“If you do it right 51 percent of the time you will end up a hero.”

― Alfred P. Sloan

By David Johnson | @TurnaroundDavid

A pumpjack brings oil to the surface in the Monterey Shale

  • U.S. Shale Firms Turn to Private Equity as Market Funding Tails Off (Reuters): As the outlook for a near-term recovery in oil prices dims, troubled shale companies are finding a less welcoming reception from the capital markets.  This lack of warmth is sparking increased private equity activity as those troubled companies unable to attract funding seek buyers instead.  With industry analysts predicting that oil prices will, in the long-term, rebound from the current low-40s range to $100 per barrel, the prospects for patient capital to generate outsized returns.
  • Samson Resources finalizes restructuring plan, expected to file bankruptcy next month (Tulsa World): Private equity backed Samson Resources, taken private in a $7.2 billion buyout in 2011, has announced that it has reached an agreement with lenders and will file a prepackaged chapter 11 bankruptcy that will feature creditors providing nearly $500 million in incremental liquidity to the troubled oil and gas company.  The restructuring will result in the company’s second-lien lenders owning substantially all of the equity in the reorganized company.
  • Chicago Pension Appeal Will Go Quickly to Illinois Supreme Court (Governing): Facing crushing pension liabilities, an inability to meet a looming payment schedule, and a recent court invalidation of attempts to restructure its pension obligations, Chicago has been granted an expedited appeal by the Illinois Supreme Court.  At stake is the prospect of the troubled city facing additional pension funding costs of several hundred million dollars a year.
  • The Fed Is on Thinner Ice Than It Realizes, and It May Be Setting Us Up for Recession (Bloomberg): The possibility that the U.S. Federal Reserve has misinterpreted the economy’s recovery, and as a result may inadvertently spark a recession with unwarranted tightening is an increasing concern of market analysts.
  • More Layoffs at Groupon (Recode): With two recent announcements Groupon, the formerly high flying daily deals company, continues to focus on transforming its core business.   The company recently announced job cuts at both flash sale site Ideel (acquired in 2014), as well as at Groupon’s restaurant software unit.