U.S. coal miner Peabody Energy Corp. said that it had emerged from chapter 11 protection and was expected to begin trading on the New York Stock Exchange today, Reuters reported. The largest U.S. coal producer filed for bankruptcy protection in April 2016, after a sharp drop in coal prices left it unable to service debt of $10.1 billion. The company said that it had reduced its debt by more than $5 billion since March 2016. Peabody will focus on reducing debt, targeting high-return investments and returning cash to shareholders over time, Chief Executive Officer Glenn Kellow said.
Less than two years after it opened, Green Valley Hospital is filing for Chapter 11 bankruptcy, its CEO said on Friday, the Arizona Daily Star reported. John Matuska told the Star the decision was made with the intent of financially strengthening the hospital for long-term success. Matuska took the helm of the for-profit hospital in October and is its third CEO. He said that the hospital was filing court papers on Friday in federal bankruptcy court in Tucson. He stressed that the filing represents a restructuring of debt, and will not affect day-to-day hospital operations. The hospital has about 300 employees and no layoffs are expected, officials said. Read more.
The owner of the Terrace Manor apartments in Southeast D.C. sought bankruptcy protection Thursday amid fresh allegations that it failed to respond to housing code violations at the 61-unit housing complex, the Washington Business Journal reported on Friday. The chapter 11 filing in U.S. Bankruptcy Court in the District put a temporary hold on two motions that D.C. Attorney General Karl Racine filed earlier on Thursday against Terrace Manor LLC stemming from housing code violations. The LLC, which is owned by an affiliate of Bethesda-based Sanford Capital, listed between $1 million and $10 million in assets and the same amount in liabilities.
Mad Catz Interactive, a struggling maker of video game accessories, said on Friday that it will file for chapter 7 bankruptcy liquidation after failing to raise capital or find a buyer, the San Diego Union-Tribune reported on Saturday. The company, founded in 1989, is incorporated in Canada but headquartered in Mira Mesa, Calif. Its board of directors and executive officers have resigned, and PricewaterhouseCoopers has been appointed to oversee the company. Mad Catz made gaming accessories, headphones and controllers for in-home gaming consoles, powerful gaming computers and other devices. Its products were sold under the Mad Catz and Tritton brands. In September, Mad Catz sold its Saitek brand of flight simulation controllers to Logitech. The company received $11 million in cash, with $2 million deposited in escrow to cover potential claims. In 2015, a line of accessories for the Rock Band 4 video game helped boost the company’s sales. But revenue has dropped significantly since then. For the first nine months of its fiscal year ended Dec. 31, sales fell 63 percent from the prior year to $44.7 million. The company posted a $4 million loss.
A Roman Catholic diocese in Montana has filed for bankruptcy protection, months before facing its first trial of a civil lawsuit stemming from child sex abuse claims against its clergy, church officials and the plaintiffs' lawyers said on Friday, Reuters reported. The Diocese of Great Falls-Billings filed a chapter 11 petition in Montana federal court as part of a negotiated settlement of dozens of "credible" sex abuse cases that date from 1950s through the 1990s, lawyers for 72 victims and the diocese said in separate statements. At least 15 other U.S. Catholic districts and religious orders have been driven to seek Chapter 11 protection by a sex abuse scandal that erupted in 2002. Montana’s other Catholic diocese in Helena, the state capital, filed for bankruptcy in 2012 to settle cases stemming from similar accusations. If granted by a judge, the Great Falls bankruptcy would allow the diocese and its insurer to contribute to a fund that would be set aside to compensate victims, the diocese said in a statement.
Le Cirque's expenses this year spun out of control, and it recently sought chapter 11 protection while saying goodbye to its chef, Tom Valenti, Forbes reported. In a court filing, Le Cirque said it estimated expenses during the next 30 days of $463,000, but only anticipated $400,000 in income. It also said it would have trouble meeting its lease obligations. At first glance, Le Cirque might be seen as the latest victim of a decline in fine dining. Last month, French stalwart Le Perigord also closed, after failing to reach agreement with the union representing its workers. (Its owner has vowed to reconstitute it and reopen.) Grub Street estimates that at least a dozen French restaurants in New York have closed this decade. Read more.
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SunEdison Inc. sees a possibility for life after bankruptcy even as its unsecured creditors have threatened to upend a reorganization plan, Bloomberg News reported yesterday. The clean energy giant, which said after its April bankruptcy that it was toggling between a wind-down or a reorganization, announced the rough terms of a restructuring on Tuesday. Its unsecured creditors have said that they intend to dispute a settlement that’s key to the plan at an upcoming trial however, raising questions about whether the company added any value for its business or lenders after a year in Chapter 11. The SunEdison plan, which comes after the piecemeal sale of more than $1 billion of assets including wind and solar farms, would split the company into a new, publicly traded unit and a trust to pursue lawsuits. It’s ability to pull off the reorganizing still hangs in the balance, hinging on Brookfield Asset Management Inc.’s deals to buy its two yieldcos, which in turn rests on a settlement that still needs court approval.
Westinghouse Electric Co. won tentative permission to take out an $800 million loan to carry it through bankruptcy, but the judge overseeing its chapter 11 case asked for more information about the use of some of the proceeds to support foreign, non-bankrupt units, Bloomberg News reported yesterday. The Pennsylvania-based company, a unit of Toshiba Corp., filed for bankruptcy on Tuesday and laid out plans to cast off money-losing businesses like reactor building and focus on decommissioning and services. Gary Holtzer, an attorney for the company, told Bankruptcy Judge Michael Wiles at a hearing on Wednesday in Manhattan that Westinghouse also wants to address “pension issues” and make other businesses more efficient. Westinghouse said that it needs the loan to keep its position as a safe and innovative provider of nuclear services and plans to use as much as $375 million of the financing for foreign, non-bankrupt affiliates.
Westinghouse Electric Co.’s financial distress sparked a feeding frenzy among Wall Street lenders keen to give the nuclear developer a lifeline while it reorganizes in bankruptcy, Reuters reported. Westinghouse, the nuclear arm of Japanese conglomerate Toshiba, filed for chapter 11 bankruptcy protection yesterday after facing billions of dollars in cost overruns at power plants under construction in Georgia and South Carolina. It has a proposal in hand for $800 million in bankruptcy financing from the credit arm of Apollo Global Management, which must be approved by a bankruptcy judge. The private equity firm won the high-profile deal after Westinghouse said it was "inundated" with offers from investment banks, private equity houses and hedge funds for the financing, a so-called "debtor-in-possession" (DIP) loan, Westinghouse's turnaround adviser said in court papers. Read more.
In related news, Toshiba Corp. shareholders, some of them in tears, denounced management at a shareholders’ meeting today outside Tokyo and asked why Toshiba had plowed billions of dollars into a now-bankrupt U.S. nuclear business, the Wall Street Journal reported. The event took place less than 24 hours after a chapter 11 bankruptcy filing by Westinghouse Electric Co., a U.S. nuclear plant builder 87 percent-owned by Toshiba that suffered huge cost overruns on U.S. projects. Toshiba said that it expected to record a loss of about $9 billion in the year ending March 31. It said the bankruptcy filing would allow it to separate Westinghouse from the Toshiba group and put a cap on losses. Read more. (Subscription required.)
