Help Center

Winter Leadership Conference | December 5-7 | Rancho Palos Verdes , CA Register Today View Schedule

Bankruptcy Headlines

PG&E Noteholders, Wildfire Victims File Formal Reorganization Plan

Noteholders of PG&E Corp. and a committee for victims of the wildfires that pushed the power producer into bankruptcy filed a formal reorganization plan yesterday for the company, proposing they get effectively all of its new shares, Reuters reported. The plan, filed with the U.S. Bankruptcy Court in San Francisco over PG&E’s wishes, proposes that the noteholders buy $15.5 billion in new shares, giving them 59.3 percent of equity. The plan also proposes issuing 40.6 percent new PG&E stock to fund a fire victims trust valued at $12.75 billion. This month, Bankruptcy Judge b>Dennis Montali issued an order allowing the noteholders and wildfire victims’ committee to file a reorganization plan for PG&E after the noteholders offered to put $29.2 billion in new money, in a combination of equity and debt, into the San Francisco-based power producer. The committee backed the noteholders’ plan because it expected the proposal to provide more than the $8.4 billion in compensation PG&E has proposed for wildfire victims. PG&E is developing a plan, backed by major shareholders, that would use $34 billion in new debt and $14 billion in equity commitments to reorganize.

Judicial Conference Opens Proposed Rules for SBRA for Public Comment

On February 19, 2020, the Small Business Reorganization Act of 2019, P.L. 116-54 (SBRA) will go into effect – long before the normal three-year rules amendment process runs its course. As a temporary measure, the Advisory Committee on Bankruptcy Rules has drafted Interim Bankruptcy Rules that can be adopted by courts as local rules or by general order when the SBRA goes into effect. The Advisory Committee has also drafted amendments to the Official Forms to address the SBRA. The Standing Committee now seeks comment on the proposed SBRA rules and forms for a short four-week period prior to making final recommendations.

- Interim Bankruptcy Rules 1007(b), 1007(h), 1020, 2009, 2012(a), 2015, 3010(b), 3011 and 3016.
- Official Forms 101, 201, 309E, 309F, 314, 315, 425A, and new Official Forms 309E2 and 309F2 The comment period is open until November 13, 2019. Because of the short publication period for the Interim Rules and related Official Forms, there will be no public hearings.

Read the text of the proposed amendments and supporting materials. 

Written comments are welcome on each proposed amendment. The Advisory Committee on Bankruptcy Rules will review all timely comments, which are made part of the official record and are available to the public. The comment period closes on November 13, 2019. Click here to submit a comment. 

Court Allows Bankrupt Philly Refiner to Award Bonuses

Bankruptcy Judge Kevin Gross on Wednesday approved a request by Philadelphia Energy Solutions to award an undisclosed number of bonuses to executives, the Philadelphia Inquirer reported. The bonus awards will be kept under seal, and a small circle of parties is bound by court order to keep the information confidential. The refinery, whose bankruptcy is filed under the corporate name PES Holdings LLC, previously paid $4.6 million in bonuses to executives following a devastating June fire that led to its closure and bankruptcy. It filed a request Sept. 27 to award additional bonuses, though it asked to keep details confidential to reduce the “negative impact on employee morale” and also the chance that competitors could use the information to recruit PES executives.

Dura Auto Files for Bankruptcy Protection with Buyout Offer from Lynn Tilton

Auto parts-maker Dura Automotive Systems LLC has filed for bankruptcy protection for its U.S. operations, saying that it is looking for a buyer to bail out its debt-laden business managed by turnaround executive Lynn Tilton, WSJ Pro Bankruptcy reported The business has been up for sale since last year, but Tilton, who says she is the majority owner, intends to be the lead bidder at a bankruptcy auction. She plans to buy Dura from herself unless rival bidders step forward. New court papers say that Tilton wants the right to credit-bid at the auction instead of bidding with cash. Dura owes her Ark II about $27 million; however, she has proposed bankruptcy financing that would elevate that loan to top priority, and add additional funds, which would also be valuable currency at an auction. The bankruptcy filing sets up a clash between Tilton and the Zohar funds, investment vehicles that are Dura’s largest senior lender, owed about $105 million. Both the Zohar funds and Tilton claim to be majority owners of the company.

Murray Energy Corp. Extends Forbearance Agreements with Lenders

Murray Energy Corp. in St. Clairsville, Ohio, the largest private coal company in the U.S., is getting more time to find a way out of its financial troubles, Crain's Cleveland Business reported. The company on Wednesday announced that it has extended forbearance agreements with its lenders through 11:59 p.m. on Monday, Oct. 28, unless otherwise extended. The forbearance period previously announced, on Oct. 2, ended at 11:59 p.m. on Monday, Oct. 14. Under terms of the forbearance agreements, Murray Energy's lenders have agreed to exercise remedies available to them as a result of the company's missed amortization and interest payments that were due on Sept. 30. Murray Energy also said on Wednesday that since discussions are ongoing with lenders and noteholders regarding "strategic options to strengthen the company's business, liquidity and capital structure," it "elected not to make the cash interest payments" that were due on Tuesday, Oct. 15, to holders of the company's 12 percent senior secured notes due in 2024, and of the 11.25 percent senior secured notes due in 2021.

McKesson CEO Among Four Summoned to Court for Opioid Talks

The CEOs of McKesson Corp., Cardinal Health Inc. and two other companies seeking to settle legal claims over their handling of opioid painkillers were summoned to meet with a judge in hopes of hammering out a final deal, Bloomberg News reported. U.S. District Judge Dan Polster in Cleveland, who is overseeing the first federal trial over the U.S. opioid epidemic, demanded that the chief executive officers appear in his court today to discuss their settlement proposals. In a sign that talks may be entering their end-game, Judge Polster made his demand on Wednesday as jury selection got underway in the trial. Opening statements are scheduled for Oct. 21 in the first case to test local governments’ claims that opioid makers and distributors fanned demand for the highly addictive pain medications. The four companies -- McKesson, Cardinal Health, AmerisourceBergen Corp. and Teva Pharmaceutical Industries Ltd. -– are seeking to resolve all opioid suits filed against them by U.S. states, cities and counties. If their settlement proposals are accepted, they’d be removed from the current trial and any further opioid litigation.

View More Headlines
MENU

Pages