Yeah, this won’t help
Posted on November 2, 2009 at 7:55 am
The somewhat expected bankruptcy filing of CIT Group looks set to further reduce credit options for small business.
CIT’s factoring business, worth about $42 billion in 2008, is estimated to be at least five times the size of its closest competitor, Wells Fargo & Co, followed by other smaller companies such as GMAC Inc and Rosenthal & Rosenthal. It is not clear if these rivals have enough capacity to take on all of CIT’s existing customers.
SEE ALSO: The company’s official restructuring site.
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Santa Fe shrinking
Posted on October 5, 2009 at 7:37 am
The bankrupt restaurant chain Santa Fe Holding has closed at least 10 of its almost 30 roadhouse-style eateries since filing to restructure its finances in July. In Columbus, Miss., things appear to have gone smoothly enough, but in Tuscaloosa, Ala., the process of winding up shop last week included some weapon brandishing that called for law enforcement intervention.
“He started running his mouth at me,” Pate said, “and that’s when I went to my truck and got my shotgun, requesting strongly that he should leave my property.”
SEE ALSO: Our July story on Santa Fe’s Chapter 11 filing
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Nortel unit auction nets $915M
Posted on September 14, 2009 at 9:33 amNetworking giant Avaya will pay more than $900 million for the enterprise telecommunications division of Nortel, which is winding down its operations in bankruptcy court. Nortel’s Nashville-based U.S. operations not that long ago employed more than 1,000.
SEE ALSO: The company’s press release from this morning
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Credit crunch hits Old Time Pottery
Posted on August 25, 2009 at 7:26 am
The Murfreesboro-based retailer of bargain home decorations has been unable to extend its main line of credit and has filed to restructure under Chapter 11 of the bankruptcy code. Old Time execs are focused on bouncing back quickly.
“We have achieved significant improvements in our operation in 2009 resulting in significant savings. We are evaluating the most prudent course of action to assist us in meeting our operational and financial objectives in the future, including the replacement of our line of credit.”
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Tortola into its first turnaround
Posted on August 12, 2009 at 7:27 am
Tortola Partners, the turnaround firm formed this spring by Steve Curnutte and Robert Gonzales, is getting to grips with its first portfolio company, an aluminum producer in Alexandria, Tenn. Gonzales, pictured here, is the company’s chief restructuring officer.
“As more and more aluminum processors have filed Chapter 11, or simply gone out of business, scrap dealers have become reluctant to extend trade credit, making it tough for otherwise healthy companies like TriStar,” said Mr. Gonzales. “Now that we’ve filed to reorganize, our trading partners can be confident that obligations going forward won’t get stuck as pre-petition debts.”
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Nortel’s Canadian pensioners ‘losing out’
Posted on August 4, 2009 at 11:42 amAs bankrupt Nortel continues talks about the sale of its businesses, its Canadian pensioners are growing increasingly uneasy about their compensation. The Pension Benefit Guaranty Corp.’s takeover of the telecom company’s U.S. estate on July 17 came as a good news to its pensioners stateside, but their roughly 17,500 Canadian counterparts say that development came at their expense.
Diane Urquhart, an independent financial analyst who is representing Nortel’s Canadian pensioners, has published a report on the bankruptcy situation and sent a letter to Ted Menzies, Parliamentary Secretary of Finance.
When one takes into account the prospects for the Nortel Canada estate having a much higher loss or compromise, at say, close to -$0.90 per $1.00 creditor claim compared to -$0.60 for the Nortel US estate, the difference in bankruptcy outcomes between the Nortel Canadian pensioners, long term disabled and terminated employees and the U.S. hedged bond owners with a profit of $0.28 per $1.00 face amount of debt, is flagrantly abusive and crass.
Nortel’s 17,500 Canadian pensioners, Urquhart said, are seriously disadvantaged relative to the other creditor groups in the Nortel realm:
The Nortel hedged bond owners are making an estimated profit of 28 percent. The majority of Nortel U.S. and U.K. pensioners are covered by robust public pension insurance plans; and the U.S. and U.K/EMEA unhedged and unsecured creditors are expected to have much higher recoveries due to their considerable power being used to deplete the Canada estate to date and to extract a considerable proportion of the pending cash proceeds from sale of the businesses.
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Ritz Camera CEO buys company
Posted on July 23, 2009 at 8:27 amDavid Ritz has won the auction to buy the photographic services company that bears his name. No word yet on store closures or other strategic moves.
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News 2 getting new management company
Posted on July 22, 2009 at 5:34 pmAtlanta-based Gray Television has reached a deal with creditors of bankrupt Young Broadcasting to take over the management of seven of the latter’s TV stations, including News 2.
Gray (Ticker: GTN) runs more than 30 stations around the country, including stations in Knoxville and Bowling Green. Young President Deb McDermott, who ran News 2 before moving up the ladder, is getting a new contract.
SEE ALSO: What Kleinheider dug up
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Will creditors waffle over which bid to choose?
Posted on at 3:44 pmWhen Waffle House Inc. earlier this month introduced its plan to take control of a restructured SouthEast Waffles Inc. and lead the Nashville-based restaurant operator out of Chapter 11 bankruptcy, its disclosure filing included one carefully worded paragraph, printed in all caps:
THE COMMITTEE, FIRSTBANK AND DEBTOR, AND THEIR RESPECTIVE PROFESSIONALS, HAVE PARTICIPATED ACTIVELY IN THE CASE, INCLUDING THE DRAFTING OF THE PLAN AND DISCLOSURE STATEMENT. THE COMMITTEE, FIRSTBANK AND THE DEBTOR’S CHIEF RESTRUCTURING OFFICER BELIEVES THAT THIS PLAN WILL RESULT IN A FAIR RETURN TO UNSECURED CREDITORS.
