Help Center

Annual Spring Meeting | April 23-25 | Washington, DC Register Today View Schedule

Bankruptcy Headlines

Judge Approves Philly Refiner's Bankruptcy Plan, Sale to Property Developer

The Philadelphia Energy Solutions oil refinery site will be sold for $252 million and redeveloped under a plan approved yesterday in bankruptcy court, ending months of uncertainty over whether the idled plant would be restarted, court filings show, Reuters reported. Judge Kevin Gross signed off on the PES bankruptcy agreement, filed with the United States Bankruptcy Court for the District of Delaware, a day after indicating at a public hearing that he was likely to do so. Hilco Redevelopment Partners, which becomes the new owner of the roughly 1,300-acre (526-hectare) PES refinery site as part of the plan, is expected to build warehouses and other commercial projects on the land. While Judge Gross approved the purchase and sale agreement, PES and Hilco have not yet closed on the deal. PES shut its 335,000-barrel-per-day refinery in South Philadelphia, the largest and oldest on the East Coast, and filed for chapter 11 protection after a fire destroyed a section of the plant over the summer. Read more. 

In related news, Philadelphia Energy Solutions secured approval of a debt repayment plan, but action continues in bankruptcy court as the refiner tries to collect on $1.2 billion in insurance it said was triggered by the explosion that drove it into chapter 11, WSJ Pro Bankruptcy reported. In a lawsuit filed on Wednesday targeting a group of insurance carriers, Philadelphia Energy said its insurance companies’ attitude has been so “miserly” that they suggested that the oil refiner made money as a result of a June explosion that destroyed much of the facility. The incident put the Philadelphia refinery out of business, leading the company to file for chapter 11 with its future uncertain. Philadelphia Energy said it has $1.2 billion in coverage for property damage and business interruption losses but has received only $65 million. The company said that it has made clear to the insurers that its losses approach and will likely exceed the $1.2 billion in protection it paid for. Read more.

PG&E’s Fire Victims Are Set to Become Its Biggest Shareholders

PG&E Corp. proposes to pay half of its $13.5 billion settlement with California wildfire victims in company shares, a move that would make victims the utility’s largest shareholders — and jeopardize payments if PG&E sparks future fires, the Wall Street Journal reported. As part of its plan to exit bankruptcy, PG&E would pay fire-victim claims through a trust funded with equal parts cash and stock. The trust would own 20.9 percent of PG&E’s shares upon the company’s emergence from chapter 11, PG&E has said, and would gradually sell the stakes over several years to compensate individuals who lost family members and property. While share-funded trusts have been used before to settle claims from asbestos victims and others, some legal experts say that the PG&E trust would pose an unusual set of risks for claimants, tying their payment prospects to a company still scrambling to reduce the threat that its aging electrical grid will start fires. Since the fall of 2017, state investigators have linked PG&E equipment to 18 wildfires that killed 107 people and destroyed more than 15,700 homes.

Hospitals in Missouri, Kansas File for Bankruptcy

Overland Park, Kan.-based Pinnacle Healthcare System and its hospitals in Missouri and Kansas filed for chapter 11 bankruptcy protection on Wednesday, Becker's Hospital Review reported. Pinnacle Regional Hospital in Overland Park, formerly known as Blue Valley Hospital, entered bankruptcy with assets totaling between $10 million and $50 million and liabilities within the same range, according to bankruptcy court documents. The hospital, which was acquired by Douglas Palzer in 2018, lost its Medicare contract two years ago. CMS terminated the contract after determining the hospital did not "primarily engage" in providing inpatient care, a requirement for Medicare participation. Pinnacle Regional Hospital in Booneville, Mo., formerly known as Cooper County Memorial Hospital, also entered bankruptcy on Feb. 12. The bankruptcy filing comes after the hospital abruptly shut down in January. The hospital closed about a month after the Missouri Department of Health and Senior Services inspected the facility and cited it for sterile processing procedures. The health department ordered the hospital to stop performing surgery until the sterile processing unit was upgraded. Hospital officials initially said they were working with the state to rectify the situation, but they ultimately decided to close the facility instead of making the repairs. Read more.

Don’t miss ABI’s Health Care Program on March 5 in Nashville, Tenn. Click here to find out more and register. 

Tops Markets Trustee Blames Morgan Stanley for Grocer’s Bankruptcy

A trustee for Tops Markets LLC creditors filed a $375 million lawsuit against private-equity backer Morgan Stanley Investment Management and other former owners, alleging they took hundreds of millions of dollars in illegal dividends that drove the grocery chain into bankruptcy in 2018, the Wall Street Journal reported. The company took on so much debt to finance four separate dividends between 2009 and 2013 that it couldn’t fund its obligations under two underfunded union pension plans, according to the lawsuit filed Wednesday in the U.S. Bankruptcy Court in White Plains, N.Y. Tops Markets, an upstate New York grocery chain, filed for bankruptcy in February 2018. The Williamsville, N.Y., chain emerged from bankruptcy the same year, leaving behind two pension plans with hundreds of millions of dollars of unfunded liabilities. Alan Halperin, a trustee appointed in the Tops bankruptcy case to pursue claims against the company’s private-equity owners, filed the lawsuit on behalf of creditors, including workers and retirees under the pension plans.

Gun Maker Files for Bankruptcy Following Kansas City Lawsuit

A Nevada-based gun manufacturer filed for bankruptcy after Kansas City sued the company over weapons trafficking last month, the Associated Press reported. In the chapter 7 bankruptcy petition filed on Feb. 10, Jimenez Arms listed assets of less than $50,000 and outstanding liabilities that surpass $1 million. This could pose a challenge for the city should it successfully recover compensation in its lawsuit. The city sued Jimenez in January, alleging that the gun trafficking created a public nuisance in Kansas City, which has one of America’s highest homicide rates. Mayor Quinton Lucas said that it’s the first such lawsuit filed against the gun industry in more than 10 years. The lawsuit joins — and shares many allegations with — an existing wrongful death lawsuit filed by the family of Alvino “Dwight” Crawford, who was killed in 2016 by a bullet from an allegedly trafficked Jimenez handgun.
Last week, a Jackson County judge denied dual motions by Jimenez to dismiss the Crawfords’ suit.

Modell’s Hires Restructuring Pros After Cheerless Holiday Showing

Modell’s Sporting Goods, the century-old New York-area chain, has hired a trio of advisers including a chief restructuring officer in recent weeks in an effort to save itself after a poor showing over the holidays, said Mitchell Modell, chief executive and founding family scion, <em>WSJ Pro Bankruptcy</em> reported. Modell acknowledged that the company has stopped paying some landlords and some of its vendors, and has started talks with suppliers, trying to preserve cash and avoid bankruptcy. Modell’s has faced sagging sales and competition from big-box stores and online retailers. Recently, Modell’s spent millions of dollars on Jets, Giants and Yankees merchandise, which hasn’t sold well since the Yankees didn’t make the World Series and the Jets and Giants football teams had a lackluster season, Modell said. A relatively warm winter also hurt since demand for boots and sweatshirts was softer than expected, Modell said. The company will start talks with its landlords next week in hopes of reaping savings on rent, he said.

View More Headlines
MENU
MENU

Pages