Moody's warns of bankruptcy in Scranton as city faces $20 million budget gap
Brazil's bankruptcy law was enacted in 2005 to correct inefficiencies in the previous system, which was based on postponing debt payments rather than saving a company through renegotiation or restructuring. Creditors, who rarely saw repayment following a bankruptcy filing, would charge exorbitant interest rates in response. Inspired by the U.S. bankruptcy code's Chapter 11 procedure, creditors now play a key role in Brazil's process, which is designed to increase recovery rates, reduce credit risk, and bring down the cost of financing. Some of the largest Brazilian companies to have filed for bankruptcy protection under the new law include airlines Viacao Aerea Sao Paulo SA, known as Vasp; Viacao Aerea Rio-Grandense SA, or Varig; pulp producer Eucatex SA, and electricity holding company Grupo Rede Energia SA. While some companies, such as Eucatex, have successfully emerged from the process, others such as Vasp were liquidated. Others, such as Grupo Rede, were sold off. The following is a look at the process OSX and OGX will undergo now that it has requested legal intervention, based on a report from Goldman Sachs Group analysts led by Felipe Mattar: STEP 1 A local judge, as opposed to a federal judge in U.S. bankruptcy cases, is assigned to OSX's case and appoints a legal manager for the company, who could be either an independent individual or a representative from a company with recognized expertise.
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Ship builder OSX files for bankruptcy protection
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Batista's Ship Builder OSX Files for Bankruptcy Protection -- Update
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Bankruptcy FDCPA Case Dismissal Upheld on Appeal
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Creditors, who have objected to Detroit's bankruptcy, portrayed Dillon's assessment as evidence that the city rushed into court. If they can prove the city negotiated in bad faith, federal Judge Steven Rhodes could dismiss the city's bankruptcy, forcing Orr back to the bargaining table on debt and long-term obligations that have reached $18 billion. Earlier in the day, General Counsel Michael Nicholson of the United Auto Workers accused the city of refusing to enter proper negotiations, describing meetings with Orr's team as lectures. DAY 4: Mich. gov calls bankruptcy right decision "I have never, ever been involved in any negotiation where one side speaks," said Nicholson, whose union represents fewer than 200 Detroit library employees and fewer than 200 city retirees. Still, Dillon, who was treasurer until last week, insisted that bankruptcy was a last resort, echoing earlier testimony in the trial from Michigan Gov. 
"The recovery for the unsecured creditors was so low, I didn't know how anyone could practicably cut a deal and walk out of the settlement room." The former treasurer was called to the witness stand under a subpoena as Detroit retirees, unions and pension funds try to block the city from receiving court protection. He is expected back on the stand when the trial before U.S. Bankruptcy Judge Steven Rhodes continues on Thursday. Dillon played a key role in the lead up to Detroit's July 18 bankruptcy filing by serving on review teams that scrutinized the city's finances. In a July 9 email to Michigan Governor Rick Snyder that was cited in court on Tuesday, Dillon wrote that there were "creative options" for Detroit's public pension shortfall, but he testified on Tuesday that he did not pursue any of those solutions because the pension deficit was "relevant but not a driving factor" behind the city's trip to U.S. Bankruptcy Court. Detroit has $18.5 billion in debt and other obligations, which the city and state say includes a $3.5 billion unfunded pension liability, a figure that is disputed by bankruptcy opponents in the case. The opponents, who include the city's labor unions, retirees and pension funds, are trying to prove that Detroit officials failed to try to negotiate a deal with them and other creditors ahead of the July 18 bankruptcy filing. To be eligible for Chapter 9 municipal bankruptcy, Detroit must prove that it is insolvent, that it negotiated in good faith with its creditors or that there were too many creditors to make negotiations feasible. 
The company would operate after bankruptcy with the help of $576 million in funding from Barclays Plc and Deutsche Bank AG. The court also approved a rights offering backstopped by Knighthead Capital Management, Patriot said. The offering, announced last month, will raise $250 million in new capital. "Today's actions by the court represent important milestones on Patriot's path to emergence as a strong, well-capitalized competitor in the coal industry," Bennett Hatfield, Patriot's chief executive, said in the statement. Hatfield added that the company is on schedule to emerge from bankruptcy in "mid to late December." Patriot declared bankruptcy in July 2012, saying it needed to cut $150 million a year in employment costs to regain profitability. It received court permission earlier this year to scrap collective bargaining agreements with its union and draw up new, cost-saving contracts. The United Mine Workers of America, which represents some 13,000 Patriot workers, retirees and their families, fought against the move. Patriot's miners will sustain much of the pain of the company's collapse, which has made the case vitriolic. 
7 (Bloomberg) -- Bloomberg Law's Lee Pacchia asks Bloomberg News bankruptcy columnist Bill Rochelle how he responded when the lights went out during his luncheon keynote speech at the annual convention of the National Conference of Bankruptcy Judges last week in Atlanta. In the new video, Bill also talks about the two bankruptcy cases coming to the U.S. Supreme Court this term. The video concludes with a proposal for a federal Court of Bankruptcy Appeals to resolve the 10 circuit splits that arose in the last year alone. Having uniformity in bankruptcy law throughout the country would bring an added 
(BLK) and Pacific Investment Management Co. When some of the deposits hed valued at $1 trillion turned out to be duds, OGX lost 98 percent of its value and ran out of cash. You have to assume bondholders are at the bottom of the cash waterfall, Omar Zeolla, a corporate credit analyst at Oppenheimer & Co., said in a telephone interview in New York . The problem now is the time it might take. Failed Talks The bankruptcy protection process will put $3.6 billion of dollar-denominated bonds into default. The 2018 notes plunged 89.6 cents this year and are the worst-performing notes globally with more than $500 million outstanding, according to data compiled by Bloomberg. The companys $1.06 billion of 2022 notes have fallen 75.6 cents on the dollar in the period. Michael Reid, a spokesman for Newport Beach , California-based Pimco, and Melissa Garville, a spokeswoman at BlackRock in New York, declined to comment. 
