%1

Creditors of a bankrupt U.S. subsidiary of Abengoa SA demanded more details on the unit's financial accounts, even as a bankruptcy judge said the company could move forward with its plan to exit chapter 11 protection, Reuters reported yesterday. Abeinsa Holding Inc. is one of several U.S. subsidiaries of the Spanish company, Abengoa, that filed for chapter 11 this year while the Seville-based renewable energy and engineering group negotiated a high-stakes plan to avoid its own bankruptcy. The U.S. bankruptcies have been clouded by creditors’ complaints that the parent drained its foreign businesses of cash and assets, prompting demands for disclosure of financial documents and records of intercompany transactions. Creditors need to see individual financial accounts to determine if U.S. entities had been "kicking money" to the parent, said Alan Smith, a creditor lawyer, at a hearing on details of the group's reorganization plan in the U.S. Bankruptcy Court in Delaware.

A U.S. judge on Tuesday ordered the bankrupt U.S. subsidiaries of renewable energy company Abengoa SA to disclose their dealings with their Spanish parent, which is accused of draining cash from the U.S. units, Reuters reported yesterday. Creditors of Abengoa Bioenergy US Holding LLC and Abeinsa Holding Inc., which both filed for bankruptcy this year, have said in court filings that the U.S. businesses were transferring cash and assets to the parent in Spain. The Seville-based parent obtained provisional support of more than 75 percent of creditors for a $10 billion debt-restructuring plan, averting what could have become Spain's largest-ever bankruptcy filing. However, creditor challenges to the U.S. chapter 11 proceedings could pose a threat to Abengoa's attempt to retain control of strategic U.S. engineering and renewable energy businesses. In the case of Abengoa's U.S. units, unsecured creditors (including some who helped finance construction of one of the world's largest solar facilities in the Mojave Desert) stand to recover only pennies on the dollar. In a ruling on Tuesday, Bankruptcy Judge Kevin J. Carey granted the unsecured creditors’ committee's request that the U.S. units hand over documents and communications on matters such as asset transfers and liabilities across Abengoa's businesses, which span more than 80 countries. Read more.

Learn about the key issues in cross-border energy company restructurings from a financial and legal perspective at ABI’s Cross-Border Insolvency Program on Nov. 14 in New York. Click here to register. 

South Korea’s STX Offshore & Shipbuilding Co. filed for bankruptcy protection in Texas in a bid to stop creditors from trying to seize its assets in the U.S. as the troubled shipyard looks to sell its business overseas, the Wall Street Journal reported today. Bankruptcy Judge Jeff Bohm granted STX a temporary restraining order to block creditors from seizing U.S. assets at a hearing yesterday, one day after Yoon Keun Jang, the administrator overseeing STX Offshore’s Korean bankruptcy case, placed the company into chapter 15. Jang said that some creditors who hired STX to build vessels are trying to circumvent the Korean proceeding by seizing STX’s assets in the U.S. The shipbuilder would “suffer irreparable harm,” he said in court papers, absent a court order barring the asset seizures.

Two Platinum Partners hedge funds have sought chapter 15 protection as part of an ongoing liquidation effort, according to court documents filed in New York federal court, Reuters reported yesterday. In August, a Cayman Islands court ordered that an outside expert unwind the so-called offshore versions of its flagship hedge fund, Platinum Partners Value Arbitrage, which, along with the firm, is also being investigated by U.S. authorities. That liquidator, RHSW Caribbean, filed the chapter 15 petition and seeks to protect Platinum’s U.S. assets from creditors while an insolvency proceeding is underway in the Cayman Islands. Mark Nordlicht founded Platinum more than a decade ago and generated years of double-digit percentage returns by investing in often controversial businesses, a Reuters special report revealed. New York-based Platinum has been caught up in federal investigation by the U.S. Securities and Exchange Commission and the U.S. Attorney’s offices in Manhattan and Brooklyn.

