All items from WSJ.com: Bankruptcy Beat

Wilmington Hammerheads defenseman Dylan Riley, right, battles for possession with Pittsburgh Riverhounds midfielder Matthew Kassal, left, at Legion Stadium in Wilmington, N.C., in April 2012.
Matt Born/Associated Press

The Pittsburgh Riverhounds soccer team is preparing to get out of bankruptcy with a new owner: a local businessman whose construction businesses have profited from region’s natural gas drilling boom.
U.S. Bankruptcy Court Judge Jeffery Deller approved two bankruptcy-exit plans—one for the team and one for its 3,500-seat stadium in Pittsburgh’s South Side—that pave the way for Terrance “Tuffy” Shallenberger Jr. to become their sole owner.
The team filed for bankruptcy on March, several days before the team’s season opener, blaming the larger-than-expected construction costs of Highmark Stadium. The team used to play at local high schools.
Team owner struggled to pay back more than $8 million in debt after the stadium opened last year, according to earlier documents filed in U.S. Bankruptcy Court in Pittsburgh. The team has never made money, the court papers said.



Posted 1 week 4 days ago

The exterior of the former Trump Taj Mahal in Atlantic City, N.J.
Wayne Parry

New Jersey’s Atlantic City, struggling to meet its annual budget after the closure of four boardwalk casinos this year, is asking a bankruptcy court for the second time in recent months to allow the city to sell a tax lien from Trump Entertainment Resorts Inc. Read the Daily Bankruptcy Review article here.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)



Posted 1 week 4 days ago

Tonja Boyd (L) talks with her daughters Nemyla Boyd (C) and Alexandria Boyd (R) as they wait at a bus stop Nov. 7 in Detroit.
Joshua Lott/Getty Images

“I just said that your leaders are about to get the city back. Actually of course it is you who are about get your city back. It is your city.” -U.S. Bankruptcy Judge Steven Rhodes
The judge who cleared Detroit to leave bankruptcy gave the city’s 700,000 residents a two-minute pep talk on Friday, urging those who fought the bankruptcy to try to move past their anger and help city leaders execute a $1.4 billion revitalization.
Referring to a bankruptcy pension deal nicknamed the Grand Bargain, U.S. Bankruptcy Judge Steven Rhodes declared there to be a “grander bargain” at play: democracy.



Posted 1 week 5 days ago

U.S. Bankruptcy Court Judge Steven Rhodes, seen in this 2012 file photo, approved Detroit’s bankruptcy plan.
John Meiu

U.S. Bankruptcy Judge Steven Rhodes approved Detroit’s bankruptcy plan and effectively ended the largest municipal bankruptcy in U.S. history during the first 34 seconds of a hearing on Friday afternoon. He spent the next 107 minutes explaining why. Here is Judge Rhodes in his own words:
Not everyone liked the plan, including some retirees, but there’s only so much money to go around, Judge Rhodes said on Friday. The city’s failure to provide basic services that protect residents’ health and safety is “inhumane and intolerable, and it must be fixed,” he said. “There really is no choice here.”

Judge Rhodes explained why city leaders can cut retirees’ monthly pensions despite wording in Michigan’s constitution that prohibits such cuts. Even if retirees appealed and won, the city would still have no ability to pay the full pensions, Judge Rhodes pointed out.



Posted 1 week 5 days ago

Florida’s Island Breeze Casino ship has filed for bankruptcy with the hope of someday returning to sea.
Ship officials on Thursday put the 600-passenger vessel into bankruptcy after halting daily excursions from Palm Beach and laying off nearly all of its 250 employees, according to documents filed in U.S. Bankruptcy Court in West Palm Beach, Fla.
The bankruptcy could help the ship restart its operations next month during Florida’s busy tourist season, said bankruptcy attorney Lawrence McMichael. The vessel might be able to pick up business from a competitor, the Bahamas Celebration cruise, which collided with something at sea on Halloween and caused hundreds of costumed passengers to evacuate.
In court papers, Chief Executive Bradley Prader blamed the Island Breeze’s financial problems on two shutdowns earlier this year.
In May, the 160-foot ship’s starboard engine “sustained a catastrophic failure,” prompting repairs that resulted in losses of $1 million, Mr. Prader said. Soon after the ship was fixed, it had to go into drydock for a mandatory U.S. Coast Guard inspection.