But Orr must OK anything the new mayor wants that requires money. "I think they're kidding themselves if they think they are going to regain financial control of this city," said Detroit-based bankruptcy attorney Kenneth Schneider. "Even after Kevyn Orr, there will be a financial advisory board that will maintain control of the city's finances indefinitely. The first part for any new mayor is to accept that and work with the state on how to right this city's finances." The AP left a message last week with Orr's office to ask how he plans to work with the newly elected mayor in January. Snyder has not endorsed a candidate, but after testimony last week in bankruptcy court, Snyder held firm in his decision to appoint Orr and keep him in place until Detroit emerges from bankruptcy and its finances are fixed. 
Markets closed New Equifax Risk Score Helps Lenders Minimize Bankruptcy Losses Bankruptcy Navigator Index 4.0 is Most Predictive Bankruptcy Risk Score to Date, With Improved Ability to Forecast Potential Consumer Bankruptcy Press Release: Equifax Inc. 14 hours ago 65.15 -0.0300 ATLANTA, Nov. 4, 2013 (GLOBE NEWSWIRE) -- Equifax ( EFX ) announced today the launch of its fourth generation Bankruptcy Navigator Index (BNI) score, its most comprehensive and predictive bankruptcy risk score ever. With BNI 4.0, lenders can make more confident risk decisions through significantly enhanced insights and predictability into potential consumer bankruptcy. "This is our most effective consumer bankruptcy risk score yet, providing deeper and more predictive insights driven by wider data and more powerful analytics," said John Cullerton, Senior Vice President of Product Innovation and Management with Equifax. "BNI 4.0 will give lenders the ability to predict and avoid potential consumer bankruptcies with improved performance and more consistent decisioning. 
Constitution, Orr said. That is a bit different from sacrosanct isnt it? Rhodes asked in response. Orr said it wasnt different because he also told people at the meeting that all creditors of the city, including employees and retirees, must be prepared to accept cuts. The bankruptcys opponents, including unions and retiree groups, are trying to show that Orr and state officials, including Governor Rick Snyder, acted in bad faith in filing the case under Chapter 9 of the U.S. Bankruptcy Code, which covers municipalities. Rhodes must decide whether the city is eligible to remain in bankruptcy court, where its protected from lawsuits and other legal actions that might disrupt reorganization efforts. Show Insolvency To remain in bankruptcy, the city must show that its insolvent, that its entitled under state law to file for bankruptcy, that it tried to negotiate with creditors or was unable to do so, and that it intends to file a plan to adjust its debts. 
Rosen has been conducting a series of closed-door talks with creditors and has appointed his own team of mediators to help. Kenneth Klee, a bankruptcy attorney for Jefferson County, Ala., which is in bankruptcy, questioned whether it will be productive for the city of Detroit because it has nearly 50 unions. "Mediation in Detroit?" Klee said. "I cannot imagine how mediation is going to be anything other than a waste of resources." But Judge Frank J. Bailey, who oversaw the Chapter 9 bankruptcy of Central Falls, R.I., said mediation "has a role" in resolving municipal bankruptcy disputes. Q: What exactly does "good faith" negotiations mean? A: This question is so difficult that Rhodes recently surprised attorneys involved in Detroit's bankruptcy by giving them until mid-November to deliver official opinions on the definition of "good faith" negotiations. 
Regulators seized a Florida bank in a rare midweek failure, American Banker reports . Stephen J. Lubben writes in DealBook about the remaining questions involving failing financial giants. Like some other California cities, Fresno is having its own financial issues, WSJ reports . Extended Stay America Inc. wants to raise up to $593 million in its initial public offering, Bloomberg reports . 
Brazil's bankruptcy law was enacted in 2005 to correct inefficiencies in the previous system, which was based on postponing debt payments rather than saving a company through renegotiation or restructuring. Creditors, who rarely saw repayment following a bankruptcy filing, would charge exorbitant interest rates in response. Inspired by the U.S. bankruptcy code's Chapter 11 procedure, creditors now play a key role in Brazil's process, which is designed to increase recovery rates, reduce credit risk, and bring down the cost of financing. Some of the largest Brazilian companies to have filed for bankruptcy protection under the new law include airlines Viacao Aerea Sao Paulo SA, known as Vasp; Viacao Aerea Rio-Grandense SA, or Varig; pulp producer Eucatex SA, and electricity holding company Grupo Rede Energia SA. While some companies, such as Eucatex, have successfully emerged from the process, others such as Vasp were liquidated. Others, such as Grupo Rede, were sold off. 
They must total all debts and assets, including a mortgage as debt and the value of property as an asset, and then assess which debts are positive and negative (i.e. college loans are positive and credit card bills are negative). Next, drivers should reduce expenses wherever possible. They must first total all monthly expenses and indicate which are necessities and which are not. Add up the minimum payments and cost of monthly necessities, which is the minimum amount needed to pay bills each month. If a person has difficulty paying bills or reducing debts he or she must find a way to reduce expenses, even if by temporarily switching from name brands to generic labels. Then, it is recommended that drivers find a way to consolidate debt. Several small debts can be difficult to manage, but consolidating them will reduce monthly bills and the amount of payments.