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 / Post-Bankruptcy Stocks / Materials

William Lyon Homes Disclosure Statement Approved, Plan Confirmed

The U.S. Bankruptcy Court entered an order approving William Lyon Homes’ Disclosure Statement and concurrently confirming its Joint Prepackaged Plan. The Company expects to emerge by the end of February 2012. Upon emergence from Chapter 11 protection, approximately $180 million in principal amount of debt will be eliminated as part of the recapitalization plan, resulting in a 37% reduction in overall debt. Annual cash interest expense will also be reduced by nearly $25 million or approximately 45% compared with current levels. “The successful and rapid recapitalization of the Company is due in large part to the continued loyalty of our customers and suppliers, the professionalism and dedication of our employees and the commitment and support of our creditor groups,” said chief executive officer, General William Lyon.  “Since we began this process just a few months ago, William Lyon Homes has successfully recapitalized the Company’s financial position, strengthened its business through the acquisition of highly desirable properties in Northern California and South Orange County, and built a foundation from which we can grow. In a matter of days, William Lyon Homes will emerge from this process a more competitive company with a strong balance sheet,” chief operating officer and president, William H. Lyon, stated. This home builder filed for Chapter 11 protection on December 19, 2011, listing $649 million in pre-petition assets.

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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."