From: Reuters

Energy XXI successfully completes financial restructuring

* Energy XXI Ltd – has successfully completed its financial restructuring and emerged from Chapter 11

* Energy XXI Ltd – in accordance with restructuring plan, Energy XXI gulf coast, as successor to Energy XXI, has appointed a new board of directors

* Energy XXI Ltd says effectively immediately, Energy XXI common stock will cease trading on OTC market Source text for Eikon: Further company coverage:

basic energy

From: Star-Telegram

Basic Energy Services has completed its restructuring and recapitalization plan and emerged from Chapter 11 bankruptcy protection.

The oil field services company filed for Chapter 11 bankruptcy in Wilmington, Del., in October after saying it had reached a deal with creditors on a prepackaged reorganization to reduce its debt. The company announced it was exiting bankruptcy court on Dec. 23.

With its prepackaged plan, Basic divided among several investors over $800 million of unsecured debt, including accrued interest, in the restructuring. It also eliminated over $60 million in annual cash interest and raised $125 million of new capital, according to a company statement.

Stockholders will receive new common stock and warrants in the reorganized company.

CEO Roe Patterson said in a statement that the court action “marks the completion of a restructuring and recapitalization that allows the company to move forward with a solid financial foundation from which we expect to continue to strengthen our business and grow.”

“We now have the financial flexibility to continue to provide our customers with industry-leading expertise and safe, efficient services,” Patterson said.

The company, which moved to Fort Worth from Midland in 2012, has suffered the past two years as the decline in oil prices reduced drilling activity. The company offers a range of services from drilling and fracking to wastewater disposal.

Trading in the new common shares on the New York Stock Exchange started Tuesday. Basic (ticker:BAS) dropped 6.68 percent in value to close at $36.40 on its initial day of trading but was up to $38.11 in after-hours trading.

Read more here:


From: Reuters

On Tuesday, CIH filed for Chapter 11 bankruptcy protection, and asked the bankruptcy court to approve a plan to sell substantially all of its assets to UnityPoint Health – Waterloo, an affiliate of UnityPoint Health.

Chapter 11 Bankruptcy is a legal process designed to help organizations continue operations, sell assets and restructure liabilities.

The bankruptcy process should not impact the organization’s healthcare services or patient care, according to a CIH press release.

CIH is the only full-service medical center in its area and more than 60,000 residents depend on it for a wide variety of healthcare services.

“This is bittersweet,” said CIH Acting CEO Dawnett Willis, in an interview with the Times-Republican. “We are saddened we had to go down the path of Chapter 11 … obviously, we would have preferred not to go down that path. But we were also excited and encouraged about the future, and being a part of UnityPoint Health-Waterloo. I think they are a great health care organization. We believe this direction is the best course of action for the communities we serve. Our decision today reflects our enduring commitment to the Marshalltown community to provide access to quality healthcare services close to home. It should be business as usual for the staff and providers throughout the bankruptcy process.”

Under the plan, all of CIH’s healthcare operations including the 49-bed acute care hospital, emergency department, four primary care clinics (Conrad, Marshalltown, State Center and Tama-Toledo) and outpatient center will operate without interruption and after completion of the proposed sale transaction.

“CIH and UnityPoint Health – Waterloo are proposing a plan that would result in continued and uninterrupted healthcare services to the Marshalltown community,” said Pam Delagardelle, President and CEO, UnityPoint Health – Waterloo.

“We will need to let the bankruptcy process take its course and UnityPoint Health – Waterloo intends to offer a fair and competitive bid. Working together, we can ensure patients continue to receive the high-quality care they expect and depend on from caregivers they know and trust. Both organizations have a rich history of serving their communities, driven by the belief that healthcare is best when it’s local.”

CIH asked the court to approve a financing arrangement that UnityPoint Health – Waterloo has offered to support CIH’s operations during the bankruptcy proceeding and pending the sales transaction which is targeted for the late first quarter of 2017. The financing will assist CIH in providing uninterrupted payment for employees and payment for future vendor services and supplies until the sales transaction is complete.

The transaction and financing arrangements are subject to approval by the bankruptcy court.

