Help Center

Bankruptcy Headlines

Trump Rejects Push to Help Solve Puerto Rico Debt Crisis

President Donald Trump said yesterday that he is opposed to a push to help Puerto Rico resolve its $70 billion debt load as the U.S. territory faces looming austerity measures amid a deep economic crisis, the New York Times reported yesterday. Trump issued a Twitter blast aimed at efforts to help the island cover its Medicaid costs — an issue that's entangled in Puerto Rico's last-minute debt negotiations. Puerto Rico Gov. Ricardo Rossello traveled to Washington, D.C., to lobby legislators for relief from a decade-long economic crisis that is blamed partly on previous administrations in the territory that borrowed billions of dollars to cover budget deficits. Rossello repeated requests that Puerto Rico receive the same amount of Medicaid funding that U.S. states do. It currently receives lower Medicaid and Medicare reimbursements compared with U.S. states, forcing it to spend more than $1 billion a year in Medicaid alone above what it would face if it were a state. Nearly half of the island's 3.4 million inhabitants rely on Medicaid. Puerto Rico faces a May 1 deadline to either reach a deal with bondholders to restructure a portion of its debt or embrace a bankruptcy-like process. The local government has been negotiating with bondholders since last week.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.


National Air Cargo Creditors Push to Oust Leader

The calls to oust National Air Cargo Inc. founder Christopher Alf grew louder this week after a group of the significant military contractor’s creditors said that its 30-month-old bankruptcy has stalled under his leadership, The Wall Street Journal reported yesterday. In court papers, National Air Cargo creditors told a judge that debt-payment negotiations with Alf and other officials at the New York military transport company have broken down. They asked Judge Michael Kaplan to appoint new leadership. The request follows a similar one from aircraft provider Global BTG LLC, which won a $10 million lawsuit in an aircraft-leasing dispute against National Air Cargo and said that the company has been “hemorrhaging cash.” National Air Cargo lawyer Raymond Fink hasn’t formally responded to the leadership change request and said that company officials are still considering options. Judge Kaplan set a May 23 hearing to consider appointing a chapter 11 trustee. National Air Cargo filed for bankruptcy in October 2014, saying that Global BTG’s $10 million judgment hit just as the military airline industry and its network of private contractors struggled with slower business from the U.S. Department of Defense. The company, based in Orchard Park, N.Y., employed 80 people at the time of the filing.

A Star Goldman Trader Goes Cold

Adam Savarese was looking to make a splash in his new job as Goldman Sachs Group Inc.’s top distressed-debt trader last year, and found it in Peabody Energy Corp., Bloomberg reported today. The coal miner was hurtling toward bankruptcy. Savarese snagged its unsecured bonds for pennies on the dollar and rode them up for one of 2016’s most successful trades. It was risky: Some peers at other banks played it safer with secured bonds, which offered greater protection, though a smaller upside. But Savarese’s blockbuster Peabody move helped engineer a rebound on a desk buffeted by losses and the departure of senior leaders. Now that same rescue play is inflicting pain. Though the trade is still a winner over its lifetime, it reversed course in the first quarter to contribute to a fixed-income trading performance at Goldman Sachs that was so unexpectedly soft that the stock tumbled as much as 5.8 percent on April 18. While currencies and commodities trading left an even bigger dent, the performance by Savarese — and the bank’s entire credit desk — has attracted attention because it contrasts with better results at rivals.

Southern’s Georgia Power Objects to Westinghouse Bankruptcy Loan

Georgia Power Co. has taken issue with Westinghouse Electric Co.’s proposed $800 million bankruptcy loan, saying the financing could threaten the construction of the first new nuclear reactors to be built in the U.S. in decades, the Wall Street Journal reported yesterday. Westinghouse filed for chapter 11 bankruptcy at the end of March and wants to borrow money to keep its other businesses healthy while it contends with the fallout of nuclear construction projects that are years behind schedule and billions of dollars over budget. With a deadline looming today for Georgia Power to decide whether to continue construction at the Vogtle Electric Generating Plant, it and other plant owners are protesting Westinghouse’s efforts to pledge intellectual property as collateral for the loan deal. If Westinghouse’s bankruptcy loan goes through as planned, the company’s lenders would be in position to “foreclose on the intellectual property, which could seriously disrupt or even potentially halt construction,” lawyers for Georgia Power, the largest subsidiary of Southern Co., warned in a court filing.

ABC Disposal Celebrates Its Emergence from Bankruptcy

There is celebration at ABC Disposal and its related companies this week in the wake of the Boston federal court’s discharge of the firm’s chapter 11 proceeding, South Coast Today reported yesterday. CEO Mike Camara said that the ruling by Judge Joan N. Feeney releases ABC to refocus its attention on the future rather than worrying about the past. A major item on the to-do list is the resumption of construction of a recycling facility in Rochester, Mass. Camara said it is preferable to recycle used materials rather than landfill them or burn them in an energy plant. One of the company’s first actions will be to host a jobs fair on May 6. Construction on the Rochester facility should resume by August or September, he said. As for customers, they probably “won’t notice a thing,” Camara said. What they won’t see is any move to sell the company, he said. It will stay in the same hands as it is today. Leading up to the court’s action, all of the creditors approved of the result, Camara said. That helped the court reach a resolution in just under a year. According to its website, ABC is one of the largest privately held solid waste, collection and transportation companies in New England. The city of New Bedford and many other local municipalities are customers.

Qatar Approves Draft Law on Bankruptcy

The State Cabinet approved a draft law on corporate bankruptcy and prevention at an ordinary session chaired by the Prime Minister and Interior Minister, Zawya reported yesterday. The Ministry of Economy and Commerce prepared the draft law aiming at improving the investment environment in the state. The law aims at developing a detailed regulation of the provisions of corporate bankruptcy and prevention, taking into account international standards in this regard. The Cabinet also approved a draft law regulating competition and its draft executive regulation.