All items from WSJ.com: Bankruptcy Beat

LightSquared’s $2.65 billion restructuring plan is better than anything available to the company and should be approved by a judge, a company adviser said in court Monday. 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.”)
Five ex-Bernard Madoff employees were found guilty of fraud, The Wall Street Journal reports.
Detroit Emergency Manager Kevyn Orr said time’s running out for creditors of the bankrupt city to reach a deal, Bloomberg reports.
According to Washington Wire, senators are criticizing General Motors Co. for its slow response to ignition-switch defects.



Posted 3 weeks 1 day ago

Interest rates that remain near zero and debt maturities that have been pushed out to 2017 and 2018 have helped drive Chapter 11 filings to historic lows. Has this difficult environment put corporate restructuring on life support?



Posted 3 weeks 1 day ago

Interest rates that remain near zero and debt maturities that have been pushed out to 2017 and 2018 have helped drive Chapter 11 filings to historic lows. Has this difficult environment put corporate restructuring on life support?

To paraphrase Mark Twain, rumors of the death of corporate restructurings are premature.
For starters, despite the abundant liquidity and lenient lending practices available to companies over the last several years, there have still been a fair number of restructurings (and, importantly, turnarounds) going on. While there haven’t been as many “big names” as in past eras, Kodak and American Airlines notwithstanding, many companies—especially middle-market ones, which often don’t have the same access to funding sources as larger companies—have had to recalibrate themselves to compete in today’s fitful economy. In fact, AlixPartners saw its Americas turnaround-and-restructuring revenues increase by double digits last year, and we’re seeing an uptick in engagements so far this year—in industries as diverse as maritime and health care, energy and restaurant chains, not to mention growing work in Latin America.



Posted 3 weeks 1 day ago

Interest rates that remain near zero and debt maturities that have been pushed out to 2017 and 2018 have helped drive Chapter 11 filings to historic lows. Has this difficult environment put corporate restructuring on life support?

To call the current macroeconomic climate difficult may strike some as cynical. Nonetheless, for the restructuring market in the U.S. and abroad, the current outlook does indeed remain bleak. While some “patients” will require restructuring care over the next  two years, it may well be that the industry will not regain its “health” until 2016 or even later; and even then,  the patient will not likely fully recover to its halcyon days of the past.
Low interest rates and extended debt maturities tell only part of the story.  Consumer sentiment in the U.S. and much of Asia continues to rise, and with the easing of fiscal policy in Europe, the consumer has returned to the European market. On the corporate side, many continue to hoard cash, which for now makes them virtually immune to any restructuring prospects regardless of fundamental weaknesses.



Posted 3 weeks 1 day ago

Interest rates that remain near zero and debt maturities that have been pushed out to 2017 and 2018 have helped drive Chapter 11 filings to historic lows. Has this difficult environment put corporate restructuring on life support?

While there have been fewer headline-making bankruptcy cases recently, the corporate restructuring industry is very much alive. In fact, many professionals are busier than they’ve been in years past. This is especially true at the marquee firms, which routinely experience the first waves of new deals. These firms largely maintained conservative hiring after the right-sizing that took place following the Great Recession. Now with modest upticks in activity, leaner teams of people are handling more work.



Posted 3 weeks 1 day ago

Michael Lynch

A charity created to memorialize a New York City firefighter killed on Sept. 11, 2001, is holding its annual scholarship awards dinner March 31 with help from a group of bankruptcy professionals.
The Michael Lynch Memorial Foundation honors Michael Lynch, a 30-year-old firefighter who was killed when the twin towers collapsed.
Unlike other charities that sprouted after Sept. 11, the Michael Lynch foundation has prospered in recent years, thanks in part to support from a network of corporate restructuring lawyers. This year, the dinner is expected to raise more than $500,000.
The foundation’s links to restructuring circles stem from the 2009 bankruptcy of door maker Masonite International Corp. Michael Lynch’s brother, Fred Lynch, is Masonite’s chief executive.



Posted 3 weeks 1 day ago

Dolan Co. filed for Chapter 11 bankruptcy protection Sunday, its business hurt by efforts to stem the rising tide of mortgage foreclosures. Read the Daily Bankruptcy Review article via 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.”)
Law firm Skadden, Arps, Slate, Meagher & Flom LLP will pay $4.25 million to avoid potential legal claims related to its former representation of hedge-fund manager Alphonse “Buddy” Fletcher Jr.’s firm. Read the DBR article via Law Blog.
According to Reuters, authorities are looking into whether General Motors Co. hid an ignition-switch problem when it filed for Chapter 11 protection in 2009.



Posted 3 weeks 2 days ago

Next week in New York, LightSquared will continue making the case for the approval of its $2.65 billion restructuring proposal. The plan, led by Fortress Investment Group, is being opposed by Dish Network Corp. Chairman Charlie Ergen. Mr. Ergen owns $850 million in LightSquared’s bank debt, making him the company’s largest secured lender.
But LightSquared is suing Mr. Ergen over his purchases of that debt, saying he improperly acquired it on behalf of Dish, a LightSquared competitor prohibited from buying it. Mr. Ergen says he bought it as a personal investment.
Both Mr. Ergen and Harbinger Capital Partners’ Philip Falcone, who controls LightSquared’s equity, are expected to testify during the confirmation hearing.
Amid the confirmation, LightSquared’s bankruptcy judge, Shelley C. Chapman, will on Tuesday consider approving a bonus package for the company’s top executives.
LightSquared wants to alter the proposed package by removing the regulatory hurdles tied to the payments.



Posted 3 weeks 4 days ago

The Trenton Titans, the Philadelphia Flyers’ minor league affiliate, is winding down in Chapter 7 bankruptcy after canceling its 2014 season.
The team—which filed for bankruptcy on March 11 with the U.S. Bankruptcy Court in Trenton, N.J., as Blue Line Sports LLC—claimed no assets and nearly $500,000 in debts in court documents. A Chapter 7 filing usually indicates a company’s intent to liquidate, as opposed to Chapter 11, which often means the company plans to continue operations and restructure its debt.
Not included in that debt load is the amount the Titans may owe to its head coach, Vince Williams. Mr. Williams is suing the team in New Jersey Superior court for breach of employment contract. The Titans listed this liability as disputed with an “unknown” amount.
Other large creditors include the Philadelphia Flyers, owed $70,000 in trade debt; the New Jersey Devils, owed $12,000 in “player transactions;” Front Row Marketing, owed more than $123,000 for alleged breach of marketing contract; and an apartment complex called Franklin Commons, owed $58,200 in housing expenses.
On the list are also a slew of season ticket holders, which likely had already purchased tickets for the upcoming season. Those debts range from a few hundred dollars to nearly $2,550. Finally, the Titans list a number of medical professionals—including a dentist, neurologist and orthopedist—as creditors owed for services.



Posted 3 weeks 4 days ago

This week on The Broke and the Beautiful, Armand Assante says he’s the face of predatory lending, a trustee wants to dismiss Dionne Warwick’s debts, and the Trenton Titans hockey team files for bankruptcy.



Posted 3 weeks 4 days ago