Key Energy Services Inc., an oil-well servicer, yesterday won court approval of its restructuring plan, slightly more than a month after filing for bankruptcy protection, the Wall Street Journal reported today. Bankruptcy Judge Brendan Shannon approved the plan, which is designed to reduce Key’s debt load to $250 million from $1 billion. Key said that it hopes to emerge from bankruptcy this month. Key plans to sell up to $110 million in new stock in a rights offering, the proceeds of which will help it pay down such debts as $290 million owed to term lenders. In addition to a cash payment, these lenders will also get cash new debt. Under the plan, bondholders are slated to receive most of the company’s new shares in exchange for forgiveness of $675 million in debt. Certain bondholders, like Silver Point Capital LP and Soros Fund Management LLC, will pick up additional shares in the rights offering. Read more. (Subscription required.)
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The judge overseeing San Bernardino, Calif.’s municipal bankruptcy said yesterday that she would approve the city's plan to restructure its finances, a spokeswoman for the city told Reuters. An official confirmation order is expected by late January, spokeswoman Monica Lagos added. Bankruptcy Judge Meredith Jury in recent months has been signaling support for the Southern California city's plan to emerge from Chapter 9 bankruptcy after four years. The plan involves slashing bondholder debt and retiree healthcare costs while protecting pensions. San Bernardino's financial restructuring also includes folding its fire department into San Bernardino County's fire services district as a cost-cutting measure.
Caesars Entertainment Corp. and Caesars Entertainment Operating Company, Inc. (CEOC) and its chapter 11 debtor subsidiaries announced yesterday that substantially all voting creditor classes have voted to accept CEOC's proposed plan of reorganization, according to a press release. The plan was accepted by more than 90 percent of voting creditors. Each of the creditor classes for the debtors' first lien noteholders, first lien bank lenders, second lien noteholders, subsidiary-guaranteed noteholders, and unsecured noteholders voted to accept the plan in numbers well in excess of what is necessary to confirm the plan. The overwhelming support for the plan is an important milestone toward CEOC confirming its plan and emerging from bankruptcy protection in 2017.
Texas power company Energy Future Holdings Corp. will start hearings in February to confirm its chapter 11 bankruptcy exit plan and its proposed sale of its power-line business to NextEra Energy Inc. for $18.6 billion, a judge said yesterday. Those hearings had been scheduled to begin yesterday, but were postponed after the U.S. Court of Appeals for the Third Circuit ruled last month that the company owed holders of its first-lien and second-lien notes about $800 million more than anticipated. The company's plan is based on a sale of its main asset, its stake in the Texas-based Oncor power distribution business, to NextEra Energy of Juno Beach, Fla. Energy Future yesterday filed a modified plan of reorganization that essentially shifted the cost of last month's appeals court ruling to holders of junior unsecured notes by reducing their payout by roughly $800 million. Those junior creditors argued to U.S. Bankruptcy Judge Christopher Sontchi that NextEra should be on the hook for making the unanticipated payment to the first-lien and second-lien noteholders. If the Florida power company did not want to pay, then it should drop its merger plan, their lawyer argued.
The parent company of Logan’s Roadhouse restaurants yesterday announced that it has emerged from bankruptcy and launched a turnaround effort that includes a revamped menu and a new marketing campaign, the Dayton (Ohio) Daily News reported today. “We’re very proud of what the company has accomplished in a little over 90 days with the balance sheet restructuring and the operational turnaround,” Nishant Machado, a senior managing director at Mackinac Partners who is leading the turnaround effort at Logan’s. Logan’s Roadhouse Inc. filed for reorganization bankruptcy in August. As part of the bankruptcy reorganization, Logan’s Roadhouse already has restructured its balance to reduce its debt from approximately $400 million to just over $100 million, while significantly lowering its interest expenses; shut down 34 “underperforming” restaurants, leaving the chain with a portfolio of what it called “strong-performing restaurants;” and renegotiated leases and contracts resulting in over $4 million in annual savings.