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Venezuela's Deals to Shield Citgo from Creditors Now in Doubt

Venezuela is facing the possible unraveling of a pair of billion-dollar settlements aimed at protecting the cash-strapped country’s U.S.-based Citgo Petroleum Corp. from seizure by creditors, Reuters reported. A lawyer for Canadian mining company Crystallex International Corp. said yesterday that Venezuela had breached the $1.4 billion November agreement that resolved a long-running fight over an expropriated gold mine. Separately, Venezuela’s $1.3 billion settlement in October with Rusoro Mining of Vancouver, also over expropriated mining assets, has been upended by U.S. sanctions on Caracas, a source told Reuters. Both companies had their sights on getting a U.S. court order to auction the parent company of Citgo, which is indirectly owned by Venezuela through its state oil company, PDVSA. While Venezuela has been crippled by an economic crisis and has defaulted on tens of billions of dollars of debt, it has struck deals to protect Citgo’s refineries, a key destination for Venezuela’s crude.

Clear Channel Settlement Delays iHeartMedia’s Bankruptcy Exit

A proposed pact immunizing the private-equity firms that own iHeartMedia Inc. from legal trouble will delay the radio broadcaster’s exit from chapter 11 until the new year, WSJ Pro Bankruptcy reported. The settlement involves iHeart’s most prized asset, billboard company Clear Channel Outdoor Holdings Inc. If approved, it would end litigation that accuses private-equity owners Bain Capital Partners LLC and Thomas H. Lee Partners L.P. of taking advantage of Clear Channel for iHeart’s benefit. The agreement would also allow iHeart to pay $150 million to eliminate the $1 billion debt it owes to Clear Channel, iHeart said. Bain and THL have denied any wrongdoing. The proposed settlement arrived in what were supposed to be the final weeks of iHeart’s bankruptcy proceedings, which began in March when the radio-station operator filed for protection in an effort to ease its debt load. Instead of a chapter 11 plan confirmation hearing that was supposed to start on Tuesday in Houston, iHeart faces a series of hearings, starting next Monday and stretching into January. Judge Marvin Isgur will review the settlement and iHeart’s chapter 11 exit plan, which most creditors had considered a done deal until the settlement was introduced.

Dallas-Based Senior Center Operator Lands in Bankruptcy

A large Dallas-based operator of senior care, assisted living and hospice facilities in Texas has filed for chapter 11 protection, the San Antonio Express-News reported. Senior Care Centers attributed its financial troubles to declining reimbursement rates, shrinking occupancies, rising rents and other challenges facing the industry. Each of its 120 affiliated companies also filed for bankruptcy protection. Senior Care Centers operates 97 senior living facilities, nine assisted living facilities and six hospice facilities in Texas and Louisiana. It has about 13,000 beds and 11,300 employees. Senior Care hasn’t made any determination yet regarding which facilities it will seek to transfer to new operators, spokesman Tom Becker said. The company lost about $94 million on $910.4 million in revenue last year. It generated $697 million in revenue in the first 10 months of this year but didn’t report its bottom-line results.

Applebee’s Franchisee Gets Court Approval of Bankruptcy Plan

RMH Franchise Holdings Inc., the nation’s second-largest Applebee’s franchisee, won final bankruptcy court approval of a reorganization that earlier was opposed by the chain’s franchiser and key creditors, WSJ Pro Bankruptcy reported. Bankruptcy Judge Brendan Linehan Shannon endorsed the chapter 11 plan — which will include a tripling of the initial equity commitment from the franchisee’s owner, private-equity firm Acon Investments — after a hearing yesterday in U.S. Bankruptcy Court in Wilmington, Del. Court papers show creditors voted overwhelmingly for the plan after RMH, which filed for bankruptcy in May, recently settled disputes with Dine Brands Global Inc., which owns the Applebee’s brand, and a secured lender group led by Bank of America Corp.

Justice Dept. Frets About Kavanaugh Recusal in Challenge to CFPB's Power

The Trump administration’s U.S. Justice Department wants to challenge the power of the Consumer Financial Protection Bureau, but is urging the U.S. Supreme Court to wait to take a case that would not require recently confirmed Justice Brett Kavanaugh to recuse, the National Law Journal reported. In State National Bank of Big Spring v. Mnuchin, the Justice Department said this week that it agrees with the bank’s argument that the restriction on the president’s power to remove the bureau’s director violates the Constitution’s separation of powers. But the issue should be decided by the full court, and that is unlikely in the State National Bank case, the Justice Department told the court. Kavanaugh would have to recuse based on his earlier participation in the case in the U.S. Court of Appeals for the D.C. Circuit, where he wrote a panel opinion reviving the bank’s challenge to the consumer bureau. Kavanaugh, as a D.C. Circuit judge, had long criticized the power of the Obama-era agency, and the Justice Department would likely count on his favorable vote in any case that confronted the independence of the agency’s single-director structure. In the 2016 case PHH v. Consumer Financial Protection Bureau, Kavanaugh, writing for the panel majority, assailed “the concentration of massive, unchecked power in a single director.”

West Texas Auto Dealer Reagor-Dykes Faces Bankruptcy Claims of $844 Million

More than 150 creditors have filed claims totaling over $844 million in response to the six bankruptcy cases filed in August by Lubbock-based Reagor-Dykes Auto Group, the Dallas Morning News reported. The deadline to file a claim was Dec. 5, but per bankruptcy procedure, others may still come in. According to the claims register, 453 claims were filed by 153 unique creditors before the deadline. Some creditors chose to file claims in multiple proceedings while some filed in just one. A total of $844,256,913.50 was claimed in the six proceedings. As of this spring, Reagor-Dykes had 12 used-vehicles-only dealerships in addition to its nine franchised dealerships selling Buick, Cadillac, Chevrolet, Ford, GMC, Lincoln, Mitsubishi and Toyota vehicles, according to trade publication Automotive News. Its dealerships included Reagor-Dykes Dallas in Addison, Texas. In the pending bankruptcy cases, over $160 million of the claims are considered secured. Of unsecured claims, $911,890.08 are marked as priorities. There is also $68,460.70 in administrative fees. The majority of claims were filed within 48 hours of the deadline. The highest claim was by Ford Motor Credit Co. for over $112 million. Ford Motor Credit filed for the same amount in each of the six bankruptcies. It is the amount Ford Motor Credit sued Reagor-Dykes for in its July 31 lawsuit alleging fraud, breach of contracts and mismanagement of inventory and funds, among other claims.