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Lordstown Charts New Course; ITT Student Loans Forgiven; Retirement Home's $200 Million Muni Default
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Good day. Lordstown Motors tried to reassure markets after the departure of two top executives. The Education Department forgave more loans from former students of ITT Technical Institute, which shut down and filed for bankruptcy in 2016.
And a retirement community in Long Island filed for bankruptcy for the second time, sporting a prenegotiated restructuring of $200 million in defaulted municipal bond debt.
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PHOTO: DAVID MAXWELL/EPA/SHUTTERSTOCK
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Lordstown Motors Looks to Reset Its Course a Day After CEO’s Exit
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Executives at troubled electric-truck startup Lordstown Motors Corp. said Tuesday that the company has enough interest from potential buyers to sustain factory output through the end of 2022 and remains on track to start limited production in September. Read More.
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Education Department Forgives $500 Million in Debt for Former ITT Tech Students
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The Education Department has approved another $500 million in loan-forgiveness requests from former ITT Technical Institute students who say they were swindled by the now-defunct chain of schools. Read More.
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Bankrupt Retirement Community to Restructure $200 Million in Debt
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Facing a cash crunch after failing to attract as many residents as it had budgeted for, the Amsterdam at Harborside retirement community on Long Island has filed for bankruptcy protection for a second time. Read More.
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Spelman College students will be among those initially eligible for the fellowship and scholarship.
PHOTO: PARAS GRIFFIN/GETTY IMAGES
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Apollo, Ares and Oaktree Team Up on Initiative to Lure Black Talent
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Apollo Global Management Inc., Ares Management Corp. and Oaktree Capital Management LP are committing a total of $90 million over 10 years toward the effort, which involves partnering with historically Black colleges and universities, or HBCUs, executives from the firms said. Read More.
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Mallinckrodt Bankruptcy Judge Sees Long Plan Confirmation Trial
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A Delaware bankruptcy judge said he expects an upcoming trial over drugmaker Mallinckrodt's chapter 11 reorganization plan to last longer than the company initially allotted for.
Judge John Dorsey of the U.S. Bankruptcy Court in Wilmington, Del. told lawyers during a hearing to prepare for a multiday confirmation trial in light of a number of creditor objections to Mallinckrodt's restructuring proposal. Mallinckrodt initially scheduled a one-day hearing in September over its plan.
The company is now seeking court permission to poll creditors on a restructuring proposal which includes a $1.6 billion settlement of opioid-related lawsuits. Mallinckrodt will return to bankruptcy court Thursday. — Jonathan Randles
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Driller Cancels Bankruptcy Auction in Favor of $250 Million Lender Bid
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Nine Point Energy Inc. called off a planned bankruptcy auction for the oil-and-gas company's assets after no rival bidders emerged to challenge its lenders for control. The Denver-based company is scheduled to seek approval of a proposed $250 million sale to lenders at a Thursday hearing in the US Bankruptcy Court in Wilmington, Del.
The bid from lenders including Goldman Sachs Group Inc. comes in the form of debt forgiveness. Opposing the bid is Caliber Midstream Holdings LP, which has demanded cash or credit support from the lenders to cover its $157 million claim against Nine Point.
The lenders "have made clear that neither of these alternatives is acceptable to them," Nine Point said in a court filing Monday. Without a resolution of the Caliber dispute, Nine Point says it faces potential liquidation. — Andrew Scurria
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J&J's Former Talc Supplier Opposes Probe Into Bankruptcy Vote
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Imerys Talc America Inc., a former supplier to Johnson & Johnson, accused the health care giant of a "fishing expedition" to try to upend a bankruptcy vote by people alleging talcum powder caused cancer.
Imerys filed for bankruptcy in 2019 after it was named along with J&J in personal injury lawsuits. The company, a U.S. mining unit of France's Imerys SA, has since sold its assets and put forth a chapter 11 plan to settle its liabilities. J&J is against the bankruptcy plan, which was voted up by injury claimants. In court filings Monday, Imerys said J&J doesn't deserve leeway to probe alleged irregularities in the voting and tabulation process.
"J&J's submission sets forth a series of wholly unsubstantiated and baseless claims," Imerys said, adding that it stands behind its process. A court hearing is scheduled for next week. — Andrew Scurria
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Transocean Bonds Pop On Stock Sale Launch
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Transocean Ltd. bonds jumped Tuesday after the offshore driller said it has hired Jefferies in an effort to sell $400 million of new shares. Proceeds from the sale are set to go toward repaying or refinancing debt, or for other corporate purposes.
Transocean's $610 million bond due in 2038 traded at 61.5 cents on the dollar Tuesday for a yield of 12.3%, up from 57.5 cents on Monday, according to MarketAxess. Transocean struggled with weak energy pricing during the pandemic, prompting the company to conduct a bond exchange in 2020 to reduce debt. — Alexander Gladstone
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Neiman Marcus exited about six locations during bankruptcy, including a location in New York City’s Hudson Yards that opened in 2019.
PHOTO: RICHARD B. LEVINE/ZUMA PRESS
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Neiman Marcus Rides a Rebound in Luxury Shoppers
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Neiman Marcus Group Inc.’s sales have rebounded from last year when Covid-19 closed its stores and briefly pushed the chain into bankruptcy protection, though the results aren’t yet to pre-pandemic levels. Read More.
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For the chief judge of one of the busiest bankruptcy courts in the country, doing right by the debt-burdened individuals who appear before her is critical for many reasons. (Reuters)
A bankruptcy trustee’s search to recover assets linked to one of the largest financial crimes in Minnesota’s history has netted $722 million. (Associated Press)
A plan to restructure $22 billion of Puerto Rico debt and fix the bankrupt island’s unfunded pension system won’t have the support of Governor Pedro Pierluisi. (Bloomberg)
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