Category Archives: Bankruptcy

Tuesday marks the five-year anniversary ofDetroit's exitfrom thelargest city bankruptcyin the nation's history.

Now billionslighter in debt and running $100 million-plusannualsurpluses, Detroit isin phenomenally better financial shape than when itentered the bankruptcy, which lasted 17 months.

But the process didnot eliminateall futureobstacles,and whether the citycankeepits budget act together and avoid a do-over bankruptcy is a question that may find ananswer over the next five to seven years.

The first big challenge comes in mid-2023, when Detroit's "pension holiday"ends and it must startmaking fullyearly contributionsabout $163 million a year and every yeartoward two city retirees'pension funds. The city was given avacation from pension payments as part of its post-bankruptcy restructuring plan.

Detroit Mayor Mike Duggan, left, accepts a check from Michigan Governor Rick Snyder, as outgoing Detroit emergency manager Kevyn Orr, back right, watches during Press conference to announce the City of Detroit's exit from bankruptcy at the Public Safety Headquarters in Detroit on Wednesday, December 10, 2014.(Photo: Detroit Free Press)

The next obstacle arrives in about 2026, when expenditures in Detroit's annualbudget are projected to begin exceeding revenues.

And yet another hits in the mid-2030swith the expiration of the so-called "Grand Bargain" money that saved city pensioners during the bankruptcy fromdeeper benefits cuts.

"We still have a lot of challenges ahead," said Gerald Rosen, a retiredfederal judge who was the mediator in Detroit's bankruptcy case. "But I dont think anyone could have predicted on July 18 of 2013 that in six years, we'dbe where we are.The city has rebounded; its fiscal health is terrific now compared to where it was."

When Detroit filed for bankruptcy in thatsummer of2013,it was beyond broke and face down in $18 billion ofdebt, unable to payfor many basic city services and at risk of seeing an artwork firesale attheDetroit Institute of Arts to pay offcreditors.

More: Even 5 years later, retirees feel the effects of Detroit's bankruptcy

More: How Detroit went broke: The answers may surprise you and don't blame Coleman Young

It was the culmination of many bad things,including a giantexodus of residents, plummeting tax revenues, a billion-dollar borrowing binge and a failure by leadersto cut expenses when they needed to.

The bankruptcyeradicated$7 billion in debt, eliminatedbillions morein future payments and health-care obligationsforretired city workersand savedDIA artwork from a forced sale.

When Detroit exitedbankruptcy onDec. 10, 2014, the future wasn't supposed to be one of endless austerity.Detroit was givenarestructuring path, called thePlan of Adjustment, that envisioned the cityspending $1.7 billion over 10 years to financenew investments andimprovements toservices.

YetDetroitdidn't emerge with an entirely cleanslate. The city still had debt and future obligations on its books andthe problemof a predominately poor and still-shrinking population within a 139-square-mile city oncehome to 1.2million in 1980.The latest population estimate is 673,100 as of last year.

To prepare forthe coming spikein required pension payments,Detroit City Council and Mayor Mike Duggan created aRetiree Protection Fund to squirrel away some of the budget surplus moneyto later ease the shock of thebigpension payments that startin the 2024 budget year,whichactually begins July 1 of2023.

The protection fundwasn't in the original restructuring plan, but became necessary whenit emergedthat pension consultants during the bankruptcy had used outdated mortality tables whichlowballed the city's estimated pension payments.

TheRetiree Protection Fundis expected to have $335 millionin it by the time the "pension cliff" arrives next decade.

In another move,Detroitrecently doubled the size of its rainy day fund to better prepare for any economic downturn. The rainy day fund is now about 10% of the general fund, up from 5%.

Financial expertshadwarned that two ofDetroit's three largest annual revenue sources income taxes and gaming taxesfrom thethree casinosare atrisk if and when the next recession happens.

There wasnt a single dissenting voice on (city)council, because they all understand the importance of that,"Detroit Chief Financial OfficerDavid Massaron saidabout the rainy day fund increase.I think well be able to manage any economic headwind and the pension cliff in2024."

Council President Brenda Jones, who is also a member ofthe Detroit Financial Review Commission, declined through a representativeaninterview for this story.

The city's other big revenue source, its roughly $200-million-per-yeartake ofstate revenue-sharing funds, is projected to drop by a modest degreeasalikely resultof Detroit havinga smallerpopulation inthe 2020 U.S. Census than in2010.

"The mayor's office has been mobilizing to make sure everyone is counted, but the effect could still be negative for Detroit," financial analysts at S&P Global Ratings said in a report this year.

Mayor Duggan cited theRetiree Protection Fund when asked last weekwhether the city would be ready to makeitslarge pension payments.

