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Bankruptcy Headlines

California Looks for a Fix for the Wildfire Problem That Burned PG&E

California is going to start trying to figure out how to keep another one of its utilities from going bankrupt, Bloomberg News reported. PG&E Corp., the state’s largest power company, has already made a chapter 11 filing to deal with an estimated $30 billion in liabilities from wildfires that its equipment may have ignited. And its peers — Edison International’s Southern California Edison and Sempra Energy’s San Diego Gas & Electric — are just one deadly blaze away from similar ruin if a commission set up by California lawmakers can’t come up with a fix. The panel is scheduled to hold the first in a series of public meetings on Monday. Ratings companies including S&P Global Ratings have already warned that SoCalEd and SDG&E are at risk of having their credit downgraded to junk before the start of the wildfire season in June unless lawmakers take concrete steps to address a legal doctrine known as inverse condemnation. It holds a utility responsible for damages if its equipment ignites a blaze. Citigroup Inc. said in a note this week that legislation may be passed in the next two to three months, citing conversations with officials in Sacramento. Read more

In related news, PG&E Corp. yesterday extended the deadline by which investors must file paperwork if they want to install their directors on the board, Reuters reported. Investors will now have until March 1 to nominate director candidates, the utility said in a regulatory filing here early on Thursday only hours before its original deadline was set to expire on Feb. 21. Last month, PG&E shareholder BlueMountain announced plans to try and unseat all board members, criticizing the company for filing for chapter 11 protection, a move it called unnecessary and harmful to investors. The New York-based hedge fund, which owns roughly 8 million shares of PG&E, said last week that it was ready to announce its director candidates by the Feb. 21 deadline. Read more

Citibank: Windstream Likely to File for Bankruptcy By Mid-March

Windstream Holdings Inc., the rural broadband provider that recently lost a legal battle with hedge fund Aurelius Capital Management, is likely to file for bankruptcy by mid-March, a Citibank NA report said on Wednesday, WSJ Pro Bankruptcy reported. In a research note, Citibank analysts David Phipps and Tony Deng said last week’s judgment in favor of Aurelius will likely trigger defaults on the company’s debt next month. They said a Windstream bankruptcy could last more than one year. A Windstream spokesman said Thursday the company is considering “all potential alternatives to maximize value for its stakeholders, maintain sufficient liquidity, and preserve the company’s long-term potential.” U.S. District Judge Jesse Furman ruled Feb. 15 that Windstream defaulted on its debt when it spun off its fiber-optic business, and the judge also awarded bondholder Aurelius more than $310 million in principal plus interest. Aurelius, the hedge fund run by ex-bankruptcy lawyer Mark Brodsky, had claimed Windstream Services, a subsidiary of publicly traded Windstream Holdings, defaulted on its bonds when it spun off its fiber-optic cable network into a new company called Uniti Group Inc. in 2015.

San Antonio Tech Company Files for Bankruptcy over Sales Taxes Dispute

San Antonio-based Bridgehead Networks Inc., a managed information technology services business, filed for bankruptcy protection recently amid a dispute with the state that had the business owing hundreds of thousands of dollars in back taxes, the San Antonio Business Journal reported. Bridgehead Networks was founded in 2001 by CEO Harry Nass and has about half a dozen employees. Bridgehead Networks shares the same office address as Bridgehead IT Inc., which is a legally separate company with a different CEO, and the networking business is a customer of Bridgehead IT — which has about 40 employees. Bridgehead IT's leadership said that it doesn't expect any major impact to its operations from Bridgehead Networks' bankruptcy. Bridgehead Networks said that a sales tax dispute with the Texas Comptroller’s office after audits, which began in 2011, compelled it to file for bankruptcy, according to court documents. The Texas Comptroller alleged that the company owed more than $435,000 in sales tax for computer hardware and software sales. The company is disputing more than $749,800 in past due taxes, including penalties, records show.

Samuels Jewelers Laundered Money in Indian Bank Fraud, Probe Finds

A court-appointed investigator said he has found evidence that Samuels Jewelers, a century-old U.S. retail chain that filed for bankruptcy last year, laundered money as part of an alleged $2 billion fraud on India’s Punjab National Bank, WSJ Pro Bankruptcy reported. The investigator, John Carney, was appointed by a judge last year to look into the U.S. end of an alleged international fraud that ran for years across the U.S., India, Hong Kong and the United Arab Emirates. His probe of Samuels homed in on a complex in Austin, Texas, where a collection of businesses controlled by Mehul Choksi shuffled tens of millions of dollars in cash and diamonds around, creating the illusion of deals with outside companies, the report said. Choksi, chairman of the company that owns Samuels, is wanted by Indian authorities and contact information for him isn’t available.

Nielsen Forms Addressable TV Ad Group After Buying Sorenson Media’s Assets for $11.25 Million

Nielsen thinks it has the pieces in place to finally drive up the scale of addressable TV advertising, targeted based on a television household’s profile the way internet ads have been served for years, Variety reported. The media-measurement firm has formed Nielsen Advanced Video Advertising, a new group focusing on developing addressable advertising initially for internet-connected smart TVs. To fill what it says was a missing link in its portfolio, Nielsen last week acquired Sorenson Media, an addressable TV technology provider, in a bankruptcy-court proceeding with a winning $11.25 million bid. Sorenson had filed for chapter 11 reorganization last fall, citing an “onerous” addressable-advertising contract with Sinclair Broadcasting that would have forced Sorenson to pay more than $100 million over the life of the deal.

Actual Brewing Lost $558K Last Year, Bankruptcy Filings Show

The financial picture at Actual Brewing Co. is coming into focus as investors and backers sort out its future, Columbus (Ohio) Business First reported. The Columbus-based brewery last week filed for chapter 11 protection in U.S. Bankruptcy Court in Columbus after ousting founder and CEO Fred Lee in the wake of sexual assault allegations. Financial documents filed in the bankruptcy case show Actual lost $558,080 in 2018 on $341,432 in sales. A tax return filed with the court showed a $255,225 loss in 2016 on $359,421 in sales. No financials for 2017 have been disclosed. The company reported assets of between $500,000 and $1 million, against debts of between $500,000 and $1 million in the bankruptcy filing. The largest unsecured claim against the company is a $100,000 loan from Dublin resident John Dilley. Four other smaller loans from individuals are listed.
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