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Hertz Offers Payout to Shareholders; NRA Tries to Ward Off Receivership; Boy Scouts Victims Face Narrowing Window to Sue Local Councils
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Good day. Bankrupt rental car giant Hertz has agreed to provide some recovery for shareholders following a competitive bidding process among rival investor groups to finance its exit plan. An NRA board member argued against appointing a receiver to take charge of the organization, claiming it would spell the end of the 150-year-old gun-rights group. And men victimized in the Boy Scouts risk losing out on their chance to sue local councils that could be held liable for the abuse they suffered.
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A Hertz rental counter in Mexico City, June 2020. EDGARD GARRIDO/REUTERS
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Hertz Proposes Shareholder Payout as Part of Bankruptcy-Exit Plan
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Hertz Global Holdings Inc. agreed to provide some value to equity holders when it leaves chapter 11, vindicating the individual traders who have insisted the company is worth something despite its bankruptcy filing.
Hertz proposed in a chapter 11 exit plan on Wednesday that current stockholders receive warrants to purchase up to 4% of the restructured business, the first time the company has said it is worth enough to distribute some value to its owners. Read More.
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NRA Board Member Says Receivership Would End Gun-Rights Group
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A National Rifle Association board member said Wednesday that appointing a receiver to take charge of the organization—a tactic the NRA worried New York authorities would pursue before it filed bankruptcy—would spell the end of the 150-year-old gun-rights group. Read More.
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Boy Scouts Sex-Abuse Victims Face Narrowing Windows to Sue Local Councils
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Men victimized during their childhood experiences in the Boy Scouts of America risk losing out on their chance to confront the local councils that allegedly failed to protect them, as time ticks down for sex-abuse survivors to file lawsuits in New York and elsewhere. Read More.
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Old Country Buffet Parent Preps Speedy Bankruptcy-Sale Process
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The owners of Old Country Buffet, Hometown Buffet and several other all-you-can eat restaurant chains are planning a quick bankruptcy sale for their assets and some of their leases, with hopes to sell them off by the summer. Read More.
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MobiTV to Keep $15.5 Million T-Mobile Bankruptcy Loan In Settlement
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Bankrupt video streaming company MobiTV Inc. said T-Mobile USA Inc. would forgive a $15.5 million loan after the cellphone carrier decided to wind down efforts to crack into the home television market.
As a MobiTV customer, T-Mobile had initially agreed to keep the streaming company afloat after it filed for chapter 11 last month. But weeks later T-Mobile terminated its agreement to buy internet protocol streaming television services, leaving MobiTV on shakier ground.
To avoid potential litigation, MobiTV said Tuesday that T-Mobile would waive its right to repayment on the loans it extended to fund the chapter 11 process. MobiTV will use the funds to pay unsecured creditors and extend its sale process, court papers said.
—Andrew Scurria
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Knotel Junior Creditors to Be Repaid Two Cents on the Dollar in Bankruptcy
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Knotel Inc. landlords and other unsecured creditors owed between $300 million and $400 million are anticipated to recover at most about two cents on the dollar in the office space startup’s bankruptcy.
The company filed a chapter 11 plan Wednesday in the U.S. Bankruptcy Court in Wilmington, Del., that projects unsecured creditors could recover less than a penny on the dollar and at most two cents on the dollar. Unsecured creditors routinely recover pennies on the dollar in corporate bankruptcy.
Knotel sold its business to Newmark Group Inc. in March, leaving behind a corporate shell to be liquidated in bankruptcy. Knotel blamed its bankruptcy on the Covid-19 pandemic which along with work-from-home policies has roiled office space providers.
—Jonathan Randles
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Liquidator is on the Scene as Oil and Gas Distress Plunges WB Supply Into Bankruptcy
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WB Supply LLC, which sells pipes to the oil and gas industry, filed for bankruptcy protection Tuesday and is likely headed to liquidation.
The 50-year-old business was already hurting from distress in the energy sector before the pandemic, and has been shuttering locations and fending off vendor lawsuits.
WB Supply has not abandoned hope of a turnaround, but with more than $10 million in secured debt, and more than $26 million in unsecured debt to cover, a buyout offer will have to arrive quickly. Liquidator Great American Global Partners, LLC is getting the inventory ready for sale.
—Peg Brickley
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Greensill’s Australian Parent Placed Into Liquidation
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The Australian parent of Greensill was placed into liquidation following a meeting of creditors owed nearly $1.33 billion when the supply-chain finance business became insolvent last month.
The move to liquidate Greensill Capital Pty Ltd. was unopposed by the 23 creditors that joined a virtual meeting on Thursday. Greensill Capital’s secured creditors include Credit Suisse Group AG and the Greensill family business, while Japan’s SoftBank Group Corp. is among the unsecured creditors. Read More.
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Corporate Bond Gauge Signals Dwindling Economic Risk
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A key measure of the perceived risk in low-rated corporate bonds is hovering around its lowest level in more than a decade, highlighting investors’ mounting confidence in the economic outlook.
The average extra yield, or spread, investors demand to hold speculative-grade corporate bonds over U.S. Treasurys dropped below 3% this month to as low as 2.90% for the first time since 2007, when it set a record of 2.33 percentage points. Read More.
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"It would be disastrous"
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— NRA board member, retired Lt. Col. Willes Lee, regarding the prospect of the gun rights group being placed into a receivership.
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How $12.3 trillion in stimulus killed the debt default cycle. (Bloomberg)
U.K. companies in financial distress rise at fastest pace in seven years. (Financial Times)
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