB to maintain correspondent accounts, according to a statement filed with the Ontario Superior Court of Justice in 2019. Correspondent banking is the business of providing services to offshore financial institutions. The joint liquidators are Grant Thornton in the British Virgin Islands and the Cayman Islands. The trial is scheduled to last three months, a spokesman for one of the plaintiffs’ lawyers said. Stanford is serving a 110-year prison term after being convicted in 2012 of running a $7.2 billion Ponzi scheme. TD estimated reasonably possible losses from legal and regulatory actions including the Stanford litigation of between zero and C$951 million ($750 million) as of Oct. 31. Provisions related to legal action will be taken when a loss becomes probable and an amount can be reliably estimated, it said in its 2020 annual report.
A judge overseeing the bankruptcy of offshore driller Valaris yesterday rejected lender efforts to submit an alternative restructuring proposal ahead of a hearing to approve the company's current plan in February, Reuters reported. U.S. Bankruptcy Judge Marvin Isgur in Houston issued his ruling after the company, represented by Kirkland & Ellis, requested a 120-day extension of its exclusive period to file a plan, which prevents creditors from submitting their own, competing proposals. Valaris also said that if its exclusivity period was not extended, it could default on its bankruptcy financing and restructuring agreement with the company's noteholders, which it said would cause irreparable harm. The COVID-19 pandemic's effect on the oil market paired with an oil rig accident caused Valaris to file for bankruptcy in August with almost $8 billion in debt. The company hopes to reorganize and convert some of its debt into equity. Valaris plans to convert $581 million owed to Citibank into 32.5% equity in the company post-reorganization. Noteholders, who are owed $6.5 billion, would receive 34.8% equity and the option to participate in a rights offering for more than half of $500 million in new secured debt. If the noteholders purchase the new debt, they would also receive another 30% of the reorganized equity, plus fees.
Midwestern farm, home and outdoor retailer Stock+Field has filed for bankruptcy and plans to close all of its stores by March after 65 years in business, WSJ Pro Bankruptcy reported. Tea Olive I LLC, which does business as Stock+Field, filed for chapter 11 protection on Sunday in the U.S. Bankruptcy Court in St. Paul, Minn. after starting a store closing sale process that is projected to conclude at the end of March. “There have been many challenges in 2020, and Stock+Field was not immune to them,” Matthew F. Whebbe, the company’s chief executive and chairman, said in a post on the retailer’s website. Stock+Field, formerly known as Big R, has 25 stores across Illinois, Indiana, Ohio, Michigan and Wisconsin, as well as two warehouses in Illinois. The retailer changed its name from Big R to Stock+Field in July 2019. “We hope to reopen stores at some point in the future,” Mr. Whebbe said in the post. In court papers, the Eagan, Minn.-based company valued its assets and total debt between $50 million to $100 million. The company said it owes about $29.7 million to asset-based lender Second Avenue Capital Partners LLC and other creditors. The retailer is requesting to use cash collateral pledged to lenders to continue operations and store closing sales to maximize asset values, according to court documents filed yesterday.
About six months after opening its first store, Art Van successor Loves Furniture is filing for chapter 11 restructuring and liquidating 25 stores in hopes of surviving, WOODTV.com reported. In court documents filed Sunday, Loves interim CEO Mack Peters said Penske Logistics Services, the company’s warehouse manager, pulled its people and trucks from Loves’ warehouse in late January after the furniture retailer ran out of cash to pay Penske. Loves says Penske also refused to let Loves use its warehouse management system to find inventory in the 1-million-square-foot warehouse to fulfill customer orders. Penske took a step further on Jan. 6 by filing for a temporary restraining order against Loves to prevent the furniture retailer from moving or delivering items in its warehouse, according to the bankruptcy court filing. Loves says it canceled all customer orders that weren’t already pulled from the warehouse that the company leased directly.
