Analysis of Distress


July 24, 2017
Share:
LinkedInTwitter

Dealing With Distress for Fun & Profit – Installment #17 – Overview (of DIP Financing and Cash Collateral Motions)

By: Michael Brandess and Luke Smith     A written tour of business bankruptcy and its alternatives. Editors’ Note:  we started this series (click here to start reading from the beginning) with a broad overview of business bankruptcy and its alternatives.  Our last few installments have focused on explaining how a creditor can, when its customer files bankruptcy, collect as much as possible on what it is owed (read about How To Protect Your Claim and about...

May 15, 2017
Share:
LinkedInTwitter

Beneath the Surface: Finding Truth in Income Statements

By Jeffrey Fishel, CPA, CFE and Michael Schwarzmann


An income statement, one component of a set of financial statements, provides a snapshot of a company’s profitability over a specific period of time by deriving net income from sales. While an income statement may help its user obtain a general sense of whether the company was profitable or not, it should not be relied on as the sole basis for determining the value of the company. It is especially important that users of financial...

January 9, 2017
Share:
LinkedInTwitter

PLATINUM PARTNERS: A PONZI SCHEME HIDING IN PLAIN SIGHT

Christopher M. Cahill
Lowis &; Gellen LLP
200 West Adams Street, Suite 1900
Chicago, Illinois 60606
(312) 628-7193
ccahill@lowis-gellen.com


No One Questioned This Hedge Fund's Madoff-Like Returns, by Zeke Faux and published in Bloomberg.com (Jan. 4, 2017), discusses the possibly $1 billion fraud alleged to have been engineered by Platinum Partners entities under the direction of Mark Nordlicht and others.  From this article we take away two principal points: Any sense that the SEC regulatory regime has wised up and will prevent another Madoff may be misplaced; and When told that a company’s auditors...

December 12, 2016
Share:
LinkedInTwitter

Life Partners Holdings –A Tower of Schemes Comes Crashing Down (Part 1)

  • Brad Daniel
  • BMC Group
  • New York, NY
  • (212) 310-5910
  • bdaniel@bmcgroup.com

If you are already familiar with the Life Partners Holdings debacle, you may think that the term “Life Partners” should stand for Brian Pardo and his partners in crime who ran that notorious company serving life sentences (instead of just paying massive fines and having some of their assets seized). Such criminals' loss of liberty may have satisfied justice in a way, but the investors in this Ponzi-like scheme really need to get their money back, or...

November 17, 2015
Share:
LinkedInTwitter

Verso Corporation Reports Third Quarter 2015 Results, Warns of Bankruptcy Risk

Breaking News Alerts from Chapter11Dockets.com


Verso Corporation (OTCQB: VRSZ) announced its financial results for the third quarter of 2015 yesterday.  Among the topline highlights were: Net sales of $782 million in the third quarter of 2015 compared to $350 million in the third quarter of 2014 Operating income before special items of $23 million in the third quarter of 2015 compared to $16 million in the third quarter of 2014 Adjusted EBITDA of $84 million in the third quarter of...

April 21, 2015
Share:
LinkedInTwitter

RECOMMENDED READING: Distressed Investor Opportunity In Oil Patch Master Limited Partnerships

From the Editorial Staff of Commercial Bankruptcy Investor


U.S. tax law encourages energy companies focused on exploration and production of oil, gas, and minerals to form as master limited partnerships.  That raises certain tax issues for investors in troubled debt of troubled energy companies. A group of lawyers from Kaye Scholer discuss related issues at length in a white paper entitled, "The Price of Oil & the Potential for Master Limited Partnership Restructuring and Insolvencies," which was published on the firm's website, and which we...

April 17, 2015
Share:
LinkedInTwitter

The Oil & Gas Psychic Hotline

From the Editorial Staff of Commercial Bankruptcy Investor


Psychic hotlines were all the rage in the late 80s and early 90s. Cable television channels were littered with their advertisements. One wonders if the so-called “psychics” answering all those pay-by-the-minute phone calls could foretell their own futures—that revenues from people willing to incur exorbitant phone bill charges by the minute (without even getting any sexual satisfaction) compared to costs (primarily advertising fees) would just not match up very well one day. Many of them...