"Thats a big reason why weve had so many credit upgrades," he told the Free Press."So I feel very good about where we are.

Wall Street credit rating agencies have praisedDetroit since the bankruptcy for its stabilizedfinances, revitalizeddowntownand success in attracting newhigh-profile development projectssuch as the Flex-N-Gate automotive supplier plant, Ford's train station redevelopmentand this year's announcement of a largeFiat Chrysler plant expansion.

The city's income tax receiptshave grownmore than$70 million since leaving bankruptcy.

But despite giving Detroit some creditupgrades, the rating agenciesstill deem the city's debt assomewhat risky and below investment grade, what is commonly known as "junk."

Financial analysts notehow most of theeye-catching growth hashappened in and around downtownnot throughoutthe city and how Detroit city schools, now known as theDetroit Public Schools Community District,are still struggling and "could also become a major drag on revitalization beyond downtown."

In addition, Detroit did a citywide parcel-by-parcel reappraisal several years agothat resulted in some lower property tax assessments.

"Detroit is left with a combustible brew: a reliance on volatile revenue sources and growing fixed costs," Moody's Investors Service said in reportlast year. "Detroit's combined debt and pension burden compared to the property tax base is extremely high compared with other major cities."

Even so, Detroit hit a milestonelast December when itsold about $135 million in general obligation bonds for capital improvements,at a surprisingly low4.8% interest rate for a junk-rated city not long out of bankruptcy.

The bond sale was not only the city's first sincebankruptcy, butalso itsfirst bond sale inmore than 20 years that didn't require "credit enhancements," such as buying bond insurance, to reassure investors and get abetter rate, according to Massaron. The city even upped the size of the sale by over $20 millionin response tostrong investor demand.

"We were a number of times oversubscribed, which means we had more investors than we had debt to sell,"Massaron said, "which shows that people believe in the continued resurgence and financial stability of the city.

One of itsbiggest achievements was theGrand Bargain, anunprecedented dealthat pooled about $820 million over 20 years inphilanthropicfoundation money and state funds toshore up city retirees' pension fundsandsafeguard the DIAcollection.

Steven Rhodes, the federal judge who presided over the bankruptcy, memorably warned representatives for thecity's retirees to not dismiss the Grand Bargain, even though the deal called forcuts to pensions and health care benefits.

From left, Chrysler executive Reid Bigland, General Motors Mark Reuss, Ford Motor Co.s Joe Hinrichs, Detroit Institute of Arts Director Graham Beal, Detroit emergency manager Kevyn Orr, Chief U.S. District Judge Gerald Rosen and DIA Arts Chairman of the Board Eugene Gargaro Jr. listen during a news conference announcing pledges to the DIAs grand bargain commitment in June. (Photo: Romain Blanquart/Detroit Free Press)

Detroit's bankruptcywas officially classified as a Chapter 9 municipal bankruptcy.

"Now is not the time for defiant swagger or for dismissive pound-the-table, take-it-or-leave-it proposals that are nothing but a one-way ticket to Chapter 18," he said. "This is bankruptcy jargon for a second Chapter 9."

In the end, the city's two older pension plans were frozen and retirees saw their benefits cut. Still, the cuts were smaller than they likely would have been without the Grand Bargain. Twonew pension plans were createdfor current and future workers. About 32,000 active or retired workers were impacted.

The police and firefighter pensioners didn'tface upfront cuts to their pension checks, but saw their2.25% annual cost-of-living increases reduced to about 1%. They also took cuts related to health care.

The city's general retirees took a 4.5% base cut in pensions and the elimination of annual cost-of-living increases.

To implement the Grand Bargain funding, a new nonprofit affiliate of the Community Foundation for Southeast Michigan was set up called the Foundation for Detroit's Future.

"The idea in the Grand Bargain was there were going to be financial controls and oversight to make sure the city did not fall into the same bad habits that got them there,"said DougBernstein, a bankruptcy attorney at Plunkett Cooney in Bloomfield Hills who is counsel for the new foundation.

Collage of former Detroit Emergency Manager Kevyn Orr (left), Michigan Gov. Rick Snyder (center) and Judge Bernard Rosen (right), who negotiated the Grand Bargain as Detroit moved to exit bankruptcy.(Photo: DFP)

Upon exiting bankruptcy, the city was placed under oversight of anine-member Detroit Financial Review Commission, chaired by the state treasurer, that initially oversawall city budgets, borrowing andlarge city-issued contracts.

After the city delivered three consecutive years of balanced budgets, the commission released Detroit in April 2018 from direct oversight. The commission continues to monitor Detroit's financial situation and can comeback if the budget falls out of balance.