While 2020 was the year when COVID-19 hit home, 2021 is expected to be the year when the economy and everyday life returns to normal, more or less. That should bring more jobs, higher incomes and less financial stress generally. But the new year also will mark a time when millions of Americans continue to grapple with the financial fallout from the pandemic, the Arizona Republic reported. Improvement won't come overnight, and some problems — tax payments, debts and saving deficits — could get worse before they get better. Some 53% of Americans said they were worried about tax debt in 2021 including 76% who lost work during the pandemic, according to a survey released in December by LendEDU. Top reasons for concern included taxable withdrawals from retirement plans, taxes that resulted from selling stocks or other assets, and taxes on jobless benefits. About 10% of respondents said they weren’t able to file and pay all of their 2019 tax obligations by the extended July 15, 2020, deadline. A wave of bankruptcy filings did not happen in 2020, thanks largely to expanded jobless benefits, stimulus payments, Paycheck Protection Program business loans, foreclosure moratoriums, landlord forbearance and other help. In fact, consumer bankruptcy filings last year ebbed to their lowest level since 1987, according to the American Bankruptcy Institute. Total filings, including for businesses, fell 30 percent last year. Many consumers and businesses have been "sitting on the edge," waiting to see if conditions improve this year before they file for bankruptcy, said Amy Quackenboss, executive director of the American Bankruptcy Institute. "They're waiting to see if things get back to normal." Some individuals might dig out of their holes, especially if jobs return big time to industries such as lodging and restaurants as the economy recovers and lockdowns ease. But many businesses, already suffering, might not make it, which could lead to permanent job losses, Quackenboss said. Business bankruptcies already are rising. Quackenboss said she expects consumer filings also will increase, at least back to 2019 levels, in the coming year. However, she added that it's difficult to predict the timing as so much depends on efforts to suppress the virus and the length that federal and other assistance programs stay in place.
The official committee of sex-abuse victims has challenged the Boy Scouts of America over claims that Philmont Scout Ranch in New Mexico and other valuable assets on the organization’s balance sheet can’t be used to pay settlements to trauma survivors, WSJ Pro Bankruptcy reported. In court papers Friday, lawyers representing those men said that the Boy Scouts are wrongly holding back $667 million in cash, investments and properties from a court-supervised bankruptcy process. The Philmont ranch is the Boy Scouts’ most prized high-adventure camp: 140,000 acres in the Rocky Mountains, the site of revenue-producing activities that have drawn more than one million young men over decades. The Boy Scouts also have said a high-adventure base in Florida and another straddling Minnesota and Canada are unavailable to cover the organization’s liabilities, according to Friday’s court filing. The committee said that nothing in the deeds of the properties would prevent them from being sold to pay creditors, chiefly the men who suffered sexual misconduct at the hands of Boy Scouts volunteers. In a statement, the Boy Scouts said that the adventure camps and other assets it says are out of reach to creditors “are critical to delivering the mission of Scouting.” The committee is asking for a court ruling on how much Boy Scouts land, cash and investments can be held out of reach of creditors as negotiations continue in the largest-ever bankruptcy case driven by claims of sexual abuse.
Restaurant franchisee NPC International Inc. has settled all the major disputes that had threatened to hold up a plan to sell its Pizza Hut locations to Flynn Restaurant Group, lawyers told a federal bankruptcy judge on Friday, Bloomberg News reported. Pizza Hut attorney Charles Gibbs said during a video court hearing that the company expects to sign a consent agreement in the next few days with Flynn, allowing the restaurateur to close a deal to buy NPC’s operations of the chain. When NPC filed for bankruptcy last year, it operated more than 1,200 Pizza Hut locations and nearly 400 Wendy’s Co. restaurants. In November, NPC called off auctions for its Pizza Hut and Wendy’s restaurants because the offers were too low, an NPC lawyer said last month. Instead, the company entered settlement talks that ultimately led to the current deal. The agreement will see Flynn purchase the Pizza Hut locations, while a group of Wendy’s franchisees will buy the burger restaurants. Wendy’s has agreed to be the backup buyer for the burger locations in case the agreement with franchise holders falls through, a lawyer for the fast-food chain said during the hearing.
Houston-based specialty apparel retailer Francesca's Holding Corp. is one step closer to selling its business to a private investor, the Houston Business Journal reported. The U.S. Bankruptcy Court for the District of Delaware has approved the company's auction process, Francesca's announced Jan. 8. Bids are due by 4 p.m. Eastern Time on Jan. 13, and the auction is set for 10 a.m. Eastern Time on Jan. 15. The auction will only be held if Francesca's receives one or more qualified bids. If not, Francesca's will seek the bankruptcy court's approval of its stalking-horse asset purchase agreement. Francesca's also announced Jan. 8 that it formalized the stalking-horse agreement with an affiliate of Los Angeles-based TerraMar Capital LLC and with New York-based Tiger Capital Group LLC. The buyers have agreed to purchase substantially all of the assets of Francesca's and its subsidiaries for approximately $17 million in cash, subject to certain adjustments, plus the assumption of substantial liabilities. Francesca's filed for chapter 11 protection on Dec. 3 with plans to sell itself. At the time, Francesca's and TerraMar had signed a letter of intent regarding a stalking-horse bidder agreement, and the retailer said that it wanted to hold an auction as expeditiously as possible.