April 16, 2015
Share:
LinkedInTwitter

More on Salon –Applying a Valuation

Jon Petersen
Distressed Debt/Equities Research Team
jpetersen@dailydac.com


 Now, we return to our case study of Salon Media Group with an eye towards developing a thesis and applying valuation methodologies discussed in an earlier article in this series here. There are, as I mentioned in my previous article on Salon, large issues of concern with the current stock offering. Given that insiders have been supporting the company through loans and preferred stock[1] that carries massive liquidation preferences,[2], why should an individual have the confidence...

April 9, 2015
Share:
LinkedInTwitter

Neither a Borrower Nor A Lender Be . . . In an Oil Market After a Sharp Plunge in Prices

From the Editorial Staff of Commercial Bankruptcy Investor


Anyone who has even casually glanced at the financial news in recent months is already well aware of the big story today—global oil prices have fallen dramatically. At their lowest levels in six years, and at 50% cheaper than the average over the last 4 years, this is a huge story, and one that is bound to end badly for certain companies in the oil and gas sector.  But aside from waiting to see who...

April 6, 2015
Share:
LinkedInTwitter

Introduction to Distressed Analysis –Developing Your Thesis and Valuation Methods

Jon Petersen
Distressed Debt/Equities Research Team
jpetersen@dailydac.com


Ok, time for a more in depth look at making a thesis and a valuation. From the outset, I want to underscore a point raised in my previous article here, that most investors will want to enter the distressed investing space by relying on the expertise of various funds that focus on these types of investments. Thus, I'll first address here the constraints that an individual investor faces, and how one who is determined to make his or her own picks can...

March 24, 2015
Share:
LinkedInTwitter

Convertible Bonds of Beleaguered NQ Mobile, Inc. Continue Decline

Breaking News Alerts from Chapter11Dockets.com


NQ Mobile, Inc. - a Beijing, China headquartered company which describes itself as "a leading global provider of consumer and enterprise mobile Internet services" - has been beset by a number of difficulties over the last year and a half.  The company's toughest period began in October 2013 when noted short-seller Carson Block and his firm Muddy Waters Research released a highly-critical report on the company. While the company's stock briefly recovered to something near...

March 9, 2015
Share:
LinkedInTwitter

RECOMMENDED READING: The Investor’s End Game in Chapter 11

From the Editorial Staff of Commercial Bankruptcy Investor


In "Restructurings and Distressed Investing,"[1] James Inness and John Houghton of Latham & Watkins explain that an investor’s return depends upon the debtor making appropriate operational, financial and corporate alterations – of course – but also upon the investor conserving its power to effect such changes (usually in concert with other constituents) according to a realistic time horizon conceived at the outset of the case. Even as substantial operational changes are executed, an investor must attend...

February 17, 2015
Share:
LinkedInTwitter

Quicksilver Resources Inc. (OTCQB: KWKA) Skips Interest Payment, Retains Advisors

Breaking News Alerts from Chapter11Dockets.com


In a filing with the Securities and Exchange Commission today, Quicksilver Resources Inc. (OTCQB: KWKA) disclosed that it "decided not to make the approximately $13.6 million interest payment due February 17, 2015 on its 9.125% senior notes due 2019."  In the same filing, the company also disclosed that it has "retained Houlihan Lokey Capital, Inc., Deloitte Transactions and Business Analytics LLP, and other advisors to collectively assist with the evaluation of the company’s options to address...

February 2, 2015
Share:
LinkedInTwitter

Breaking: RadioShack Receives ANOTHER Default Notice from Lender Salus Capital Partners, at Risk of Triggering Cross-Default Provisions of Other Debt Obligations

Breaking News Alerts from Chapter11Dockets.com


This afternoon, RadioShack Corp. (RSH) filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission.  You can find a copy of that document here.  In the Current Report, RadioShack disclosed that it has received a second notice of default from Salus Capital Partners, LLC, as agent for the lenders under the Credit Agreement, dated as of December 10, 2013, between RadioShack and the lenders: As previously disclosed on Form 8-K filed on December 2, 2014,...

