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Brazil's largest fixed line carrier Oi SA on Monday unveiled a debt restructuring proposal, offering to sell assets and proposing a debt-for-equity swap option that could mean a 70 percent haircut for bondholders, Reuters reported today. Oi filed for protection from creditors on June 20 in the country's biggest-ever bankruptcy case, involving 65.4 billion reais ($19.3 billion) in bonds, bank debt and operating liabilities. In a securities filing yesterday, Oi offered four payment options to unsecured creditors such as bondholders owed approximately 34 billion reais. At the same time, the company said it is willing to repay secured creditors such as the Brazil's BNDES development bank in full over the course of 15 years. Brazil's Oi offered to exchange up to 32.3 billion reais ($9.90 billion) in unsecured debt for equity under the plan, which would give lenders up to 85 percent of the company's capital, according to the filings.

Republic Airways Holdings Inc. reached a deal to continue providing regional flights for its largest customer, completing its third pact with the biggest U.S. carriers and removing an obstacle on the path to exiting bankruptcy, Bloomberg News reported on Friday. The agreement with American Airlines Group Inc. is critical because the world’s largest carrier accounts for about half of Republic’s revenue, the bankrupt regional airline said in a court filing on Friday. While the accord will initially reduce Republic’s flying for the airline, there’s an option to increase it with American’s consent. “The comprehensive commercial settlement and claims resolution with American is a major achievement for the debtors that clears the pathway for a successful emergence from chapter 11,” Republic said in the filing. The agreement must be approved by Bankruptcy Court Judge Sean Lane.

South Korea’s Hanjin Shipping Co., one of the world’s largest container shipping companies, has filed for bankruptcy protection in the U.S. to protect its vessels from being seized by creditors, the Wall Street Journal reported on Saturday. Hanjin filed for protection under chapter 15 of the Bankruptcy Code on Friday, days after the company sought protection in South Korea on Wednesday. Hanjin is currently the largest shipping company in Korea, operating approximately 60 regular lines world-wide, with 140 container or bulk vessels, court papers said. It is ranked as the world’s ninth largest container shipping company, transporting over 100 million tons of cargo a year. Its failure would be the largest container-shipping failure in history, dwarfing all previous carrier bankruptcies. Since Hanjin called in the bankruptcy lawyer, the refusal of ports to handle its cargo has stranded 45 ships at sea, according to the company, and more than half a million containers. Read more. (Subscription required.) 

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Horsehead Holding Corp. was cleared to exit bankruptcy on Friday although a U.S. judge acknowledged that allegations by the zinc producer's shareholders that their investment was being unfairly wiped out came very close to derailing the company's plan, Reuters reported on Friday. Horsehead can now proceed with its plan that will eliminate most of its $427 million in pre-bankruptcy debt, cancel its stock and allow the company to emerge from chapter 11 under the control of its noteholders, led by Greywolf Capital Management. Horsehead had to defend its plan during a three-day trial against allegations by an official equity committee that noteholders were enriching themselves at shareholders' expense. The shareholders attacked a valuation by the Lazard investment bank and argued that Horsehead was a "loan-to-own" play by secured noteholders, who bought the company's debt at a discount and then provided a bankruptcy loan with strict provisions. Bankruptcy Judge Christopher Sontchi said that the noteholders "shot themselves in the foot" by including a "no-shop" provision in the bankruptcy loan. Without it, the company could have tested its value with an auction and avoided this week's trial that largely turned on experts' competing views of valuation. Judge Sontchi said that the evidence showed the company was worth around $650 million, or roughly equal to the claims held by creditors, leaving nothing for stockholders.

A consortium led by Simon Property Group Inc. and General Growth Properties Inc. won an auction for the assets of Aeropostale Inc., with a plan to keep open 229 of the the bankrupt teen retailer’s stores, Bloomberg News reported today. The bidding group will also keep the chain’s online business and licensing operation up and running, according to a statement yesterday. A bankruptcy judge must still approve the deal after reviewing the terms and any objections as a hearing on the matter has been set for Sept. 12. Aeropostale filed for bankruptcy in May, succumbing to competition from big-box stores, online merchants and “fast fashion” purveyors. The company also accused lead lender Sycamore Partners of pushing it into chapter 11 to buy it on the cheap. The bankruptcy judge rejected that claim and allowed the private equity firm to take part in the auction. Read more. 

