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Plunging oil prices and the economic fallout from the global coronavirus outbreak are setting the stage for a potential wave of debt restructurings and bankruptcies, especially in the energy and services sectors, according to company advisers and analysts, Reuters reported. Oil prices dropped by a third over the weekend after Saudi Arabia discounted its crude and signaled it would raise output, fueling concerns about the survival of heavily indebted oil and gas exploration and production companies. Credit investors pulled money out of the riskiest energy bonds, widening the spread of U.S. junk-rated energy debt over safer Treasuries to the highest since March 2016, the ICE/BofAML U.S. high yield energy index showed. Oasis Petroleum Inc, Chesapeake Energy Corp and Whiting Petroleum Corp were among those hardest hit, with their stocks and bonds losing as much as half their value. “This weekend’s developments in the oil market represent a strong additional headwind that will lead to further repricing in risk as well as increasing defaults and downgrades,” Credit Suisse credit analysts wrote in a research note this week. At the same time, the spread of coronavirus around the world continues to roil global markets and unnerve investors. On Monday, Wall Street suffered its biggest one-day stock market loss since the 2008 financial crisis, only to recoup half of the losses yesterday. Debt-laden companies in service sectors hit by reduced tourism and discretionary spending, such as airlines, cruise lines, movie theaters, gaming companies and hotel chains, are particularly vulnerable, according to Fitch Ratings and restructuring experts. Read more.

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Shares of global movie-theater chains AMC Entertainment Holdings Inc. and IMAX Corp. have declined in recent weeks as fear of the coronavirus has intensified, WSJ Pro Bankruptcy reported. AMC, the world’s largest cinema chain, has seen its stock fall close to 30 percent over the past two weeks, reducing its market value to $580 million. Meanwhile, the Kansas-based company’s $1.7 billion of bond debt has dropped to roughly 80 cents on the dollar, down by 10 percentage points from mid-February, according to MarketAxess. The fall in the company’s market value has come despite the fact that AMC recently posted better-than-expected earnings for the fourth quarter of 2019, indicating that while the virus hasn’t yet affected sales, investors are expecting it to, according to Michael Pachter, an analyst at Wedbush Securities. “Movies might start slowing down their releases, though a significant percentage of forgone ticket sales could be shifted later,” Pachter said. AMC recently said that it will temporarily shut down 22 of its movie theaters in northern Italy, where the virus outbreak has been particularly severe. However, the company isn’t anticipating widespread closures of its more than 1,000 theaters world-wide, Chief Executive Adam Aron said on the Feb. 27 earnings call. Read more. 

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The Aspen Club & Spa’s plan to emerge from chapter 11 bankruptcy by obtaining $140 million in exit financing is drawing opposition from the Colorado Bankers Association (CBA), which represents more than 95 percent of all banks in the state, the Aspen Times reported. In a filing made Jan. 24, the Bankers Association claimed a precedent will be set to the detriment of commercial lenders and borrowers if the bankruptcy court blesses the fitness club’s request for the funding to satisfy $26.8 million in mechanics’ liens and resume construction on its delayed redevelopment project. The Aspen Club & Spa’s legal team responded on Tuesday with its own brief claiming the CBA’s argument — which it made in the form of an amicus curiae, or friend-of-the-court brief — is unripe because it is based on conclusions the bankruptcy judge overseeing its case has yet to approve the exit loan proposal. The CBA’s brief, in the meantime, argued The Aspen Club’s reorganization plan will potentially damage creditors who have existing secured loans on its property at 1450 Ute Ave., while setting a precedent that could impact commercial lenders industry-wide.

The Aspen Club and Spa has rolled out a reorganization plan that calls a buyout the worst possible outcome for the creditors owed more than $100 million in its bankruptcy case, with its chief goal to get $140 million in financing to build what it calls a “world-class club and spa facility,” the Aspen (Colo.) Times reported. The plan also calls for Michael Fox, the president of The Aspen Club, to remain at the helm to “oversee the day-to-day operations” while being “subject to the oversight of the new board,” according to The Aspen Club’s reorganization plan. The Tuesday filing marked the second time The Aspen Club, through Denver law firm Markus Williams Young & Hunsicker LLC, has produced a reorganization plan in its attempt to satisfy its creditors, which, generally speaking, must confirm the plan in order for the bankruptcy court to accept it. The original version was filed in September. A disclosure statement to creditors, also filed last week, summarizes a plan that puts the mechanics’ lienholders at the top of the pecking order of payback priority. Combined, those mechanics’ lienholders with secured claims would receive $26.8 million under the reorganization plan.

The majority shareholder of Tough Mudder, Will Dean, and its board of directors have consented to bankruptcy proceedings for the company, making a speedy sale to rival mass participation business Spartan more likely, Sportbusiness.com reported. A motion filed with the U.S. Bankruptcy Court of Delaware states that Tough Mudder’s board of directors will not oppose a petition for chapter 11 reorganisation of the company by its creditors and will not stand in the way of a sale to Spartan. On 7 January it emerged that the obstacle racing event organizer is the subject of chapter 11 proceedings in the U.S. after three companies — Valley Builders, Trademarc Associates and David Watkins Homes — filed a petition in the U.S. Bankruptcy Court of Delaware, claiming they are due a total of $854,558.40. The latest consent motion appears to end a standoff between Tough Mudder’s co-founders, Will Dean and Guy Livingstone, and the company’s largest lender Active Networks over the sale of the company. Dean and Livingstone were accused of “a game of brinkmanship” and of ignoring the best interests of these creditors in holding out for $44 million to sanction the sale to Spartan.

The horse-drawn carriages operated by H.R.H. Carriage Co. and Yellow Rose Carriage Co. are familiar sights in downtown San Antonio, offering quaint joyrides for tourists. But a bitter fight is playing out over ownership of the two companies, the San Antonio Express-News reported. It started peacefully enough, with longtime owners Richard and Ann Van Dyke striking a deal to sell the companies to Stephanie and Richard Buck, who moved from England to San Antonio four years ago. Before both deals could be completed, though, relations between the Bucks and Van Dykes soured, leading the couples to sue each other in state District Court. The fight essentially is over how much money they owe each other. For now, the Van Dykes still own Yellow Rose, and the Bucks control H.R.H. On Wednesday, a day after the Van Dykes filed a motion to have the Bucks held in contempt for allegedly saddling both companies with debt in violation of a court order, Stephanie Buck filed an emergency bankruptcy petition for H.R.H. The contempt hearing that had been set for Friday was dropped as a result. As part of their contempt motion, the Van Dykes wanted the court to order the Bucks to surrender their passports because they are not U.S. citizens and they “pose a flight risk.” H.R.H. listed up to $50,000 in assets and liabilities ranging from $100,000 to $500,000 in its chapter 11 petition.