Since the Federal Reserve’s annual report on household well-being began in 2013, the survey (most recently of more than 11,000 Americans) has become a key measure of whether the benefits of the recovery have reached beyond the upper end of the socioeconomic spectrum. Although this year’s report painted a positive picture overall, it identified underlying fragility and exposed pockets of distress, the Washington Post reported. Almost four in 10 people (39 percent) said that they wouldn’t be able to scrape together the cash to meet a $400 emergency expense. Even without any sudden expense, about 17 percent of adults said they would miss a payment on at least one bill during the month surveyed. More than 6 in 10 said losing their job would mean they couldn’t cover three months of expenses, even if they took out loans, sold assets or borrowed from friends and relatives. Only 36 percent said their retirement savings are on track. Almost a quarter of Americans skipped some form of medical care in the past year because they couldn’t afford it. Separately, 1 in 5 faced major, unexpected medical bills. About 4 in 10 of those folks were still carrying debt related to those bills.
Offshore drilling contractor Seadrill is considering selling non-core assets, including its 15.7 percent stake in oil service firm Archer, to reduce its liabilities, the firm’s outgoing chief financial officer said yesterday, according to Reuters. Seadrill, controlled by Norwegian billionaire John Fredriksen, emerged from chapter 11 protection last year, and is betting on the offshore oil market’s recovery to repay its remaining debts and liabilities. The company repurchased in April $311 million out of $880 million in 12 percent senior secured notes due in 2025, issued as part of the chapter 11 plan.
What remains of Sears Holdings Corp. will finish its bankruptcy with a heap of unpaid bills, according to creditors who are ramping up for a court fight over the former retailer’s bankruptcy plan, WSJ Pro Bankruptcy reported. The retailer filed for bankruptcy protection last year, sold off parts of its business, and tried to scrape together cash to pay off hundreds of millions of dollars of debts. The old Sears left behind is pushing for court approval of a chapter 11 plan, but a group of creditors said in a court filing on Wednesday that there is not enough money to cover costs from the bankruptcy process itself. Suppliers, landlords and others owed money by Sears would be better off if the chapter 11 case was converted to a chapter 7 liquidation, with a trustee to take over for the 10 legal and professional firms that have been managing the company’s final affairs, the committee of unsecured creditors said. Read more.
In related news, Sen. Elizabeth Warren (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) teamed up yesterday to blast Treasury Secretary Steven Mnuchin over the bankruptcy of Sears, Roll Call reported. Warren and Ocasio-Cortez are questioning Mnuchin’s actions as a member of the Sears board and his longstanding ties to Eddie Lampert, the Sears CEO who came into that role after the retailer was purchased by his hedge fund. “We are deeply concerned by the financial engineering and potentially illegal activity that took place at Sears Holding Corporation while you served on the company’s board. In addition, we are concerned that, as Treasury Secretary, you are in position to take actions that benefit Sears’ shareholders and owners at the expense of workers and taxpayers,” the lawmakers wrote in a letter released yesterday. Read more.
Arcadia Group, a London-based fast-fashion retailer and operator of the Topshop and Topman brands, filed for bankruptcy in the U.S., citing many of the same challenges facing much of the broader retail industry, the Wall Street Journal reported. The group on Wednesday sought court protection under chapter 15 — the section of the U.S. bankruptcy code that deals with foreign insolvencies — with plans to exit its U.S. operations and to begin liquidating inventory in its U.S. stores as soon as this weekend. The U.S. filing follows a separate insolvency process Arcadia began in the U.K., also on Wednesday. Bankruptcy Judge James Garrity Jr. will oversee the case and already has agreed to grant provisional approval of Arcadia’s chapter 15 filing. A final hearing before the judge is set for June 14.