%1

A subsidiary of cocoa-trading house Transmar Group, which supplies Hershey Co., Nestlé SA and other big chocolate makers, has filed for bankruptcy protection, blaming its financial problems partly on the U.K. vote to exit from the European Union, the Wall Street Journal reported today. Transmar Commodity Group Ltd., the company’s U.S. arm, filed for chapter 11 on Saturday to restructure debts of more than $413 million, court papers say. The company’s financial woes flow primarily from wrong-way bets on the price of cocoa made by the Transmar Group’s troubled European operation, Euromar Commodities GmbH, according to Deloitte’s Robert Frezza in a declaration filed with the bankruptcy court. Mr. Frezza was retained by Transmar Commodity Group to serve as the company’s chief restructuring officer.

A branch of one of the nation’s largest unions says a Houston janitorial firm that has long been embroiled in a legal battle with local organizers is trying to force the union out of Texas, the Wall Street Journal reported today. In court papers filed on Friday with the U.S. Bankruptcy Court in Corpus Christi, the Texas branch of the Service Employees International Union asked a judge to reject a bid by the company, Professional Janitorial Service of Houston Inc., to have the Texas arm of the union liquidated or tossed out of bankruptcy altogether. Dismissal of the union’s chapter 11 case, filed last month, would lift legal protections that are preventing PJS from collecting a $7.8 million defamation verdict it won against SEIU Texas last year.

Samson Resources Corp. has given junior creditors until Friday to stand down from a bankruptcy court confrontation over the oil-and-gas company’s future, warning that the $168.5 million junior creditors are being offered will decline if the creditors press ahead with a rival chapter 11 exit plan, the Wall Street Journal reported today. Talks that took place in the waning days of 2016 brought the Oklahoma company and the official committee representing Samson’s unsecured creditors close to a deal that would allow the company to exit bankruptcy peacefully, ending a contentious chapter 11 proceeding. Instead of an all-out liquidation of the company, Samson’s creditors committee agreed to take the cash and allow Samson to reorganize. However, Samson and the committee are still at odds over provisions that could trigger a forced sale of remaining assets, Samson’s lawyers said in court papers. Read more. (Subscription required.) 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

The featured keynote at ABI's 2017 Annual Spring Meeting will be Spencer Abraham, former U.S. Senator and former U.S. Secretary of Energy. Click here to register! 

A group of former students at ITT Technical Institutes yesterday filed a lawsuit against the parent company to ensure participation in bankruptcy proceedings, the Washington Post reported today. The group is asserting claims against the company of consumer protection violations and breach of contract, and asks for class-wide status to cover anyone who attended ITT Tech in the past 10 years. The group is also seeking an injunction to stop the collection of private loans administered by ITT, which ran an in-house lending program that is at the center of two federal lawsuits. Eileen Connor, counsel for the students, estimates the students’ claims at $7.3 billion, roughly the amount of student loan revenue ITT Tech took in over the past 10 years. Connor, who is also an attorney at the Project on Predatory Student Lending at Harvard Law School, said that it was critical to file the lawsuit now because the claim deadline is at the end of the month. https://www.washingtonpost.com/news/grade-point/wp/2017/01/03/former-students-fight-for-a-stake-in-itt-educational-services-bankruptcy/?utm_term=.4f3d8559d127

Now available in the ABI Bookstore: Pick up your copy of the updated and revised Graduating with Debt: Student Loans under the Bankruptcy Code, Second Edition. 

Energy XXI Ltd. on Friday announced that it has successfully completed its financial restructuring and emerged from chapter 11, according to a press release. Through this process, Energy XXI has substantially improved its financial position by eliminating more than $3.6 billion of debt from its balance sheet. Effectively immediately, Energy XXI common stock will cease trading on the OTC Market. Energy XXI Gulf Coast, Inc. (EGC), as successor to Energy XXI, will have approximately 33 million shares outstanding after the reorganization issued pursuant to the restructuring plan. Read more. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

Four months after Energy Capital Partners led a $90 million investment in coal miner Ramaco Resources, the New York private equity firm has kicked off a process to potentially sell a stake in the portfolio company, TheStreet.com reported on Friday.  Ramaco on Thursday filed a Form S-1 with the Securities and Exchange Commission in an effort to raise enough cash for the $133 million the company expects to spend to fully develop its projects; it plans to spend $106.5 million through Dec. 31, 2018. It is unclear whether the IPO of Ramaco, which also has backing from a number of Yorktown Partners LLC funds, would represent a complete exit for its private equity owners or if either firm would retain partial stakes in the Lexington, Ky., coal mining company. The initial S-1 does not detail the firms' current or future stakes.

Dusty Buns Bistro, a Fresno, Calif., food truck turned brick-and-mortar restaurant, has closed amid its bankruptcy proceedings, the Fresno Business Journal reported today. Dustin and Kristen Stewart began the business in 2009 with a food truck that became a staple at local farmers markets and events in Fresno and eventually San Francisco. The Stewarts opened the Fresno restaurant in 2012, and the San Francisco location in early 2015. Dusty Buns’ chapter 7 liquidation filing lists total liabilities for the business of nearly $900,000.

Bankruptcy Judge Carla E. Craig on Wednesday ruled that New York taxi tycoon Evgeny "Gene" Freidman must surrender 46 of his taxicabs and medallions to a chapter 7 trustee or face arrest, TheStreet.com reported yesterday. Freidman owns more medallions than any other individual in the city: 830 of the 13,000-plus in circulation. His empire has proved to be anything but invincible in recent years, though, as Uber, Lyft and other ride-sharing startups have shaken New York's yellow cab industry. Freidman put holding companies possessing 46 of those medallions into chapter 11 in July 2015, placing the blame for their collapse squarely on Uber and Lyft. The cases were converted to a chapter 7 liquidation on Sept. 22 after Freidman failed to produce a realistic reorganization plan and then attempted to publicly abandon the cabs outside the Queens office of creditor Citibank.

Peabody Energy Corp. said yesterday that it extended a deadline for creditors to join financing deals aimed at bringing the largest U.S. coal miner out of bankruptcy amid growing creditor support for its plan of reorganization, Reuters reported. Last week, Peabody unveiled its plan to eliminate more than $5 billion of debt and raise capital from creditors with a $750 million private placement and a $750 million rights offering. The financing agreements were funded by key creditors that signed on to a plan support agreement with Peabody, although a portion of those deals were reserved for other noteholders if they agreed to back Peabody's plan by Wednesday. Peabody said in a statement the deadline was extended to today for Peabody noteholders to join the financing deals, which offer an opportunity to receive financial incentives. Peabody said a judge on Wednesday extended the deadline to Jan. 6 for a group of large investors holding about $444 million of the company's securities who had filed a lawsuit to halt the financing process.

About 300 creditors of the failed Ruden McClosky law firm can expect to receive a check this week for pennies on the dollar of what they were owed when the large Florida firm filed for chapter 11 protection in 2011, the Orlando Sun Sentinel reported today. A bankruptcy court approved a final distribution equal to 3 percent of the $7.6 million in claims allowed by the court. Combined with a 10 percent distribution in May 2015, the creditors are recovering $1.03 million of the $7.6 million. That $7.6 million in "allowed claims" was itself a fraction of the $73 million creditors claimed was owed when the firm declared bankruptcy. In 2015, Wells Fargo, the firm's secured lender, received $4.8 million, while priority tax and wage creditors were paid in full — about $58,000, said Joseph Luzinski, senior managing director of the debt restructuring firm Development Specialists Inc.