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Debevoise Builds Out Restructuring Ranks; American Dream Bonds Slide on Valuation Suit
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Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Friday, February 13. In today's briefing, Debevoise & Plimpton has expanded its restructuring bench by hiring partners from DLA Piper, Sidley Austin and Cooley. And American Dream municipal bonds tumbled after bondholders sued, alleging the developer and its host borough deflated the New Jersey mall’s valuation to cut at least $24 million in annual interest payments, a claim the mall’s owner Triple Five Group denies.
The WSJ Pro Bankruptcy newsletter won't be published Monday in observance of Presidents Day. We'll be back Tuesday, February 17.
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Debevoise & Plimpton is based in New York. Photo: Krista Kennell/ZUMA Press
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Debevoise Adds Partners From Sidley, DLA, Cooley to Restructuring Group
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Debevoise & Plimpton has added partners from Sidley Austin, DLA Piper and Cooley to bolster its restructuring practice, the firm said.
The New York law firm hired Rachel Ehrlich Albanese from DLA Piper, as a new restructuring group co-chair, as well as restructuring partners Sam Newman from Sidley Austin and Daniel Shamah from Cooley.
Existing Debevoise partners Ben Pedersen, Scott Selinger and Erica Weisgerber are being named co-chairs of liability management and special situations, while Weisgerber is also being named chair of bankruptcy litigation.
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Shoppers visited the American Dream mall in East Rutherford, N.J., on Black Friday last year. Photo: Eduardo Munoz Alvarez/Getty Images
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American Dream Mall Bonds Plummet Following Property Valuation Lawsuit
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Municipal bonds that backed the American Dream shopping mall in East Rutherford, N.J., plummeted 18% this week following a bondholder lawsuit that alleged the developer and the borough “artificially deflated” the property’s valuation to reduce interest payments.
The lawsuit, filed last Friday in New Jersey Superior Court in Hackensack, N.J., alleges holders of the $800 million in bonds were shortchanged at least $24 million in annual interest. Investors claim the developer manipulated the mall’s valuation by pressuring the borough to replace its longtime independent appraiser with a new one. Unlike standard municipal bonds, interest payments on these bonds are tied directly to the property’s assessed value.
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Detroit Automakers Take $50 Billion Hit as EV Bubble Bursts
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U.S. automakers have been pumping the brakes on their electric-vehicle businesses for months, and the costs are piling up.
Following years of investments into EV technology, the Detroit Big Three — General Motors, Ford Motor and Jeep-maker Stellantis have announced more than $50 billion in combined write-downs.
EV sales fell nearly 30% last year, even with a $7,500 federal tax credit juicing U.S. sales through September. Demand cratered for the highest-profile EVs, from Tesla’s Cybertruck to Ford’s much-hyped electric pickup. Automakers expect demand to remain muted.
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Coinbase Swings to a Fourth-Quarter Loss Amid Crypto Meltdown
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Coinbase Global swung to a quarterly loss, the latest sign the recent fall in digital currencies is dragging down companies built to bring the crypto revolution into mainstream finance.
Coinbase, the biggest U.S. crypto exchange, reported Thursday afternoon a net loss of $667 million, or $2.49 a share, in the fourth quarter, compared with net income of $1.3 billion, or $4.68 a share, in the year-earlier period. Quarterly net revenue fell 22% to $1.7 billion.
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The Demand for Bonds Is Insatiable. Even Risky Borrowers Are Reaping the Benefits.
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A new AI borrowing frenzy and lingering fears about potential defaults haven’t deterred investors hungry for bonds from U.S. companies, states and cities.
The extra yield—or spread—that investors demand to hold highly rated corporate bonds instead of ultrasafe U.S. Treasurys hit a 27-year low in late January. Spreads on speculative-grade corporate bonds dropped to an 18-year low. In the $4 trillion municipal bond market, the spread between interest rates on triple-A and triple-B bonds is at one of its lowest points in two years.
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Nuveen to Buy U.K. Asset Manager Schroders for $13.5 Billion
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Nuveen agreed to buy U.K. asset manager Schroders for $13.5 billion, bolstering its business in Europe with a storied London investment house that dates back more than two centuries.
The deal is the latest between active money managers trying to keep up with passive investment giants like BlackRock and Vanguard as well as private-market specialists. The takeover would also end the independence of one of London’s last remaining major financial dynasties, after American and European banks swooped on the City in the 1980s and 1990s.
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