Following the closing of the sales transaction, CIH’s assets will be owned and operated by UnityPoint Health. Current CIH employees will be encouraged to seek employment with the new UnityPoint Health entity’s team, once the transaction is finalized by the court.

Employees retained will work for UnityPoint Health, said CIH Board of Trustee President Carol Hibbs.

“The anticipation of being acquired by nonprofit health system, UnityPoint Health – Waterloo, brings a promise of strengthened healthcare services, enhanced access to primary care providers and specialists while improving care coordination and patient experience. Through this plan, it is intended that the healthcare needs of the communities we serve will continue to be met,” said Willis.

Local reaction

“The announcement is a positive sign, said David Barajas, Jr., CEO of Marshalltown Regional Partnership.

“Health care is a key component in our community’s growth and development. It is a tool — an extremely valuable tool — for our residents and businesses. A strong and viable health care system is essential for retaining existing businesses and promoting the Marshalltown area as a place to do business to prospects and to potential new residents.”

Barajas was relieved to hear of the proposed plan.

“The community has been waiting for information about the future of CIH for quite sometime”, he said. “We are grateful for the efforts put forth by the volunteer trustees and administrative team. They have worked diligently and tirelessly for seven months to find a solution for providing the best health care now and well into the future.”

About UnityPoint Health – Waterloo

UnityPoint Health – Waterloo includes Allen Hospital, a 204-bed, non-profit community hospital, two critical access hospitals, an outpatient community mental health center, a nursing and allied health college and 26 family practice and specialty clinics serving the Cedar Valley. As an affiliate hospital of UnityPoint Health, the organization is part of a health system that cares for many patients in Iowa. Allen cares for more inpatients, outpatients, emergency patients and cardiac patients than any other hospital in the 10-county service area.

About UnityPoint Health

Formerly Iowa Health System, UnityPoint Health is the parent organization of UnityPoint Health – Waterloo. UnityPoint Health is one of the nation’s most integrated health systems with a physician-led team of professionals. Through relationships with more than 280 physician clinics, 31 hospitals in metropolitan and rural communities and home care services throughout its 9 regions, UnityPoint Health provides care throughout Iowa, Illinois and Wisconsin. UnityPoint Health entities employ more than 24,000 employees. UnityPoint Health, UnityPoint Clinic and UnityPoint at Home provide a full range of coordinated care to patients and families. With annual revenues of $2.7 billion, UnityPoint Health is the nation’s 13th largest nonprofit health system and the fourth largest nondenominational health system in America. UnityPoint Health provides community benefit programs and services to improve the health of people in its communities.



This year, Chapter 11 bankruptcy is getting an overhaul. These changes are designed to make filing for Chapter 11 bankruptcy easier for businesses.

What is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy is a type of bankruptcy that is reserved for business entities. With this type of bankruptcy, a business owner must reorganize his or her company to pay back the company’s creditors.

Businesses may file for one of the following three types of bankruptcy: Chapter 7, Chapter 11, and Chapter 13. Each is designed for filers with different circumstances. Chapter 13 bankruptcy is generally meant for individuals who can get into a repayment plan to reduce their personal debt levels, but sole proprietorship companies may also take advantage of this option.

If a business has no hope of recovering from its financial woes, its owner may opt to file for Chapter 7 bankruptcy. Chapter 7 bankruptcy is available to individuals and businesses whose debt is insurmountable. By filing for Chapter 7, these businesses and individuals eliminate their debts by liquidating their assets under the supervision of a court-appointed trustee.

Owners who want to continue to operate their businesses but need to reorganize their operation in order to do so may file for Chapter 11 bankruptcy. Chapter 11 bankruptcies can be complex, but for many business owners, they are the saving grace their company needs.

How Does Chapter 11 Bankruptcy Work?

When a company files for Chapter 11 bankruptcy, it must submit its plan for reorganization to the court. The company’s creditors then vote on the plan. If the court and creditors approve of the company’s bankruptcy plan, the court assigns a trustee to guide it through the reorganization process. This process can take 20 years or even longer in some cases. If the court does not approve of a company’s bankruptcy plan, the company must write a new plan and resubmit it to the court for consideration. For many companies, getting a plan submitted and approved by the court can take a year or longer.

