Debtwire

Gymboree Misses Interest Payment, Prepares For Bankruptcy Filing

Distressed children's clothing retailer Gymboree took the first step to a Chapter 11 bankruptcy filing after it elected not to make the interest payment due June 1 on its outstanding 9.125% notes due in 2018, Debtwire reported, with Moody's downgrading the company to D from CC on Friday, as it does not expect Gymboree to make the interest payment.

How Uber Hurts Hertz

While Hertz gets keelhauled when it loses a few hundred millions dollars, Uber is considered a hero when it loses billions of dollars. It’s easy to plow down competition when burning unlimited amounts of investor cash is part of the business model. This allows Uber to undercut any kind of competition.

As The Puerto Rico Lawsuits Begin "A Bankruptcy Is A When, Not An If"

On Tuesday Puerto Rico and its federal financial oversight board were flooded with the first lawsuits from stakeholders, with more expected in the coming days, which could ultimately push the insolvent U.S. territory into bankruptcy, and in fact prompting one analyst to conclude that "I continue to think bankruptcy is a when, not an if."

SunEdison Plummets 40% On "Substantial Bankruptcy Risk" Warning

Just as we warned was likely, the once infamous hedge fund hotel US solar company SunEdison unit TerraForm Global said on Tuesday there was "substantial risk" that SunEdison would soon seek bankruptcy protection  given liquidity difficulties, noting that "such an action would have a material adverse effect” on TerraForm Global. In 2016 alone, SUNE has collapsed from a hope-strewn $6 price to just 73c this morning...

Chesapeake Plummets Over 20% On Report It Has Hired Bankruptcy Attorneys

The saga of the gas giant Aubrey McClendon's built, Chesapeake Energy, enters its endgame, when moments ago following a Debtwire report that the company has hired Kirkland and Ellis as its restructuring/bankruptcy attorney - typically a step taken just weeks ahead of a formal Chapter 11 filing - the stock has plunged 22% to $2.40, the lowest price in the 21st century, and for all intents and purposes, ever.

SandRidge On The Verge Bankruptcy: Would Be 2nd Largest Shale Chapter 11 In Past Year

As we said two days ago when looking at the paltry recoveries on their total debt that bankrupt energy debtors are generating in liquidation and bankruptcy asset sales, "the energy bankruptcy party is only just starting." And sure enough, overnight we learned that another company is preparing to throw in the towel following a Reuters report that SandRidge Energy - a shale oil and gas producer in the Mid-Continent region of the U.S. - is exploring debt restructuring options, "as the heavily indebted U.S. oil and gas exploration and production company struggles with the fallout from plunging energy prices."

From Perennial (Rumored) LBO Candidate To Imminent Restructuring: How The Unmighty Radioshack Has Fallen

There was a time when one couldn't spend an hour without some moronic rumor of a Radioshack LBO popping up. Those time are gone. Instead, as DebtWire reports, the rumor of a takeover has been replaced with the all too unpleasant reality of a corporate restructuring which may or may not end up in Chapter and which likely means the equity is all but wiped out. As DW reports the firm is set to listen to restructuring pitches from the usual restructuring suspects, which means unless someone is crazy enough to do another JCP-type deal (they aren't), the firm's debt is about to be substantially discharged. This usually means a full or at least partial wipe out of the equity tranche below it. "The move to hire a banker to explore a balance sheet fix comes as the struggling electronics retailer faces a string of maturities, escalating cash burn and bloated inventory levels, the sources said. RadioShack first engaged AlixPartners for operational help over a year ago, as previously reported by Debtwire."

They Came, They Saw, They Got The Hell Out Of UBS In 7 Days

Housing is recovering. The Fed has your back. The consumer is healthy. All things that would suggest the commercial-mortgage bond business should be on the cusp of a renaissance. So the question is - what did Brett Ersoff and John Herman see, seven short days after being promoted to run the UBS real-estate finance division, that made them depart the venerable Swiss firm with the paintball sized Stamford trading floor?

Another Attempt At Paid Blogging Fails

It took FT Alphaville offshoot FT Tilt precisely 9 months to learn that charging £1,000 a head for widely available information may not be the best business model (unless one is that "other" and probably only profitable FT business line DebtWire, which actually does have "expert network" level information now and then). One wonders just how successful some other financial blogs would be if they were spun off from their publicly traded corporate parents.

Europe Imploding (Again) Following Another Ugly Italian Bond Auction, WSJ Article Discussing French Bank Nationalization

Despite another round of unsubstantiated rumormongering by the FT yesterday (more on this in a second), investors in this morning's critical round of Italian bond issuance were nonplussed and demanded 10 pounds of flash with every bond, which in turn sent 5 year BTP yields to the highest since the introduction of the zEURo. If the purpose of the planted Debtwire/FT story was to make this auction attractive, one can only conclude that it failed. The result is yet another"Europe is Open" type market session, where everything is tumbling on Greek default and contagion fear, further stoked by a front-page WSJ story which says what we have been warning about every single day for the past 3 weeks (those pretty Libor charts that go from the lower left to the upper right are not just there to make the place pretty): namely that banks, in this case French mega institution BNP, no longer have access to dollar funding markets. The result: yet another increase in the actual 3M USD Libor rate, nearly the 40th day in a row, which in turn makes the dollar lock out even more painful. From the WSJ: ""We can no longer borrow dollars. U.S. money-market funds are not lending to us anymore," a bank executive for BNP Paribas, who declines to be named, told me last week. "Since we don't have access to dollars anymore, we're creating a market in euros. This is a first. . . . we hope it will work, otherwise the downward spiral will be hell. We will no longer be trusted at all and no one will lend to us anymore. He's not the only one worried. Société Générale has lost 22.5% of its value since the beginning of the summer. In early September, BNP released a statement—in English, which is highly unusual—explaining that it has abundant dollar liquidity and that BNP has nothing to worry about, unlike other banks. France's three biggest banks have been the subject of whisper campaigns about their solvency throughout the summer." It gets worse: "Now that the situation is bordering on catastrophe, analysts are suggesting that the government is set to start nationalizing France's banks. The banks have remained silent on the matter, and the government denies this talk." Well, whatever good will the FT tried to create with its rumors,the WSJ destroyed with its facts.

Jefferson County Retains Klee Tuchin For Upcoming Chapter 9 Legal Advice

As anyone who follows the restructuring process (and religiously reads debtwire) will tell you, the first sign of smoke is when a creditor retain legal bankruptcy counsel, promptly followed by financial, which in turn, or at least 95% of the time, leads to a dropping off of bankruptcy docs at the local bankruptcy court, or Southern New York. And where there's smoke, there's Alabama fire. According to blog al.com, the Jefferson County Commission has just retained the services (at $975/hour) of Ken Klee, of LA-based Klee Tuchin, best known for advising Orange County on its Chapter 9 filing back in 1994. And with this the probability that Jefferson County will conclude that the time to file its own Chapter 9 in two days, is virtually a certainty (and sorry, no bankruptcy lawyer will advise his clients not to file for bankruptcy. Hourly retainer, remember?). And with the US debt situation still unlikely to be resolved within 48 hours, the last thing the market needs is to worry not only what known on effects this mega-municipal bankruptcy case will end up generating, but who else will file after. That said, we are confident the market will surge even more as it digests these news. Why? Two words: Bernanke Put.