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EchoStar Creditors Retain Adviser Following Bankruptcy Threat
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Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Wednesday, June 11. In today's briefing, EchoStar bondholders have hired law firm Akin Gump amid growing bankruptcy concerns, after the company skipped nearly $500 million in interest payments following a regulatory threat to revoke its key wireless spectrum licenses.
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EchoStar skipped bond interest payments in response to uncertainty over the FCC’s decision last month to review its compliance with the requirement that the company build out a nationwide 5G network. Photo: Pavlo Gonchar/Zuma Press
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EchoStar Bondholders Engage Law Firm Ahead of Possible Bankruptcy
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EchoStar bondholders have engaged Akin Gump Strauss Hauer & Feld ahead of a potential bankruptcy filing sparked by recent threats by federal regulators to revoke the company’s key wireless spectrum licenses, according to people familiar with the matter.
The Englewood, Colo., owner of Dish TV and Boost Mobile opted in recent weeks to skip roughly $500 million in interest payments on several bonds, triggering 30-day grace periods.
Akin Gump is advising holders of EchoStar bonds, the people said. The company opted not to make a $326 million interest payment on EchoStar bonds related to its spectrum business on May 30 as well as a $183 million payment on Dish DBS bonds on June 2.
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Earlier: EchoStar is considering a chapter 11 bankruptcy filing as the company vies to shield its cache of wireless spectrum licenses from the threat of revocation by federal regulators, people familiar with the matter said.
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Photo: Naomi Tajitsu/Reuters
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Automotive Supplier Marelli Files For Bankruptcy With Plan For Lenders To Take Control
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Marelli, the Japan-based automotive supplier owned by private-equity firm KKR, filed for bankruptcy with a plan to hand control to its lenders, according to a release.
The company entered chapter 11 in the U.S. Bankruptcy Court in Delaware with commitments for $1.1 billion in debtor-in-possession financing from its lender group.
CEO David Slump said in the release that “industry-wide market pressures have created a gap in working capital that must be addressed.” Slump added that the company will continue operating as usual and that “taking this action now provides access to new liquidity to fund our long-term growth and innovation pipeline.”
Marelli is advised by Kirkland & Ellis, PJT Partners, and Alvarez & Marsal, while the lender group is advised by Akin Gump, Houlihan Lokey, and AlixPartners. —Alexander Gladstone
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Withdrawal Requests at Starwood Property Fund Are at $850 Million
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One of Starwood Capital Group’s largest real-estate funds was overwhelmed with redemption requests last spring when a long line of investors tried to exit at the same time.
Rather than sell some of the fund’s commercial property into a poor market to meet those requests, Starwood Chief Executive Barry Sternlicht decided to impose strict limits on the amount of money investors could withdraw.
Now, a little more than a year later, investors are still queuing up to yank about $850 million from the fund, according to Robert A. Stanger & Co., an investment banking firm that tracks the business.
The future is cloudy for the Starwood Real Estate Income Trust, known as Sreit. It has struggled to raise new money partly because it imposed what is now the tightest redemption limit in the industry.
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Moody’s Sounds Alarm on Private Funds for Individuals
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Wall Street’s push to sell private-equity and private-debt funds to individual investors risks overheating financial markets and backfiring on firms launching the funds, according to Moody’s Ratings.
Private-fund managers have turned to individual, or retail, investors to offset a decline in money raised from traditional clients such as pensions and endowments. But in a report viewed by The Wall Street Journal, Moody’s warned that selling funds to retail clients will introduce new risks to private-asset managers, including “reputation loss, heightened regulatory scrutiny and higher costs.”
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PwC Overhauls U.S. Advisory Arm, Boosts Hiring to Offer More Industry-Specific Services
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PricewaterhouseCoopers is overhauling the structure of its U.S. advisory business and hiring for thousands of roles as it sees recovering demand for such services.
The firm told workers Tuesday it plans to expand its advisory divisions to eight from four to provide more industry-specific services to companies, effective July 1. It also will embed managed services—in which consultants operate part of a client’s business, such as information technology and human resources—in each of the divisions as opposed to keeping that group separate.
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World Bank Sees U.S. Growth Rate Halving as Tariffs Slow Global Economy
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Economic growth in the U.S. might halve this year as a result of President Trump’s tariff policies, while the global economy is set to suffer a more modest, but still significant, slowdown, the World Bank said Tuesday.
The Washington, D.C.-based development bank said it expects the world’s largest economy to grow by just 1.4% in 2025, a sharp deceleration from the 2.8% expansion recorded in 2024. In its January report on the outlook for the global economy, the World Bank forecast a 2.3% increase in U.S. gross domestic product.
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Pharmacy chain Walgreens and reality star turned entrepreneur Kourtney Kardashian are among those picking over the remaining assets in Rite Aid's bankruptcy, according to two people familiar with the matter. (Reuters)
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