Bloomberg confirms that 2020 was the biggest year for large commercial bankruptcies since the Great Recession in 2009. Led by the energy, retail, and consumer services sectors, 224 companies with liabilities exceeding $50 million filed Chapter 7 and 11 cases, far exceeding the number of large filings each year in the preceding decade. Bloomberg also
As reported in Yahoo Finance, the first trading day of 2021 was off to a rocky start in the U.S. Despite progress on COVID vaccine distribution, markets reacted to the discovery of a highly transmissible strain of COVID in the US, which comes with a greater risk of lockdowns, along with uncertainty surrounding the
BJ Services, a Texas-based provider of hydraulic fracturing (i.e., “fracking”) and cementing services for upstream oil and gas companies, filed for chapter 11 protection on July 20, 2020, in the US Bankruptcy Court for the Southern District of Texas, along with three of its affiliates. Their chapter 11 filings were prompted by unsuccessful restructuring negotiations with one of their equity sponsors—CSL Capital Management—which would have provided a $75 million new money investment, including $30 million in the form of DIP financing, in exchange for the majority of the reorganized equity. Citing commodity price volatility and an unmanageable capital structure, the debtors have been pursuing an orderly wind-down and confirmation of a chapter 11 liquidation plan, the cornerstone of which was a sale process for six asset packages: (a) cementing business; (b) fracking business; (c) certain equipment related to the cementing business; (d) certain equipment related to the fracking business; (e) shared lab equipment; and (f) other miscellaneous equipment (e.g., tractors).
Continue Reading BJ Services, LLC, et al.: Not-So-Smooth Sailing for Credit Bidders
Research from the Brookings Institute finds that the COVID-19 pandemic’s impact on firm profits and revenues thus far is comparable to the worst quarter of the 2008-2009 financial crisis. The researchers further project that bankruptcy filings will increase by as much as 140 percent this year compared with last year. [Brookings; Sept. 23, 2020]
Retail Ecommerce Ventures (“REV”), an investment firm that seeks to convert struggling brick-and-mortar brands into successful e-commerce brands, has purchased the intellectual property and e-commerce assets of Pier 1 Imports for $31 million, reports Forbes. REV also recently purchased the intellectual property and e-commerce assets of Dressbarn, which has seen growth in revenue since
Reporting from Reuters discusses how large firms that have filed for bankruptcy relief since the beginning of the COVID-19 pandemic have awarded bonuses to executives shortly before filing for bankruptcy. Of the 40 large firms investigated, Reuters found that approximately one-third awarded bonuses to executives within the month before filing for bankruptcy. [Reuters; July 17,
The New York Times reports that natural gas extraction company Chesapeake Energy Corporation has sought chapter 11 bankruptcy relief in the United States Bankruptcy Court for the Southern District of Texas. Chesapeake’s bankruptcy is reportedly the largest bankruptcy of a United States oil and gas company since 2015 (N.Y. Times; June 29, 2020)
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PG&E Corp. received approval from the United States Bankruptcy Court for the Northern District of California to sell $20 billion worth of new debt and equity, reports the Wall Street Journal. Approximately $10.7 billion worth of both investment grade and high-yield bonds will be issued and the company is seeking to find investors to
Recent oil price drops may accelerate the pace of oil and gas bankruptcies in the United States, reports Law360. In light of such drops, the industry appears to be facing a situation similar to one it faced in 2016 and 2017, when many drilling companies sought bankruptcy protection. [Law 360; Mar. 11, 2020]
Law360 reports that Purdue Pharma LP is seeking a 180-day extension of a preliminary injunction put in place earlier in the bankruptcy process that halted litigation relating to Purdue’s role in the national opioid crisis not only against the debtors themselves but also against the debtors’ current and former owners, officers, directors, employees, and associated