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Bankruptcy Judge Christopher Sontchi gave the green light to Paragon Offshore PLC’s creditors to vote on its restructuring plan, which would wipe more than $1 billion in existing debt from its balance sheet, the Wall Street Journal reported today. Judge Sontchi on Monday signed off on an outline of Paragon’s restructuring plan, court papers show, paving the way for creditors to begin casting their votes. In addition to lowering the company’s debt load, Paragon will also see a $60 million reduction in annual cash interest expense from its balance sheet. Creditors eligible to vote on the plan will have until May 31 to submit ballots, and Judge Sontchi will consider approving the plan itself at a hearing set for June 3.

Peregrine Midstream Partners LLC filed a chapter 11 plan that proposes to slash the natural gas storage company’s debts by more than $249 million, the Wall Street Journal reported today. The plan, filed on Monday with the U.S. Bankruptcy Court in Wilmington, Del., is the product of last month’s deal under which key lenders pledged their support for a restructuring that will see them forgive several hundred million dollars in debt in exchange for new debt and/or equity in the reorganized business. The lenders that have signed the plan-support agreement include ING Capital LLC, Royal Bank of Canada and Sumitomo Mitsui Banking Corp., according to court papers. Houston-based Peregrine and its affiliates sought chapter 11 protection on Feb. 2 after the construction of its Ryckman Creek natural gas storage facility in Wyoming ran into trouble, including a fire that caused substantial damage, and contributed to the company’s debt load. Read more. (Subscription required.) 

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Peabody Energy Corp., the world's largest privately owned coal producer, filed for chapter 11 protection today in the wake of a sharp fall in coal prices that left it unable to service a recent debt-fueled expansion into Australia, Reuters reported. The company listed both assets and liabilities in the range of $10 billion to $50 billion, according to a court filing. Peabody's Chapter 11 bankruptcy filing ranks among the largest in the commodities sector since energy and metals prices began to fall in the middle of 2014 as once fast-growing markets such as China and Brazil began to slow. Peabody has secured $800 million in debtor-in-possession financing from both secured and unsecured creditors, including a $500 million term loan, $200 million bonding accommodation facility and a letter of credit worth $100 million. The case is in the U.S. Bankruptcy Court for the Eastern District of Missouri, St. Louis, case number 16-42529.

A Seattle bankruptcy judge put Northwest Territorial Mint’s finances in the hands of a trustee, rejecting the owner’s proposal to hire a restructuring expert instead as the company faces thousands of creditors as well as a large jury verdict in a defamation lawsuit, the Seattle Times reported yesterday. NW Mint has operations in Washington, Nevada, Texas, Wisconsin, Hawaii and Virginia, with 237 employees, its court documents say. According to the defamation-suit judgment, NW Mint is on the hook for $12 million, while company owner Ross B. Hansen is personally liable for $25 million. The hefty defamation verdict stems from an obsessive online smear campaign by Hansen against Los Angeles real-estate developer Bradley S. Cohen, and the developer’s equally determined counterstrike. Papers filed in the suit detail how Hansen ordered NW Mint employees to help set up a series of anonymous websites targeting Cohen. The acrimony apparently started when Cohen sued the mint for polluting an Auburn warehouse it leased from him. Cohen won and collected a $3 million judgment.

Pacific Sunwear of California Inc. filed for chapter 11 protection, the latest youth-oriented clothing chain to falter in an increasingly cut-throat retail environment, Bloomberg News reported today. Golden Gate Capital, a private equity firm that loaned $60 million to the retailer in 2011, has worked out a deal that will help PacSun avoid liquidation. The pre-packaged bankruptcy agreement involves swapping debt for equity after the retailer emerges from chapter 11. PacSun also will get financing to continue operating during the restructuring process. Without the deal, PacSun might have faced a total shutdown of the surfwear chain, which has struggled to adapt to shifting consumer tastes.

The co-founder of Apollo Global Management, Marc Rowan, resigned from the board of Caesars Entertainment Corp.’s operating unit after an investigation found that he had led a deal that was undervalued and shortchanged the now-bankrupt unit, Reuters reported yesterday. The disclosure was made in court documents filed on Monday in bankruptcy court in Chicago. The documents did not say why the billionaire investor resigned. The bankrupt unit is negotiating a settlement over several deals, including the one led by Rowan, that creditors allege stripped the unit's best casinos and left behind unsustainable debt. Rowan remains on the board of the parent, which may have to contribute billions of dollars to a restructuring plan to avoid litigation over the deals. Read more. 

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A federal judge in Delaware is scheduled to hear arguments over how to split up some $7 billion Nortel raised from the sale of its patents and other assets, which has pitted U.S. bondholders against creditors of the Canadian parent company and U.K. pensioners who say they’re owed $3 billion to shore up their underfunded plans, Forbes.com reported today. The multinational bankruptcy proceedings will have amassed nearly $2 billion in legal fees to date. British law firm Herbert Smith Freehills appears to be the biggest winner, billing for some $400 million to advise Ernst & Young on the administration of Nortel’s European bankruptcy estate. Ernst & Young comes in second at around $335 million. The high fees reflect the vexing complexity of Nortel’s bankruptcy, which is taking place across three countries and two continents and features the increasingly common clash of bondholders against pensioners. In Nortel’s case the big unsecured creditor is the company’s U.K. pension plan, which administrators there claim is underfunded to the tune of $3 billion. Unfortunately for those pensioners, Nortel’s U.K. operations were dwarfed, in terms of revenue and earnings, by its U.S. business. According to one analysis the U.S. operation held 70 percent of Nortel’s patents — a key measure in a company whose assets are mostly intellectual property — and would get 73 percent of the bankruptcy assets on a pure revenue basis. The U.S. divisions also issued more than half of Nortel’s debt.

Chaparral Energy Inc. has reached a short-term agreement with its lenders, buying the Oklahoma City-based oil and natural gas producer more time to complete negotiations, The Oklahoman reported today. Chaparral said in a regulatory filing yesterday that it has reached a forbearance agreement with senior noteholders and other lenders who agreed to not exercise their right to call the note due at least until April 15, as long as all other conditions of the agreement are met. Chaparral said its loans were considered in default after the company last week failed to make a $16.5 million interest payment within the 30-day grace period, and after its independent auditors said they had "substantial doubt" over the company's ability to continue as a going concern. Chaparral said it owed $1.6 billion as of the end of 2015. The company borrowed another $141 million in February, maximizing its credit limit. The company said it had $176 million in cash as of March 30. "If we are unable to reach an agreement with our creditors prior to any of the above described accelerations, we could be required to file for protection under chapter 11 of the U.S. Bankruptcy Code," Chaparral said last week.