“I found Rome a city of bricks and left it a city of marble.”
― Augustus Caesar
By David Johnson | @TurnaroundDavid
- Junk Bond Traders See Black Friday Flop (Bloomberg): Distressed debt professionals assessing the prospects of retailers as the crucial holiday shopping season approaches are seeing few signs for optimism. Retailers as diverse as former trendsetter J. Crew, Bon-Ton and Men’s Warehouse have seen substantial losses on their bonds this year as junk bond experts, wary of the poor track record of retailers seeking to reorganize in chapter 11 bankruptcy, have pushed down prices fearing a liquidation should any of the firms be forced into bankruptcy.
- The Future of Bankruptcy Work for Lawyers (Credit Slips): The 2005 change to the U.S. bankruptcy code has not been kind to bankruptcy attorneys. With increased incentives for indebted companies to pursue out-of-court restructurings, distressed situations are requiring fewer attorneys providing less counsel.
- ConAgra Restructures With Lamb Weston Spinoff (CFO): Facing a dynamic and rapidly changing food industry, ConAgra has announced the spinoff of its frozen potatoes and vegetables business, which generated sales of $2.9 billion last year. The remaining businesses, to be named ConAgra brands, generated annual sales of $9 billion last year.
- The Last Days Of Marissa Mayer? (Forbes): The tenure of Yahoo CEO Marissa Mayer may be coming to an end as the former dot-com darling struggles to revitalize a flagging business model. While Mayer has provided investors with increased clarity regarding Yahoo’s stakes in Alibaba (a spinoff is planned, regardless of the prospect of disadvantageous tax treatment) and Yahoo Japan (a similar spinoff is anticipated), the declining fundamentals of Yahoo’s core business has dismayed both shareholders and executives, with both increasingly choosing to abandon ship.
- Should Time Warner Spin-off HBO? (New Yorker): Time Warner leadership is faced with a dilemma when it comes to HBO. The premium cable channel generated nearly $2 billion in profit last year and is supported by over 120 million subscribers globally. Faced with the near certainty that HBO would be more highly valued if it were separated from some of the slower growth parts of the Time Warner empire, Time Warner management must seek to maximize the value of a corporate golden goose while also defending its current structure to investors screaming for value maximization.