Body Central is closing its chain of 265 clothing stores Sunday and is terminating 2,500 employees, the company said on Friday, marking the latest blow to the women's retail sector, Dow Jones Daily Bankruptcy Review reported today. The Jacksonville, Fla.-based company will liquidate through a state-court procedure called an "assignment for the benefit of creditors," which puts the company into the hands of an adviser who will work to pay off its debts. The company had hoped to restructure through a chapter 11 bankruptcy proceeding, according to its bankruptcy lawyer, Gardner Davis, but switched course "when the financing didn't materialize."
A New York architecture and interior-design firm with roots dating back more than a century has filed for chapter 11 protection, citing its inability to collect more than $2 million from an assignment in Russia, the Wall Street Journal reported today. Unlike many companies that go into bankruptcy, Swanke Hayden Connell doesn’t have any major bank loans or other secured debt. Instead, the firm says in court filings that a shortage of cash and its inability to pay its bills led to the bankruptcy. Over the years, Swanke Hayden has worked on a number of well-known projects in New York and elsewhere, including the Trump Tower, a 1980s facelift of the Statue of Liberty, and the recent rehabilitation of Central Park restaurant Tavern on the Green. In recent years, Swanke Hayden has taken on several projects in Russia, including a 70-story mixed-use tower in Moscow and a planned mega-complex in downtown Moscow. Swanke Hayden says in filings that one of its Russia clients hasn’t paid $2.3 million due to the firm because it claims “it has suffered damages as a result of the debtor’s alleged delays and omissions.”
Junior creditors of Caesars Entertainment Corp. moved to force the main operating unit into bankruptcy in an attempt to block a plan to protect senior lenders at their expense, after contentious wrangling over the casino company’s future, Bloomberg News reported today. The involuntary chapter 11 filing today by Appaloosa Investment LP and other junior lenders in Delaware pre-empts Caesars’ own effort to put the unit under bankruptcy court protection and threatens to scuttle a deal between the company and senior creditors. Appaloosa asked the court to appoint an examiner to investigate claims that insiders “plundered” the unit, paying themselves hundreds of millions of dollars while moving assets out of the junior creditors’ reach. The filing by Appaloosa and other holders of second-priority senior secured notes in the unit follows months of negotiation and litigation between Las Vegas-bases Caesars and its creditors. http://www.bloomberg.com/news/print/2015-01-12/appaloosa-files-to-put-c…
In related news, bondholders of Caesars Entertainment Corp. will continue their fraud lawsuit against the casino company controlled by Apollo Global Management LLC (APO) even after its operating unit’s planned bankruptcy filing around Jan. 15, Bloomberg News reported on Friday. Caesars was asking the judge to toss the lawsuit, saying that bankrupt companies are automatically protected from litigation. The bondholders, who accused Caesars and its directors from Apollo of “looting” assets from the insolvent unit that owes them money, said their claims against those parties aren’t affected by the rule. The Las Vegas-based company has made agreements with a few lenders to try to use bankruptcy court to cut about $10 billion of debt from the money-losing unit that runs the casinos by offering them fees and special payments, filings show. Those who sign up must agree to drop out of lawsuits, Caesars says in regulatory filings. http://www.bloomberg.com/news/print/2015-01-09/caesars-bondholders-to-c…
Victims of the Lac-Megantic oil-by-rail disaster that killed 47 people in the Canadian province of Quebec in 2013 agreed to a nearly $200 million settlement with some of the firms involved, including the insolvent rail operator at the center of the tragedy, Reuters reported on Saturday. Montreal Maine and Atlantic, along with its insurers, founder Edward Burkhardt, and various other companies, will pay into the settlement fund, which will be distributed to the victims of the train derailment and explosion, according to lawyer Peter Flowers of Meyers & Flowers. A draft plan of the arrangement was filed in the Quebec Superior Court on Friday as part of MMA's bankruptcy proceedings in Canada and a similar plan will also be filed in a U.S. court. The settlement is subject to approval by the courts.
A judge on Wednesday said U.S. Coal Corp. could put half the company's eastern Kentucky coal operations up for sale at an auction next month, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Tracey Wise approved the request, which allows U.S. coal to sell its Central Appalachia division at a Feb. 20 auction. The company has said that the division, with 24.4 million tons of coal reserves, is expected to lose money as mining costs increase and the coal-market weakens.
Caesars Entertainment Corp. won more support for a plan to put its biggest unit into bankruptcy as soon as next week after a bondholder group that’s already on board with the restructuring bought $500 million of debt from BlackRock Inc., Bloomberg News reported today. Caesars, owned by Apollo Global Management LLC and TPG Capital, has been negotiating with creditors for four months on a plan to reorganize Caesars Entertainment Operating Co., the subsidiary that owns most of its casinos. Its proposal would restructure $18.4 billion of debt by putting the unit into bankruptcy as soon as Jan. 15 and turning it into a real estate investment trust.
Farmers and land owners who invested in two small wind farms in southwest Minnesota have filed for bankruptcy reorganization, the Associated Press reported yesterday. Regulatory filings say the 360 owners stand to lose their investment and the wind farms may eventually have to shut down. Minwind says the turbines have needed extensive repairs and it can no longer afford the maintenance. Minwind has also failed to file some paperwork with the Federal Energy Regulatory Commission since 2006 and has a $1.9 million liability. Minwind's attorneys have told the government the owners are "unsophisticated" about regulatory matters and should be excused for the filing lapse.
Teen retailer Wet Seal Inc. said yesterday that it is shutting two-thirds of its stores as it races to shore up liquidity and keep its operations afloat, MarketWatch.com reported yesterday. But it may be too late to avoid the fate of former rivals Delia’s and Deb Shops, which filed for bankruptcy protection in December. Already, a lender on some of the company’s senior convertible notes has issued a default notice with a deadline of Jan. 12. Unless Wet Seal meets its obligations or strikes a new agreement, the company is facing bankruptcy, said former bankruptcy attorney David Tawil of hedge fund Maglan Capital.
A group of Caesars Entertainment Corp.’s senior bondholders is holding out for more money, threatening to make it difficult for the casino owner to obtain enough creditor votes to make its bankruptcy plan a reality, Bloomberg News reported yesterday. Investors who say they own $1.6 billion in Caesars first-lien notes hired law firm Debevoise & Plimpton LLP to negotiate for better terms, said My Chi To, a partner at the New York-based firm. Caesars has five days before a deadline to win more support from bondholders for a restructuring agreement it struck with some creditors last month. The agreement with investors including Elliott Management Corp. and Pacific Investment Management Co. requires the company to sign at least 60 percent — or $3.8 billion — of first-lien bondholders by Jan. 12 onto its plan to restructure Caesars Entertainment Operating Co. To win court approval for a related bankruptcy reorganization proposal, Caesars would need support from creditors holding at least two-thirds of the bonds.
Body Central Corp., a mall-based clothing retailer, is preparing a bankruptcy filing that could come within the next week, Bloomberg News reported yesterday. The company is working with the accounting and consulting firm Richter. Jacksonville, Fla.-based Body Central said yesterday that it received a notice of default on $18 million in debt and is assessing strategic alternatives. The company, which lost $70.2 million in the 12 months ended in September, is the latest seller of young women’s clothing to fight for survival. Shrinking foot traffic and encroachment by online sellers have put the squeeze on retailers that count on malls for their livelihood. Body Central, a four-decade-old chain that operates 265 stores in 28 states, had only $4.5 million in cash and equivalents as of Nov. 3.