On the budget front,startingabout2026, the city'sexpenditures areforecast to begin exceeding revenues. Avoiding that problem will require"more economic growth and development," according to the forecast.

Detroit did a debt restructuring last yearto preventa $25-million debt spike in themid-2020s. That maneuver ultimately saved some money, but pushed forward some higher debt paymentsinto the following decade.

"It is incumbent upon the mayor and city council to work together through upcoming budgets to ensure we continue on a fiscally sustainable path,"Massaron, the city's CFO, said in an email about the forecasted budget imbalance.

Yet another big challenge arrivesin 2034-2035 budget year, whenthe Grand Bargain expires. The city's pension payments from its general fund will then jumpto about $181 million per year.

Massaron said Detroit remains on pace to achieve its $1.7 billion spending goal forcity servicesby the 10-year anniversary of exiting bankruptcy. Some of the investments so far include:

An estimated 40% of Detroit's streetlights weren't working at the time of the bankruptcy. In 2016, Detroit became the largest U.S. city to haveall light-emitting diode (LED) streetlights. That three-year, $185-million projectwas financed througha public authority separate from city governmentand wasset in motion by former Mayor Dave Bing.

Massaron said he doesn't considerthe city in anydanger of a secondbankruptcy.

Right now, I would say the answer is no," he said. "And I would say the answer is no in large part because we have alignment among policymakers around making fiscally responsible decisions."

Rosen, the former bankruptcy mediator, said he gives city officials "an A+" for their management of Detroitsince leaving bankruptcy.

"I think the measure of the success is the rebound the city is experiencing now," he said.

Contact JC Reindlat 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter@jcreindl. Read more on business and sign up for our business newsletter.

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5 years out of bankruptcy, can Detroit avoid another one? - Detroit Free Press

Allegheny County, Pennsylvania, is poised to implement a major change in the way families are hooked up with social services come January 2020. If Allegheny County sounds familiar, its probably because the county recently received significant attention for its child welfare investigative process. In 2015, it incorporated a predictive algorithm called the Allegheny Family Screening Tool into its child welfare program. That algorithm analyzes parental and family data to generate a risk score for families who are alleged to have maltreated a child.

In 2020, Allegheny will begin applying a similar algorithm to every family that gives birth in the county, with the goal of linking families in need to supportive services before a maltreatment case is opened. But some critics insist that it will be just another way for government to police the poor.

The new program is called Hello Baby. The plan is to eventually apply it across the county, but the January launch will begin in only a select few hospitals. Like the Allegheny Family Screening Tool, the Hello Baby algorithm analyzes family data to apply an individual family score.

Emily Putnam-Hornstein, who helped design both programs, told TalkPoverty that Hello Baby uses slightly different data than the child maltreatment algorithm, which was criticized for targeting poor families because much of the data used was available only for people who used public services.

This is a universal program, explained Putnam-Hornstein. In the [child services] model the county was being forced to make a decision after an allegation had been received; in this case were taking about more proactively using data so we wanted that to be built around universally available data.

But these exclusions dont guarantee that the data will not end up targeting low-income families again. They rely on data where the county has the potential to have records for every family, said Richard Wexler, the executive director of the National Coalition for Child Protection Reform. The county acknowledges they will probably use data from [Child Protective Services], homeless services, and the criminal justice system, so yes, theoretically everyone can be in that, but we know whos really going to be in it.

An overview provided by the county online cites birth records, child welfare records, homelessness, jail/juvenile probation records as some of the available service data incorporated into the predictive risk algorithm, indicating that Wexlers assessment was absolutely correct. Although that data is potentially available about anyone, several of these systems are known to disproportionately involve low-income people and people of color.

Putnam-Hornstein said via email that the Hello Baby process is truly voluntary from start to finish. A family can choose to drop-out of the program or discontinue services at any time.

The option to drop out will be presented at the hospital, when families are first told about the program. A second notification, and chance to opt-out, will then be made by postcard. If a family doesnt respond to the postcard, they are automatically included in the next phase of the program, which involves running available data through the system to determine how much social support each family needs.

According to Putnam-Hornstein, scores will be generated about four to six weeks after birth for families that do not choose to opt out (or who are too busy to realize they want to). Once a family is scored, what happens next varies based on which of three tiers they fall into.

Under the universal tier, the most basic approach, families receive mail notifications about resources available throughout the county. Families grouped in the second, family support, tier will receive a visit from a community outreach provider and an invitation to join one of 28 Family Support Centers located around the city of Pittsburgh.

