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Energy Future Holdings Corp. bondholders are asking what happened to a proposal from NextEra Energy Inc. that would have meant more money for creditors of the Texas energy seller, which is working out its financial troubles in bankruptcy, Dow Jones Daily Bankruptcy Review reported today. The trustee for some $3.5 billion worth of bonds said in a court filing on Friday that the facts leading to NextEra's decision to withdraw the offer are "entirely undisclosed" and "must be fully explored." In July, NextEra went public with a proposal to infuse value into Energy Future's bankruptcy to acquire the company's stake in Oncor, a Texas transmissions business. In August, the offer was withdrawn, after Energy Future said that it would hold an auction.

Trump Entertainment Resorts Inc., which operates two casinos in Atlantic City, joined the list of casino operators in New Jersey that have filed for bankruptcy, Reuters reported today. Trump Entertainment operates the Trump Taj Mahal Casino Resort and the Trump Plaza Hotel and Casino in Atlantic City. The company, founded by Donald Trump, listed assets and liabilities of between $100 million and $500 million in its bankruptcy petition in a Delaware court. The case is In re: Trump Entertainment Resorts Inc., U.S. Bankruptcy Court, District of Delaware, No:14-12103.

Bankruptcy Judge Robert Drain’s ruling on Aug. 26 in the unrelated bankruptcy of chemical maker Momentive Performance Materials could end Energy Future's $1 billion battle with creditors and reinvigorate its restructuring, Reuters reported on Friday. The two cases are linked by disputes over “make-whole” provisions in bond contracts. Make-wholes are an early redemption payment to bondholders to compensate them for the loss of anticipated interest. Bondholders have become increasingly willing to fight for the make-whole payments in recent bankruptcies such as American Airlines in part because there are few places to invest their money to earn above-market returns given the current low-rate landscape. Energy Future filed one of the largest corporate bankruptcies in U.S. history in April with a plan that was premised in part on refinancing high-coupon secured bonds. Bondholders sued, arguing that the company was wrongfully denying them $1 billion in make-whole payments. Momentive proposed a plan that had similar elements, and last week Judge Drain swept aside objections from bondholders.
http://www.reuters.com/article/2014/09/05/us-energy-future-bankruptcy-a…

For further analysis of “make-whole” provisions and the effect of the Momentive Performance Materials decision, be sure to sign up for tomorrow’s abiLIVE webinar, “Understanding Make-Whole and No-Call Provisions: Key Takeaways from Recent Decisions.”
http://www.abiworld.org/webinars/2014/0909Web/index.html

Nuclear power plant fuel supplier USEC Inc. was cleared on Friday to exit chapter 11 protection, with a new name, Centrus Energy Corp., and significantly smaller than when it sought bankruptcy court protection in March, Dow Jones Daily Bankruptcy Review reported today. Ousted from its role leading the American Centrifuge project in Ohio not long after seeking bankruptcy protection, and no longer in the business of producing fuel, USEC plans to work through its contractual backlog of orders, court papers say.

Momentive Performance Materials Inc. amended its restructuring plan to comply with a bankruptcy judge's requirement that the silicone and quartz producer pay its top-ranking bondholders a slightly higher interest rate, Dow Jones Daily Bankruptcy Review reported today. With the updated plan, filed on Wednesday in bankruptcy court, Momentive took what is likely to be the final step in securing Judge Robert Drain’s signature on its proposal to slash more than $3 billion from its balance sheet. Under the revised plan, first-lien bondholders will receive an added 0.5 percentage points for a total interest rate of about 4.1 percent.

