The U.S. Trustee for Georgia's Region 21 is asking that the bankruptcy filed by Hutcheson Medical Center be dismissed, saying that the condition of the Fort Oglethorpe medical facility is too far gone to be salvaged, The Chattanoogan reported today. U.S. Trustee Guy G. Gebhardt said that HMC has picked up over $5 million in new debts since filing for bankruptcy. He said patient care is at risk at the facility, and asked for an expedited hearing and that the case be dismissed. Farrell Hayes, president and CEO of Hutcheson Medical Center, said, “Hutcheson’s medical staff and the patients themselves will be the first to tell you that our patient care fully meets the needs of this region and places the safety and comfort of our patients front and center.
After a flurry of negotiations, a bankruptcy judge yesterday said that he would authorize Patriot Coal Corp.'s creditors to begin voting on the company's plan to pay them, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Keith Phillips said that he would approve an outline of Patriot's chapter 11 plan. At the heart of the plan is the sale of Patriot's mines to new owners. Before Tuesday's hearing, creditors had lined up to criticize what they said were gaping holes in the payment plan, including how much they could expect to be paid, the terms of new debt the company hopes to issue and the scope of liability releases.
Arch Coal Inc. is seeking a compromise with lenders opposing a debt-swap deal that would help the struggling coal miner avoid a bankruptcy filing, Bloomberg News reported yesterday. Holders of the coal miner’s $1.9 billion loan may be offered better terms as an incentive to drop their opposition to a proposal to swap as much as $2.38 billion of junior-ranking borrowings for new senior obligations. The opposing group, claiming to represent the majority of senior creditors, is demanding to be paid a comparable yield on a new loan the company is seeking as part of the exchange, Arch Coal said in a July 29 statement. The lenders say that new creditors would receive preferential treatment over existing investors, which would violate provisions of the loan pact.
Apollo Global Management LLC, one of the owners of Caesars Entertainment Corp., received an ultimatum from creditors who are the staunchest opponents of the casino operator’s bankruptcy plan, demanding that the private-equity firm surrender control of the still-solvent parent company to them, Bloomberg News reported yesterday. The opponents, junior bondholders of Caesars’ bankrupt unit, made their demand in a meeting this month. Through the parent, creditors would then take charge of several profitable units outside of the bankruptcy case. In exchange, the creditor group would withdraw the pile of lawsuits it has filed related to the bankruptcy. Apollo rejected the offer, but the two sides are continuing negotiations. The second-lien group includes Appaloosa Management, Oaktree Capital Group LLC and Tennenbaum Capital Partners, according to a February court filing.
RadioShack’s creditors committee has secured court backing for a settlement with senior lenders that removes a potential impediment to approval of the company’s bankruptcy plan at a confirmation hearing next week, Bloomberg News reported yesterday. Separately, a hearing on a demand by Texas Attorney General Ken Paxton that holders of gift cards receive information from the court was rescheduled for Aug. 26, the date of the confirmation hearing. When RadioShack sold assets this year, including more than 1,700 stores to the Standard General hedge fund, senior lenders got $12 million from the proceeds. The money was put into escrow accounts for paying expenses and settlements of lawsuits in which the senior lenders have indemnification from RadioShack, which changed its name to RS Legacy Corp. after the sale. The unsecured creditors’ committee threatened to sue, claiming defects in the senior lenders’ lien package. By settling, lenders agreed to collect only from the escrow account in compensation for indemnification claims, in return for the unsecured creditors’ agreement not to sue.
What’s left of the Standard Register Co. going through chapter 11 bankruptcy is now officially called SRC Liquidation Co., the Dayton (Ohio) Business Journal reported today. Late last week the court authorized the name change, a formality that allows its new owner to keep the Standard Register brand name after the bankruptcy is complete. The fact that Minnesota-based Taylor Corp. will continue to market the Standard Register name is good news — at least in the short term — for the more than 750 Dayton-area employees that remain. Taylor Corp. closed on the deal to buy Standard Register on July 31.
Patriot Coal Corp. hopes to unload more than $400 million in debt in a newly announced deal to sell its remaining West Virginia mines, the Wall Street Journal reported today. Patriot said yesterday that an affiliate of the Virginia Conservation Legacy Fund (VCLF), an environmentally focused nonprofit, is in line to acquire two Patriot mining complexes in West Virginia as well as mining permits. As part of the deal, which Patriot hopes to subject to higher bids through a court-overseen auction process, VCLF would take responsibility for more than $400 million in liabilities — workers’ compensation, black lung and environmental — tied to the assets. VCLF Chief Executive Tom Clarke said that mining operations would continue at Patriot’s Federal complex in northern West Virginia, where the organization will seek to reduce carbon emissions. The deal covers most of the assets that would remain if Patriot closes a previously announced sale of most of its mines to Blackhawk Mining LLC. Read more. (Subscription required.)
In related news, busloads of United Mine Workers of America miners and retirees roared in protest outside Patriot Coal headquarters yesterday, as the bankrupt company looks to nix a union contract that includes pension contributions and health benefits, the New York Times reported today. From a makeshift stage on the bed of a tow truck, UMWA President Cecil Roberts bellowed out to a camouflage-clad crowd of 1,500 to 1,800 miners and led them in a march to nearby Patriot headquarters. UMWA packed 22 buses of miners from Kentucky, West Virginia, Pennsylvania and elsewhere, according to union spokesman Phil Smith. Read more.
Attorneys for the bankrupt-but-still-open Renault Winery Resort and Golf asked a federal judge this week to schedule a Sept. 22 auction for virtually all of the property’s assets, including a 150-year-old vineyard billed as one of the oldest continuously operating wine producers in the U.S., the Press of Atlantic City (N.J.) reported today. The resort filed for bankruptcy protection last November, having fallen behind on loans from mortgagee OceanFirst Bank. The bank obtained a $7.7 million mortgage foreclosure judgment against Renault last summer. Offers are being solicited for the entire property or for each of three components: a restaurant and 54-room hotel, an 18-hole golf course, and a restaurant and 40-acre winery, said Hank Waida, managing director of Equity Partners HG, the investment banking firm running the auction.
Lenders to Arch Coal Inc. are close to picking a replacement for Bank of America Corp., which resigned last month as their agent bank amid an escalating creditor feud, Bloomberg News reported on Friday. Wilmington Trust NA is the top choice to fill the role as an advocate for holders of a $1.9 billion term loan after Bank of America quit when a group of lenders asked it not to sign off on a debt swap. The firm hasn’t been hired yet, according to those familiar with the negotiations. If Wilmington Trust gets the loan-agent job, it will walk into a squabble that’s pitting senior lenders against Arch Coal and junior bondholders who would benefit from the debt exchange announced six weeks ago. Arch Coal is attempting to cut debt costs in a bid to weather a commodities slump that’s already pulled three other large U.S. coal miners into bankruptcy this year.
Samson Resources Corp. said that it reached a restructuring deal with its senior lenders and plans to file for bankruptcy within 30 days, Bloomberg News reported on Saturday. The Tulsa, Oklahoma-based gas producer, majority owned by private equity firm KKR & Co., will skip about $110 million of an interest payment due Aug. 17 and enter a 30-day grace period to try to build a broader support for the plan, Samson said on Friday. Lenders of Samson’s second-lien term loan led by Silver Point Capital LP, Cerberus Capital Management LP and Anschutz Investment Co. will take control of the company. The group, which represents about 45.5 percent of the holders of its $1 billion term loan, will provide as much as $485 million to support operations and pay down first-lien debt, the company said. The plan also includes a rights offering that will be backstopped by the same group.