The priority tier engages families with a two-person team made up of a peer-support specialist and a social worker who will work closely with the families to identify their needs and partner them with appropriate providers. It is designed to be an individualized program that grants families access to the full range of support services available on a case-by-case basis. That could mean helping a parent navigate the complexities of applying for housing assistance or ensuring timely placement in a substance use treatment program. The county said in its promotional material which was reinforced by Putnam-Hornstein over the phone and by email that choosing not to engage with any aspect of the program will not lead to any kind of punitive action.

But parents who need supportive services still have reasons to fear intervention from child services. The reality is that any program putting families in contact with social service and medical providers means, by default, also putting those families at greater risk of being reported to child services by placing them in more frequent contact with mandated reporters.

A mandated reporter is someone who is legally required to report any suspicions of child maltreatment they encounter. The intention is to ensure timely detection of as much child abuse and neglect as possible, but data have not shown that an uptick in mandatory reporting equates to more child safety.

In Pennsylvania, nearly anyone who regularly interacts with children in a professional or semi-professional capacity is legally considered a mandated reporter. An unfortunate side-effect of the mandated reporter system is that even though a referral program like Hello Baby is not directly involved with child services, participating families will always be haunted by the possibility of coming under investigation.

Putnam-Hornstein assured that familys scores will not be retained or shared with child services, even for families under investigation but noted that it is possible that child welfare workers could infer the level of risk if the family has voluntarily agreed to participate in Hello Baby Priority services and a child welfare worker learned that when gathering family history.

Its clear that the new program is not designed to get families involved with child services, although it is spearheaded by the Department of Human Services, which oversees the Office of Children, Youth, and Families that conducts child maltreatment investigations and responses. Rather, Hello Baby was created with the goal of offering a more equitable way to expedite service referrals for families with new children who need them.

Universalizing the assessment of social needs at birth is the only way to avoid discrimination, said Mishka Terplan, an obstetrician and addiction medicine physician, who was not talking specifically about the Hello Baby program. He observed that patients with obvious social needs, such as those suffering from acute addiction, were often screened and referred for other issues, like postpartum depression or housing assistance, while other parents needs were going undetected and unaddressed. That seemed unfair, he lamented. Terplan believes that universal screening programs would eliminate both the disparity between services rendered, and reduce the stigma attached to needing behavioral health treatment and other social supports.

Hello Babys creators hope that offering families these programs before there is a child maltreatment complaint can help keep them out of the system altogether. But by using imbalanced data points like child welfare history, homeless services, and county prison history to auto-generate scores, it assumes poverty as the main basis for family need. While poverty does generate certain needs, it is not the only indicator for the whole range of unique social supports that new parents require, such as mental health screening or child care assistance.

A system that continues to embed data that target the poor may only end up automating the social inequities that already exist, while placing vulnerable families under increased scrutiny by mandated reporters for the child welfare system even if it intends to serve as a universal screening process that helps families avoid punitive interventions.

As long as the system confuses poverty for neglect, any form of such screening is extremely dangerous, said Wexler.

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Bankruptcy Promised Me a Fresh Start. Predatory Lenders Are Trying to Ruin It. - TalkPoverty

LUBBOCK, Texas The United States Trustee asked a judge to basically toss out the Reagor Dykes reorganization plan and convert its bankruptcy case from Chapter 11 (reorganization) to Chapter 7 (liquidation).

The trustee suggested January 7 be the cutoff date for Reagor Dykes to get a plan approved or else stop reorganization.

The office of trustee listed out the net losses of seven Reagor Dykes companies that field for bankruptcy in August 2018.

a) Reagor-Dykes, LP: net loss of $3,190,437.00b) Reagor-Dykes Snyder: net loss of $717,602.00c) Reagor-Dykes Floydada, LP: net loss of $2,001,799.00d) Reagor-Dykes Auto Company, LP: net loss of $2,790,368.00e) Reagor-Dykes Auto Mall, LLC: net loss of $2,676,907.00f) Reagor Dykes Imports, LP: net loss of $2,346,225.00g) Reagor Dykes Amarillo, LP: net loss of $2,001,291.00

On Tuesday the trustee wrote in court records, the Debtors have been in bankruptcy collectively for 496 days and have been unable to confirm a plan.

The United States Trustee Program is a division of the U.S. Department of Justice to oversee bankruptcy cases.

Reagor Dykes filed for bankruptcy after Ford Motor Credit Company made allegations of fraud and default. Local banks also made allegations of fraud. So far, nine former Reagor Dykes employees pleaded guilty to federal charges.

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U.S. government objects to letting Reagor Dykes continue in bankruptcy - KLBK | KAMC | EverythingLubbock.com

Family drama. One month after real estate developer Mohamed Hadid was ordered to tear down his $100 million Bel Air mansion due to safety concerns, neighbors allege that Gigi and Bella Hadids dad is committing bankruptcy fraud by removing valuables from the property.

The real estate developers 901 Strada LLC declared bankruptcy on November 27, a move that, while stressful, Gigi and Bella are relieved about. [They] know that the filing caused a lot of stress but are happy its settled, a source exclusively reveals in the new issue of Us Weekly.

The neighbors suspect the tycoon, 71, will try to avoid paying for the mansions $5 million demolition, which hes said he cant afford, and therefore the responsibility would fall on local taxpayers. However, Hadids lawyer denies any wrongdoing.

Formoreon the Hadid scandal, watch the video above, and pick up the new issue of Us Weekly, on newsstands now.

With reporting by Brody Brown

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What Gigi and Bella Hadid Think of Dad Mohamed Hadids $100 Million Bankruptcy Nightmare - Us Weekly

Financial woes and a lack of officers might prevent a five-decade-old pool in Springdale Township from opening next summer.

Richard Kern is interim treasurer for the Allegheny Valley Swimming Pool Association, which operates Bouquet Park Pool.

Kern said the most significant issue the pool is facing is the need for volunteers to fill pool board officer positions, including president, vice president, secretary and treasurer.

Board members manage the pools operations.

We need people to be able to assume the role of the board officers, and we need a large number of additional pool board members, Kern said. We believe six is what would be required in order to provide a good size board.

Bouquet Park Pool is a membership-based nonprofit community pool.

Kern said the pool board intends to dissolve a form of bankruptcy unless new board members are found and other issues are addressed.

One of those issues has to do with finances.

The pools annual operating budget is about $75,000. Thats raised through membership costs and fundraisers.

The pool is membership-based but holds several community days each summer when it is open to the public.

Kern said a plan is needed to significantly increase memberships for the 2020 season.

The pool has 115 members. It would need 160 for financial viability, he said.

Were still in debt. We were something like $15,000 in debt come Jan. 1, Kern said. It varies as the off-season goes on as we have certain bills, insurance and stuff, that are big ticket items that show up.

Board members this year asked for help raising $20,000 to be able to open the pool this past summer.

The board met with its members and told them they likely wouldnt open this year unless they raised the $20,000, and would consider bankruptcy protection if they didnt meet the goal.

Many of the members agreed to pay an additional maintenance fee this year, and the pool was able to open.

We werent sure it was going to open. We had a lot of community members step up and some very substantial donations, Kern said. Its just very risky. We have such a large expenditure to stay open legally in terms of everything that we need to do. And if you have bad weather, or you dont get the memberships, we risk taking members funds to open and then not give them a full season.

Kern said some members that stepped up to help fund the pool later ended their memberships due to the cold and rainy start to the swim season.

The pool also lost roughly 50% of its family memberships from 2018 to 2019 in part because of lack of a swim team.

Instead of the 160 members they were hoping for, they received only 115.

That does not raise enough funds to make it throughout the entire year, Kerns said. We would need enough funds to first pay off the debts and then to be able to open up the pool.

The pool was established in 1966. Board members say, since then, operating costs have gone up because of increased water rates, declining membership and various repairs.

The rate to open up the pool is about $10,000. It costs $7,000 to fill the pool with water.

Whenever we make a decision to issue our membership applications we take the risk that if we start depositing checks from individuals and not getting sufficient members that people may pay fully but we may not have enough funds to continue throughout the season, Kern said.

Kerns said at-large pool board members are needed to help with pool operations. In addition, volunteers who dont have to be board members are needed to help with tasks such as maintenance, landscaping, employee management, snack bar management, payroll and fundraising.

He said when the pool board was larger that was fairly easy, but is has become more difficult since pool board members has declined.

This year, except for a few occasions, once the pool opened we did all our landscaping ourselves, Kern said. Its just a pretty big burden on the pool board members to continue to support that.

Workers at Springdale Townships municipal building said they had no comment because the pool is privately owned and separate from the township.

Springdale Township Commissioners Anthony Rozzano and Shirley Redman said they dont have anything to do with the pool and declined comment. Commissioners Timothy Sweet and Charles Common couldnt be reached for comment this week.

Commissioner Henrietta James, whose term expires in December, said the fact the pool might not open next year is terrible. Children of members potentially wont have a place to hang out over the summer, James said.

James said commissioners could potentially vote to donate money to the pool.

I know some people that belong to it who do enjoy it, she said.

If anyone wants to donate to the pool, they can mail checks made out to the Allegheny Valley Swimming Pool Association to P.O. Box 172, Springdale 15144.

Madasyn Lee is a Tribune-Review staff writer. You can contact Madasyn at [emailprotected], 724-226-4702 or via Twitter.

How to donateDonation checks made out to the Allegheny Valley Swimming Pool Association can be mailed to P.O. Box 172, Springdale, PA 15144.

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Bouquet Park Pool in Springdale Township on brink of closure, bankruptcy - TribLIVE

There are few clearer examples of the strength of collective bargaining than the average pay of members of the International Longshore and Warehouse Union, which the Los Angeles Times pegs at $171,000 plus free healthcare.

A story in the Times today, however, reports that actions by members of the ILWU's local placed both the local and the parent union at risk of bankruptcy.

The union's financial troubles stem from a dispute between the ILWU and ICTSI Oregon Inc., which operated the Port of Portland's container shipping dock on contract.

After ICTSI took over the facility, the ILWU wanted the company to force another union, the International Brotherhood of Electrical Workers, to forfeit two jobs plugging in refrigerated shipping containers while they were on the dock. A dispute over those two jobs simmered for years and, according to a federal lawsuit first reported on by The Oregonian, led to the loss of container shipping service for Portland and forced ICTSI to buy its way out of its contract with the port for $20 million.

As The Oregonian reported, a jury in U.S. District Court in Portland earlier this month found in ICTSI's favor in a federal lawsuit and told the ILWU to pay the company $94 million in damages.

Read explores the role of Leal Sundet, a longtime leader in the Portland ILWU local who rose to be the union's second ranking official on the West Coast.

"In some ways Sundet, 63, whom McEllrath assigned to pursue the jobs at Portland's Terminal 6, embodies the proudly militant approach of the union founded by the late Harry Bridges, a Marxist who won respect championing civil rights and equality," Read writes. "But Sundet's scorched-earth tactics stymied judges, confounded three Oregon governors, increased costs of trade and affected his reputation among fellow union members, who in 2015 voted him out of his $307,000-a-year post."

Now the ILWU faces the consequences of its tactics. Judge Michael Simon will hold a hearing Feb. 14 to determine whether the jury verdict show be upheldwhich would mean near-certain bankruptcy for the union, which has just $20 million in assetsor reduced.

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Longshore Union Faces Bankruptcy Over Two Jobs in Portland - Willamette Week

November 29, 2019 | 6:27 AM

Reid R. Frazier is an energy reporter for The Allegheny Front, a Pittsburgh-based public media outlet covering the environment in Pennsylvania. His work has aired on NPR and Marketplace.

Kenny Crookston / AP Photo

FILE PHOTO: In an Aug, 26, 2007 file photo, Robert Murray, center, chief executive of Murray Energy Corp., smiles while talking to Dave Canning, left, and Mike Glassom, right, two miners in charge of drilling bore holes into the Crandall Canyon M before a news conference northwest of Huntington, Utah.

President Trump came into office promising to save coal. And coal jobs.

Instead, Americas coal industry has continued to slide. The question now is how far will it go? An industry that once employed hundreds of thousands now has about 50,000 workers. Eight coal companies have declared bankruptcy in the last year.

For the Trump on Earth podcast, The Allegheny Fronttalked about the state of coal with an expert on the topic. Taylor Kuykendallcovers the industry for S&P Global Market Intelligence.

The latest coal company to declare bankruptcy is Murray Energy, the largest privately held coal company in the United States. Until recently, Murray had been doing a lot of expanding. When others were filing for bankruptcy, they were scooping up assets.

So why did Murray Energy file for bankruptcy?

They faced a lot of the same pressures that the rest of the coal industry did, Kuykendall explained. Competition from cheap, natural gas; decline in export demand; but most of all, there was a whole lot of debt on the companys balance sheet [about $8 billion dollars]. Ultimately, their lenders didnt want to keep giving them passes.

Bob Murray, CEO of Murray Energy, is a major ally of President Trump. Early on in Trumps presidency, Murrayhand-delivered a wish listof sorts to the new Energy Secretary, Rick Perry.

One of the first things the administration checked off that list was getting rid of the the Obama-eraStream Protection Rulethat would have restricted coal companies from dumping mining waste into streams and waterways.

Murray didnt get everything on his list. Kuykendall says even where Murray was successful, it hasnt really proven to move the needle as far as coals long-term or even medium-term prospects.

Weve seen a lot of coal plant retirements already, said Kuykendall. Those arent going to come back. And nobody is really building any new coal plants as a general rule. Power plants are getting older and less efficient or they require more investment to become more efficient. Meanwhile, theres tons of cheap up options right now. Natural gas is very cheap. Renewable energy is increasingly getting more into that space.

So has the coal industry plateaued or is it just on a steady trajectory to become less and less important to the American electric grid? And will it matter who wins the election in 2020?

