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Cancer Treatment Firm 21st Century Oncology Files for Bankruptcy

21st Century Oncology Holdings Inc., which bills itself as the world's largest operator of cancer treatment centers, filed for chapter 11 protection yesterday citing changes in insurance reimbursement rates and uncertainty caused by political changes, Reuters reported. The Fort Myers, Fla.-based company said that the bankruptcy would not impact its 179 treatment centers with locations across 17 U.S. states and Latin America. Paul Rundell, the interim chief executive officer, said in a statement the company entered bankruptcy with an agreement with lenders and bondholders that would reduce its debt by $500 million. The company's lenders agreed to provide $75 million for working capital during its bankruptcy and a group of creditors agreed to invest $75 million into the reorganized business.

Trump Administration Considers Moving Student Loans from Education Department to Treasury

The Trump administration is considering moving responsibility for overseeing more than $1 trillion in student debt from the Education Department to the Treasury Department, a switch that would radically change the system that helps 43 million students finance higher education, the New York Times reported today. The potential change surfaced in a scathing resignation memo sent late Tuesday night by James Runcie, the head of the Education Department’s federal student aid program. Runcie, an Obama-era holdover, was appointed in 2011 and reappointed in 2015. He cut short his term, which was slated to run until 2020, after clashing with the Trump administration and Betsy DeVos, the education secretary, over this proposal and other issues. A shift in handling federal student aid is being weighed as the Trump administration and DeVos consider overhauling the Department of Education. Trump’s proposed budget for 2018 slashes funding for the department by nearly 50 percent.

Commentary: Counting on Student Loan Forgiveness? Don't Bet on It

Nearly half of college students surveyed earlier this year said that they expected to be helped by the federal government’s various student loan forgiveness programs, but new government figures suggest that their hoped-for windfall won’t be that generous, according to a Bloomberg News commentary yesterday. The U.S. Department of the Education projects that borrowers who next year enroll in loan forgiveness programs would, on average, repay every penny they borrowed. Some debtors in the programs, which cap monthly payments relative to earnings and offer the possibility of debt forgiveness, are projected to pay as much as 76 percent more than they borrowed. The forgiven amount would largely be interest that accrued over what could be as long as 25 years of making payments. In fact, the government projects that just 53 percent of debtors who’d enroll in these plans in the 2018 fiscal year would receive any forgiveness at all, according to estimates made public on Wednesday. Even that estimate may be too high, separate government figures suggest. Less than half of all government-owned student debt (by dollar volume) belongs to people enrolled in income-based repayment plans, Education Department data show.

Payless to Try Fending Off Creditor Probe of Owners with Own Review

Discount retailer Payless ShoeSource is investigating whether its leveraged buyout by private equity firms and the dividend payments they received led to its bankruptcy, according to court papers, Reuters reported yesterday. The company disclosed its investigation on Wednesday in a filing aimed at persuading Bankruptcy Judge Kathy Surratt-States in St. Louis to reject a request by an official committee of creditors to hire an expert to review pre-bankruptcy transactions. Creditors have said in court filings that San Francisco private equity funds Golden Gate Capital and Blum Capital, which together hold 98.5 percent of the company and control its board, received more than $350 million in dividends in recent years. Payless, which has 4,000 stores around the world, said in court papers that a separate investigation could hinder its goal to recapitalize and emerge from bankruptcy in August.

Bankrupt Westinghouse Ends Pensions for Former CEOs, Executives

Bankrupt Westinghouse Electric Co LLC, the U.S. nuclear technology firm owned by Toshiba Corp., has stopped making pension payments to former executives, Reuters reported yesterday. The move comes as the company scrambles for cash and works to extract itself from two U.S. power plant projects, the first new nuclear plants in three decades, which are years behind schedule and billions of dollars over budget. Westinghouse spokeswoman Sarah Cassella said in a statement that in chapter 11 bankruptcy, the company is not permitted to make pension payments to retired executives because it is a non-qualified plan. Unlike "qualified" plans for rank-and-file workers that are funded from money set aside in a trust, Westinghouse's executives receive their payments from the company's ongoing operations. The plan covers around 75 former managers, according to a court filing by Ronald Gellert, a Delaware lawyer who was hired to represent the plan participants. It includes retired senior vice presidents, directors, regional presidents and at least two former chief executives.

Caesars, Exiting Bankruptcy, Seeks Growth Beyond Gambling

Caesars Entertainment Corp. will resurface from bankruptcy this year after nearly a decade of struggles with unsustainable debt dating back to the financial crisis, the Wall Street Journal reported today. Now it faces a new challenge: How to grow when gambling is already within driving distance of virtually every American, and even international development prospects have diminished. Caesars expects shareholders to vote on a plan to emerge from bankruptcy by late September, and executives in recent weeks have begun offering their vision for the company’s future. Having extinguished $10 billion in debt following a brutal bankruptcy reorganization, Caesars will have the balance sheet to pursue acquisitions and new investments in the way that rivals such as MGM Resorts International have done in recent years. But the reconstituted Caesars faces hurdles that illuminate how much the world of casino gambling has shifted since the company was purchased in a disastrously timed 2008 private-equity buyout.