Oil and gas producer Sable Permian Resources filed for chapter 11 protection in the Southern District of Texas, hit by a slump in oil prices as the COVID-19 pandemic hurts fuel demand, Reuters reported. The Houston-based company said it had secured debtor-in-possession (DIP) financing of $150 million to fund its operations during the restructuring and that it was working with advisers and stakeholders on a range of alternatives. The company was created last year when Aubrey McClendon’s American Energy - Permian Basin LLC, a company he founded in 2014 shortly after being ousted from Chesapeake Energy Corp., merged with its parent company in an attempt to avoid bankruptcy. Chesapeake Energy is itself widely expected to file for bankruptcy under the weight of too much debt and the drop in energy demand and prices.
GNC Holdings Inc. filed for bankruptcy protection with the aim of selling itself and closing stores after its latest effort to manage its debt load unraveled amid the coronavirus pandemic, Bloomberg News reported. The health and wellness company’s chapter 11 petition filed in U.S. Bankruptcy Court in Delaware allows the retailer to keep operating while it pursues a dual-track process to restructure its balance sheet in a standalone plan or complete a sale, according to a statement. GNC entered into the process with support from a majority of its secured lenders and an affiliate of its largest shareholder, Harbin Pharmaceutical Group Holding Co., the Pittsburgh-based company said in the statement. The agreement also includes its largest vendor and joint venture partner, IVC. Certain lenders also provided $130 million in additional liquidity to financially support the company through its proposed restructuring. The company’s pre-negotiated plan will shutter stores as it looks to emerge leaner. It also reached an agreement in principle to market and sell itself through a court-supervised process, with an initial bidding price of $760 million, subject to court approval. A higher bid could be presented and accepted, and would be implemented instead of just the standalone plan transaction, according to the statement. With the support of its lenders and stakeholders, GNC expects to confirm a standalone plan of reorganization or complete a sale that will allow the business to exit from its restructuring process by the fall. GNC’s U.S. and international franchise partners and its corporate operations in Ireland, which are separate legal entities, aren’t part of the bankruptcy.
AAC Holdings Inc., the publicly traded parent of American Addiction Centers, filed for chapter 11 protection, Bloomberg News reported. The Brentwood, Tennessee-based company listed debt of $517.4 million and assets of $449.3 million in its filing in U.S. Bankruptcy Court in Delaware. The company said that it expects to emerge from bankruptcy in 125 days after executing on a recapitalization plan that will slash its debt. AAC lined up $62.5 million of initial financing that will allow it to maintain operations during the restructuring, according to a separate statement. The company, which operates rehab centers in seven states, has struggled with its debt load, including borrowings it took on from its acquisition of AdCare in 2018. The company defaulted on its debt obligations last year and entered into a forbearance agreement with lenders. AAC operates rehab facilities in California, Florida, Texas, Nevada, Mississippi, New Jersey, and Rhode Island, according to its website.
A pair of natural-gas-fired power plants owned by Talen Energy Corp. are going into chapter 11 protection for the third time since 2014, and the plan is to hand ownership to senior creditors owed nearly $555 million, WSJ Pro Bankruptcy reported. Talen’s Northeast Gas Generation LLC, which owns a 1,080-megawatt facility in Athens, N.Y., and a 360-megawatt plant in Charlton, Mass., is seeking a debt restructuring in the U.S. Bankruptcy Court in Wilmington, Del. The facilities have passed through bankruptcy twice since 2014. In the last bankruptcy, their owner — then known as New MACH Gen LLC — sold a third plant in Arizona to a lender in 2018 while retaining ownership of the Athens and Charlton facilities. Talen acquired MACH Gen in 2015 for $1.175 billion, one year after MACH Gen emerged from its first chapter 11 case. Talen executive Dale Lebsack said yesterday that the facilities had been subject to “extraordinary fluctuations” in their regional power markets, driven by low natural-gas prices that have depressed energy pricing. At the same time, he said, supply is increasing relative to demand, which has further eroded during the coronavirus pandemic and the ensuing economic recession as industrial and commercial consumers use less electricity. First-lien lenders are supplying a $40 million loan package to finance the bankruptcy. The company expects to propose a restructuring transaction that would “transfer, sell or otherwise convey” the plants to those lenders, Lebsack said.
Private-equity-owned Chisholm Oil & Gas Operating LLC has become the latest shale driller to file for bankruptcy, pushed into chapter 11 by a decline in commodity prices and production challenges in Oklahoma that have also caused other energy companies to fail, WSJ Pro Bankruptcy reported. The Tulsa-based driller has signed a restructuring support agreement with private-equity sponsors Apollo Global Management LLC and Ares Management LLC as well as lenders including Citibank NA, administrative agent on the company’s reserve-based lending facility, and Goldman Sachs Lending Partners LLC. The agreement is meant to provide the blueprint for a chapter 11 plan that would cut about $517 million in long-term debt from Chisholm’s balance sheet, according to court papers filed Thursday in the U.S. Bankruptcy Court in Wilmington, Del. Chisholm said that it has $263 million outstanding on its reserved-based lending facility and a further $254 million outstanding on a term loan. Chisholm’s reserve-based lenders are impaired, meaning they are unlikely to be repaid in full, according to the restructuring support agreement.