I think its pretty safe to assume that, no matter who comes in, coal is going to continue to decline. Its just a matter of speed, Kuykendall said. I was just at a coal conference, and the consensus there was that coal country has more bankruptcies coming, whether its under Trump or not.

During the 2016 election, Trump talked about bringing back coal and ending the so-called war on coal. But with the industry so clearly on the decline, can he still use that kind of framing? Kuykendall says its going to be tough, partly because the average voter isnt going to be checking Trumps track record.

If you look at the numbers, he clearly did not bring back the coal industry, he said. Even before the [2016] election, when I talked to people in the mining industry, [they said] the war on coal language was divisive and not really effective.

Kuykendall will be watching to see how Trump plays coal going forward and whether he will continue to cater to the voter who wants to hear the message that coal is coming back or that something can be done.

For the miners no longer getting a paycheck, its hard to imagine theyd get much comfort from that.

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After the Murray Energy bankruptcy, what's the future of coal? - StateImpact Pennsylvania

The Boston Childrens Theatre is filing for bankruptcy, according to an email sent out late Wednesday night by Jim Solomon, the interim president of the BCT's board of directors. The nonprofit has also canceled all events for the foreseeable future.

As of now, all classes, productions, trips, and birthday parties run by BCT are cancelled, Solomon said in the email. Many of you have asked about refunds, and we hope to provide these as soon as possible. These matters will be handled by Bankruptcy Trustee: Mark Degiacomo.

The organization has been in the midst of tremendous upheaval after the resignation of former executive artistic director, Burgess Clark, last month. At the end of October, Clark resigned two days before Solomon received a letter that alleged inappropriate behavior by Clark. On Nov. 15, the board of directors announced its decision to part ways with the BCTs former executive director, Toby Schine. Schine lives with Clark and Clark's partner in Beverly. In the email sent out last night, Solomon said the board learned of the BCTs precarious financial situation from Schine over the past couple of weeks.

One of the oldest children's theaters in the country, the BCT has served more than 1 million children since its inception in 1951 through classes, workshops, summer programs, field trips and live performances.

We are sadly left with no choice but to file for bankruptcy while we investigate the factors that led to our dire financial situation, Solomon said in the email, which included a link for people who believe they are owed money by the BCT.

In a follow-up email, Solomon said the numbers are being verified and creditors are being identified and confirmed. He would not confirm whether Clark, Clark's partner, or Schine are under investigation in relation to the theater's finances.

"It would not be responsible to comment while allegations are pending," Solomon said in the email. "Out of respect for the process, I will refrain from any subjective or objective remarks...It appears that financial mismanagement is apparent. While we have no specific indication of fraud, it will be investigated."

The Boston Globe first reported that more than a dozen former students at the Boston Children's Theatre made allegations against Clark and that the Essex District Attorney's Office was investigating those claims, which were forwarded by the Beverly police.Solomon said they continue to fully cooperate with law enforcement in all matters related to the investigation of Clark.

When reached by phone on Thursday, Carrie Kimball Monahan, director of communications at Essex District Attorney's Office, said that the Essex DA provided assistance to Beverly police to investigate the allegations by former students, but that calling it a full investigation by the DA would be an overstatement. The Essex DA is "providing assistance" to the Beverly police to follow up on information that the police have given them, Kimball Monahan said.

In the email, Solomon said that BCT families are partnering with the executive director of MassKids, Jetta Bernier, to raise awareness and educate the public about making child-serving organizations safer for kids.

He also noted that parents of children on the choir have raised money independently to hold their holiday concert, which is slated for Dec. 15 at the Old South Church.

While separate from BCT, the Board supports the spirit of BCTs former students and hopes this will be an event filled with love and songs for all, Solomon said in the email. Inspiring children to develop and share their musical talents with the Greater Boston Area has always been the core purpose of BCT. Our hearts are with the children and their families during this challenging time.

Marci Johnsons 15-year-old daughter has been a regular at the BCT over the past several years. Johnson heard about the bankruptcy in an email Thursday morning. Her daughter was supposed to play Lucy in the this year's production of "A Charlie Brown Christmas."

"I knew they were having financial difficulties ... We've discussed it at meetings, Johnson said in a phone interview with WBUR on Thursday morning. "Boston Children's Theatre is a nonprofit. It always for years would go into the hole, and then they would do a show and come out of the hole and pay everybody, and that's kind of how it's run, and how they've kept it afloat, from what I've heard."

Johnson said she's saddened by the closure.

"I find it really sad. You can't replicate the theatre that Boston's Children Theatre provided. Children who want to go into theatre professionally, there is not another program like it in Boston of its caliber."

