Bankruptcy Blogs

Puerto Rico: Facilitate an Exchange Offer, Now

03/04/16

Jacoby asks what can the Executive Branch do to help out Puerto Rico.  The most practical thing it could do, right now, is to facilitate an exchange offer.  Whether the Treasury itself can act as a mediator, or at least facilitate mediation by some outsider, this seems like the quickest way to a real solution to the near-term problems the Commonwealth faces.  Treasury might also act as an overseer of reforms and a (comparatively

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Next Week in Bankruptcy

03/04/16

A Manhattan bankruptcy judge on Tuesday is expected to announce her decision on whether to free Sabine Oil & Gas Corp. from pipeline agreements it negotiated before the oil glut.

The agreements require Sabine to deliver minimum amounts of oil and natural gas to two pipeline operators for transport. If it doesn’t hit the benchmark, the pipeline companies collect a deficiency payment.

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Retailer Sports Authority Can Tap Loan, Start Liquidation Sales

03/04/16
John Taggart/Bloomberg News

Sporting-goods retailer Sports Authority won approval to use part of its bankruptcy loan and to start liquidating some of its stores.

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Puerto Rico: Eminent Domain, Greenbacks, and the Exchange Stabilization Fund--Some Outside-the-Box Musings

03/03/16
The Puerto Rico situation feels a little like a McGuyver episode.  How do we get out of a locked room with only a rubber band and a toothpick?  Here are some half-baked thoughts, first on the nature of the problems and then some ideas for solutions.  
 
To set the stage, there seem to me to be three core problems facing Puerto Rico.  First and most immediate is a leverage problem.  There’s simply too much leverage for what the Puerto Rican economy can support.  Second, there is a priorities problem.
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Number of Troubled Companies Nears 2009 Peak

03/03/16

Financially strapped companies’ ranks are swelling.

A Moody’s Investors Service tally of the least-creditworthy companies rose by 10 to 274 this month, pushing it nearer to April 2009’s record 291. The list comprises companies rated at least six notches into junk territory with a negative outlook–which suggests a further downgrade could come soon.

The uptrend is a sign that while the U.S. high-yield default rate remains below its long-term average (3.1% now versus 4.7% since 1983, per Moody’s), more corporate borrowers are finding themselves on shaky financial ground.

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Operator of Texas Toll Road Enters Bankruptcy

03/03/16
Mark Duncan/Associated Press

Texas toll-road operator SH 130 Concession Co. filed for chapter 11 protection after not being able to restructure $1.3 billion in debt outside a courtroom.

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Puerto Rico And (Very) Soft Executive Power

03/02/16

Melissa's post asked what the executive branch could do to facilitate restructuring of Puerto Rico's debt. I'll get to that, but I first want to talk about Puerto Rico itself. At first glance, the Commonwealth seems to be in a uniquely terrible position. It has the disadvantages of a sovereign (e.g., no bankruptcy) but lacks the advantages (e.g., legal and/or practical immunity from legal enforcement).

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Puerto Rico: Blame and the Debt of "the Other"

03/02/16

Recently, I have been spending a lot of time thinking about the psychology of other people's indebtedness. I see parallels from this work and the way we think about Puerto Rican government debt. This thinking then tends to stand in the way of solutions.

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Here’s the List of Sports Authority Stores on the Block

03/02/16

The Sports Authority Inc., which filed for chapter 11 bankruptcy protection Wednesday, has earmarked about 140 of its 463 stores for closure or sale in the coming months, as well as two distribution centers.

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