Analysis of Distress

Financial Structure


December 12, 2016
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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...

April 21, 2015
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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...

March 24, 2015
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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 10, 2015
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What is Distressed Investing?

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


Distressed investing has been a distinct style of investing for a couple of decades now. Many of us probably feel we understand the general gist of it--purchase bonds of a company that are trading at 50 cents on the dollar, or equity shares that are priced below their long-term value, and if you've done your homework right and the company turns around, the price rebounds and you make a killing. But what are the techniques...

March 9, 2015
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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
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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...

January 13, 2015
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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
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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%...

January 2, 2015
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RADIO SHACK BANKRUPTCY WATCH VII: RECOMMENDED READING On the Role of Credit Default Swaps in this Serial Drama

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

In the most recent installment of this Serial, we reported that the International Swaps and Derivatives Association ruled that the early December declaration of a Radio Shack default issued by a junior lending group (led by Salus Capital Partners LLC) did not constitute a “credit event” that would trigger the obligation of credit default swaps parties to pay counterparties under  those contracts. We also noted that there are outstanding some $25.7 billion in swaps contracts...

December 18, 2014
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RADIO SHACK BANKRUPTCY WATCH VI: Cut me, Mick!

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

Last week, we speculated that Salus Capital Partners LLC declared a default under its junior loan facility because it wants to acquire the senior secured facility, taken over in October by investor Standard General and others, at a steep discount. According to Fitch Solutions, Inc., in a liquidation held today, the $585 million senior secured ABL facility would be in the money, the $250 million junior secured term loan (held by Salus) would still be...

December 15, 2014
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LightSquared Inc. Files Monthly Operating Report for November

Breaking News Alerts from Chapter11Dockets.com


LightSquared Inc., the troubled satellite communications company which has been operating in bankruptcy since May 2012, filed its required Monthly Operating Report for the month of November 2014 this afternoon with the United States Bankruptcy Court for the Southern District of New York.  The company reported that its cash balance grew by nearly 50% during the month, although the increase was primarily the result of additional borrowings under its debtor-in-possession (DIP) financing facility. LightSquared also...

December 15, 2014
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RadioShack 6.75% Bonds Due 2019 Trading in Low Teens, Yielding Over 80%

Breaking News Alerts from Chapter11Dockets.com


According to FINRA's TRACE system, RadioShack's 6.75% bonds due 2019 have traded as low as 12.375 cents on the dollar today.  At those prices, the bonds would yield over 82% assuming that RadioShack did not default before maturity.  That final caveat, of course, is looking increasingly unlikely, despite the International Swaps and Derivatives Association's determination last week that a "credit event" had not yet occurred to trigger payment on credit default swaps related to RadioShack's debt....

December 10, 2014
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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 5, 2014
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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...



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