Big Changes Ahead for Chapter 11

After two years of research, the American Bankruptcy Institute submitted its proposal for ways to make the Chapter 11 bankruptcy process less stressful for companies. The proposal can be summarized in four points:

  1. Narrowing Applicability to Leveraged Buyouts.

These changes include the narrowing of Section 546(e)’s applicability to leveraged buyouts. Section 456(e) provides a safe harbor for certain securities-related transfers. A safe harbor is a statute that deems certain actions are not in violation of a given rule. With the changes to Chapter 11, the protection of settlement payments written into Section 456(e) has a more narrow scope than it did under the old rules. Talk to your attorney about how the recently-narrowed scope will affect your company’s bankruptcy settlement.

  1. Narrowing of the Repo Safe Harbors, Especially with Regard to Mortgage Financing.

Another newly-narrowed safe harbor is the one that regulates repos, or the state of securities with the promise to purchase them back at a slightly higher price.
3. Conforming the Bankruptcy Code to the Federal Deposit Insurance Act and the Dodd-Frank Act’s Orderly Liquidation Authority Standards.

The Federal Deposit Insurance Act bolstered the Federal Deposit Insurance Corporation (FDIC) to insure deposits by banks and other savings associations. This act also determines the activities that insured state banks may participate in and the penalties for individuals who unlawfully engage in related activities.

The Dodd-Frank Act is a recent act that was created in response to the 2008 recession.

  1. Making it Clear That the Safe Harbors Should Not Apply to Ordinary Supply Contracts That Don’t Involve Financial Institutions.

How Can These Changes to Chapter 11 Bankruptcy Affect New York Small Businesses?

These changes protect junior creditors from losing money through haphazard restructurings based on low valuations. These changes also give bankrupt companies extra time after filing their bankruptcy petitions to work out their financing and sales. This makes it easier to obtain financing during the bankruptcy process. Additionally, these proposed changes create an alternate path for small and medium-sized businesses to reorganize their operations.

Contact A Nyack Bankruptcy Lawyer Today

If you are a New York business owner facing bankruptcy, contact an experienced Nyack bankruptcy attorney at the Law Offices of Robert S. Lewis, P.C. at (845) 358-7100 today for your free legal consultation. As one of Rockland County’s premier bankruptcy attorneys, Robert S. Lewis can guide you through the Chapter 11 bankruptcy process and toward a better financial future for you and your company. Don’t wait to make the call – contact our firm today to discuss your case with us and learn more about the options available to you.

The Law Offices of Robert S. Lewis, P.C. uses modern technology in performing research and in the preparation for bankruptcy petitions. The firm assists client with bankruptcy and loan modification, divorce, estate planning and real estate and foreclosure litigation.



From Forbes

American Apparel filed for Chapter 11 bankruptcy protection for the second time in just over a year on Monday.

The beleaguered retailer also agreed to sell the intellectual property rights related to its brand and some assets to Canada’s Gildan Activewear for $66 million.

American Apparel, an iconic Los Angeles-based retailer known for its racy advertising, just emerged from its first bankruptcy in February. It has struggled to overcome a difficult split with founder and CEO Dov Charney, tumbling sales and steep losses. In September, chief executive Paula Schneider resigned, apparently unable to turn things around after Charney’s ouster.

Gildan, which owns brands like Peds and Anvil, will not be purchasing any of American Apparel’s physical stores. It said it plans to integrate American Apparel into its printwear business and will separately purchase some inventory to ensure a smooth transition.

The bankruptcy process will allow American Apparel to put its stores up for auction and it’s possible a bidder could come in with a better offer and beat out Gildan. However, assuming that Gildan continues to be the preferred buyer, the deal is expected to be completed during the first quarter of 2017.

In the meantime, American Apparel plans to continue running its U.S. business as normal and said there would be no noticeable changes to the day-to-day operations of stores, according to a letter to employees obtained by Forbes. It will also seek to keep its manufacturing operations in California. (It’s a different story in the U.K. and Europe, where American Apparel appears likely to shutter its stores.)

American Apparel is far from the only retailer to experience hardship amid intense competition from online stores and declining foot traffic at malls, with companies like Aeropostale, PacSun and Sports Authority also tumbling into bankruptcy.