Posted 1 week 5 days ago

Dendreon Corp. filed for Chapter 11 bankruptcy protection Monday after coming to terms with senior lenders on a restructuring that could mean a reorganization or a sale of its cancer drug operation. Read the Daily Bankruptcy Review story in The Wall Street Journal.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)
GT Advanced Technologies Inc. said it sought bankruptcy protection last month because Apple Inc., a key customer, engaged in a “classic bait and switch” strategy that left the company stuck in “an onerous and massively one-sided deal,” WSJ reports.



Posted 1 week 5 days ago

Jones Day lawyers David Heiman (front left) and Heather Lennox leave court at the start of Detroit’s bankruptcy case in July 2013.
Bill Pugliano/Getty Images

As Detroit’s historic bankruptcy comes to an end, citizens and creditors can thank a humble barbershop for helping the city wrap up the case.
With Detroit and its creditors deadlocked and Motor City’s fate hanging in the balance, the city and a big bond insurer hammered out a crucial creditor settlement over haircuts at a downtown barbershop.
The barbershop deal is just one example of the unorthodox ways Detroit’s $18 billion restructuring came together. The plan, which a bankruptcy judge blessed Friday, cuts Detroit’s debts by $7 billion. It also promises private and state funds to cover pension shortfalls and pledges to reinvest $1.7 billion in shoring up lacking city services, from garbage pickups to working streetlights.



Posted 2 weeks 1 day ago

Next Monday at a law office in Wilmington, Del., vitamin maker Natrol Inc. will auction itself off. ICV Partners is offering approximately $90 million for Natrol, but other bidders can top that at the auction.
The California company filed for Chapter 11 bankruptcy protection in June, due to a dispute with lender Cerberus Business Finance LLC. The buyout firm had criticized the company’s management. Natrol lawyers said they “strongly disputed” the lender’s claims of mismanagement.
Cerberus backed down when Natrol agreed to try to find new financing to pay off the loan or to put the company up for sale.
The ICV deal, or a topping offer, would pay Cerberus off in full. The winner of Monday’s auction will come before a Wilmington, Del., judge two days later and ask for the sale to be approved.
Next Wednesday in Camden, N.J., Revel Casino Hotel will ask a judge to send its liquidation plan to creditors for a vote.
The casino, which filed for its second bankruptcy this past June, plans to pay back creditors after a $110 million sale to Brookfield Property Partners LP goes through.
The hearing on the so-called disclosure statement, a plain English version of a company’s reorganization plan on which creditors must vote, comes a day before a scheduled final hearing on the company’s bankruptcy loan from a group of lenders led by Wells Fargo Bank .



Posted 2 weeks 1 day ago

When a company files for Chapter 11 protection a second, third or even fourth time, who’s to blame?
Answering the question of who, or more appropriately, what, is to blame for a company refiling for Chapter 11 is not simple. New York University Professor Edward Altman has written extensively on the topic, focusing on, among other things, analytics that can be utilized to help predict the likelihood a debtor will need to restructure again.
I posit that there is no one identifiable party (or factor) to blame for repeat corporate bankruptcy filers. Rather, understanding why a company may need to file for Chapter 11 more than once requires an in-depth analysis of the specific company at issue. There are, however, recurring themes in habitual debtor scenarios. These include both factors intrinsic to the company itself and macroeconomic factors which are beyond the company’s control.



Posted 2 weeks 1 day ago

When a company files for Chapter 11 protection a second, third or even fourth time, who’s to blame?
An empirical study from New York University Professor Edward Altman concludes that 15% to 18% of reorganized Chapter 11 debtors revisit bankruptcy (sometimes more than once). According to the study, some of the main causes of recidivism are too much leverage and flawed Chapter 11 plan feasibility assessments based on overly optimistic projections. The study concludes that, in a significant number of Chapter 11 cases, a plan of reorganization should never have been confirmed because the debtors had little or no prospect of  succeeding after bankruptcy and were, therefore, quite likely to file for bankruptcy again.



Posted 2 weeks 1 day ago