Hartford Connecticut is F*cked and Houston/Dallas Are Dealing

in

Hartford officials are turning over rocks looking for loose change at this point as they try and plug a projected $40mm budget shortfall. Anyone know which law firm they've hired for the inevitable Chapter 9? If so, email us! Speaking of bad municipal situations, it looks like Dallas and Houston will get a temporary reprieve financed on the back of pensioners. At least there is some sensibility being baked into "return" assumptions. We bet the numbers will still be way off. They always are. 

News for the Week of 01/15/17

in
  • Canada. Predicting lots of doom and gloom.
  • Covenants. Some developments in the capital markets thanks to recent activity with makewhole provisions - including "the end of covenants?". 
  • Fees. It was only a matter of time before there was a new chapter in the always inevitable vilification of restructuring professionals due to fees. Instead of a front page story about Lehman or TXU in the WSJ, here the Houston Chronicle highlights oil and gas cases.
  • Fund Performance. Bloomberg does IR work for Brigade Capital Management, highlighting the asset management company's purported big '16. And for Mudrick Capital, noting the fund's turnaround after a period of high profile poor performance.
  • Let's Get Technical. For you geeks who love worrying about CDS, high yield bonds and liquidity, this report is for you.
  • Municipal Trouble: we've talked about Dallas in the past and now Providenceis in the crosshairs.
  • North Dakota: In a shocking development, the state's forecasts did not account for the upheaval in the energy space: just a mere billion short.
  • Radio. Pros focused on radio-based media situations ought to take note of what is happening in Norway, which is now the first country to completely switch off its FM radio network and convert entirely to digital. Meanwhile, in the streaming music space, Soundcloud bankruptcy rumors continue to increase (we called it).
  • Sears. We're tempted to run a pool to gauge when this sucker FINALLY files for bankruptcy but like the villain in Die Hard, Lampert will probably find a way to keep the thing coming back.
  • Rewind I: Garden Fresh Restaurant has sold to Cerberus Capital Management in bankruptcy. Sun Capital's pain is Cerberus' gain. Speaking of Sun Capital, it seems they made out okay with their Limited investment thanks to distributions and dividends. To summarize, they made 1.8x their initial $50mm investment. And 4000 people are losing jobs.
  • Rewind II: Gilden Activewear Inc. will acquire American Apparel for $88mm, a premium to the original stalking horse bid. Meanwhile, Nasty Gal received approval to sell its brand and customer information for $20mm. Wet Seal, meanwhile, looks headed towards a Chapter 22 at best and a liquidation at worst - not long after Versa Capital bought it out of bankruptcy for $7.5mm.
  • Rewind III: Jawbone continues to struggle as the wearables space continues to consolidate.
  • Chart of the Week: 
  • Tweet of the Week: 

News for the Week of 11/06/16

in
  • For-Profit Education - Despite a recent settlement with the government, for-profit educator DeVry University faces new headwinds. Also, another college closure.  
  • Fossil joins the ranks of retailers who will soon be taking restructuring charges and closing stores.
  • Healthcare/Pharma - many distressed investors and professionals are turning their attention away from E&P, OFS and retail are turning their attention here given the possibility that increased regulatory pressure may create more stress.
  • Lumber Liquidators continues to face legal scrutiny: is it a near-term bankruptcy candidate?
  • Municipal bankruptcy -  Populism converges on Scranton as a $500mm+ debt load triggers voter movement to put bankruptcy to vote.  
  • Payday Lenders are under siege.  
  • Private Equity - an assessment of its influence and future.  
  • Last Week: We noted the large AUM raises by Oakhill and Carlyle for deployment into the distressed market. In contrast, Fortress Investment Group underscores that prices are too rich and yields too low, and so they're prepared to return investor funds.
  • Last Week II: As "Dead Malls" continue to garner attention, a major mall owner talks up its own book and projects a major Aeropostale turnaround.
  • Last Week III: In the wake of increased seismic activity, Oklahoma and federal regulators order the closure of injection wells in Oklahoma. We noted this issue in last week's feature.  
  • Chart of the Week: