Category Archives: Bankruptcy

A St. Louis judge has accepted Payless Shoesources plan for reorganization, a move that will help the company achieve its goal of leaving bankruptcy by August with a significantly lighter debtload.

Payless spokeswoman Meghan Spreer said the company is not commenting on the plan until everything is finalized, but should have a statement within the next few weeks.

Chief Judge Kathy A. Surratt-States, U.S. Bankruptcy Court for the Eastern District of Missouri, approved the plan last week.

Payless entered bankruptcy in April with $838 million in debt. Senior lenders owed $506.3 million will receive a 91 percent equity stake in the company, while junior lenders, owed $145 million, will receive the remaining nine percent, according to bankruptcy documents.

General unsecured creditors will receive pennies on the dollar for their debt.

Many Topeka companies hold Payless debt, but most refused to discuss the impact it, saying they hoped to continue to do business with Payless.

Since the announcement, Payless has treated us professionally and fairly. We are hoping to continue a strong relationship with them going forward, said Paul Bossert, president of Premier Employment Solutions.

According to bankruptcy filings, Premier was owed $12,483, while another associated company, Premier Personnel Inc., was owed $7,363.

Amounts owed to Topeka businesses varied considerably, from just $150 owed to Harvesters of Topeka to $31,570 owed to Stacks LLC and $139,041 owed to ISS Facility Services of Topeka.

Bettis Asphalt &Construction was left with a bill of $23,300, confirmed Rich Eckert, the companys general counsel. The bill was for one job finished in December 2016. Eckert said the company probably will be paid $4,000 to $5,000 on the debt.

These were loading dock repairs out at their warehouse, he said. The part that burns us is that more than likely, they knew they were taking this bankruptcy while we were out there working, knowing that we would never get paid. Thats a hard pill to swallow.

Eckert said bankruptcies were more frequent during the recession and that, fortunately, its not something Bettis runs into frequently.

While some local companies werent owed dollars when Payless filed bankruptcy, they are missing the business they did with the company and are hopeful the reorganization sets Payless up for a successful future.

We didnt have any loss except for we arent continuing to print for them, said Janice Salsbury, bookkeeper for Capital Graphics. We have missed their business because they are a good client, friendly, easy to work with. Were sorry because its a major business in Topeka.

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Payless Shoesource bankruptcy plan approved by court, paving way ... - Topeka Capital Journal

Photo A Lehman Brothers company sign being brought into Christies auction house in London for a sale in September 2010. Credit Ben Stansall/Agence France-Presse Getty Images

Judge Shelley C. Chapman of the Federal Bankruptcy Court in Manhattan has issued an opinion that provides an important reminder for employees throughout the United States who participate in deferred-compensation plans.

The opinion is from the long-running Lehman Brothers bankruptcy, but it applies to employees of all sorts of companies.

In short, the tax benefits you get from a deferred-compensation plan are not free, and by deferring compensation, you are taking on the credit risk of your employer.

In 1985, Shearson Lehman Brothers Inc. which later became Lehman Brothers Inc., Lehmans regulated broker-dealer established the deferred-compensation plan. In the plan, each employee agreed that:

the obligations of Shearson hereunder with respect to the payment of amounts credited to his deferred-compensation account are and shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of all claims of all other present and future creditors of Shearson whose claims are not similarly subordinated.

The wording not only gives us some insight to gender issues on Wall Street in the 1980s, but also drives home the point that the employers obligation to pay the deferred compensation is an unsecured obligation. In this case, a deeply subordinated one. These employees were no better than subordinated bondholders of Lehman Brothers.

The employees had several novel arguments for why they should, at least, get out from under the subordination provision in the agreement, but the court rejected them all. The court also rejected the argument that Lehmans alleged breach of the deferred-compensation agreement would remove the employees obligation to subordinate their claims. The court explained that unlike an ordinary contract dispute, the present case involved the simple question how to treat the employees claim in bankruptcy.

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Lehman Bankruptcy Ruling Shows Risk of Deferred Compensation - New York Times

Pittsburgh Post-Gazette

Pittsburgh Athletic Association bankruptcy documents show iconic Oakland club overwhelmed by debts Pittsburgh Post-Gazette The documents filed late last week in U.S. Bankruptcy Court in Pittsburgh listed more than 100 creditors, ranging from federal, state and city tax collectors and employee pension funds, to utility companies, insurance firms, law firms, food vendors and ...

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Pittsburgh Athletic Association bankruptcy documents show iconic Oakland club overwhelmed by debts - Pittsburgh Post-Gazette

Bridal retailer Alfred Angelo broke its silence on Thursday after filing for bankruptcy protection last month, informingbrides nationwide they wont be receiving the wedding dresses they ordered from the national chain.

On a statement posted to the companys website, the trustee for the firmsaid after evaluating its options the retailer would be unable to fulfill remaining customer orders.

The Chapter 7 Trustee greatly regrets the upset that Alfred Angelos July 14 bankruptcy filing has caused its customers, the statement said. While we have been successful in obtaining customer records and delivering many dresses and accessories for customers all over the country, even after the bankruptcy filing date, it has now become apparent that the logistical and financial strain of fulfilling each and every open order makes continuing that course of action no longer possible.

Thus, to the extent any order has not been fully delivered to a customer, it shall have to remain unfilled.

The company went on to advise customers who think they are owed money from the company to submit a form with this link.

The announcement represented the first public statement by the bridal chain since it abruptly closed its stores on July 13 with no notice, sending brides nationwide into a panic during the traditionally busy summer season.

At the time, company employees said they were given no warning of the stores impending closure. They were told that morning the store would close at the end of the business day. Managers were instructed to return their keys after closing time. Employees had encouraged customers to call the companys customer service line, which went to voice mail when the Post had tried at the time.

Competitors like Davids Bridal have capitalized on Alfred Angelos closing, offering special deals to affected brides and wedding parties that wouldnt have their orders fulfilled.

Based inDelray Beach, Fla., the company was founded in 1933 by Alfred Angelo and his wife, Edythe Piccione, in Philadelphia. In the 1960s, their children, Vincent and Michele Piccione, began running the company, which they would do for the next 35 years. It was underthe childrens leadership that the company expanded itsretail stores across the country.

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This shuttered bridal chain can't bring customers' orders to the altar - Washington Post

Wall Street Journal (subscription)

Sears Canada's Largest Stockholders Call Off Joint Bankruptcy Bid Wall Street Journal (subscription) Eddie Lampert and Bruce Berkowitz called off a potential joint bankruptcy deal for Sears Canada Inc., clearing the way for other bidders to challenge its two largest shareholders. The two hedge-fund managers on Friday terminated a joint legal ... and more »

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Sears Canada's Largest Stockholders Call Off Joint Bankruptcy Bid - Wall Street Journal (subscription)

Westinghouse Electric Co. has finalized its business plan, but its strategy is not yet ready for prime time, the bankrupt nuclear technology firm said in a court filing on Wednesday.

Cranberry-based Westinghouse asked a New York bankruptcy judge to allow the company an extra three months to file a reorganization plan.

Westinghouse filed for bankruptcy protection in late March in an attempt to wall off its profitable businessessuch as servicing operating nuclear plants and supplying them with fuel from its spiraling and money-losing involvement in the construction of four new nuclear power plants in Georgia and South Carolina.

Less than four months (later), Westinghouse has made substantial progress toward achieving these goals, the company said in court records.

Given the complicated nature of the business the company hasthousands of vendors, some 37,000 creditors and five different business lines that serve more than half of the nuclear power plants in the world -- more time is needed, Westinghouse said.

While Westinghouse was able to strike a deal for Southern Co., the parent of the Vogtle project in Georgia, to take over the construction of the nuclear power plants there, it is still negotiating with Scana Corp., which owns the V.C. Summer project in South Carolina.

Companies in bankruptcy have a 120-day exclusivity period to come up with a reorganization plan and another 60 days to try to gain approval of it without worrying about creditors or others introducing competing plans. Westinghouse is seeking to extend both deadlines until Dec. 6 and Feb. 4, 2018, respectively.

Spokesperson Sarah Cassella said the extension has been anticipated since the outset of our Chapter 11 cases, and has no practical impact on Westinghouses day-to-day operations.

The company delivered a business plan to its bankruptcy lenders on Thursday -on schedule, Ms. Cassella said.

In a related filing on Wednesday, Westinghouse also asked for more time to decide the fate of 60 property leases, including for space at its Cranberry headquarters, and others in Warrendale, Youngwood, Monroeville, New Stanton and Pittsburgh.

A hearing on these motions is scheduled for Sept. 7.

Anya Litvak: alitvak@post-gazette.comor 412-263-1455.

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Westinghouse needs more time in crafting bankruptcy plan - Pittsburgh Post-Gazette

SunEdisonInc. won final court approvalTuesdayof a bankruptcy-exit plan that wipes out billions of dollars in investments and renders the one-time renewable energy darlinga shadow of its former self.

Following a hearing at theU.S. Bankruptcy Court in New York,Judge Stuart Bernsteinsaid he would approve the plan, the culmination of nearly 15 months of hard-fought negotiations betweenthe solar-power developerand its creditors.

SunEdison SUNEQ, +25.23% is expected to formally emerge from bankruptcy byNov. 15, according to its lawyers.

The vast majority of objections to the bankruptcy-exit plan were resolved ahead ofTuesdayshearing.AQR Capital Management LLC, which pressed its objectionTuesdaybut wasoverruled, sought modifications to the plan because of a dispute over a $300 million rights offering, funding that the company says will serve as the backbone of its exit from chapter 11.

An expanded version of this report appears on WSJ.com.

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SunEdison wins final approval for bankruptcy exit - MarketWatch

Wall Street Journal (subscription)

Toshiba Bankruptcy Filing Pushed by Some Involved in Workout - WSJ Wall Street Journal (subscription) With Toshiba's effort to raise cash by selling its chip unit stalled, a number of creditors and others involved in its restructuring are pushing for a bankruptcy filing ... and more »

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Toshiba Bankruptcy Filing Pushed by Some Involved in Workout - WSJ - Wall Street Journal (subscription)

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Renewable energy company SunEdison is exiting Chapter 11 bankruptcy, but as a much smaller company.

Under the court agreement, second lien debtholders will own 90% of SunEdisons new common stock and 90% of its Class A shares, while the companys original shareholders will receive nothing, Bloomberg reports.

SunEdison declared bankruptcy after a proposed $1.8 billion merger with Vivint Solar fell apart. Running up to bankruptcy filing, SunEdison had gone on an acquisition spree and racked up $11.7 billion in debt, more than double its debt load the year before.

SunEdisons bankruptcy also prompted the sale of the companys yieldcos, specialized vehicles designed to hold renewable energy assets and pay high dividends. TerraForm Power and TerraForm Global had 2,987 MW and 917 MW of capacity, respectively. In March, Brookfield Asset Management bought TerraForm Global and a controlling stake in TerraForm Power.

In approving SunEdisons bankruptcy plan, U.S. Bankruptcy Judge Stuart Bernstein overruled the objections from shareholders and two investors. Under the court approved deal, unsecured SunEdison creditors will receive $32 million in proceeds of directors and officers insurance settlements and $18 million as a result of negotiations with the yieldcos. Secured creditors will be repaid in full with cash.

SunEdison flew too close to the sun and landed in Manhattan bankruptcy court, Nathan Serota, an analyst with Bloomberg New Energy Finance, told Bloomberg. During the Chapter 11 process, the company lost nearly all of the assets and personnel that -- for better or worse defined it in the first place.

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SunEdison secures final approval for bankruptcy deal - Utility Dive

With the bankruptcy filing of the Skip Barber Racing School now making its way through the courts, Skip Barber himself president of Lime Rock Park has issued a statement clarifying the fact that he no longer has any connection with the school he founded.

"It has come to my attention that there are some people both inside and outside the motorsport industry who erroneously concluded that the bankruptcy filing of the Skip Barber Racing School is somehow connected to me. I've even heard reports that 'Skip Barber,' referring to me, is bankrupt," said Barber (pictured above presenting the trophy at the Lime Rock IMSA race earlier this month)."I sold the school in its entirety nearly two decades ago (1999).

"I'm pretty sure I know why this happened. Since the school's founding in 1975, 'Skip Barber' became the universal shorthand for 'Skip Barber Racing School.' So when a headline reads, 'Skip Barber Files for Bankruptcy,' there are people wrongly concluding it means me.

"To be clear: I have not filed for bankruptcy. Lime Rock Park is in fine financial shape. There is nothing connected to the Skip Barber Racing School's attempt to re-organize its business under bankruptcy law that's connected to Lime Rock aside from its outstanding debt to the track.

"Lastly, I want to thank the local, national and international news outlets who, in their very first reporting of the school's bankruptcy filing, made it clear that I have no connection to the Skip Barber Racing School."

The Skip Barber Racing School announced in May that it was filing for bankruptcy protection, with debts in excess of $10m to creditors.

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Skip Barber reiterates lack of connection to racing school bankruptcy - Racer