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Boston Children's Theatre Files For Bankruptcy and Cancels Productions - WBUR

Dive Brief:

It has been a tumultuous few months for the energy construction giant. On Nov. 4, CFO Stuart Spence resigned to pursue other opportunities, on the same day the company reporteda third-quarter net loss of nearly $1.89 billion on revenue of $2.12 billion. That number is down from net income of $2 million on revenue of nearly $2.29 billion in the third quarter of 2018.

Spence was replaced earlier this month by McDermott chief accounting officer Chris Krummel, who has 25 years of experience in various leadership roles including as CFO of EnTrans International and had served as McDermott's chief accounting officer for the past three years, according to LinkedIn. Senior Director of Financial Planning and Analysis Dale Suderman was named to take over the chief accounting officer role.

McDermott, which merged with Chicago Bridge & Iron Co. (CBI) in May 2018, isthe country's second largest petroleum contractor after Fluor, according to Engineering News-Record. The firm reported $6.7 billion in revenue last year.

Since the merger, the company has been in financial difficulties, cutting guidance and losing 35% of its share price in a single day this summer, according to Energy New Bulletin.

While McDermott is "pursuing different avenues to get its debt down to a sustainable level,"it appears that the company is doing what it can to avoid a bankruptcy filing, Moody's Investors Service Analyst Michael Carelli told Construction Dive. He noted that the firm's $20.5 billion backlog is strong and "from what I can tell they've been doing right by their customers, making sure they complete their projects effectively," he said.

"If that wasnt the case they wouldn't be continuing to win bids and build backlog," he said.

In the event that the company does declare bankruptcy, it could potentially lose customers and projects, Carelli said, although many clients would probably stay on.

"For many of their customers on projects that are already underway, they are already invested with the work," he said."It would entail some work on the part of the customer to rebid the project or negotiate with another bidder."

All in all, company leaders seem to be working on alternatives to filing bankruptcy, "even though the easiest thing might be to file and restructure debts," Carelli said.

McDermott is building one of the largestenergy projects in Texas,the $10 billion LNG export facilitythat Exxon Mobil and Qatar Petroleum awarded to McDermott in March, along with joint venture partners Chiyoda International Corp. and Zachry Group. McDermott said the facility in Sabine Pass will have three 5.2-million-tons-per-year trains and that the team will provide engineering, procurement, construction and commissioning services.

In related news, the Houston Business Journal reported that construction work on McDermott's new headquarters in Houston has stopped. The general contractor filed a lien on the improvements to the building on Oct. 30, saying that McDermott was $14.2 million behind on its payments.

McDermott confirmed that work on the building has been delayed, but spokesperson Gentry Brann told the Houston Business Journal that the company still plans to move the first group of employees to the building before Thanksgiving.

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McDermott board brings on bankruptcy experts - Construction Dive

News you don't want to miss for Nov. 28:

1. Hide the women and children! An "atmospheric river" is on the horizon. Heavy rains in the Bay Area and snow in the Sierras is expected to arrive starting this weekend, SFGate reports. The deluge could continue for most of the next week.

2. Tuesday night's hard rain was too much for the new $1.4 billion Chase Center in San Francisco. "Light flooding" occurred at the arena in a few rooms because of a broken pipe, the San Francisco Chronicle reports. That noise yesterday was the sound of thousands of Oakland fans snickering. $$

3. A federal bankruptcy judge ruled against PG&E's bid to overturn a state law that puts the utility on the hook for liabilities stemming from the wildfires its equipment started in California, the Associated Press reports. The fires in 2017 and 2018 cost PG&E up to $20 billion in damages.

4. The PG&E bankruptcy case also affects the 2016 Ghost Ship warehouse fire in Oakland. The San Francisco Chronicle reports families of the victims asked a judge to lift the suspension on lawsuits against PG&E in order to allow for their claims to move forward. $$

5. Oakland International Airport is losing two non-stop summer routes to Denmark and Sweden, SFGate reports. Direct flights on Norwegian Air to Copenhagen and Stockholm will cease next summer. Oakland recently lost non-stop flights to London and Barcelona.

6. High demand and limited space in Bay Area's shelters and warming centers is continuing problem, KQED reports. And when it rains, as one person noted, there's no shelter for those waiting in line to be admitted to the actual shelter.

7. So maybe you burned the turkey or forgot to fully thaw your bird this week. Tofurky, a tofu substitute is becoming more popular this Thanksgiving season, the San Francisco Chronicle reports. But, here's the herb rub: Americans are still consuming considerable amounts of turkey.

8. Meanwhile, don't mess with wild turkeys. They will mess you up. Video here.

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Thanksgiving Day Briefing: Hard rains coming this weekend; Bankruptcy judge says PG&E still liable for wildfires - East Bay Express