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Hercules Offshore Inc., owner of the largest fleet of shallow-water drilling rigs in the Gulf of Mexico, filed for bankruptcy with a plan to be taken over by senior creditors, Bloomberg News reported yesterday. The company said that it planned to use the bankruptcy process to implement a proposal, announced in July, to cut $1.2 billion in debt. The plan calls for investors to trade their senior notes for almost 97 percent of Hercules’s equity. Some noteholders would also lend the company $450 million to help finish building a new oil-drilling rig, the company said in a statement. Under the plan, current shareholders would have a chance to split the 3 percent of the company not going to noteholders, Hercules said.

Gospel Light Publications, known for its Sunday school and vacation Bible school curricula, filed for bankruptcy with plans to sell its assets, the Wall Street Journal reported today. The Christian media company, founded in 1993, blamed the filing on “a number of unanticipated occurrences during the last nine months” as well as a “long-term slowdown in the Christian publishing market, court papers show. Those unplanned-for events include the bankruptcy filing of one of its biggest customers, the Family Christian retail chain. Gospel Light said the filing forced it to write off $143,000 in expected income. With current business conditions not promising, Gospel Light said that it began looking for buyers this spring. Those efforts yielded a $175,000 offer for its ZDL unit, which publishes Christian literature and provides consulting services in China, from the company’s current minority owner, Pacific Resources International LLC. Pacific’s offer, which is subject to bankruptcy-court approval, would buy out Gospel Light’s majority stake in ZDL.

Executives with the struggling St. Michael's Medical Center in Newark, N.J., filed for bankruptcy protection on Monday, with officials blaming uncertainties surrounding the state's long review of the proposed sale of the facility, NJ.com reported yesterday. "We've done everything the state has asked us to do," said David Ricci, the hospital's CEO. "After two and a half years, it would appear we're no further along than when we started." The bankruptcy move was done so the hospital will continue to have enough money on hand until the expected sale to Prime Healthcare Services, a for-profit company out of California. Employees and patients should not notice any change, Ricci said. "The state remains committed to the health and well-being of Newark residents," said Donna Leusner, spokeswoman for the N.J.Department of Health. "The department has taken a reasonable and deliberative approach as it always does with certificate of need applications. Having completed multiple rounds of questions, it remains under review." She declined to provide any timetable for when that review would be concluded. Read more. 

For more on the bankruptcy proceedings related to hospital facilities, be sure to pick up a copy of ABI’s Health Care Insolvency Manual, Third Edition. 

Response Genetics Inc. sought chapter 11 protection with plans to sell its cancer diagnostics business to a rival for $14 million, subject to higher bids at a court-overseen auction, Dow Jones Daily Bankruptcy Review reported today. The Los Angeles company on Sunday filed its chapter 11 petition in the U.S. Bankruptcy Court in Wilmington, Del., citing declining reimbursement rates for medical tests as being among the setbacks that contributed to its financial distress. Cancer Genetics Inc. would serve as stalking-horse bidder at an auction of nearly all of Response Genetics' assets, court papers show. Cancer Genetics is offering $7 million in cash and $7 million worth of its shares as part of its bid, in addition to its pledge to take on certain liabilities.

The owner of one time mail-order music giant Columbia House filed for chapter 11 bankruptcy protection yesterday, seeking to sell what remains of its business after almost two decades of declining revenue, Dow Jones Newswires reported yesterday. Filmed Entertainment Inc. filed for chapter 11 at the U.S. Bankruptcy Court in Manhattan, citing the advent of digital music and dramatic changes in technology that are threatening to render CDs and DVDs obsolete. Since peaking in 1996 at about $1.4 billion, revenue has declined almost every year since, according to FEI director Glenn Langberg. Last year, net revenue was just $17 million.

Coyne International Enterprises Corp., a leading U.S. commercial laundry service company, filed chapter 11 protection, the ABL Advisor reported today. Pending the completion of the sales, Coyne will continue to operate under the supervision of the bankruptcy court. Coyne employs approximately 620 people at its nine locations. Under the three proposed sales, seven of Coyne’s nine locations will remain open and approximately 525 jobs will be preserved. To finance its operations in chapter 11, Coyne has obtained a commitment for $3.5 million in debtor-in-possession financing from NXT Capital, LLC, a financial institution based in Chicago. NXT is also the agent for Coyne’s senior secured debt.

The Southern Regional Medical Center near Atlanta filed for bankruptcy on Thursday while executives look for buyers for the 331-bed hospital, Dow Jones Daily Bankruptcy Review reported today. Officials who put the nonprofit hospital into chapter 11 protection said that the Riverdale, Ga.-based facility faces more than $100 million in debt. The 685,475-square-foot hospital's operations have already drawn interest from potential buyer California-based Prime Healthcare Services, which operates roughly 35 hospitals and has made offers for other bankrupt hospitals. Prime Healthcare would continue to operate the hospital, one of Clayton County's largest employers with about 1,350 people, according to documents filed in U.S. Bankruptcy Court in Atlanta. Read more.  (Subscription required.)

For more on hospital and health care insolvency issues, be sure to pick up a copy of ABI’s Health Care Insolvency Manual, Third Edition.

Manhattan’s WASA Studio, one of the country’s oldest architecture and engineering firms, whose predecessor designed Grand Central Terminal train station, filed for bankruptcy on Monday while fighting several legal battles with ex-clients, the Wall Street Journal reported today. Officials who put the firm into chapter 11 protection blocked its landlord from evicting the company’s operations from their Broadway office space. The company plans to relocate to another floor and look for buyers who could stabilize its operations, according to documents filed in U.S. Bankruptcy Court in Manhattan. The firm, known for decades as Wank Adams Slavin Associates, is fighting several lawsuits against ex-clients who are pushing for damages of more than $11 million, said Senior Managing Partner Harry Spring in court papers.

Z’Tejas Southwestern Grill has filed for bankruptcy protection, the Austin (Texas) American-Statesman reported on Saturday. Z’Tejas has a total of nine restaurants, including five locations in Arizona and one in Costa Mesa, Calif., according to the company’s website. After reviewing the “historical performance of the company,” as well as “current and long-term liabilities,” “it is desirable and in the best interests of the company, its creditors, employees, stockholder, and other interested parties that” the bankruptcy petition be filed, according to court documents.

A century-old, family-owned scrap metal company in Watertown, Wis., has filed for receivership amid declining global prices for iron ore, the Milwaukee Journal Sentinel reported on Friday. Loeb-Lorman Metals Inc., which employs about 75 people, has sought protection from creditors in a bankruptcy-like proceeding. The action places the firm, which has been owned by members of the Loeb family since its founding in 1914, in the hands of a court-appointed receiver. The receiver, attorney Ronald M. Carlson, will sell the company's assets to raise money to cover as much of its debt as possible. In a statement, Carlson said he hopes to sell the business in one piece as a going concern — typically the best possible outcome in receivership cases.