Friday, May 30, 2014

The Broke and the Beautiful: BottleRock Edition

This week on The Broke and the Beautiful, BottleRock is back from rock bottom, and Denis Leary is aiding Detroit firefighters. Also, an injured baseball fan is still looking for compensation from the Los Angeles Dodgers.





Rivers Cuomo, left, and Scott Shriner of Weezer perform in San Diego in July 2013. Weezer is one of more than 60 bands being featured at this year’s BottleRock music festival in Napa Valley.

John Shearer/Associated Press



The company behind California’s BottleRock music festival filed for Chapter 11 protection in February with millions in debt, but it’s not over for the Napa Valley festival. As the Contra Costa Times reported, new investors Latitude 38 Entertainment Group are giving life to BottleRock. David Graham, the chief executive of Latitude 38, said the group had long been optimistic that it could turn things around for the festival. “First-year companies have to brutally prioritize and not get caught up spending time and money on things that are not mission-critical to the business,” Mr. Graham said. “I don’t stand in judgment of the founders.”


The show, which opened Friday and runs through Sunday, will feature more than 60 acts including Weezer, Heart and the Black Angels. Ticket prices range from $149 for a single day to $3,000 for a “platinum” three-day pass.





Denis Leary in May 2012

Chris Pizzello/Associated Press



Denis Leary may have written a song about being one, but he isn’t acting like an a**hole (Bankruptcy Beat is family-friendly) toward the city of Detroit. MLive recently reported that the actor and comedian, who’s worked on movies and TV shows including “Wag the Dog,” “Ice Age” and “Rescue Me,” donated $275,000 worth of equipment to city firefighters through his Leary Firefighters Foundation. The equipment was purchased through proceeds from “Burn,” a documentary featuring the Detroit Fire Department. “They are always the first guys to get cut financially,” Mr. Leary said, later adding that “Burn” is “probably one of the greatest action movies you’ll ever see in your life.”





San Francisco Giants fan Bryan Stow is shown while attending jury selection for his civil trial against the Los Angeles Dodgers in this sketch created May 28.

Reuters/Mona Edwards



The Los Angeles Dodgers are long out of bankruptcy, but the fight between the MLB team and an injured baseball fan is as present as ever. Lawyers for Bryan Stow, a San Francisco Giants fan who was attacked at Dodger Stadium on opening day in 2011, said the severe beating might not have happened if the team had spent more money on security, Reuters reported. Mr. Stow, who suffered brain damage that left him unable to return to his job as a paramedic, is accusing the Dodgers and former owner Frank McCourt of skimping on security to finance his lavish lifestyle and is seeking $35 million in compensation.


“You need to take the steps to prevent bad things from happening to people, it takes money to do that,” Thomas Girardi, an attorney for Mr. Stow, said in opening court arguments. McCourt lawyer Dana Fox said the team “had never had a larger security force for an opening day game,” noting there were 437 security people that day.





Teresa Giudice, 41, arrives at the federal court in Newark, N.J., on March 4.

Eduardo Munoz/Reuters



Teresa Giudice may be getting ready for up to 27 months in prison, but she’s going to look good doing it. According to the Daily Mail, the “Real Housewives of New Jersey” star took some time over the Memorial Day weekend to get some sun on the beach with her husband and daughters. Ms. Giudice and her husband, Joe, have pleaded guilty to bankruptcy fraud, as well as mail fraud and wire fraud. In addition to nearly four years in prison, Joe Giudice could also face deportation because he is an Italian citizen. The two will be back in court for sentencing on July 8.


Write to Melanie Cohen at melanie.cohen@wsj.com. Follow her on Twitter at @MelanieLisa.






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The Examiners: Marc Leder on Liability in Bankruptcy Asset Sales

Should bankruptcy be allowed to erase claims that may technically have arisen pre-bankruptcy but which a company’s creditors weren’t aware of at the time?







Our modern bankruptcy system plays a critical function in our economy, as it provides a mechanism for financially insolvent businesses with the opportunity to chart a new, sustainable path forward through the Chapter 11 process. Every day, businesses are given a second chance on life, and American jobs are preserved, when a bankruptcy court oversees an asset sale or makes way for a new owner to enter the picture.


The current procedure allows for a potential new owner to be fully aware of both the assets and liabilities it will be assuming. This knowledge is vital to an investor’s assessment of a company and our development of a financially and operationally sound path forward.


Without these clearly defined court-ordered assurances, purchasers could face significant unknown and never-ending liability for mistakes occurring during the previous ownership period. If a new owner was held liable for unquantifiable pre-bankruptcy claims, it would have a chilling effect on both the system and the market. Such a failure would spur significantly more liquidations and undermine the very assurances our bankruptcy process is intended to afford.


While the particulars of the GM case are still emerging, it is important to remember the old adage, “hard cases make bad law.” We must consider that the bankruptcy process plays an important role in the U.S. economy, as it functions to preserve capital, retain jobs and ensure there is a fair and predictable process for creditors to recover what they’re owed.


Marc Leder, co-chief executive officer of Sun Capital Partners Inc. of Boca Raton, Fla., has been engaged in leveraged buyouts, investment banking, and business operations for more than 25 years.






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CORRECTED-Swiss, Austrian groups leading offers for Hediard -source

(Corrects Do & Co to Ledunfly in graph 6 and Ledunfly to Do & Co in graph 7.)