However, the retailer has also had to contend with steep legal bills tied to Charney, who was fired in 2014 amid allegations of sexual harassment and misuse of corporate funds. Charney, who founded the company in 1998 and built it into a global business with some 200 stores, has since tried and failed to buy the company back.

According to court filings, sales have fallen by about a third since American Apparel emerged from bankrtupcy earlier this year, and the company’s debtors were borrowing more than $2 million a week to keep the business afloat.

Here’s the full text of the letter sent to employees on Monday:

Dear Employees,

The Board of Directors and senior management of American Apparel have reached an agreement to be acquired by global apparel holding company, Gildan Activewear Inc. (also known as “Gildan”).  We are confident that this decision is the best strategic move forward, in order to preserve the legacy of the American Apparel brand.

Gildan is one of the largest domestic consumers of U.S. cotton, and is a leading manufacturer and marketer of quality branded basic family apparel, including T-shirts, fleece, sports shirts, underwear, socks, hosiery and shapewear.  Gildan is also invested in U.S. manufacturing.  They  own and operate vertically-integrated, large-scale domestic manufacturing facilities, offices and distribution centers and employ over 2,500 people here in the U.S. 

Recently, Gildan purchased Alstyle Apparel, which is based in Southern California, like American Apparel.  As part of that deal, Gildan continues to employ people in Alstyle’s administrative offices and distribution center.  Similarly, Gildan has asked for the opportunity to maintain certain of our manufacturing, distribution and warehouse operations in and around Los Angeles. 

In order to provide for an orderly sale of the business, American Apparel filed voluntary Chapter 11 bankruptcy this morning.  Although we have reached an agreement with Gildan, filing with the court allows us to hold an auction process, where other buyers who might propose a better deal than Gildan’s, can submit competing offers, including for the retail business.  Ultimately, we will be able to get the best deal done, by requiring various other bidders to compete to buy our iconic, valuable brand.

The competitive sale process I have discussed above will take some time to complete.  Throughout this process, the Company will run its business as usual in the U.S.  This will have no noticeable effect on our day-to-day operations in the U.S.  

I’m sure you have many questions about what this means for you. In the short-term, there is still work to be done.  Everyone will continue to come to work, do their jobs and get paid on each payday. Wages, hours, and benefits will remain the same. 

Later this week, you can expect a more detailed communication from Craig Simmons, our head of Human Resources, who will give you additional information and further updates.  In the meantime, you may reach the Human Resources Department at any time with any questions you may have.

We will continue to update you as we move forward.  As always, we thank you for your continued dedication.  I know we all care deeply about the Company and want the best for American Apparel.


Bradley Scher

Chairman of the Board

Bankruptcy is in most countries, the legal status of a person that cannot repay their debts they owe. In some countries this can also apply to the status of a company. Bankruptcy is usually imposed by a court order by the presentation of a Petition to File for Bankruptcy.

From NyTimes – 

The Supreme Court is scheduled to hear arguments in Czyzewski v. Jevic Holding Corp. on Wednesday. At issue is whether a bankruptcy court can approve a settlement that distributes the debtor’s remaining assets in a way that could not be done under a Chapter 11 plan, at least not without the agreement of all creditors. In this case, some of the parties agreed to settle the case and to pay out the debtor’s cash to some of the creditors, but they intentionally skipped a class of creditors who were entitled to priority payment under the bankruptcy code.

This order of payment in bankruptcy is often referred to as the absolute priority rule, though the term does not appear in the bankruptcy code itself. The basic idea is that secured creditors get paid before the unsecured, who in turn get paid before the shareholders. The application of the rule to bankruptcy liquidations has a long history.

But its use in a corporate reorganization is a bit more confused. The notion that the rule might even apply in this context is something that Justice William O. Douglas essentially pulled out of thin air in Case v. Los Angeles Lumber Products Company. That 1939 case is partly reflected in the current bankruptcy code and Chapter 11, which says that if a class of creditors objects, a reorganization plan has to comply with the absolute priority rule.

But the code says nothing about distributions of the debtor’s assets before there is a reorganization plan. A strict constructionist might say that is the end of the story: Absolute priority applies only when there is a settlement plan in place.

