Tag Archives: Chapter 11

True Value hit hard: Declaring bankruptcy

True-Value declaring bankruptcy

Important Takeaways:

  • In a press release, True Value said it will continue day-to-day operations of selling hardware and other homeware tools to its 4,500 independently operated locations during the Chapter 11 process, which includes a $153 million stalking horse bid from rival company Do it Best.
  • True Value said its stores will remain open, because they are not part of the bankruptcy proceedings.
  • In bankruptcy court filings, True Value said it faces a significant cash crunch as the housing market stalled and consumers have become far more picky about discretionary purchases like hardware. Bigger rivals like Home Depot and Lowe’s have also been in a yearslong slump since the pandemic boom, but they remain in a significantly stronger financial situation than True Value.
  • Still, a number of other chains have voiced similar problems that also tipped them into bankruptcy, including Big Lots and LL Flooring.

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49% rise in companies seeking Chapter 11

Red-Lobster

Important Takeaways:

  • At least 10 restaurant chains, not including multi-unit franchisees, have filed for bankruptcy in 2024. August alone brought three Chapter 11 filings from notable eateries. The increase in bankruptcies comes as diners pull back their spending, labor costs keep rising and Covid-era government help disappears.
  • Restaurants are not the only companies seeking bankruptcy protection as high interest rates weigh on businesses. Chapter 11 filings have climbed 49% this year as of Aug. 20, according to BankruptcyWatch. Mall retailer Express, nursing home chain LaVie Care Centers and Joann Fabrics and Crafts are among the companies that have filed for bankruptcy protection this year.
  • Here are the 10 notable restaurant chains that filed for bankruptcy protection in 2024:
    • Roti
    • Buca di Beppo
    • World of Beer
    • Rubio’s
    • Melt Bar & Grilled
    • Kuma’s Corner
    • Red Lobster
    • Tijuana Flats
    • Sticky’s Finger Joint
    • Boxer Ramen

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Eyeing Chapter 11: Once popular Red Lobster to shut 48 locations and auction off restaurant equipment

Red-Lobster-closing

Important Takeaways:

  • The full list of Red Lobster locations that were closed overnight has been revealed.
  • The 48 shuttered restaurants will have their contents, including kitchen equipment and furniture, auctioned off on Thursday.
  • Closures were announced across 21 states on Monday night, effective immediate
  • Florida and California have seen the most closures, followed by Colorado and Maryland.
  • The auctions will be run by Restaurant Equipment Bid. They specialize in selling off gear from restaurants that close down and need to liquidate quickly.
  • Red Lobster items available vary by location but include the likes of high-performance ovens, upright refrigerators and freezers, cooking and warming gear, as well as ‘comprehensive bar and dining setups’, according to the auction site.
  • The struggling chain is eyeing up a possible Chapter 11 filing to restructure its debt, allowing it to discard long-term contracts and renegotiate new leases.
  • The abrupt closures come after the company last year reported record losses of $11 million, which its CFO partly blamed on its unlimited shrimp deal.
  • The chain, which started as a single restaurant in Lakeland, Florida, in 1968 has around 650 locations across almost all states. It’s famous for its cheese-flavored biscuits.

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PG&E settles wildfire claims with insurers for $11 billion

(Reuters) – PG&E Corp said on Friday it has reached an $11 billion settlement to resolve most claims by insurance carriers related to 2017 and 2018 wildfires in California.

It is the second major settlement of wildfire claims by PG&E, and requires approval by the federal bankruptcy judge overseeing the utility’s Chapter 11 case.

PG&E said proceedings on the third and final major group of wildfire claims remain pending in federal and state courts.

It said the latest settlement is related to payments made by insurers to individuals and businesses with coverage for wildfire damage.

Representatives of holders of 85% of so-called subrogation claims said the latest accord does not fully satisfy its $20 billion in claims, but would “pave the way for a plan of reorganization that allows PG&E to fairly compensate all victims and emerge from Chapter 11 by the June 2020 legislative deadline.”

Subrogation allows insurers that pay policyholders for insured losses to recoup sums from third parties they deem responsible for them.

The company also amended its equity financing commitment agreements to accommodate the claims, and reaffirmed its $14 billion equity financing commitment target for its reorganization plan.

In June, PG&E agreed to pay $1 billion to resolve claims by 18 local public entities related to wildfires in 2015, 2017, and 2018.

On Monday, the company unveiled the outlines of a reorganization plan that would pay $17.9 billion for claims stemming from the wildfires that led to its bankruptcy in January.

At the time of its Chapter 11 filing, PG&E projected more than $30 billion in liabilities from wildfires, including last year’s Camp Fire, the deadliest and most destructive wildfire of California’s modern history.

The plan filed in the U.S. Bankruptcy Court in San Francisco includes up to $8.4 billion for wildfire victims, payments capped at $8.5 billion for reimbursing insurers, and the $1 billion settlement with local governments.

On Tuesday, a lawyer representing wildfire victims called the $8.4 billion cap “totally unacceptable” because government agencies could have billions of dollars in claims, leaving far less than $8.4 billion for victims.

PG&E shares were up 7.8% in early afternoon trading, after earlier rising as much as 9.8%.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Arun Koyyur and Shinjini Ganguli)