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New Administrative Orders Effective June 2, 2014

Coldwater Creek Shoppers Say ‘Fear and Need’ Drove Sales Boom

Coldwater Creek’s creditors are at a loss to understand why sales boomed in the wake of its bankruptcy filing, but it’s not a mystery to the former retailer’s target customers.


Decent quality, decent prices and humane tailoring for women who are not 25 years old and/or a size two is a rare commodity. Coldwater Creek launched in the Midwest some 30 years ago and catered to mature, educated women. The line caught on among a crowd of people, including professional women, who didn’t have the time or patience to go from store to store to find comfortable classics. No muumuus. No sequins unless it’s a holiday garment. Not necessarily black. And if it’s something that’s been around five years or so, that doesn’t mean it’s out of style. That means it works.


When Coldwater Creek shoppers found out the company was going under, they stocked up, according to Massachusetts attorney Alanna Cline, who identified herself as “a very satisfied and needy customer—notwithstanding the decline in quality and design over the past couple of years.” The prospect of saving a couple more bucks at going-out-of-business sales wasn’t worth the risk that favorite items would be sold out, it seems. “Fear and need” drove a run on the Coldwater Creek website, according to Ms. Cline.


“Knowing how long it took me to find CWC, I have been racing to purchase a couple years’ worth of clothing,” Ms. Cline told Bankruptcy Beat. “It would take me at least that long to find some reasonable alternative.”


She’s not the only one, as shopper laments posted on the Coldwater Creek website demonstrate. “I truly do not know where I will find clothes that I like, wear well and look new after years of wear,” wrote shopper Suzabell.


That could be why sales outstripped management’s projections in the weeks between the company’s April bankruptcy filing and when liquidators launched the final sales. The official committee of Coldwater Creek’s unsecured creditors is questioning why management’s sales projections fell so far short of actual sales in the weeks between the bankruptcy filing and the time liquidators marched in to sell off the remaining inventory.


In court papers, creditors have raised suspicions that Coldwater Creek low-balled its sales projections to justify hefty bankruptcy financing, paying fees on loans it didn’t need in light of the cash flow from the sales boom. Wells Fargo, the company’s bankruptcy lender, has said the projections appeared reasonable at the time, given Coldwater Creek’s history of declining business. Coldwater Creek denies the allegations, accusing its creditors of hurling “numerous false accusations against the debtors and other parties, based upon nothing more than speculation and unwarranted suspicion.”


Coldwater Creek devotees, in the meantime, have turned to eBay to pick up suddenly-scarce wardrobe staples. Used items are being snapped up at the original retail prices, as the defunct retailer’s mature, educated target customers strive to delay the inevitable day when they’ll find themselves slogging through unfamiliar racks looking for something comfortable, reasonably priced, well-made, not necessarily black, and in sizing where “large” does not mean a size 10.


As firefly1 commented on the retailer’s website, “We’ll miss you CWC!!!”


Write to Peg Brickley at peg.brickley@wsj.com.






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Hypo Alpe-Adria to open new chapter for Europe bank debt bail-in

* Legislation to be used as threat for discounted buy-back





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Investors prepare for bond pricing push-back

* Investors continue to find value in peripheral and subordinated bonds





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Tuesday, May 27, 2014

After Santa Barbara Shooting, Should California Reconsider Gun Laws?

In the aftermath of last week's deadly shooting in Santa Barbara, California that left seven dead and 13 injured, shock is turning into anger for many who feel that lax gun laws are at least partially to blame. Others argue that if California's gun laws, already some of the......



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LightSquared, creditors head to judge-supervised mediation

NEW YORK, May 27 (Reuters) - LightSquared and its creditors, including Dish Network Corp Chairman Charles Ergen, will go into court-ordered mediation to settle on a plan to restructure the bankrupt...





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Clearwater Beach Shootings: Multiple Arrests, 2 Injured

A chaotic string of shootings in Clearwater Beach over Memorial Day weekend have ended with a handful of arrests and at least two persons injured. The shootings allegedly sparked during a fight between two groups at a Clearwater, Florida Hyatt Regency, reports Tampa Bay's WTSP. The hotel shooting was......



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Candy, Snack Companies Want Names Off E-Cigs

Electronic cigarettes are getting some serious attention, and not just from smokers. The holders of trademarks for iconic brands like Tootsie Rolls and Girl Scout cookies are pressuring the makers of e-cig liquid to stop using their names on flavored nicotine labels. Why aren't these candy and cookie makers......



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Iceland says defunct banks could be made bankrupt unless creditors take haircut

STOCKHOLM, May 27 (Reuters) - Iceland's defunct banks could be put into bankruptcy if creditors do not agree to a haircut on debts owed by Kaupthing, Glitnir and Landsbanki, which collapsed in 2008...





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Supreme Court Strikes Strict IQ Cutoff for Death Penalty

The U.S. Supreme Court ruled that a Florida law which allowed executions for those with IQ above 70 was unconstitutional. Freddie Lee Hall, 68, was set to be executed in Florida, despite having a 71 IQ. The High Court determined in a 5-4 decision that Florida's law held too......



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Can Secret Service Arrest You for Protesting the President?

The U.S. Supreme Court ruled today that the Secret Service is immune to a lawsuit charging them with unfairly discriminating against anti-presidential protesters. But this case brings up another interesting question: Can the Secret Service arrest you for protesting the President? Despite your First Amendment rights, recent cases seem......



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