Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11 / Bonds / Post-Bankruptcy Stocks / Telecommunication Services

TerreStar Corporation Plan Filed

TerreStar Corporation (TSC) filed with the U.S. Bankruptcy Court a First Amended Joint Chapter 11 Plan and First Amended Disclosure Statement. According to the Disclosure Statement, “As described in further detail in the table below, the Plan provides that holders of Allowed Unsecured Claims will receive full satisfaction of their Claims, in the form of the New TSC Notes. The remaining value of the Reorganized TSC Debtors will be transferred to the holders of TSC Series A and B Preferred Shares in the form of the New Common Stock of Reorganized TSC. After taking into account the value distributed to unsecured creditors, and assuming that the Claims asserted by Elektrobit Inc. Van Vlissingen and Company, Jefferies & Company, Inc. and other vendors are allowed in full, the equity value of Reorganized TSC being transferred to the holders of TSC Series A and B Preferred Shares is between $144.8 million3 and $154.8 million, while the face value of the interests held by the holders of TSC Series A Preferred Shares is $90 million and TSC Series B Preferred Shares is $318.5 million (not including amounts owed on account of earned but unpaid dividends). In the event the Claims asserted by Elektrobit, Van Vlissingen and Company and Jefferies are disallowed in their entirety, the equity value of Reorganized TSC being transferred to the holders of TSC Series A and B Preferred Shares is between $177.2 million and $187.2 million. Accordingly, after repaying the holders of TSC Series A and B Preferred Shares, there is simply no value remaining to distribute to any other equity interest holders.”

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Is there value in bankrupt PG&E’s stock?

In nearly every case, the shares of a company in bankruptcy become worthless. In very rare cases, however, they can become great investments. W.R. Grace (NYSE:GRA) shares produced a 75-fold return, as an example. With California utility PG&E (NYSE:PCG) now in bankruptcy, the range of possible outcomes for its equity is wide.

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EV/EBITDA: What Is It & Why Are We Using It More?

In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple.  We thought it might be useful to describe this measure and why we like it.

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Turnaround Letter Stock Pick Named Top Performer of 2017


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What Last Year's Top Stock Pickers Are Buying in 2018


This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.


George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."