All items from WSJ.com: Bankruptcy Beat

Nortel Networks Corp.'s warring creditors are headed into a July showdown over a $1.6 billion question that creditors outside the U.S. said could be the key to a fast payday in the long running international insolvency. The Wall Street Journal has 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.”)
Energy Future Holdings Corp.’s bondholders are suing junior creditors over a financing deal, DBR (sub. req.) reports.
General Motors Co. is planning to offer a broad payout for victim compensation related to cars with defective ignition switches, The Wall Street Journal reports.



Posted 5 weeks 12 hours ago

As Detroit nears a crucial point in its restructuring, what lessons does the city’s historic bankruptcy offer troubled municipalities?

Having worked on the Chapter 11 case of auto supplier Collins & Aikman from 2005 to 2007 and, as a result, spending significant amounts of time in Detroit, it was clear that Detroit was a city in despair. The financial crisis of 2008 was the tipping point, making it only a matter of time before Detroit—with mounting indebtedness, swelling pension obligations, an aging population, urban flight and the disintegration of its cornerstone enterprises—would need to find a way to restructure.



Posted 5 weeks 1 day ago

As Detroit nears a crucial point in its restructuring, what lessons does the city’s historic bankruptcy offer troubled municipalities?

Facing issues head-on is difficult, and it’s tempting to put off until tomorrow what should be done today. But it’s unwise. That’s perhaps the No. 1 lesson from Detroit—and one that applies as much to cities and other municipalities as to companies.
Lesson No. 2: With Michigan Gov. Rick Snyder recently signing the “grand bargain” that officially pledges $195 million in state money to aid Detroit’s pensioners, it’s worth keeping in mind that, as with corporate turnarounds, there’s often a big difference between fixing an organization’s balance sheet and actually fixing its underlying operations, which will be the next big step for Detroit. However, it’s encouraging to see what appears to be a new spirit emerging in a grassroots way among Detroiters themselves—reflected, many think, by the election last fall of businessman Mike Duggan, who was a write-in candidate in the primaries, as mayor.



Posted 5 weeks 1 day ago

As Detroit nears a crucial point in its restructuring, what lessons does the city’s historic bankruptcy offer troubled municipalities?

When Detroit tumbled into bankruptcy in July 2013, it became the largest municipality (by a factor of five) to seek protection under Chapter 9. Detroit’s issues were legendary and massive; urban and economic flight had reduced the population by nearly 70%, which had eviscerated property and income tax bases. With revenues declining by over $250 million, the city could not meet its expenses, despite drastic spending cuts, which had further destabilized Detroit. With this and the city’s $18 billion debt, Detroit was hopelessly insolvent.



Posted 5 weeks 1 day ago

Nautilus Holdings Ltd., a container shipping venture led by Andreas Papathomas, filed for bankruptcy protection, the latest victim of too much debt and a downturn in the shipping industry. 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.”)
Source Home Entertainment LLC filed for Chapter 11 protection Monday after failing to reach a deal to save its magazine distribution business, DBR reports.
Brookstone Holdings Corp. won a judge’s approval on Monday to sell itself to a consortium of Chinese investors that plans to continue operating the majority of the specialty retailer’s 240 stores after the company exits bankruptcy. Read the DBR article via The Wall Street Journal.



Posted 5 weeks 1 day ago

In the fourth installment of The Examiners, our restructuring experts turn their attention from corporations to municipalities.
In a historic move, the city of Detroit last summer filed for Chapter 9 bankruptcy protection, the chapter of the U.S. Bankruptcy Code available to cities and other municipalities. The city sought to confront a host of troubles to which other municipalities are no stranger: debt, population declines, declining tax revenues and significant employee and retiree liabilities.



Posted 5 weeks 2 days ago

Settlement talks may be in the works as the long-running trial over Nortel Networks Corp.'s billions winds to a close. The Wall Street Journal has 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.”)
Michigan Gov. Rick Snyder signed bills Friday that will give Detroit about $200 million in state aid, WSJ reports.
The watch is on for RadioShack Corp.’s New York Stock Exchange Listing, MoneyBeat reports.



Posted 5 weeks 2 days ago

A Coldwater Creek store in downtown Seattle.
Associated Press/Elaine Thompson

When women’s clothing retailer Coldwater Creek filed for Chapter 11 protection in April, the company went out of its way to tell a bankruptcy judge that it planned to continue honoring gift cards and other customer service programs for the purpose of “preserving goodwill and maximizing revenue during the liquidation process.”
One customer promotion, however, didn’t make the cut—tens of thousands of Groupon deals offering Coldwater Creek shoppers $50 worth of merchandise for $25.



Posted 5 weeks 5 days ago

The week in bankruptcy kicks off Monday in Wilmington, Del., when Brookstone Holdings Corp. will go before a judge to seek approval of its bankruptcy-exit plan.
The centerpiece of the retailer’s plan is a $174 million bid to buy the company from Sailing Innovation US Inc.–a collaboration between Chinese investment firm Sailing Capital Overseas Investment Fund LP and Chinese conglomerate Sanpower Group, with a financing commitment from GE Capital.
The consortium’s bid trumped a $146.3 million offer by an affiliate of Spencer Spirit Holdings Inc., the parent of the Spencer’s and Spirit Halloween retail chains, which had served as the lead bidder at a June 2 auction.
Under the current plan, Brookstone’s unsecured creditors will receive at least $1.25 million, plus a chance to collect as much as $1.5 million more depending on how much money comes in from the sale. The plan also proposes to pay off the company’s approximately $51 million in bank loans with a loan provided by bondholders funding the restructuring.
Brookstone’s new owners plan to keep open nearly all of the specialty retailer’s 240 stores and also expand the brand’s presence abroad, an attorney for Brookstone said at a bankruptcy-court hearing earlier this month.
Brookstone sought Chapter 11 protection in April, citing sales that have lagged since 2007. Outside of its stores, Brookstone also sells its merchandise, which includes travel electronics, massage chairs and other novelties, online and through a catalog.



Posted 5 weeks 5 days ago

Revel resort and casino, which at 47 stories is the tallest building in Atlantic City, N.J., filed for Chapter 11 protection Thursday.
Associated Press

Atlantic City’s Revel resort and casino filed for Chapter 11 protection Thursday, its second trip to bankruptcy court in recent years. The Wall Street Journal has 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.”)
Michigan Gov. Rick Snyder is set Friday to sign Detroit’s “grand bargain,” bills to help the city leave bankruptcy, Crain’s Detroit Business reports.



Posted 5 weeks 5 days ago