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David’s Bridal Files for Chapter 11 Bankruptcy Protection

Wedding gown retailer David’s Bridal filed for chapter 11 bankruptcy protection yesterday to implement a restructuring deal reached in recent weeks with lenders, WSJ Pro Bankruptcy reported. Last week, the retailer announced it had reached an agreement with term loan lenders and substantially all of its senior bondholders and equity holders on the terms of the deal, which will see it slash more than $400 million in debt from its balance sheet. A balance sheet reworking that will preserve David’s as an operating business has support from investors that collectively hold or control roughly 85 percent of the approximately $481 million under the top-ranking loan, and roughly 97 percent of the $270 million in unsecured notes, court papers say. Term lenders will become the majority stakeholders of the business, with a 76 percent stake, assuming the votes come in as expected and the chapter 11 plan wins court confirmation. David’s admitted it had lost some market share to local bridal competitors, but blamed the bulk of its financial struggles on an overload of debt. The Conshohocken, Pa.-based retailer skipped a loan payment recently and opened talks with lenders about how to resolve a debt load of more than $900 million.

Aegean Marine Gets $681 Million Stalking-Horse Bid from Mercuria Energy

Aegean Marine Petroleum Network Inc. said on Tuesday it has received a $681 million stalking-horse bid by Swiss commodities trader Mercuria Energy Group Ltd, Reuters reported. The proposal has been filed with the U.S. bankruptcy court for the southern district of New York, the marine fuel logistics company said. Earlier this month, Aegean Marine and some of its subsidiaries filed for chapter 11 bankruptcy protection. The company said that it received a court approval granting it access to the $532 million debtor-in-possession credit facility funded by Mercuria.

Sears Proposes Bonus Package for Top Executives

Sears Holdings Corp. is seeking permission to pay its top executives millions of dollars in bonuses over the next two financial quarters, WSJ Pro Bankruptcy reported. The company has pinpointed 18 top executives to share in a total $8.5 million in bonuses, split between the periods ending in January 2019 and April 2019, according to court papers filed on Thursday. In addition, Sears wants to pay 322 non-insider workers bonuses from a $16.9 million pool. The move comes as Sears’s uncertain future is being debated by some of the retailer’s creditors. Sears entered bankruptcy with the goal of selling and reorganizing around about 400 of its most profitable stores. The company has proposed a sale process that includes a Dec. 15 deadline for a so-called stalking horse bidder to make its offer, and the auction to take place in January.

Awash in $100 Million Debt, VeroBlue Files for Chapter 11, Sues Top Management

VeroBlue Farms (VBF), which promised to make fish a leading commodity in landlocked Webster City, Iowa, has filed for chapter 11 protection, disclosing that it is drowning in more than $100 million debt, most of which is unsecured, the (Fort Dodge, Iowa) Messenger reported. VBF, according to its bankruptcy petition, owes $98,943,246.22 in unsecured debt to its top 20 creditors. It has another $6 million in secured debt, that being assigned to Broadmoor Financial LP, of Wichita, Kansas, VBF’s top creditor. VBF owes more than $53 million to that firm alone. In a separate civil lawsuit, five of Vero­Blue’s top management are accused of misappropriation of funds. The suit, filed in federal court, claims Leslie A. Wulf, Bruce A. Hall, James Rea, John E. (Ted) Rea, and Keith Driver “wasted VBF assets.”

New York Fed Chief Expects Gradual Rate Rises

New York Fed President John Williams said he expects the U.S. central bank to press forward with its slow and steady pace of rate rises, the Wall Street Journal reported. “We are going to be doing what we’ve been doing, as best we can” and pursue “a gradual path” of getting back to more normal interest rates, Williams said yesterday. “Interest rates are still very low. We’ve raised them but they are still at a low level.” Williams, who also serves as vice chairman of the interest-rate setting Federal Open Market Committee, didn’t offer much in the way of specific guidance about the outlook for rates. Fed officials are widely expected to raise what’s now a short-term interest-rate target range that stands at between 2 percent and 2.25 percent next month and to press forward with more increases next year.

PBGC’s Single-Employer Program Records First Surplus Since 2001

The Pension Benefit Guaranty Corp. (PBGC) on Friday reported a surplus in its single-employer program for the first time in nearly two decades in fiscal 2018 on the back of higher interest rates, the Wall Street Journal reported. The PBGC's single-employer program had assets of $109.9 billion and liabilities of $107.5 billion as of Sept. 30, resulting in a net surplus of $2.4 billion. The program insures 23,400 plans that cover 26.2 million people. This is the first surplus since 2001 and came as a result of stronger U.S. economic growth, lower than expected claims and higher interest rates, said PBGC Director Thomas Reeder. “Every year since then we’ve been in deficit because of failures of large plans and changes in the market,” he said. That risk remains on the horizon, as there are a number of non-investment-grade companies that sponsor underfunded defined-benefit plans, Reeder said. One such company, Sears Holdings Corp., filed for bankruptcy protection last month. Sears has two pension plans that held a combined $2.5 billion in assets and had a funding shortfall of $1.5 billion at the end of 2017. The company hasn’t terminated its plans and retains responsibility for paying the roughly 90,000 workers and retirees covered by the plans.
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