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Ligado in Talks to Restructure About $8 Billion in Debt | Flywheel Sports to Close | Vivus Fails to Win OK of Icahn-Backed Chapter 11 Plan
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Good morning. Ligado Networks LLC, the wireless venture formerly known as LightSquared, is in talks to restructure close to $8 billion of debt and equity as it waits to get its 5G project off the ground, write WSJ’s Alex Gladstone and Andrew Scurria. Flywheel Sports Inc., spin boutique operator that recently settled a bruising patent fight with Peloton Interactive, is shutting down. And Vivus Inc., a drugmaker focused on obesity treatment, will go back to the drawing board after a bankruptcy judge rejected the company’s plan to sell its business to Carl Icahn’s investment firm.
Now for today's news...
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Ligado faces opposition from officials concerned that its network could interfere with other wireless systems. Pictured, the company’s CEO, Doug Smith, at an event in Washington in 2017.
PHOTO: ROD LAMKEY JR.
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Ligado in Talks to Restructure Debt
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Wireless venture Ligado Networks LLC is in talks with key creditors and shareholders to restructure about $8 billion in debt and other obligations while buying time to monetize its 5G-network assets, according to people familiar with the matter. Read More.
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Spin Studio Operator Flywheel Sports Shuts Down
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Flywheel Sports Inc., the operator of spin boutiques that gained popularity with the rise of stationary biking, has filed for bankruptcy and is shutting down, the latest fitness-industry casualty of the Covid-19 pandemic.
Read More.
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Court Rejects Vivus Bankruptcy Sale to Icahn Unit
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Carl Icahn’s investment firm suffered a setback in its effort to take control of bankrupt Vivus Inc. after a judge rejected the drugmaker’s reorganization plan and gave a rare green light to the formation of a shareholder committee in the chapter 11 proceedings. Read More.
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Shares of the Texas shale driller rose on news of the restructuring deal. PHOTO: SERGIO FLORES/BLOOMBERG NEWS
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Lonestar Reaches Deal to Restructure Under Chapter 11
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Lonestar Resources US Inc. on Tuesday said it plans to file for chapter 11 bankruptcy after reaching a restructuring support agreement that will eliminate roughly $390 million in debt obligations and preferred equity interests. Read More.
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Airport Services Provider Swissport Agrees to Restructure Debt
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Airport ground services and air-cargo handler Swissport International AG has reached a deal on a balance-sheet restructuring that will preserve its business under pressure from the Covid-19 pandemic. The debt-for-equity swap will lighten the debt side of Swissport’s balance sheet as it contends with the impact of reduced air travel on its revenue. Read More.
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A Francesca's store in Manhattan in July. The company described the current environment as “unprecedented and extremely challenging.” PHOTO: NATALIE KEYSSAR FOR THE WALL STREET JOURNAL
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Francesca’s Exploring Strategic Alternatives
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Francesca’s Holdings Corp. said it is exploring strategic alternatives as the coronavirus pandemic dents sales and disrupts its supply chain. Read More.
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After Wirecard, E&Y Says Auditors Should Focus on Fraud
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Ernst & Young, under fire for missing a suspected fraud that blew up German fintech company Wirecard AG, said auditors should play a bigger role in detecting such wrongdoing, challenging the accounting industry’s longstanding assertion that its job isn’t to seek out malpractice. Read More.
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Coronavirus Insurance Fight Goes Global
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A debate over whether business-interruption insurance policies held by millions of companies cover a pandemic is increasingly being tested in global courts, drawing in regulators, insurers, industry groups and company owners. Read More.
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“Even though we were successful in uncovering the fraud, we regret that it was not uncovered sooner.”
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— Carmine Di Sibio, chairman of EY Global, on the fraud the blew up German fintech company Wirecard AG
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The next big wave of U.S. bankruptcy filings won’t happen until mid-2021, when companies that borrowed heavily to survive Covid-19 hit a wall, says bankruptcy attorney James Sprayregen of Kirkland & Ellis. (Bloomberg)
North American shale producers far outspent their revenue in the second quarter despite making deep spending cuts to survive the worst oil-price crash in decades. (FT)
A&G Real Estate Partners has begun marketing leases for 280 Stein Mart locations being closed amid the company’s bankruptcy filing. (CSA)
A two-judge court in Richmond, Va., increasingly is becoming a venue of choice for large companies seeking bankruptcy protection. (Bloomberg Law)
More oil and gas companies are expected to file for bankruptcy this year as the pandemic continues to depress energy demand. (Houston Chronicle)
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