A U.S. subsidiary of Ireland’s Trane Technologies PLC has filed for bankruptcy as a way to deal with roughly 100,000 asbestos lawsuits, fearing the personal-injury litigation could otherwise continue for decades, WSJ Pro Bankruptcy reported. Aldrich Pump LLC, which has its North American headquarters in Davidson, N.C., said that the chapter 11 strategy centers around creating a trust that would pay “legitimate” asbestos claims, including from people with mesothelioma. Murray Boiler LLC, an affiliated company, also filed for bankruptcy. The businesses are owned by publicly traded Trane, an Irish industrial manufacturing company, according to papers filed in U.S. Bankruptcy Court in Charlotte, N.C. Neither Trane, which makes climate-control products, nor other subsidiaries are part of Wednesday’s bankruptcy filing. Aldrich said that it didn’t use asbestos in its manufacturing process but made industrial equipment that, in some instances, had asbestos-containing parts. Most of the lawsuits filed against the company involve its pumps and compressors that used metal piping through which liquids or gases flow. A gasket, a sealing product, was inserted between the pipes to avoid leaks. Decades ago, certain gasket materials that were the industry standard at the time contained asbestos, Aldrich said. About 20 years ago, after the miners and sellers of raw asbestos themselves began seeking protection from creditors in bankruptcy court, the number of mesothelioma cases against Aldrich and Murray doubled, the company said. Currently, Aldrich and Murray face roughly 100,000 asbestos-related lawsuits nationwide, according to court papers. The vast majority were filed at least a decade ago.
Proteus Digital Health Inc., a pioneer in the use of sensors to track whether patients are taking their medication, filed for bankruptcy protection Monday, with little to show for the hundreds of millions of dollars it received from venture-capital investors, WSJ Pro Bankruptcy reported. Under chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., Proteus said that it would continue efforts to find a buyer. In court papers, Proteus described itself as “pre-revenue” and said it had about $15 million in unpaid bills as well as lease obligations on its Redwood City, Calif., headquarters. Proteus makes sensors embedded in pills that, among other things, signal smartphones once the pill reaches the gut so doctors can track whether patients are taking their medication. The chip ultimately passes through the digestive tract normally. Stocked up with hundreds of patents, the maker of smart pills is unable to find more funding in capital markets roiled by the Covid-19 pandemic, court papers say. Big Proteus stakeholders include Novartis International AG and Medtronic Inc., as well as Kaiser Permanente Ventures, PepsiCo and Yuan Capital of Hong Kong. Past backers include Carlyle Group and Oracle Corp.
24 Hour Fitness Worldwide Inc. sought court protection from its creditors, unable to keep up with debt payments after the prolonged shutdown caused by coronavirus outbreak, Bloomberg News reported. The fitness chain’s chapter 11 petition was filed in Delaware, court papers show. Even before the onslaught of the coronavirus, middle-tier operators like 24 Hour struggled with customer defections to higher-end or budget-friendly fitness options. The gym operator posted a 2 percent revenue decline in unaudited fourth-quarter earnings, Bloomberg reported. Privately held 24 Hour, with more than 430 clubs and based in San Ramon, Calif., reported a slide in 2019 earnings partly due to the rocky debut of an automated system for checking in and signing up customers. Memberships at the company fell to 3.4 million in 2019’s third quarter from 3.5 million in the second quarter, according to Moody’s Investors Service. Chief Executive Officer Tony Ueber had to close all of the chain’s gyms in the middle of March, in line with other businesses across the U.S., to stop the spread of the virus. The company fully drew its $120 million credit line to cope with the expected impact of the pandemic. Management had been in talks with creditors to rework its debt load, but negotiations ended in a stalemate around the time of the closures, 24 Hour Fitness said in a March 23 earnings report.
Maines Paper & Food Service Inc. filed for chapter 11 bankruptcy yesterday, a move that had been hinted at for weeks following layoffs and sale of the 101-year-old Conklin, N.Y.-based food distribution giant, the Binghamton (N.Y.) Press & Sun-Bulletin reported. The federal court documents, filed in the Eastern District of Delaware, said "it is desirable and in the best interests of the companies, their creditors, employees, stockholders and other stakeholders" that a petition seeking relief under chapter 11 be filed. At $3.5 billion in annual sales, the family-owned Maines Paper & Food Service represented the largest and most expansive privately held business based in the Binghamton region. A $24 million, 340,000-square-foot Conklin warehouse completed in 1997 set the company up to expand from a $400 million enterprise to a distribution juggernaut, with sales and customers growing by geometric proportions. But on May 22, the Maines family ended its connection to the 101-year-old company it began. The business was sold to Lineage Logistics, a Novi, Michigan-based "cold storage" company that has been on an acquisition spree since 2013. No acquisition price was disclosed. A week before that, Maines filed a notice with the New York state Department of Labor, stating 119 workers had been laid off from its Broadline operation. Layoffs at that time were partly attributed to "unforeseeable business circumstances prompted by Covid-19." Although circumstances leading to the company's decline had been brewing for months, if not years, before the coronavirus pandemic, documents prepared in April as part of a layoff notice in an Ohio location said many of Maines' customer operations had either gone dark or seen drastic drops in sales.
