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Judge Approves Duluth Diocese Insurance Settlements

A judge overseeing the Diocese of Duluth's bankruptcy has signed off on two insurance company settlements that will pump nearly $10 million into the case, the West Central Tribune (Willmar, Minn.) reported. The agreements, approved by U.S. Bankruptcy Judge Robert Kressel at a hearing yesterday in Minneapolis will provide almost $9 million to victims of child sexual abuse and allow officials to pursue additional compensation. The settlements with Catholic Mutual Relief Society of America and Fireman's Fund Insurance Co. resolve two-fifths of a federal lawsuit filed in June 2016 that has stalled the bankruptcy proceedings. The diocese, which filed for chapter 11 protection in December 2015 in the wake of a $4.9 million verdict, brought the suit against five insurers in an effort to force coverage of claims received from 125 people who said they were abused by priests.

Toshiba to Sell Billions of Dollars in Westinghouse Claim

Toshiba Corp. is selling billions of dollars of its own claims against its bankrupt Westinghouse Electric Co. nuclear subsidiary in a process expected to attract some of the largest hedge funds and money managers in the world, WSJ Pro Bankruptcy reported. Westinghouse’s deal to sell itself to Canadian investment firm Brookfield Business Partners LP for $4.6 billion will leave the company’s creditors fighting over the proceeds when the sale is completed. Westinghouse’s biggest creditors include Boston hedge fund Baupost Group LLC, which purchased billions of dollars of claims against Toshiba in the bankruptcy case from South Carolina utility SCANA Corp. Toshiba, however, has its own claims against Westinghouse, and the Japanese parent company has also acquired claims from one of the utilities to which it owed money.

U.S. Trustee: Court Should Demand More Info on Seadrill Restructuring

A U.S. court should dismiss the information provided by drilling rig firm Seadrill about its restructuring plan as inadequate, the U.S. Trustee said in a filing on Wednesday, Reuters reported. The U.S. Trustee said that the bankruptcy court in Texas should reject Seadrill’s “disclosure statement” on its restructuring proposal, a move that would require the Norwegian company to revise its statement and could delay the process. Seadrill, once the largest drilling rig operator by market value, filed for bankruptcy protection in a U.S. court on Sept. 12 after being hit hard by cutbacks in oil company investment following a steep drop in oil prices. The company’s main owner, Norwegian-born billionaire John Fredriksen, has drawn up a $1.1 billion restructuring plan with Centerbridge Partners L.P. and a group of hedge funds. The court, which has to approve the disclosure statement before the plan can be put to a vote by creditors, is due to hold a hearing on Jan. 10.

Another Retail Bankruptcy Wave Is on the Way, Credit Suisse Says

A wave of store closings and retailer bankruptcies is coming in early 2018, as the industry deteriorates faster than analysts had expected a year ago, according to Credit Suisse Group AG, Bloomberg News reported. The retail business’s “large and undeniable transformation” will crimp rents and vacancy rates this year, strategists Roger Lehman and Benjamin Rozyn wrote in a note Thursday. Bonds backed by these loans will likely weaken, they added. Even if the just-ended Christmas shopping season was the best for retailers in a decade, according to early estimates, mall staples like Macy’s Inc. and J.C. Penney Co. haven’t wowed investors with their results. Although those companies are far from bankruptcy, Macy’s said yesterday that it was closing 11 stores in early 2018. While most commercial mortgages for retail space will continue to perform in the coming years, the reduction in financing options available to mall and store owners “could spell trouble” when the loans mature, the analysts wrote.

Sears Holdings Announces Closure of More Stores

Sears Holdings, parent company of Sears and Kmart stores, told its employees yesterday that it will be closing more than 100 additional stores this year, CNBC.com reported. That consists of 64 Kmart stores and 39 Sears stores, all of which are expected to shut between early March and April. Sears wouldn't say how many of its employees would be impacted by the closings but did say the majority of the jobs are part-time positions, and eligible associates will receive severance. Liquidation sales will begin as early as Jan. 12 at the closing stores, Sears said.

Washington, D.C., Weekly Newspaper Publisher Files for Bankruptcy

Current Newspapers Inc., a 50-year-old publisher of weeklies serving northwest Washington, D.C., filed for chapter 11 bankruptcy Wednesday, just months after Gannett Co. sued it over unpaid printing bills, WSJ Pro Bankruptcy reported. Current Newspapers owes almost $1.3 million to unsecured creditors, including about $180,000 to Gannett, and has assets of less than $50,000, according to the filing in U.S. Bankruptcy Court in Washington, D.C. In the bankruptcy filing, Current cited “an interruption in cash flow resulting from outside printing costs” as a reason for seeking to reorganize in bankruptcy court. Gannett sued Current last September in Superior Court of the District of Columbia, and the court record shows Current Newspapers Chairman Davis Kennedy pleading for more time to pay off the debt and warning that it could end up in bankruptcy.

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