Bankruptcy

Comatose watchdogs evoke Great Recession flashback

14 Jul 2022

Crypto lender Celsius slipped through regulatory cracks at the state and federal level. Failures in isolation aren’t big enough to be systemic. But SPACs, too, are crumbling, and people are getting hurt. As sirens wail, like 15 years ago, financial police sleep through it.

PG&E victim payout experiment goes up in smoke

11 Aug 2021

In the utility’s bankruptcy, people who faced losses from wildfires received roughly $6.8 bln of stock in compensation. It’s now worth $4 billion. Handing a volatile asset to those who have already lost out is risky – especially if, as at PG&E, problems haven’t been fixed.

Capital Calls: Turkish gas, Generali, Garuda

4 Jun 2021

Concise views on global finance: President Erdogan’s “good news” on hydrocarbons smells off; the Italian insurer’s 1.5 bln euro bid for NN Group’s asset management unit may trigger a shootout; the Indonesian flag carrier’s long struggle to avoid bankruptcy is coming to a head.

Credit Suisse best bet is hardball over Greensill

18 May 2021

The bank’s clients want it to cover up to $2.3 bln of possible fund losses related to the collapsed financier. Doing so might stop them from pulling business, but it may also complicate legal wrangling and force CEO Thomas Gottstein to raise capital. Better to weather their ire.

Hertz Robinhood squad is right for wrong reasons

13 May 2021

The rental-car firm’s shares retained value through a restructuring process, partly thanks to retail investors' enthusiasm. After a bankruptcy-exit auction, shareholders are set to collect cash, shares and such worth over $1 billion. Next time, disappointment is more likely.

Latest Hertz saviors put hope over history

23 Apr 2021

The rental-car firm may exit bankruptcy covering some $6 bln in debt and, unusually, with something left for equity holders. An industry shortage of cars has helped valuations. Even so, new private equity owners would have to reinvent Hertz, yet again, to make the plan add up.

Review: Blockbuster’s demise had many culprits

16 Apr 2021

The lore is that Netflix killed the video rental chain. “The Last Blockbuster” examines the more nuanced truth through its final store. Reed Hastings’ company played its part, but corporate raiders, bad decisions and heavy debt all drove the once-mighty company into its grave.

UK’s Gupta merits net zero rescue in all senses

1 Apr 2021

The steel entrepreneur’s tottering industrial empire is a tricky candidate for a state bailout. But it could give the government a chance to decarbonise a major source of emissions. Done smartly, it may help Britain hit green goals and stabilise a perennially flaky sector.

Credit Suisse is overdue for new chairman’s axe

31 Mar 2021

The Swiss bank’s shares are down 23% in a month after Archegos and Greensill collapsed. Though losses are unclear, investors assign no worth to the investment bank. By shrinking that unit, and hiving off the fund and local divisions, António Horta-Osório could rescue some value.

Credit Suisse has PAF to redemption over Greensill

26 Mar 2021

Funds linked to the collapsed supply-chain firm may have billions of dollars in bad debt. The bank and its employees are culpable and should share losses with clients. Reviving a post-2008 asset-backed bonus vehicle would be one way for senior staff to shoulder some of the risk.

Review: When “Ocean’s Eleven” meets Chapter 11

19 Mar 2021

“The Caesars Palace Coup” rolls a casino caper and legal thriller into one edifying book. Dense bankruptcy lingo sometimes bogs down the ruthless scrap over $18 bln of distressed debt. And it’s hard to find a Danny Ocean in a Wall Street dramatis personae full of Terry Benedicts.

SoftBank financial innovation fails at Greensill

12 Mar 2021

The Japanese investor’s Vision Fund seems to love byzantine funding structures as much as disruptive technology. Its involvement with the supply-chain lender, which supported other investees, has backfired. It’s another cautionary tale for the ex-bankers in the fund’s ranks.

Boris Johnson will feel Gupta steel jitters too

10 Mar 2021

GFG Alliance says it has adequate funding, but key financing partner Greensill is collapsing. If Sanjeev Gupta’s industrial empire were to struggle, the UK leader has little economic reason to save its British operations. Yet domestic politics may still force him to step in.

Greensill exposes perils of Credit Suisse strategy

10 Mar 2021

The supply-chain financier’s collapse affects almost every division of the Swiss bank. While the financial hit appears manageable, cooperation between its fund, wealth and lending arms increases risk. That’s worrying as CEO Thomas Gottstein’s growth plans hinge on collaboration.

Next Hertz drivers face a hairy ride

4 Mar 2021

Hedge funds Knighthead and Certares want to lead an injection of up to $4.2 bln in equity to take the wheel at the bankrupt car-rental firm. It would restart less indebted and should be more efficient. The rise of ride-sharing, however, puts a speed limit on potential returns.

HNA’s final agonies deserve investor study

29 Jan 2021

The indebted Chinese travel group looks set to enter bankruptcy. That’s unusual but unsurprising: Beijing already let a bank go under last year, and allowed market-rattling bond defaults. Given the empire’s complexity and broad creditor base, distributing haircuts could get ugly.

Revlon may take shareholder rights full circle

18 Nov 2020

The cosmetics company controlled by Ron Perelman became a case study on shareholder value maximization following a 1980s lawsuit. Last week it narrowly avoided bankruptcy. Its business and stock price have been sliding for several years. A sale looks like the best final chapter.

Politics may turn bankruptcy wave into a tsunami

6 Oct 2020

U.S. Chapter 11 filings are up by a third this year, with small firms flailing and billion-dollar bankruptcies above 2009 levels. But total filings – including personal and business – are down almost 30%. Stimulus has kept many afloat. Political gridlock may open the floodgates.

The Exchange: China’s bad debt opportunity

15 Sep 2020

Beijing is letting lenders go belly-up as it attacks systemic risk. That’s all fine for Benjamin Fanger, founder of ShoreVest, a manager $1.8 bln of soured loans. He talks with Pete Sweeney about the message China is sending bankers, and the opportunity for foreign investors.

E-commerce is a life raft for sinking real estate

10 Sep 2020

The surge in digital sales from the likes of Walmart, Target and Amazon is driving up demand for warehouses. No wonder mall owner Simon is after the likes of J.C. Penney. Creating a fall back plan to turn malls into industrial space with higher rents has a decent payoff.