“There is no terror in the bang, only in the anticipation of it.”

― Alfred Hitchcock

By David Johnson | @TurnaroundDavid

  • For GE, Breaking Up is Hard to Do (Fortune): As Jeffrey Immelt steers General Electric through a massive restructuring that will result in the divestiture of the majority of GE Capital, and return the company to its industrial roots, the scope of a new, refocused GE’s ambition, and the challenges it faces, is coming into focus.  If Immelt succeeds, he may accomplish far more than simply taking apart that last of the great mid-century U.S conglomerates: he may breathe new purpose and vision into a company that has continually reinvented itself.
  • How Oaktree Wound Up Pouring More Cash Into Failing Molycorp (Bloomberg): With a $400 million loan outstanding to troubled lender Molycorp, distressed investing giant Oaktree was not eager to commit additional capital.  But when hedge fund JHL Capital sought to provide bankruptcy financing that would become senior to Oaktree’s investment, the behemoth investment company moved quickly to advance Molycorp $130 million of rescue financing and in doing so protect its original investment.  The dilemma faced by Oaktree is increasingly common to creditors of troubled companies: double down or risk a lower position in a post-restructuring capital structure.
  • Energy companies face anxiety as borrowing base redetermination nears (Reuters): Oil prices continue testing new lows, the capital markets are increasingly skeptical, hedges are expiring, and borrowing base redetermination is nearing.  Energy companies are facing a confluence of events that augur a painful end to 2015.
  • Large Carl’s Jr., Hardee’s franchisee files Chapter 11 (Nation’s Restaurant News): Frontier Star, a 177-unit Carl’s Jr. franchisee owned by the grandchildren of Carl’s Jr. founder Carl Karcher, filed for chapter 11 bankruptcy in Arizona recently.  The company’s largest creditor is franchisor CKE Enterprises, which is owned by Roark Capital Group.
  • Patriot Coal Leveraged Loan To See 80% Recovery Under Reorg Plan (Forbes): Patriot Coal, which filed for chapter 11 bankruptcy on May 12, has submitted a plan of reorganization that envisions the sale of the majority of its assets to Blackhawk Mining.