The Puerto Rico Electric Power Authority (PREPA), which has been in negotiations with lenders over its debt burden, said yesterday that it had hired the consulting firm AlixPartners to supervise its restructuring, the New York Times DealBook blog reported yesterday. The assignment will be led by Lisa J. Donahue, the head of AlixPartners’ turnaround and restructuring practice, the PREPA said in an announcement. The authority, which faces a severe cash strain and a mountain of debt, agreed with its lenders to complete a restructuring by next March. PREPA faced payments this summer that it could not pay on $671 million in loans to a group of Wall Street lenders. The lenders, including Citigroup, gave the authority more time to make the payments and restructure its finances. http://dealbook.nytimes.com/2014/09/04/puerto-rico-said-to-hire-alixpar… For further analysis of PREPA’s financial distress and Puerto Rico’s Public Corporate Debt Enforcement and Recovery Act, be sure to listen to ABI’s latest podcast: http://news.abi.org/podcasts/151-examining-puerto-rico-recovery-act-and…

The privately held U.S. producer of AriZona iced tea might face insolvency if the judge overseeing a dispute between its founders sets its value at $3 billion or greater, a lawyer for the co-owner running the company said yesterday, Reuters reported. During closing arguments in New York state court, Louis Solomon, an attorney for Beverage Marketing USA Inc. co-owner Domenick Vultaggio, said that the AriZona beverage maker should not be forced to buy out estranged business partner John Ferolito based on "la la land" numbers. The closing arguments capped a valuation trial to determine how much Vultaggio and Beverage Marketing must pay to buy the 50 percent stake held by the Ferolito and his son's trust. Nicholas Gravante, Ferolito's attorney, countered the company has many suitors willing to pay billions of dollars, including Tata Global Beverages Ltd, Nestlé SA and Coca-Cola Co, among others.
http://www.reuters.com/article/2014/09/04/arizonaicedtea-trial-idUSL1N0…

For further analysis of valuation issues of distressed companies, be sure to pick up a copy of ABI’s A Practical Guide to Bankruptcy Valuation available now in the ABI Bookstore.
http://bookstore.abi.org/practical-guide-bankruptcy-valuation

The trustees of a 122-year-old amusement park in northwestern Pennsylvania have hired an attorney to file chapter 11 bankruptcy in hopes of preventing a sheriff's sale of the park to satisfy more than $910,000 in overdue county, school and municipal property taxes, the Associated Press reported yesterday. Officials for Crawford County, Pa., and the local taxing bodies have threatened Conneaut Lake Park with a sheriff's sale, though they've yet to formally pursue that option. Mark Turner, the executive director of the Economic Progress Alliance of Crawford County, says that the group still hopes to redevelop, revitalize and expand the park. The bankruptcy filing is needed to freeze the park's assets and prevent the sheriff's sale while the park maps out a plan to repay creditors all or part of the $2.5 million owed to creditors in addition to the delinquent taxes.

Total bankruptcy filings in the United States decreased 16 percent in August 2014 over August of last year, according to data provided by Epiq Systems, Inc., the largest year-over-year drop thus far in 2014. Bankruptcy filings totaled 75,170 in August 2014, down from the August 2013 total of 88,962. Consumer filings declined 15 percent to 72,467 from the August 2013 consumer filing total of 85,125. Total commercial filings in August 2014 decreased to 2,703, representing a 30 percent decline from the 3,837 business filings recorded in August 2013. Total commercial chapter 11 filings dipped 41 percent to 357 filings in August 2014 from the 604 commercial chapter 11 filings registered in August 2013. To read ABI’s full statistical release, please click here: http://news.abi.org/press-releases/august-bankruptcy-filings-register-l…

Matagorda Island Gas Operations LLC, a private oil and gas development company sanctioned by the U.S. for failing to comply with safety-disclosure rules put in place after the 2010 Gulf of Mexico oil spill, filed for bankruptcy protection, Bloomberg News reported yesterday. The Morgan City, La.-based company listed assets of as much as $50 million and debt of as much as $500 million in chapter 11 documents filed in court yesterday. The Bureau of Safety and Environmental Enforcement ordered Matagorda and four other companies to halt offshore oil and gas operations after they failed to give regulators an audit of safety plans required since the 2010 blowout by a BP Plc oil well and subsequent spill, according to a statement by the agency in November.
http://www.bloomberg.com/news/print/2014-09-03/matagorda-island-gas-ope…

For further analysis and insight into oil and gas bankruptcy proceedings, be sure to pick up a copy of ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy from the ABI Bookstore. Click here to purchase: http://bookstore.abi.org/when-gushers-go-dry-essentials-oil-gas-bankrup…