TerraForm Global Inc. and TerraForm Power Inc., the "yieldcos" of bankrupt solar company SunEdion Inc., said today that they were exploring strategic alternatives, including a sale of their entire business, Reuters reported. The yieldcos were not part of SunEdison's bankruptcy in April and said at the time that they had sufficient liquidity to operate and that their assets were not available to satisfy the claims of SunEdison creditors.
Hercules Offshore Inc. sweetened shareholders’ payout in its bankruptcy after a battle led by distressed investor Centerbridge Partners, the Wall Street Journal reported today. The offshore oil-and-gas driller on Thursday submitted an amended debt-payment plan that offers a cash payout of $15 million to shareholders who rejected a previous plan. Depending on the success of the sales of Hercules’ rigs and other assets, however, shareholder recoveries could rise as high as $138 million, according to an analysis by Hercules investment bankers at PJT Partners. A prior analysis of potential asset sale outcomes by PJT had forecast a shareholder recovery of $0 to $27 million, court papers show. Led by Centerbridge, shareholders teamed up to oppose a plan they said would give Hercules senior lenders a “massive windfall” in the company’s second chapter 11 filing in as many years. Court papers show mediation led by U.S. Bankruptcy Court Judge Christopher Sontchi produced a settlement in which lenders agreed to reduce about $546 million in claims by $32.5 million. The deal also includes a pledge from the lenders to allow the shareholders to receive the $15 million in cash before the lenders are paid. General unsecured creditors are expected to be paid in full. Read more. (Subscription required.)
ITT Educational Services Inc. began liquidation proceedings in an Indianapolis bankruptcy court Friday after closing 136 technical schools, leaving over 35,000 students stranded in one of the largest college shutdowns in U.S. history, Bloomberg News reported on Friday. The 50-year-old for-profit college operator, which had campuses in 38 states, said that it was forced to close its doors after the U.S. Education Department demanded a steep increase in the security the company would have to post to guarantee federal student aid. More than 8,000 employees were affected by the shutdown, with the majority losing their jobs, Carmel, Indiana-based ITT said. The company announced this week that it would cease all operations on Friday. Since August 2014, ITT has been under financial and operational scrutiny by the Obama administration, which has been cracking down on the for-profit college business. The agency expanded its oversight in June, citing “significant concerns about ITT’s administrative capacity, organizational integrity, financial viability and ability to serve students.” The U.S. Securities and Exchange Commission brought fraud claims against ITT and two executives in 2015 for allegedly concealing major losses in two student loan programs. That lawsuit is still pending in Indianapolis federal court. The Consumer Financial Protection Bureau sued the company in 2014, accusing it of overstating students’ job prospects and potential salaries and then pushing them into high-cost private loans that were likely to end in default. That case is also pending in Indianapolis. Read more.
A New Jersey bankruptcy judge denied a bid from Hanjin Shipping Co.’s creditors to keep several of the South Korean carrier’s ships from leaving U.S. ports, the Wall Street Journal reported today. Bankruptcy Judge John Sherwood refused to reverse an order forbidding creditors from seizing Hanjin’s assets, thereby protecting its ships from being confiscated while docked in the U.S. The earlier decision, handed down on Sept. 9, has been key to prodding a number of Hanjin ships — loaded with thousands of containers filled with consumer electronics, clothing and other goods — to pull into port in the U.S. The bankruptcy of Hanjin, one of the world’s largest shipping companies, created a crisis that stranded as much as $14 billion of cargo at sea. As cargo owners, container companies, freight forwarders and others sort through the complex process of getting goods delivered to their final destinations, Judge Sherwood has consistently prioritized getting goods sitting idle on Hanjin ships back into the supply chain.
SunEdison Inc., the bankrupt renewable energy giant, won court approval of a $144 million sale of wind and solar assets to a unit of NRG Energy Inc., Bloomberg News reported yesterday. The company will sell equity interests in some North American utility project companies after an auction in which NRG Renew LLC’s opening offer prevailed. Bankruptcy Judge <b>Stuart Bernstein</b> said that the deal was “fair and reasonable” given the extensive marketing of the asset package, as he signed off on the sale yesterday. The court delayed consideration of a private sale of a stake in SUNE Troughton Farm Solar Ltd. in England and Wales, to Stark Solar Ltd. so SunEdison Chief Executive Officer John S. Dubel could answer questions. That’s scheduled for Friday morning. A request in August to sell the assets said Stark would pay a negligible amount but help get the project access to financing. Bidding procedures for the company’s solar materials business were also approved.