That’s not quite a full-throated endorsement from secured creditor FirstBank and SEW’s committee of unsecured creditors. It’s legalese for “That’s very nice, dear.”
Yesterday it emerged that FirstBank and the committee had reason to hedge their bets. An affiliate of Gaylord Sports Management, an Arizona firm privately owned by Gaylord Entertainment heir E.K. Gaylord II, has stepped in with what it says is a better offer for SEW’s assets.
Gaylord’s venture includes golfer Phil Mickelson as an investor. Serving as CEO of the unit, GS Acquisitions LLC, is Terry Pefanis, former chief operating officer of Big Idea Inc., which created the VeggieTales kiddie entertainment franchise.
In the reorganization plan it filed late yesterday, along with an accompanying disclosure statement, GS Acquisitions says it will pay a total of $20.2 million for the waffle seller’s assets, with $4.8 million coming up front and the remainder paid out over time. Unsecured creditors would receive between 35 and 45 percent of their claims.
In filing its own plan on July 6, Waffle House Inc., based in Norcross, Ga., offered to pay about $21.4 million for the assets over the course of ten years, with unsecured creditors due to get back between 25 and 38 percent of their claims. But its initial payment would be only $800,000, a sixth of what the Gaylord team is offering.
The WHI plan and the GS Acquisitions plan include virtually identical provisions concerning the possible liability of longtime SouthEast Waffles CEO Jim Shaub and CFO Becky Sullivan for the losses that got the company into financial trouble in 2008. From the GS Acquisitions plan:
The Liquidation Agent, acting on behalf of Debtor’s estate, may pursue Recovery Causes of Action against Lattimore, Black, Morgan and Cain, PC, and/or any of its current or former partners or shareholders in connection with auditing and other services provided to the Debtor, as well as professional and other obligations to the Debtor. The Liquidation Agent, acting on behalf of Debtor’s estate, may also pursue Recovery Causes of Action related to payments to the Debtor’s Chief Manager, Shaub, as well as the actions and management of the Debtor by Shaub and the Debtor’s former Chief Financial Officer, Rebecca Sullivan, including without limitation any actions and omissions which had the effect of the Debtor, creditors, or other parties-in-interest suffering damages.
A hearing on the Gaylord plan is set for Aug. 11 in Nashville’s U.S. Bankruptcy Court. Bill Norton of Bradley Arant Boult Cummings represents GS Acquisitions.
Feelin’ fit for growth
Posted on July 14, 2009 at 10:18 amAfter a $10.2 million shot of capital from Council Ventures brought it out of chapter 11, New Day Pharmacy says it’s ready to grow.
On the heels of a $10.2 million investment from a syndicate of institutional investors led by Council Ventures, New Day Pharmacy expects to boost its revenue by 50 percent a year and increase staff by slightly less than that, says CEO Richard Wager.
Wager says the company expects to increase its 28 person staff significantly to slightly less than 50 percent more than it currently employs.
New Day’s “in-house pharmacy” features a virtual information data bank, a paperless admissions process, a time-sequenced packaging system, long-distance delivery of medications, and on-site medication dispensing units.
Note: The article linked here from TechJournal South mistakenly refers to Richard Wager as New Day’s CEO. Wager is in fact the company’s president. New Day’s new chairman and CEO is James Usdan.
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News 2 parent headed for auction block
Posted on June 30, 2009 at 8:17 amInvestors looking to bid on bankrupt Young Broadcasting’s assets have until July 10 to submit their papers, according to recent court documents filed in New York. Young, which owns WKRN News 2 as well as 10 other TV stations around the country, filed for Chapter 11 early this year, unable to handle its debt load. Operating numbers for May show that WKRN posted a profit of almost $237,000 on net revenue of $1.9 million.
HT: Bonna Johnson
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Crescent in Chapter 11
Posted on June 10, 2009 at 11:43 amThe Charlotte-based developer of much of Cool Springs has secured $110 million in DIP financing and named a new CEO.
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Lawmakers lash out on GM, Chrysler dealership plans
Posted on June 3, 2009 at 7:01 pmBloomberg reports from Capitol Hill, where the two bankrupt auto makers took a lashing from senators. Exchanges like this one just don’t look good.
Senator Amy Klobuchar, a Minnesota Democrat, said the planned closing of successful dealers was “puzzling” and that some Chrysler dealers were given 26 days to close.
Rockefeller asked West Virginia dealer Peter Lopez at the hearing if he could close in 26 days. The answer was, “No way.”
The senator asked [Chrysler President] Press if he could close that quickly if he were a dealer.“I would have to find a way,” Press said.
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Lamar: Give GM stock to the people
Posted on June 2, 2009 at 8:40 am
Tennessee’s senior senator says the government should get out of the auto business by distributing shares of the new General Motors to taxpayers.
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Spring Hill idled, on standby
Posted on June 1, 2009 at 8:37 amThe 2,500 General Motors workers in Spring Hill were told this morning they won’t be working for a while.
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