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A group of SandRidge Energy Inc. shareholders is accusing the oil and gas producer of grossly understating its value, threatening to derail a prepackaged bankruptcy agreement with its lenders, Reuters reported yesterday. The shareholders' court filing on Wednesday comes before a hearing next week, when the company will ask a judge to approve the Oklahoma City company's reorganization plan. Shareholders are hoping to prove SandRidge may be the rare bankruptcy where a company's assets are valuable enough to repay creditors and have money left over for stockholders, according to their bankruptcy court filing. SandRidge filed the pre-packaged bankruptcy pact in May to restructure roughly $4 billion of debt, joining a long list of oil-and-gas producers hit by a deep crash in U.S. energy prices. The company's financial adviser, Houlihan Lokey, estimated the reorganized company's enterprise value, generally a measure of market capitalization plus debt minus cash, at $1.0 billion to $1.3 billion. The shareholders said that an analysis by energy consultant SSR put the value at almost three times that amount.

PetroQuest Energy Inc. fell almost 9 percent in late trading after skipping an interest payment and saying it could face bankruptcy, joining energy companies whose flow of cash has been cut to a trickle by the industry’s prolonged slump, Bloomberg News reported yesterday. The oil and gas producer may consider new financing arrangements, “joint ventures, asset sales, exchange offers and a filing under chapter 11 of the U.S. Bankruptcy Code,” PetroQuest said in a regulatory filing. The company invoked a 30-day grace period on a payment that was due yesterday on its 10 percent senior notes maturing in 2017, according to the filing. At least 90 North American oil and gas producers have filed for bankruptcy since the start of 2015, according to data from Haynes and Boone LLP. S&P Global Ratings counts 65 defaults by energy companies this year, according to a report last month. PetroQuest, which operates mainly in the Texas, Gulf Coast Basin and Oklahoma regions, said that it “believes that it has current liquidity sufficient to make the approximately $6.8 million semi-annual interest payment,” but declined to do so pending the outcome of debt exchange offers under way. Read more. 

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TerraForm Power Inc., a public holding company founded and controlled by bankrupt clean-energy giant SunEdison Inc., reached a deal with bondholders to buy more time to file its delayed 2015 annual report, Bloomberg News reported yesterday. A unit of the yieldco, TerraForm Power Operating LLC, persuaded subsets of bondholders to extend the deadline to file the 2015 report and its first-quarter report to Dec. 6, according to a statement on Tuesday. In May, bondholders slapped Bethesda, Md.-based TerraForm Power with notices of default for failing to produce the annual report. That left the yieldco with about 90 days to file or extend the deadline -- or face a demand for accelerated payments.  TerraForm, which owns operating wind and solar farms, has blamed SunEdison for its inability to file. SunEdison, it has said, provides systems needed to complete the reports. In March -- about a month before it filed for bankruptcy protection -- SunEdison attributed its own delayed 2015 report to “deficient information technology controls” from a new reporting system.

A bankruptcy trustee has scraped up the money to keep the sole U.S. source of rare earths safely in mothballs as its former owner, Molycorp Inc., exits chapter 11, Dow Jones Newswires reported yesterday. Molycorp failed to sell the Mountain Pass mine in San Bernardino County, Calif., as part of its bankruptcy case. Molycorp is morphing into a new company today, exiting bankruptcy and leaving Mountain Pass mine behind. Trustee Paul E. Harner asked a judge to shut down the bankruptcy owing to lack of funding. Harner revealed on Tuesday that Lexon Insurance Co. has offered to lend the estate $4.2 million to maintain the mine and continue the search for a buyer. Long idle, Mountain Pass still costs money to keep in a safe condition and California environmental authorities are watching. "At the minimum, we want to make sure they keep the lights on, the gates locked and the pump running," said Patty Kouyoumdjian, executive officer at the Lahontan Regional Water Quality Control Board, part of California's network of water safety overseers.

Several dozen creditors of Providence Financial Investments attended a public hearing in Miami this week in the bankruptcy case, as pressure mounts internationally against the Miami-based investment company that allegedly took in millions of dollars from hundreds of investors from around the world before declaring itself insolvent, the Miami Herald reported today. The company filed for chapter 7 bankruptcy on July 28 in the U.S. Bankruptcy Court of the Southern District of Florida after the U.S. Securities and Exchange Commission moved to shut the company down in June, calling the investment scheme involving factoring in Brazil an “ongoing fraudulent and unregistered securities offering.” The securities that offered annual returns of 12 percent to 13 percent had not been registered with the SEC, and brokers selling them were unregistered, the agency said in its complaint seeking a jury trial. In addition, Providence hasn’t accounted for the money it has collected — about $64 million in U.S. investors’ money alone, the SEC alleges — and its poor financial condition wasn’t disclosed to its investors, while it continued to solicit the nest eggs of more than 400 investors around the country.