So far none of the parties to the case have taken that approach to heart. One group of law professors — lead by Professors Melissa Jacoby and Jonathan Lipson — argues that settlements should comply with absolute priority. They harken back to Justice Douglas’s probable reason: A hard and fast rule prevents the big players from squeezing out the little players.

But another, smaller group of law professors argues that Chapter 11 thrives on flexibility, and that courts should retain discretion to approve settlements and distributions that they view as fundamentally fair. They also argue that the absolute priority rule is poorly named, in that it is not an actual rule and has never played a central role in American corporate restructuring. For the latter point, they cite an article I wrote last year, among others.

And while the last point endears me to the second group of professors, I admit to being conflicted over what the right result is here. There is a real risk that dissenters are getting squeezed out by modern Chapter 11 practice — which is becoming even more transactional and deal-driven. But a poorly written Supreme Court decision on this point could simply flip the switch and create a tyranny of the minority. Many of the virtues of Chapter 11 would be lost.

I think I ultimately come down on the side of affirming the appellate court decision. That court said that the bankruptcy court could approve a settlement like the one at issue in the Jevic case, but such approvals should be rare. If the Supreme Court simply underlined that last point in a short opinion, the bankruptcy community would be well served.

I should note that there is also some risk that the Supreme Court will never provide a clear answer on these issues. While the case was originally taken to decide the absolute priority rule issue, the dissenting creditors have tried to recast the case as focusing on whether a bankruptcy court can dictate terms when a case is dismissed before there is a plan. The fight over whether that change of direction is proper could well divert the court from the issue originally at stake.


From NyTimes

CHICAGO — A natural gas-fired power plant in California that earlier this year warned it might need to shut down filed for bankruptcy protection on Tuesday, blaming “inhospitable” regulations and a shift toward renewable energy for power generation.

La Paloma Generating Co LLC [CMENGL.UL], a 1,200 megawatt combined cycle plant about 110 miles northwest of Los Angeles, filed for U.S. Chapter 11 bankruptcy in Delaware on Tuesday, citing $524 million of debt.

In its filing, La Paloma said market factors including slower-than-expected growth in electricity demand and a rise in renewable generation resources in California were “exacerbated by an inhospitable regulatory environment.”

La Paloma is owned by Rockland Capital LLC, one of several California plant owners that has asked the state for help in offsetting losses, arguing that it is in the state’s interest to support the natural gas plants because they provide stability and reliability to the power grid.

An unexpected combination of oversupply of natural gas and a boom in solar and other renewable energy has depressed power prices and threatened the viability of natural gas plants that sell power into California’s electricity market.

In its court filing, La Paloma said it had decided that Chapter 11 was in the best interests of the company and its creditors and stakeholders, following consultation with financial and legal advisers.

The company listed Bank of America Corp and SunTrust Bank [STIHCB.UL] as its lenders. It has trade debt with a number of organizations including Alstom Power Inc, the West Kern Water District and Pacific Gas & Electric Co

A clerk counts Chinese 100 yuan banknotes at a branch of a foreign bank in Beijing January 4, 2016.   REUTERS/Kim Kyung-Hoon

From NyTimes

BEIJING — China’s finance ministry said on Tuesday that preferential tax policies would be implemented in efforts to cut the country’s mounting corporate debt, including deferring tax for firms that are restructuring their debt through M&A activities.

The ministry specified eight preferential tax policies in a notice posted on its website, and urged all government departments to take these policies “very seriously” to help firms deleverage.

The move followed guidelines released in October by the State Cabinet which said China would provide preferential tax treatment to help firms cut debt levels.

The cabinet guidelines indicated the government will take a multi-pronged approach to cutting company debt, including encouraging mergers and acquisitions, bankruptcies, debt-to-equity swaps and debt securitisation.

Debt has emerged as one of the country’s biggest challenges, with corporate China sitting on $18 trillion in debt, equivalent to about 169 percent of gross domestic product (GDP).

According to a recent Reuters analysis, profits at roughly a quarter of Chinese companies were too low in the first half of this year to cover their debt servicing obligations, as earnings languish and loan burdens increase.