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Bankruptcy Headlines

Canned Tuna Maker Bumble Bee Preps for Bankruptcy Filing

Bumble Bee Foods LLC is preparing to file for bankruptcy within days over mounting legal expenses stemming from its involvement in a conspiracy to fix prices on canned tuna, WSJ Pro Bankruptcy reported. The San Diego-based company, owned by London-based private-equity firm Lion Capital, is expected to file a chapter 11 petition shortly and will put itself up for sale. Bumble Bee didn’t respond to a request for comment. Lion Capital, which bought the company in 2010 for $980 million, also didn’t immediately respond. Bumble Bee pleaded guilty in 2017 and agreed to pay a $25 million fine for having formed a cartel with its two main competitors, Chicken of the Sea and StarKist Co. The Justice Department subsequently indicted Bumble Bee Chief Executive Christopher Lischewski for his alleged role in the conspiracy. Lischewski, who pleaded not guilty, took a leave of absence from Bumble Bee last year and is on trial in California federal court. In addition to the hit from the antitrust probe, the company is facing class-action lawsuits from consumers, distributors and retailers over the conspiracy. Other consumers suing Bumble Bee have said it wrongfully labeled its tuna as being produced through “dolphin-safe” fishing methods. Bumble Bee has said its labeling was justified.

MDC Energy, Lenders Fight for Control of Oil Driller

Bankrupt oil-and-gas driller MDC Energy LLC and its lenders are gearing up for a possible legal fight over control of the business, lawyers indicated Tuesday, after top creditors accused company leadership of mismanagement, WSJ Pro Bankruptcy reported. Bankruptcy Judge Karen B. Owens in Wilmington, Del., told lawyers for MDC and lenders, including the credit arm of Riverstone Holdings LLC, to spend the next few days talking to each other to see if parties can resolve any of their disagreements over the chapter 11 case. Andrew Glenn, a bankruptcy lawyer representing MDC, said the best course of action at the outset of the case would be to let the various parties engage in discussions for at least the next few days “before we start World War III.” Riverstone has accused MDC, its parent MTE Holdings LLC and its chairman and chief executive, real estate-developer Mark Siffin, of breaching lending agreements numerous times and has sought to install new board members and a chief restructuring officer. Riverstone, which also claims MDC didn’t have the authority to file the bankruptcy petition, is the collateral agent to lenders that have lent the company $410 million. On Tuesday, another creditor, the New York branch of investment bank Natixis, sought the appointment of an independent chapter 11 trustee and accused MDC of incompetence and mismanagement. Natixis said that it is the administrative agent to lenders for a $60 million credit facility. A lawyer for Natixis said Tuesday he didn’t receive advance notice of MDC’s bankruptcy filing.

McDermott Stock Remains Stuck Below $1 Per Share

Stock prices for Houston oilfield service company McDermott International have remained stuck below $1 per share for more than a week, the Houston Chronicle reported. Traded on the New York Stock Exchange under the stock ticker symbol MDR, McDermott slid below $1 per share on Nov. 8 and has yet to recover. An important clock has been triggered by the stock price dip. Under New York Stock Exchange rules, companies whose stock trades below $1 per share for 30 days or more face being delisted from the exchange. McDermott's stock was trading just below $6 per share when market rumors that the company had contracted the services of a bankruptcy advisory firm sent prices plunging in mid-September. Traded on the New York Stock Exchange under the stock ticker symbol MDR, McDermott slid below $1 per share on Nov. 8 and has yet to recover. An important clock has been triggered by the stock price dip. Under New York Stock Exchange rules, companies whose stock trades below $1 per share for 30 days or more face being delisted from the exchange. The company posted an eye-popping $1.9 billion loss during the third quarter, which was mostly attributed to $1.5 billion of impairments related to its recent stock price plunge and cost overruns on at least six projects in North, Central and South America. The company has more than 32,000 employees in 54 nations. The Houston company posted a $2.8 billion loss on $2.1 billion of revenue in 2018. Over the past year, two area energy companies either headquartered in or with a strong presence in Houston that were delisted from the New York Stock Exchange later ended up filing for chapter 11 bankruptcy.

Proposed Sexual Abuse Reform Legislation in Pennsylvania Concerns Catholics

Two Pennsylvania state House representatives are hopeful that sexual abuse reform legislation they’ve proposed will pass today in the state Senate and eventually become law, the Altoona Mirror reported. But the measures have plenty of critics, chief among them the Roman Catholic church, which claims it is the prime target of the legislation. Church representatives have said that they have acknowledged the past sins of clergy sexual abuse, and they’re atoning for those with compensation funds and counseling for victims. They’ve said they’ve also instituted reforms to avoid future problems. State Reps. Jim Gregory (R) and Rep. Mark Rozzi (D) put forth the pair of bills earlier this year. Their bills, to be voted upon today in the Senate, would eliminate the statute of limitations on sexual abuse criminal charges and provide a two-year window on outdated civil lawsuits against alleged sexual abuse offenders. Both bills raise the age of victims who can file claims from 30 to 55. Rozzi’s piece refers to eliminating the criminal statute of limitations on sex abuse crimes.

Thousands Could Be Impacted by PG&E's Upcoming Potential Power Cuts

About 180,000 customers in California could find themselves in the dark as Pacific Gas & Electric warned that an upcoming “strong offshore wind event” could prompt the bankrupt power producer to yet again shut off power in some areas, Reuters reported. “The forecast remains uncertain, but there is a possibility that the weather could prompt a Public Safety Power Shutoff (PSPS) for some customers in the Sierra Foothills, North Valley and North Bay”, the company said yesterday, adding that it was monitoring for adverse weather on Wednesday. “At present, projections reflect a possible weather event similar to previous PSPS events that impacted about 180,000 customers.” The company said the potential cuts were intended to avoid its equipment sparking wildfires in hot weather. The upcoming possible outages are only the latest in a string of recent events for which PG&E has been widely criticized.

SEC Whistleblower Tips Decline as Agency Looks to Limit Big Awards

The SEC received 5,212 tips during the 2019 fiscal year ended in September, down 1 percent from a year earlier, the agency said on Friday in an annual report to Congress, the Wall Street Journal reported. The largest drop was in tips about potential cases of fraud in securities offerings, which had spiked the previous year. The overall decline follows years of steady growth since the program was established by Congress after the financial crisis. Tips in 2018 jumped 18 percent from 2017. Under the SEC whistleblower program, tipsters are entitled to awards that can reach tens of million dollars if they provide useful information in cases that result in corporate penalties. Awards range between 10 percent and 30 percent of the monetary penalties in cases in which companies are fined more than $1 million. In March, the agency issued its third-largest award, providing $50 million to two whistleblowers who provided information in a case against JPMorgan Chase & Co. It handed out its largest award in 2018, providing $83 million to three tipsters who offered information in a case against Bank of America Corp. The SEC could begin imposing limits on its largest awards under a proposal introduced last year that would give the agency discretion to scale back awards above $30 million.