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A Late Push to Find Wildfire Victims Doubles PG&E Claims

A deadline extension and an aggressive effort to track down victims have doubled the number of damage claims against Pacific Gas & Electric over California wildfires started by its equipment, the New York Times reported. A filing yesterday related to the giant utility’s bankruptcy case said that more than 80,000 people were now seeking to tap into a relief fund projected to total $13.5 billion. In his report, a court-appointed accountant charged with identifying and finding additional wildfire victims attributed the increased number of claims to, among other things, “grass-roots campaign efforts of the fire victims themselves.” Less than three weeks before the previous Oct. 31 deadline, the New York Times reported that about 31,500 victims had filed claims but that 70,000 others could lose out on benefits if they did not act quickly. Bankruptcy Judge Dennis Montali, who is presiding over the bankruptcy case, extended the deadline to Dec. 31. And U.S. District Court Judge James Donato, who is responsible for estimating how much PG&E owes wildfire victims, said: “It would be a heartbreaking shame if even 10 percent of the eligible victims don’t file claims for whatever reason. If we’re talking about 50 percent not filing, that’s — that’s intolerable.” Judge Donato suggested that “someone should be going door to door” to get victims to file claims.

Philadelphia Refinery Expected to be Sold to Real Estate Developer

Bankrupt Philadelphia Energy Solutions is expected to sell its fire-damaged refinery site to real estate developer Hilco Redevelopment Partners, Reuters reported. The agreement between PES and Hilco, a Chicago-based developer that specializes in redeveloping industrial properties, is expected to be announced soon.  Any sale would have to be approved by the U.S. Bankruptcy Court for the District of Delaware. A sale to Hilco would reduce the possibility that the more-than 1,300-acre (526-hectare) Philadelphia site would be resurrected as an oil refinery. Hilco, which has $2.5 billion of assets under management and has acquired 5,000 acres in North America, specializes in redeveloping obsolete industrial sites, according to its website. The 335,000 barrel-per-day refinery is the largest and oldest on the U.S. East Coast, but was shut after a fire and a series of explosions on June 21 last year that destroyed a key processing unit. PES filed for chapter 11 protection a month after the blaze and put the 150-year-old refining operation up for sale.

Engineering Firm McDermott to File for Bankruptcy

McDermott International Inc. said that it will file for chapter 11 protection yesterday, after succumbing to depressed conditions in the offshore drilling industry and setbacks in major energy projects, WSJ Pro Bankruptcy reported. The engineering firm said that it has reached an agreement with more than two-thirds of its creditors in a restructuring transaction that would eliminate more than $4.6 billion in debt. McDermott has obtained commitments for a $2.81 billion debtor-in-possession facility to fund its bankruptcy proceedings. The financing, subject to court approval, could enable the company to stabilize its cash flows, McDermott said. As part of the restructuring, the company said yesterday that it would sell Lummus Technology, which licenses gas-processing, refining, petrochemical and coal-gasification technologies, to a joint partnership between private-equity firms Chatterjee Group and Rhône Group for $2.73 billion. The company said it would have the option to retain or buy a 10 percent equity ownership interest in the joint partnership. McDermott said that it expects to hold an auction in about 45 days to solicit superior bids for the Lummus business.

Fast-food Chain Krystal Files for Chapter 11 Bankruptcy after Closing Dozens of Restaurants

Fast-food chain Krystal has filed for Chapter 11 bankruptcy protection despite efforts to shore up its bottom line by closing dozens of restaurants, USA TODAY reported. The Dunwoody, Ga.-based company, whose restaurants are scattered throughout the southeastern U.S., blamed rising labor costs and online delivery competition as factors leading to its bankruptcy. Krystal has 182 company-owned restaurants and another 116 franchise locations in 10 states, according to a court filing: Georgia, Tennessee, Alabama, Georgia, Florida, Kentucky, Mississippi, North Carolina, South Carolina and Arkansas. Most of its restaurants are located in suburban communities with many of them near interstate exits. "Shifting consumer tastes and preferences, growth in labor and commodity costs, increased competition, and unfavorable lease terms" were key reasons for the company's bankruptcy, chief restructuring officer Jonathan Tibus wrote yesterday in a court filing. Owned by K-Square Restaurant Partners LP, Krystal received an investment of $59.8 million in April 2018, which it used to repay $42 million of loans, fund "substantial remodeling" and make other investments, such as marketing, according to a court filing. The company closed about 44 locations over the last year, including 13 on Dec. 15, to boost its finances.

U.S. Bankruptcy Watchdog Can’t Dislodge Highland Directors, Judge Rules

The judge overseeing Highland Capital Management LP’s chapter 11 case rejected a government bankruptcy watchdog’s bid for a chapter 11 trustee, satisfied that a recent governance reform would protect the interests of creditors, WSJ Pro Bankruptcy reported. Bankruptcy Judge Stacey G.C. Jernigan emphasized her view during a court hearing yesterday that a negotiated governance overhaul, which she approved earlier this month, was in the best interests of creditors. An official creditors committee, largely composed of investors who have spent years locked in court battles with Highland, supported the governance reform and urged the judge not to hand over control to a chapter 11 trustee. The governance deal creates an independent board of directors at Highland’s general partner, Strand Advisors Inc., that will assume managerial control from Highland co-founder James Dondero. However, the Office of the U.S. Trustee, a Justice Department bankruptcy monitor, had argued the arrangement was flawed and didn’t go far enough, in part because Dondero is the sole shareholder of Strand. Under the deal, the board assumed control of Highland’s management functions and Highland agreed that independent directors can’t be removed without permission from the creditor committee or the bankruptcy court, according to court papers.

Fairway Planning to File for Chapter 7 Bankruptcy, Close All Stores

New York grocer Fairway Market is planning to file for a chapter 7 bankruptcy, the New York Post reported. The grocery chain previously filed for chapter 11 in 2016. Under the current plan, Fairway will close all 14 of its stores, including its flagship store at Broadway and West 74th Street. The liquidation could be announced as soon as today. The liquidation plan comes despite ongoing interest by a potential rival in acquiring the Fairway brand, which dates to 1933, when the Glickberg family opened a fruit and vegetable stand on the Upper West Side. Fairway has been toying with bankruptcy protection after failing to find a buyer for its 14 stores last year. Aside from Village Super Market, prospective buyers of stores owned by Brigade Capital Management and Goldman Sachs Group were scared off by its $174 million debt and expensive leases, including $6 million in rent on its flagship New York City store.