Creditors

Creditors Demand Payment on Defaulted Venezuelan Bond

A group of five investment funds have filed an acceleration request after Venezuela failed to pay the principal and about $140 million in outstanding interest on a bond, Reuters reports. No claim has been filed in New York courts, but an acceleration request was submitted to both the fiscal agent of the bond, Bank of New York Mellon, and the law firm representing Venezuela.  The article notes that “the government and state-owned companies owe nearly $8 billion in unpaid interest and principal following this year’s default on bonds amid a hyperinflationary collapse of the country’s once-wealthy sociality economy.” Over 1 million Venezuelans are expected to have left the country by the end of the year to escape the economic peril.

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Missed the Creditors Practice Forum? Never Fear ... Online Videos are Here!

If you missed the section’s annual forum back in September, check out the online videos that are now available to purchase on the TBA website: 

The CLE deadline is quickly approaching, and TBA’s vast catalog of online videos provide the much-needed flexibility to work around a busy schedule. 

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Bankrupt Crypto Mining Firm Giga Watt Owes Millions to Creditors

Chapter 11 bankruptcy court documents filed last week by U.S.-based bitcoin mining firm Giga Watt revealed millions are still owed to creditors, CoinDesk reports. Nearly $7 million is owed to its biggest 20 unsecured creditors, including a utility provider and an electricity provider. The court documents also revealed that Giga Watt’s assets are estimated at less than $50,000 while the estimated liabilities are somewhere between $10­ and $50 million. Minutes from a special meeting of the firm’s shareholders indicate the belief that the creditors and corporation would best be served by reorganization under Chapter 11.

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Creditors Threaten Suit Following Nine West Deal

An official committee of unsecured creditors seek to file a $1 billion lawsuit against Sycamore Partners LLC for its role in the Nine West 2014 leveraged buyout, Bloomberg reports. They claim the buyout left the retailer unable to pay its debt. Following the committee’s reiteration of their intent to sue, a Nine West reorganization plan was filed which included a proposal to pay $105 million to the creditors to settle the allegations. Next month, a U.S. bankruptcy judge will decide if the plan and settlement should be sent to the creditors for a vote.

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Sears Files for Bankruptcy

Sears Holdings has filed for Chapter 11 bankruptcy following its inability to make a $134 million debt payment, which was due Monday, CNN Business reports. The company’s chairman and largest shareholder, Eddie Lampert, gave up the title of CEO. Last month, Lampert proposed restructuring Sears’ finances in order to avoid filing for bankruptcy; however, the creditors instead decided to head to bankruptcy court. With the advent of online shopping and big box stores, Sears has been struggling for several years. The last profitable year for the 132-year-old company was 2010. In addition to the 46 store closings planned for next month, the company will also close 142 stores near the end of the year.

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CEO of Sears Proposes Rescue Plan to Avoid Bankruptcy

Upcoming debt payments and a limited cash flow loom over Sears Holdings Corp. CEO Edward Lampert tells the Wall Street Journal. In order to avoid a bankruptcy filing, Lampert, who is also Sears’s chairman, controlling shareholder and biggest creditor, is encouraging creditors to restructure over $1 billion of debt coming due in the next two years. He also proposes that the Sears board sell an additional $1.5 billion of real-estate and divest $1.75 billion of assets, which would include Sears Home Services and the Kenmore appliance brand.  In August, Lampert made an offer to buy the brand for $400 million in cash, but the board has yet to approve it. His proposal requires approval from multiple stakeholders, including Sears’s independent board committee and bondholders.

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Sovereign Bilateral Creditor Collaboration Encouraged by IMF

Low-income countries that have built up high levels of debt from non-traditional sources are a growing cause of concern, according to the managing director of the International Monetary Fund, Christine Lagarde, Reuters reports. At a sovereign debt restructuring conference, Lagarde warns that debt restructuring cases with non-traditional lenders are going to require better collaboration. Non-Paris Club providers of credit, like China, often do not have developed guidelines on how to restructure debts. She advised borrowers and their new creditors to be more transparent about their liabilities to prevent debt from spiraling into massive government obligations.

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