Bankruptcy News

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

K-V Pharmaceutical Plan Filed

K-V Pharmaceutical filed with the U.S. Bankruptcy Court a Sixth Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “The overall purpose of the Plan is to provide for the restructuring of the Debtors’ liabilities in a manner designed to maximize recovery to stakeholders and to enhance the financial viability of the Reorganized Debtors. The Plan reflects an agreement and compromise (the ‘Global Settlement’) among the Debtors, the Creditors’ Committee, the holders of at least 75% in dollar amount of the Class 3 Senior Secured Notes Claims, and the holders of approximately 97% in dollar amount of Class 6 Convertible Subordinated Notes Claims. Under this agreement and compromise: (a) each holder of an Allowed Senior Secured Notes Claim will receive its pro rata share of a Cash distribution in the amount of (i) $231,409,850 (i.e., the total amount of Senior Secured Notes Claims for prepetition principal and interest owing under the Senior Secured Notes less unamortized original issue discount); plus (ii) the amount of any postpetition interest and accreted original issue discount amount determined by the Bankruptcy Court to be owed to the holders of Senior Secured Notes under the subordination provisions of the Convertible Subordinated Notes Indenture (which amounts, if any, shall be determined by the Bankruptcy Court in connection with confirmation of the Plan); (b) the Debtors’ existing indebtedness under the DIP Credit Agreement will be paid in full in Cash; (c) the Debtors’ existing indebtedness in respect of Convertible Subordinated Notes Claims will be cancelled and exchanged for 7% of the New Common Stock of Reorganized KV; and (d) each holder of an Allowed General Unsecured Claim against any Debtor shall receive Cash in an amount equal its Pro Rata Share of $10,250,000.” The Court Scheduled an August 28, 2013 hearing to confirm the Plan.

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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."