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A judge ruled that Caesars Entertainment Corp. must face bondholder lawsuits that could force it into bankruptcy alongside its main operating unit, Bloomberg News reported on Friday. The ruling by Bankruptcy Judge A. Benjamin Goldgar means Caesars could lose court cases by mid-September in New York and Delaware worth $11.4 billion. Judges in those states have scheduled court hearings to decide whether to rule immediately against the company, dismiss key parts of the suits, or send the cases to trial. The lawsuits are the biggest obstacle left to getting Caesars’s operating unit, Caesars Entertainment Operating Co., out of bankruptcy. Bondholders want to use the suits, which a court examiner found have a good chance of succeeding, to boost their recoveries above the 34 percent offered by the unit. Caesars bankruptcy lawyers vowed to appeal and asked the judge to halt the suits while a U.S. District Court judge reviews Goldgar’s decision. Judge Goldgar denied the request, which means CEOC must now seek an emergency order from a higher court overturning Goldgar’s ruling. Goldgar, who said that will be difficult, concluded that halting the lawsuits with an injunction wouldn’t help Caesars settle with bondholders.

Hedge fund manager D.E. Shaw & Co LP is weighing a bid for SunEdison Inc.’s controlling stake in TerraForm Power Inc., the bankrupt U.S. renewable energy producer's most valuable asset, Reuters reported yesterday. D.E. Shaw's emergence as a possible bidder for TerraForm Power indicates that the potential sale process for the so-called "Class B" shares of TerraForm Power, which was formed by SunEdison to buy and operate its solar and wind power plants, is likely to be competitive. Another hedge fund, Appaloosa Management LP, and asset manager Brookfield Asset Management Inc., have already announced plans to jointly bid on SunEdison's TerraForm Power Class B shares. D.E. Shaw and its affiliates already own some of the publicly traded common shares of TerraForm Power. They received them in an agreement announced last year after forgiving debt owed by SunEdison, regulatory filings show.

NextEra Energy Inc. has reached agreement with financial institutions on its bid to buy Energy Future Holdings Corp.’s Oncor Electric Delivery Co. utility in Texas, Bloomberg News reported today. As part of the transaction, NextEra plans to fund $9.5 billion, primarily for the repayment of about all of the Energy Future Intermediate Holding Company debt, NextEra said today. NextEra has proposed to take over the biggest transmission operator in a state where regulators have already proven they can drive a tough bargain. An investor group led by Dallas-based Hunt Consolidated Inc. tried and failed in May to buy Oncor. At stake is a transaction that’s key to Energy Future’s emergence from one of the biggest bankruptcies of all time, involving the restructuring of about $50 billion in debt. NextEra has previously agreed to buy all of the equity of reorganized Energy Future Holdings and certain of its direct and indirect subsidiaries, including Energy Future Holdings’ approximately 80 percent indirect interest in Oncor.

Energy Future Holdings Corp., Texas' biggest power company, won bankruptcy court approval on Friday for a plan that will allow the bulk of its operations to exit chapter 11 after two years of battling creditors, Reuters reported. "I am going to overrule all of the remaining objections,” said Bankruptcy Judge Christopher Sontchi. Dallas-based Energy Future filed for bankruptcy in April 2014 when weak electricity prices left it unable to service $42 billion in debt, mostly related to the company's creation through a 2007 leveraged buyout. The reorganized company will own TXU Energy, the state's largest retail electric utility, and Luminant, Texas' largest power plant operator and largest coal miner. The spinoff of the two divisions into the new company avoids a tax liability that had worried creditors. The potential for a "massive" tax liability was the "elephant in the room," Judge Sontchi said on Friday, adding that he believed the plan "was the best possible deal" to push the company out of bankruptcy.

A bankruptcy judge has dealt a big blow to Aéropostale Inc.’s bid to survive chapter 11, refusing to rein in the bidding rights of Sycamore Partners, a former big backer and now major critic of the retailer, the Wall Street Journal reported on Saturday. Bankruptcy Judge Sean Lane, in a decision signed Thursday but not made public until Friday afternoon, said that Sycamore is entitled to wield its $151 million loan as currency at the bankruptcy auction of the retail chain, a credit-bid that gives it an advantage in the competition. The ruling portends bad news for landlords and employees of the teen fashion retailer, which has been at odds with Sycamore since before it filed for bankruptcy protection in May. The private-equity firm has said liquidation may be the best outcome for Aéropostale and its stores, and scoffed at the company’s hope of a job-saving turnaround. The credit-bid means Sycamore can walk into the auction without cash, and demand rival bidders pay off the $151 million loan from Sycamore if they want to save, or liquidate, the company. During arguments, Aéropostale warned that allowing Sycamore to credit-bid makes it unlikely that anyone but liquidators will show up at the auction. Read more. (Subscription required.) 

