Bankruptcy

Texas becomes oil vampire squid

21 Feb 2020

Even though fracking doesn’t produce corporate profits, the Lone Star state’s plentiful oil continues to attract investment. That’s been a boon for state coffers. But much like OPEC, U.S. drillers elsewhere are feeling the squeeze. Texas’s success is at the expense of others.

Energy debt woes are a canary in the shale mine

27 Jan 2020

U.S. oil and gas group McDermott is filing for bankruptcy and Chesapeake may default after undisciplined deals left them crumbling under piles of debt. Low natural gas prices are a bigger problem than oil right now. But their woes are a warning for the likes of Occidental.

PG&E is squandering its bankruptcy

23 Jan 2020

The California utility’s latest restructuring plan helps wildfire victims and insurers. But PG&E would be left more indebted than when it started, and the Golden State has punted tough decisions. Being reliable, green, cheap and profitable at the same time remains a challenge.

PG&E deal gets another restructuring ball in air

9 Dec 2019

The bankrupt California utility has seized the initiative from creditors by settling wildfire victims’ claims for $13.5 bln. It’s a big step in qualifying for a state wildfire fund. Satisfying other political, legal and financial demands on the firm requires more deft juggling.

India’s shadow bank fix shows much-needed audacity

21 Nov 2019

The regulator is taking control of a credit crisis, sending housing lender DHFL and $12 bln of liabilities to bankruptcy court. Unpicking a financial institution’s woes with a process designed for regular corporates is bold. It might also be the only way to break an impasse.

How Big Milk failed to see writing on the carton

15 Nov 2019

The bankruptcy of Dean Foods, America’s biggest milk processor, stems from falling demand and retailers like Walmart aggressively pushing their own cheaper brands. Yet the company’s poor decisions helped curdle its finances, and may now leave hundreds of farmers in the lurch.

PG&E faces judicial bankruptcy brownout

10 Oct 2019

Just as the California utility cut off customers to avoid wildfire risks, a judge opened the door for creditors to seize power over its restructuring. They are offering more to fire victims, and less to equity holders. Running the agenda matters: PG&E stock fell another 30%.

Thomas Cook crash is dry run for Brexit failures

23 Sep 2019

The UK government refused a 150 mln pound bailout of the travel firm, citing moral hazard, but will fund the repatriation of thousands of stranded Brits. A chaotic departure from the EU will leave more businesses ailing. That will test Prime Minister Boris Johnson’s tough stance.

India unlocks a $200 bln stressed debt market

22 Jul 2019

The country’s first comprehensive bankruptcy code has hit bumps with cases like the drawn-out takeover of Essar Steel. But the framework is starting to offer better recovery, prompting creditors to act sooner. That’s good news for lenders and investors like Apollo and Oaktree.

PG&E’s hands may slip on bankruptcy steering wheel

2 Jul 2019

The California utility is, for now, in charge of its exit from Chapter 11, where it landed with $30 bln of wildfire liabilities. But the less new capital it seeks, and the more it ties future cash flow to past costs, the more credible a rival plan from creditors will become.

Parent’s bankruptcy loosens its grip on Casino

24 May 2019

The French grocery giant’s debt-riddled controlling shareholder, Rallye, sought protection from its creditors. For now, Casino will keep sacrificing growth to pay large dividends to owner Jean-Charles Naouri. But a debt restructuring might eventually free the 3.5 bln euro group.

U.S. pension backstop is sinking under own weight

7 Mar 2019

The government’s insurance fund for certain retiree pay faces bankruptcy by 2025, potentially affecting millions. Charging the likes of UPS and Albertsons more could hasten the decline. That leaves Congress to find a way to cover a $54 bln hole. All sides will feel the pain.

PG&E governance brownout calls for a jump start

14 Feb 2019

The troubled California utility wants to replace half its board, but shareholder BlueMountain proposes a full reset. A complete overhaul is rarely wise, but in PG&E’s case it could be helpful. The catch is, looming bankruptcy means the activist fund may not be the best advocate.

Viewsroom: Why did PG&E file for bankruptcy?

31 Jan 2019

The California utility may face up to $30 bln in wildfire costs. But shareholders see value and lenders were willing to stump up cash. The board’s desire to cut other expenses may have driven the decision. Plus: How U.S. charges against Huawei may affect the telco industry.

PG&E takes pre-emptive bankruptcy to a new level

29 Jan 2019

The California utility has filed, despite having a $20 bln surplus of assets over liabilities, offers of finance, and one less big wildfire to worry about. The company hasn’t yet made a persuasive case for choosing a process that will surely be lengthy, expensive and distracting.

BlueMountain is tardy with PG&E activism

24 Jan 2019

The hedge fund firm wants to oust the California utility’s directors, who are heading toward bankruptcy. It has a point: The hit from wildfires is not yet defined, and PG&E has stumbled in other ways. But BlueMountain is running out of time to rouse bigger, longer-term owners.

Lampert tightens grip in slow strangle of Sears

16 Jan 2019

The hedge-fund manager’s $5.2 bln bid won the bankruptcy auction for the embattled retailer. That may keep the doors open for now. But in his 13-year tenure atop Sears, Lampert has starved it of cash and sold assets. Unless he changes tack, a slow-motion liquidation looks likely.

PG&E takes one for the California wildfire team

14 Jan 2019

The utility is readying a bankruptcy filing, facing $30 bln of fire-related liabilities partly thanks to the Golden State’s questionable legal norms. Poor planning, including inadequate insurance, was its own fault. But state and other government actors have also fallen short.

Warren Buffett finds value in Sears wreckage

7 Jan 2019

The Berkshire Hathaway boss owns a stake in Seritage, the real-estate firm spun off from the bankrupt retailer. Revamping vacant Sears properties is driving growth and reducing dependence on the ailing chain. But true to form, Buffett has protected his investment with a loan.

Investors’ J.C. Penney discount is familiar spiral

2 Jan 2019

The outfitter’s stock, like Sears’, has fallen below $1. With debt mounting and sales dwindling, its decline follows a familiar pattern. From Bill Ackman to Eddie Lampert to KKR, ailing retailers have drained many a deep pocket. What looks like a bargain is rarely the case.