%1

Paragon Offshore Plc, the oil services company spun off just as crude began its plunge, filed for bankruptcy protection after announcing deals to reorganize its debt and avoid protracted legal battles involving its former parent, Noble Corp., Bloomberg News reported yesterday. Houston-based Paragon is the latest casualty of an oil market that has fallen more than 70 percent since June 2014, just weeks before the company was split off from Noble, in one of the most ill-fated spinoffs of recent years. Paragon has said that it will use the chapter 11 process to execute a restructuring agreement it announced on Feb. 12. Read more. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt with ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. 

Bankrupt retailer Joyce Leslie Inc. will hold an auction for its store leases on Feb. 16, NorthJersey.com reported yesterday. The company has a stalking-horse bid from 618 Main Street Corp., which sells clothes under the Mad Rags/10spot name, for a number of the store leases. Joyce Leslie also is seeking bids for the lease on its corporate offices and distribution center, and for the rights to its name and intellectual property. The company is holding liquidation sales at its 42 stores in New Jersey and three other states.

Glenn Straub is “at it again,” according to lawyers for a handful of deserted restaurants trapped inside the shuttered Revel Casino Hotel in Atlantic City, N.J., the Wall Street Journal Bankruptcy Beat Blog reported yesterday. Bankruptcy court papers filed earlier this month show yet another dispute between the restaurants and the Florida-based developer has flared up, this time fueled by nearly a quarter million dollars of alcohol — beer, wine and liquor left behind in the darkened resort. Last spring, a bankruptcy judge approved an $82 million sale of Revel to Straub, ending nearly 10 months of courtroom struggles for control of the property. The purchase price amounted to more than a 96 percent discount from the $2.4 billion it cost to build Revel. Revel never turned a profit after opening its doors in 2012 and landed in chapter 11 twice in just two years. But the judge’s order left unresolved one of the stickiest aspects of the sale: whether former business tenants, including the restaurants, can remain at Revel when — and if — the property reopens. The issue remains tied up in litigation.

Sundevil Holdings Holdings LLC, which operates two gas-fired power plants in Gila Bend, Arizona filed for yesterday for chapter 11 protection, Reuters reported. The company, owned by private equity firm Wayzata Investment Partners, listed $100 million to $500 million of both assets and liabilities in its filing with the U.S. Bankruptcy Court in Wilmington, Del. The company said that it would seek court approval to borrow $45 million to support its operations during its bankruptcy.

Oaktree, Molycorp Inc.’s senior lender, is battling a committee of lower-ranking creditors over the size of its loans and how best to restructure the company, Bloomberg News reported yesterday. Oaktree and Molycorp agree that loans made before and after the bankruptcy bring the amount owed to Oaktree to $514 million. Other creditors, including bondholders owed $1.4 billion, are disputing that figure. Molycorp filed for bankruptcy in June after a drop in rare-earth prices made its California mine unprofitable. The company is planning to either sell itself at an auction or, if no bids are high enough, reorganize and reduce debt by turning itself over to Oaktree. The case is In re Molycorp Inc., 15-bk-11357, U.S. Bankruptcy Court, District of Delaware (Wilmington).

Rig contractor Hercules Offshore Inc. said that it was considering strategic options, including selling itself, three months after emerging from bankruptcy, Reuters reported today. The company filed for chapter 11 protection in August and emerged from bankruptcy in November. Hercules Offshore said the move to explore alternatives was not in response to any proposal received by the company. The company had about $514 million in cash and $450 million in total debt as of Feb. 9.

Horsehead Holding Corp. has received initial approval from a court for $90 million debtor-in-possession financing that will allow the company to operate in the early weeks of the chapter 11 bankruptcy filing, the Pittsburgh Business Times reported today. According to a filing with the U.S. Securities and Exchange Commission, Horsehead plans to file a reorganization plan with the U.S. Bankruptcy Court for the District of Delaware by March 13, receive approval by May 27 and complete the reorganization plan by June 11. Missing any one of those dates would result in a default of the financing, Horsehead said in the filing.

The remnants of mobile accessory maker Targus International Inc., whose primary assets are now in the hands of its lenders, filed for bankruptcy Tuesday to help settle its final affairs, the Wall Street Journal reported today. What little remains of Targus filed for chapter 11 protection after lenders Guggenheim Partners and Mudrick Capital Partners foreclosed on the operations of the longtime laptop and iPad case maker. The lenders purchased Targus’s name along with its manufacturing assets. The new Targus — Targus International LLC — is expected to continue operating normally. The old Targus, essentially a shell with relatively few assets, is now preparing to liquidate under a prearranged plan it negotiated with its creditors.

Noranda Aluminum Inc. won court approval to draw $25 million against a bankruptcy-financing package that may run as high as $165 million as it launches a restructuring that will likely involve the sale of its profitable flat-rolled product line of business, Dow Jones Daily Bankruptcy Review reported today. The Franklin, Tenn.-based company is trying to salvage its primary aluminum business in chapter 11 and went to court yesterday to get access to desperately needed cash. Noranda agreed to test the market for buyers for its flat-rolled business, which produces foils for consumer and industrial uses, in order to get existing lenders to finance its bankruptcy.

Bankrupt coal miner Arch Coal Inc. has reached a deal with the state of Wyoming that will provide it with temporary relief from liability for millions of dollars in future cleanup costs for coal mines, Reuters reported yesterday. In the past, companies like Arch Coal have covered the costs of cleaning up mines through self-bonds that allowed them to use their balance sheet as a guarantee. That practice has come under federal scrutiny since Arch Coal, the second-largest U.S. coal miner, and Alpha Natural Resources filed for bankruptcy, potentially leaving taxpayers exposed to billions of dollars in cleanup costs. Arch said in a court filing that the state of Wyoming and the Wyoming Department of Environmental Quality have agreed to accept $75 million from a debtor-in-possession financing carve-out in the bankruptcy. That amount will cover cleanup costs related to mines operated by Arch, including Black Thunder, one of the country's largest mines, as well as the Coal Creek and Vanguard mines. An additional $17 million will be provided in third-party collateral for four smaller mines, it said.