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 / Energy / Post-Bankruptcy Stocks

Energy Conversion Devices Chapter 11 Petition Filed

Energy Conversion Devices (ECD) and two affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Eastern District of Michigan, lead case number 12-43166. The Company, which manufactures flexible photovaltac laminates for renewable energy purposes, is represented by Aaron M. Silver of Honigman Miller Schwartz & Cohn. The Company announced its intentions to sell through separate sales its wholly-owned operating subsidiary United Solar Ovonic and other assets, including its minority stake in Ovonyx. The Company has received support for its operating and divestiture plan pursuant to a formal plan support agreement executed with holders of approximately 70% of the Company’s $263.2 million in outstanding 3% Convertible Senior Notes due 2013. “We firmly believe there is a strong and sustainable commercial market for UNI-SOLAR products. USO’s next-generation, 12% efficient, flexible PV products build upon 25 years of PV experience and enable highly competitive production costs with a fundamentally differentiated product. However, our current capital structure and legacy costs are preventing USO from making the investments necessary for the future of the business without restructuring through the bankruptcy process,” said Julian Hawkins, ECD’s president and chief executive officer. “The processes we initiated today will afford greater opportunity for ECD to maximize value for its stakeholders and conduct an orderly sale of USO to ensure it is viable and successful for the long-run.” On February 13, 2012, ECD sold its majority-owned subsidiary Ovonic Battery Company to BASF Corporation for the gross purchase price of $58 million in cash before transaction fees, minority participations, and working capital and other adjustments.

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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."