Noble Environmental Power LLC, a wind-energy company backed by billionaire Michael Dell, filed for bankruptcy protection yesterday in a debt-for-equity restructuring deal, the Wall Street Journal reported today. Noble entered chapter 11 protection with a restructuring deal that gives sole control of the Centerbrook, Conn., energy company to Dell Inc. Chairman and Chief Executive Michael Dell’s investment operation, MSD Capital. MSD Capital, which already owns 54 percent of Noble, will take a 100 percent stake in the reorganized wind-energy company. In exchange the investment company will forgive about 10 percent, or $21.5 million, of the $215 million in debt it’s owed, said Kay McCall, Noble’s chief executive, in court papers.
Delivery Agent, a company that helps entertainment and sports operations sell products online, filed for chapter 11 bankruptcy protection Thursday, after hopes of an initial public offering of stock fell through, the Wall Street Journal reported today. Hillair Capital Investments L.P., which stepped up with rescue financing late last year, is set to lead a bankruptcy auction for the business. Hopes are that the chapter 11 filing will spur interest in Delivery Agent, allowing a sale free and clear of the more than $65 million in unsecured debt weighing on the company’s balance sheet. The idea behind the San Francisco-based company is to help TV, music and other entertainment companies sell products to consumers, through online technology. Delivery Agent is connected to hundreds of digital commerce storefronts, offering thousands of products relating to TV shows, movies, music, sports and artists. Besides its proprietary e-commerce technology platform, the company provides in-house services including website operations, product design, development, merchandising, order fulfillment, and customer service.
Aerospace-parts manufacturer Fansteel Inc. filed for bankruptcy Tuesday, blaming its financial troubles on the U.S. military drawdown in Afghanistan and the drop in oil prices, Dow Jones Newswires reported yesterday. Fansteel, which along with its affiliates employs more than 600 people, filed for chapter 11 protection in the U.S. Bankruptcy Court in Des Moines, Iowa, seeking to restructure a debt load that tops $40 million. The company serves customers in the aerospace and defense industries, and its parts are used in U.S. military helicopters and aircraft carriers, court papers say. As oil fell to $35 a barrel, the Creston, Iowa-based company tried to refinance its debts with several banks. In May, the Fansteel board of directors replaced its top executives with a team of professionals that developed a turnaround plan, which was presented to regional banking lender Fifth Third Bank. Los Angeles-based credit fund TerraMar Capital later stepped in and purchased the debt from Fifth Third.
Tucson, Ariz.-based artificial heart maker SynCardia Systems will seek final approval of a bankruptcy sale of its assets to a proposed buyer on Friday, after no competing bids emerged, the Arizona Daily Star reported today. Approval of the asset sale would pave the way for SynCardia’s emergence from chapter 11 reorganization. SynCardia filed for chapter 11 on July 1 in Delaware, proposing to sell all of its assets to its senior secured creditor in an effort to save the company. Sindex SSI Lending LLC, an affiliate of Philadelphia-based Versa Capital, purchased about $22 million worth of SynCardia’s senior debt at a steep discount in June. Sindex bid $19 million of that debt in a credit bid for SynCardia, plus $150,000 in cash, to buy the company. U.S. Bankruptcy Judge Mary F. Walrath will now consider final approval of the sale to Sindex on Friday.
Golfsmith International Holdings Inc. filed for bankruptcy, hoping to reorganize or attract a buyer who can save the golf-gear retailer as the sport’s popularity fades in North America, Bloomberg News reported yesterday. Golfsmith listed debt and assets of as much as $500 million each in its chapter filing yesterday, and said that it would try to sell part of the chain as a going concern while shutting some stores. If that fails, the Austin, Texas-based company will liquidate, according to a resolution by Golfsmith directors included in the chapter 11 filing. The company blamed an aggressive plan that began in 2011 to open bigger stores that cost more to operate just as golf began to lose popularity.
