Help Center

Bankruptcy Headlines

Fieldwood Energy Files for Chapter 11 Bankruptcy Protection

Fieldwood Energy LLC, one of the largest oil producers in the Gulf of Mexico, sought bankruptcy protection yesterday after agreeing to the terms of a novel deal with investors that calls for a combination of a debt-for-equity swap and the purchase of Noble Energy Inc.’s Gulf-based oil and gas assets, WSJ Pro Bankruptcy reported. Fieldwood, which is backed by energy investment firm Riverstone Holdings LLC, filed for chapter 11 in U.S. Bankruptcy Court in Houston with a pre-packaged bankruptcy plan that hands control of the reorganized business to a group of junior debt holders, which includes Riverstone, and slashes $1.6 billion in debt off its books. Riverstone, which pumped nearly $700 million into Fieldwood’s equity since founding the company in late 2012, will see its stake greatly reduced under the chapter 11 plan. The New York investment firm will emerge with about 50 percent of the equity in the reorganized company by swapping debt it owns and injecting new cash.

Seadrill Close to Restructuring Deal with Bondholders

Seadrill’s main owner, billionaire John Fredriksen, is close to a deal with unsecured bondholders and South Korean shipyards on a restructuring plan for the rig operator, Reuters reported. The Norwegian company, which last year filed for bankruptcy protection in a U.S. court, has been working with creditors since last month on a restructuring plan to bring in more than $1 billion in fresh funding, allow it to maintain its fleet of rigs and pay creditors and staff. The breakthrough in the talks came after Seadrill agreed on claims from Daewoo Shipbuilding & Marine Engineering (DSME) and Samsung Heavy Industries under Seadrill-guaranteed newbuild contracts for four drillships. The South Korean companies had previously claimed a total of $1.7 billion in contingent liabilities.

Puerto Rico Lawyer Warns of Power Shutdown If Loan Denied

Puerto Rico’s power company will begin shutting down as soon as Friday if it doesn’t receive a $1 billion loan from the territory’s central government, threatening to cause widespread electricity outages across the hurricane-devastated island, a lawyer for Puerto Rico told a U.S. judge, Bloomberg News reported. The injection of cash from the bankrupt government will allow the Puerto Rico Electric Power Authority, called Prepa, to keep running while it waits for President Donald Trump’s administration to release disaster-recovery loans approved by Congress. Without it, the company may be forced to begin rolling outages within weeks, said Joseph Davis, an attorney for Puerto Rico. Damage from Hurricane Maria in September decimated the power grid, leaving some residents without power for months after the storm. The damage has also intensified the financial squeeze on the government-run utility, whose revenue was decreased as customers went without electricity. Governor Ricardo Rossello said yesterday that PREPA is set to run out of cash within three weeks. The loan would prevent a humanitarian crisis, he said, and possibly allow the commonwealth to access the federal loans that have been held up since Trump’s administration said Puerto Rico’s government may have too much cash on hand to warrant the assistance yet. Read more

In related news, Puerto Rico Governor Ricardo Rosselló said yesterday that he expects the bankrupt island’s oversight board to certify his revised fiscal plan in “the next couple of days,” Reuters reported. Aimed at putting the U.S. territory on a path to economic recovery, Rosselló’s latest plan, introduced on Tuesday, has already drawn opposition from a large group of creditors. Rosselló said that his ability to address creditors’ broad concerns was limited by the Title III court restructuring process. That court case, or negotiations around it, will ultimately be used to hash out specific debt repayment terms, he said. Following the release of the revised plan, which taps federal money and turns a deficit into a modest surplus, the price on Puerto Rico’s benchmark GO bond is on a third straight day of significant gains on heavy volume. Read more

Trump ‘Strongly’ Favors Imposing Online Sales Tax, Mnuchin Says

Treasury Secretary Steven Mnuchin said yesterday that President Donald Trump “feels strongly” that the U.S. should impose a sales tax on purchases made over the Internet, Bloomberg News reported. Mnuchin, speaking at a hearing before the House Ways and Means Committee, said that he has spoken personally with Trump about the issue, and that the president “does feel strongly” that the tax should be applied. The prospect of an online sales tax has been a long-standing point of contention between Internet-based retailers and their brick-and-mortar rivals. Trump has previously gone after Internet giant Amazon.com Inc., saying that last year that it does “great damage to tax paying retailers.” Amazon began collecting sales taxes on purchases in all states that levy them earlier last year, despite an exemption that allows online retailers to avoid collecting them in places where they don’t have a physical presence. But Amazon still avoids charging shoppers sales taxes when they buy from one of its third-party vendors — sales that make up about half the company’s volume. 

NASCAR Cup Team BK Racing Files for Bankruptcy Ahead of Daytona 500

Former Red Bull NASCAR Cup series team BK Racing has filed for chapter 11 protection ahead of the 2018 Daytona 500, AutoSport.com reported. In BK Racing's bankruptcy filing, there are 20 creditors owed money which totals over $1.2 million and the team is estimated to have between 50 and 99 creditors total. The largest claim is $569,539.95 owed to Race Engines Plus LLC. BK Racing's filing also adds that it has more than $10 million in assets and liabilities. NASCAR could revoke BK Racing's charter — its guaranteed right to start a Cup race and entitlement to larger race revenue — but said it will remain with the team for now.

US Bank to Pay More Than $600 million over Federal Charges It Had Lax Anti-Money Laundering Controls

Federal prosecutors said yesterday that U.S. Bancorp failed to monitor suspicious transactions and other activities that should have raised money laundering alerts, and then its employees tried to hide the deficiencies from regulators,CNBC.com reported. In one particularly extreme example, federal prosecutors say that the bank's anti-money laundering watchdogs looked the other way as a customer named Scott Tucker used several accounts to launder ill-gotten proceeds of a fraudulent payday lending scheme. The government says U.S. Bank "willfully" failed to report the suspicious activity in a timely manner. Tucker was convicted in New York federal court last year of operating the illegal payday loan scheme, and in January he was sentenced to more than 16 years in prison.

MENU
MENU

Pages