January 21, 2015
Share:
LinkedInTwitter

RECOMMENDED READING: Gordon Brothers' Oil & Gas Industry Watch Critical Update

Breaking News Alerts from Chapter11Dockets.com


Gordon Brothers Energy Partners recently released a publication titled Oil & Gas Industry Watch Critical Update.  If you are interested in the distressed situations many companies in this industry are increasingly facing, the publication may be worthwhile.  Among the topics covered are: The Battle with Breakeven Production Changes Impact on Asset Values Forecasting Supply and Demand

January 13, 2015
Share:
LinkedInTwitter

Wilmington Savings Fund Society Files Papers Supporting Appointment of Examiner for Caesars Entertainment Operating Company, Inc.

Breaking News Alerts from Chapter11Dockets.com


As readers are almost certainly aware, yesterday morning an involuntary bankruptcy petition was filed against Caesars Entertainment Operating Company, Inc. in Delaware by Appaloosa Investment Limited Partnership I, OCM Opportunities Fund VI, L.P. and Special Value Expansion Fund, LLC.  In connection with that filing, the petitioning creditors also filed a motion asking the bankruptcy court to appoint an examiner with access to and authority to disclose privileged materials.  Today, their motion got additional support, as the examiner motion...

January 6, 2015
Share:
LinkedInTwitter

Newland International Properties Corp. - Developer of Panama City's Trump Ocean Club International Hotel & Tower - Misses Principal Payment on Bond Debt

Breaking News Alerts from Chapter11Dockets.com


Newland International Properties Corp., the developer of the $295 million Trump Ocean Club International Hotel & Tower in Panama City, Panama, disclosed that it failed to make a $23,422,154.00 principal payment on its 9.5% bonds due July 2017 when due yesterday.  Newland did, however, make a $9,447,553.85 interest payment on the same bonds yesterday.  In the announcement of the bond payments, Newland also reported that it entered into a November 26, 2014 Cooperation Agreement with registered holders of 66.32%...

December 10, 2014
Share:
LinkedInTwitter

Fitch Provides Estimate of Recoveries for Caesars Entertainment Operating Company Creditors in Event of Bankruptcy

Breaking News Alerts from Chapter11Dockets.com


In a release this afternoon, Fitch Ratings provided the following estimates of recoveries for creditors of Caesars Entertainment Operating Company (CEOC) in the event that the company makes a bankruptcy filing, as is widely expected: Term loans: 100% First-lien notes: 80% "More junior" debt: less than 10% The release explains the methodology used in arriving at its estimates, stating that its recovery analysis incorporates "a weighted 9.6x EV/EBITDA multiple, $844 million run-rate EBITDA, $975 million of excess...

December 8, 2014
Share:
LinkedInTwitter

Connacher's Woes: Over-Levered and at the Mercy of Global Economic Forces

Jon Petersen
Distressed Debt/Equities Research Team
jpetersen@dailydac.com


Shifts in both commodities and credit markets are causing pain for Connacher Oil and Gas, and have led to a “going concern warning"[i] being included in their Q3 results. Connacher is seen as likely to run into difficulties making interest payments, and as a result its stock price is down some 85% from its 2 year highs in April, when WTI crude prices were trading closer to $95. The Alberta based company operates two projects...

December 5, 2014
Share:
LinkedInTwitter

RADIO SHACK BANKRUPTCY WATCH V: O War, thou son of Hell!

  • Christopher M. Cahill
  • Lowis & Gellen LLP
  • Chicago, Illinois
  • (312) 628-7193
  • ccahill@lowis-gellen.com

When we last left Radio Shack, we imagined its new Chief Revitalization Officer as Henry V giving a St. Crispin’s Day speech to rouse beleaguered troops toward an improbable turnaround victory.  That scenario was premised upon Radio Shack’s largest shareholder, Standard General LP, having doubled down on its investment by replacing GE Capital as leader of a $585 million facility (which included all senior secured loans, plus a $140 million line of credit), having put...



FP ad for BK sites
hyper ams bk
DailyDac
Fuel Break - BK