A leading bankrupt subsidiary of Abengoa SA won U.S. court approval to join a $10 billion debt-restructuring agreement in Spain, a week before a deadline for the renewable energy firm to secure creditor support for the plan, Reuters reported today. Abengoa, with a global renewable energy footprint, filed for pre-bankruptcy in November in Spain, and will become the largest Spanish corporate failure ever unless 75 percent of its creditors approve a wide-ranging restructuring deal by Oct. 25. Dozens of Abengoa's subsidiaries filed for U.S. Chapter 11 protection this year, and the reorganization of the U.S. and Spanish businesses both depend on the success of the master restructuring plan in Spain, according to lawyers for Abengoa. Bankruptcy Judge Kevin Carey approved the request by Abeinsa Holding Inc, one of Abengoa's two main U.S. subsidiaries in bankruptcy, to join the MRA, overruling objections by unsecured creditors who said the deal would give them a recovery of only pennies on the dollar. Read more. 

Learn about the key issues in cross-border energy company restructurings from a financial and legal perspective at ABI’s Cross-Border Insolvency Program on Nov. 14 in New York. Click here to Register. 

A centuries-old tapestry factory in Spain has come back from the brink of bankruptcy after an injection of public money, a debt restructuring plan and its biggest order in 200 years — a German commission for dozens of tapestries, Reuters reported yesterday. The turnaround of the 296-year-old Royal Tapestry Factory in Madrid is a rare bright spot for Spanish companies facing insolvency. Nearly 50,000 businesses have entered administration since the start of the country's economic downturn in 2008. The market for hand-woven tapestries and rugs plummeted during Spain's financial crisis, with key clients like the government crippled by spending cuts. "It was now or never," said Maria Pardo, a Madrid city council official who announced, together with the regional government and the Ministry of Culture, an increase in annual subsidies to 1.5 million euros ($1.7 million) next year from 900,000 euros this year. Prior to 2015, the factory barely received any public money.

South Korea's Hanjin Shipping Co Ltd. is selling major businesses, including its Asia to U.S. route network, and will receive letters of intent by Oct. 28, Reuters reported today. The sale comes as creditors line up claims less than two months after the company applied for court receivership as the first major shipping line to be dragged down by global industry overcapacity and comparatively low freight rates. The firm had total debt of 6.03 trillion won ($5.41 billion) as of the end of June, according to its court filing. Hanjin Shipping received court approval to seek buyers for assets in order to pay back creditors now in the process of making claims until Oct. 25.

More than a month after Hanjin Shipping Co. sought bankruptcy protection in South Korea and in courts around the world, customers are still fighting with the company over how to retrieve their goods, the Wall Street Journal reported today. Ashley Furniture Industries Inc. said that it has been left on the hook for cleaning up the logistical mess in the wake of Hanjin’s bankruptcy and is asking a U.S. judge to allow it to withhold damages from fees it owes to Hanjin. The South Korean shipping company, however, is refusing to release some of Ashley Furniture’s cargo until it is paid in full. Some of Ashley Furniture’s containers have been delivered or otherwise retrieved by the company, many of which are weeks behind schedule. Other containers, still stocked with goods, are floating on Hanjin ships or sitting idle on port tarmacs waiting to be released by the shipper. During a hearing Friday in Newark, N.J., lawyers for Ashley Furniture asked Bankruptcy Judge John Sherwood to help it recover damages of more than $1 million it said that it is owed for having to pick up containers delivered to the wrong ports.

Warring national units of defunct Nortel Networks Corp. have failed to reach a deal on how to divide $7.3 billion raised in the bankruptcy liquidation of the company, a fallen icon of the Canadian technology scene, the Wall Street Journal reported today. The money has been tied up for years in court fights, which are set to continue in a federal appeals court in Philadelphia. Talks continue, according to a letter filed with the U.S. Court of Appeals for the Third Circuit, but efforts to settle the litigation have so far not panned out. Nortel U.S. is preparing once again to go to court against the Canadian parent company and European creditors, chiefly British pensioners, according to the letter, filed on Friday by one of Nortel U.S.’s lawyers Derek Abbott. The federal appeals court in the U.S. is being asked to overturn a bankruptcy judge’s decision on dividing the money on the grounds it is outside the bounds of the law. Nortel’s U.S. lawyers on Friday set out a schedule of briefing on the appeal, but left the dates blank, saying that they would like to take another month to try to reach agreement and end the litigation.