Misery Index: Week of December 11, 2017

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PacerMonitor’s look back at this week's most compelling bankruptcies

Boston Herald parent files for bankruptcy to sell its businesses.

Herald Media Holdings, owner of the major publication Boston Herald, filed for chapter 11 in Delaware, and is seeking the court’s approval to sell the business’s assets to GateHouse Media as a going concern for at least $5 million comprising $4.5 million in cash and the assumption of certain liabilities including up to $500,000 of employee paid time off. The 170-year-old business said that the increase in alternatives for news sources and advertising has had a detrimental impact on revenue in its business focused on traditional print media. Herald Media’s most recent financial statements reflect assets of roughly $6 million and liabilities of about $31 million, which is mostly pension and severance liabilities.
COO Jeffery Magram’s declaration can be found here.
Read petition here.

Specialty finance company J.G. Wentworth seeks chapter 11 protection

J.G. Wentworth Co., most well-known for its “877-CASH-NOW” TV advertisements, filed for chapter 11 bankruptcy protection less than nine years after its previous filing. J.G.W. is proposing a debt-for-equity swap where the lenders holding $449.5 million of debt will receive 95.5% of restructured J.G.W. The company attributed its struggles to increased competition in the structured-settlement and home-lending industries sparked by the extended period of low interest rates and a low barrier to entry.
CEO Stewart Stockdale’s declaration can be found here.
Read petition here.

Cobalt Energy seeks chapter 11 protection from lawsuits while trying to restructure debt after failed $1.75B asset sale

Oil exploration and production company Cobalt International Energy filed for chapter 11, listing assets of $10 million to $50 million and liabilities of $1 billion to $10 billion following repeated issues with its business operations in Angola. Cobalt had inked a deal in 2015 with an Angolan government-affiliated entity to sell Cobalt’s Angolan assets for $1.75 billion, which fell through just a year later in 2016 with Cobalt receiving only the initial $250 million. Cobalt claimed it was a contract breach and is in ongoing negotiations with a hearing date on the matter in 2019. Additionally, following the failure of the Angolan asset sale, Cobalt faced issues with the SEC, a pension trust fund and retiree healthcare fund, among others, alleging violations of the Foreign Corrupt Practices Act concerning operations in Angola. During the bankruptcy, Cobalt is seeking to stop the pending lawsuits and address its $2.8 billion of long-term debt.
CFO David Powell’s declaration can be found here.
Read petition here.

Dextera Surgical using chapter 11 to sell its assets to leading healthcare solution provider.

Makers of the surgical stapler for advanced minimally invasive surgery, Dextera Surgical, filed for chapter 11 targeting a sale of its business at auction with an opening bid of $17.3 million from Aesculap Inc. an affiliate of B. Braun Group. Dextera Surgical was created 20 years ago under the name Vascular Innovations, which later changed to Cardica in 2001 before being renamed Dextera Surgical in 2016. As of the most recent financial statement, Dextera indicates assets of $6.5 million and liabilities of $14.8 million. The company had been actively pursuing a merger or acquisition of the business for about a year and said that the chapter 11 process was best suited to facilitate that transaction.
President and CEO Julian Nikolchev’s declaration can be found here.
Read petition here.


Yet another retailer, Charming Charlie, ends up in chapter 11.

Marking the 20th major retailer of the year to file bankruptcy, Charming Charlie said it had no choice but to file for chapter 11 during the busy holiday season because it was down to less than $3m of total liquidity without enough money to stock shelves. Charming Charlie entered an agreement with debtholders, seeking a conversion of debt for equity in a newly reorganized company, shedding over $100 million in debt. As of the filing the company listed assets between $50 million and $100 million with liabilities of $100 million to $500 million, including roughly $154 million of funded debt.
Senior VP and CFO Robert Adamek’s declaration can be found here.
Read petition here.

Many major retails have fallen victim to rising costs, increased competition and customers’ migrations away from retail shopping and ended up in chapter 11. Below is a list of the largest retailers who have filed in 2017.

The Limited

Wet Seal

Eastern Outfitters

BCBG Max Azria

hhgreg

RadioShack

Gordmans

Gander Mountain

Payless ShoeSource

Rue21

Gymboree

Cornerstone Apparel (Papaya Clothing)

True Religion Apparel

Alfred Angelo

Perfumania

Vitamin World

Aerosoles

Toys R Us

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