Need more insight into credit bidding in bankruptcy? Pick up a copy of ABI’s Credit Bidding in Bankruptcy Sales: A Guide for Lenders, Creditors, and Distressed-Debt Investors. 

Valuation has become a contentious issue in the chapter 11 case of Horsehead Holding as some shareholders are alleging that the company’s assets are actually worth more than the company contends, the New York Times reported on Saturday. The company listed $421 million in secured and unsecured debt obligations in its February bankruptcy filing. Like many companies in the commodities business, Horsehead has stumbled. Spot prices for zinc and nickel swooned in 2015, and a new zinc plant it built in Mooresboro, N.C., encountered production problems. Still, metals prices have rebounded significantly since the company filed for bankruptcy. And some Horsehead shareholders contend the company is lowballing the value of its assets to let leading creditors gain control of it at a bargain price. The decline in Horsehead’s assets has certainly been precipitous. Just before the February filing, its assets were valued at $1 billion. Six months later, Horsehead’s financial adviser estimated that the company’s assets were worth about one-third of that. Diane Lourdes Dick, an associate professor of law at Seattle University Law School, said the Horsehead case highlighted a flaw in the bankruptcy process. “What we have here are equity owners that are functionally shut out of the process, and that provides the opportunity for exploitation by other stakeholders,” she said. “It is yet another example of the unique challenges that equity holders face when the company they’ve invested in is in chapter 11.” Read more.

Get additional insights and analysis on valuation topics by picking up a copy of ABI’s A Practical Guide to Bankruptcy Valuation. 

A bankruptcy judge said Primorsk International Shipping Ltd.’s creditors can vote on the oil shipper’s liquidation plan, which divvies up the proceeds from the sale of its fleet, the Wall Street Journal reported today. Primorsk sold its fleet of nine double-hulled, ice-class tankers to SCF Tankers Ltd., an affiliate of Russia’s Sovcomflot, for $215 million after filing for bankruptcy earlier this year. The sale of the vessels — which are capable of transporting crude oil in extreme conditions in the Arctic and the Russian Far East — followed an auction held in London in June. Bankruptcy Judge Martin Glenn signed off on Primorsk’s plan disclosure document at a hearing earlier this week. Proceeds from the sale won’t be enough to fully repay senior lenders, a group of banks that include BNP Paribas SA and Nordea Bank Norge ASA affiliate of investment firm Oaktree Capital, owed about $262 million.

Former professional wrestler Hulk Hogan, whose real name is Terry G. Bollea, helped to put a stop to Gawker Media LLC founder Nick Denton’s bid to lease his downtown Manhattan loft, the Wall Street Journal reported today. Bollea had taken issue with Denton’s bid to rent the loft for $12,500 a month for at least a year, saying that wouldn’t be enough to cover condominium expenses. A bankruptcy judge on Wednesday sided with Bollea and denied Denton’s request to lease the condominium, which is valued at $4.25 million. In objecting to the Gawker founder’s request, a lawyer for Bollea said in a court filing “it is quite understandable that [Mr. Denton] does not want to sell his former home,” but the Gawker founder hasn’t offered up justification for leasing the property. A monthly rental of $12,500 would leave Denton in the red by $97,000 a year, court papers say. The Gawker founder and his spouse have since relocated to a cheaper apartment, according to court papers.

Bankruptcy Judge A. Benjamin Goldgar said yesterday that Caesars Entertainment Corp. is unlikely to get protection from bondholder lawsuits that would last as long as its insolvent operating company is in bankruptcy, Bloomberg News reported. Judge Goldgar today will decide whether to extend a halt on lawsuits in New York and Delaware, and if so, for how long. Goldgar made it clear yesterday that he would not give Caesars a lawsuit shield that lasts until after Caesars Entertainment Operating Co. wins approval of its reorganization plan, which can’t happen until next year at the earliest. “I’ve said that isn’t going to happen,” Goldgar said yesterday near the end of a three-day hearing on possibly halting bondholder lawsuits that could impose $11.4 billion in judgments on the parent company. The lawsuits are the biggest obstacle left to getting Caesars’ main operating unit out of bankruptcy. Bondholders want to use the suits, which a court examiner found have a good chance of succeeding, to boost their recoveries to more than the 34 percent offered by CEOC.