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 / Retailing

Furniture Brands International Chapter 11 Petition Filed

Furniture Brands International (fka Interco) and certain of its wholly-owned subsidiaries filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 13-12329. The Company, which designs, manufactures, sources and retails home furnishings, is represented by M. Blake Cleary of Young Conaway Stargatt & Taylor. Furniture Brands International also announced that in conjunction with the bankruptcy filing, it is pursuing a sale process under Section 363 of the Bankruptcy Code. To this end, the Company has entered into an asset purchase agreement with affiliates of funds managed by Oaktree Capital Management. Under the agreement, Oaktree will acquire substantially all of the assets of Furniture Brands International, except the Company’s Lane business, through a Court-supervised auction process, subject to Court approval and certain other conditions. This bid will serve as a starting point for a sale process, which may include other bidders. In addition, the Company is engaged in a process to evaluate sale alternatives for the Lane business and has already received several indications of interest from potential acquirers. The Company also announced that it has received a commitment from Oaktree for $140 million in debtor-in-possession financing, including $50 million of new liquidity. “After careful consideration of a range of alternatives, we firmly believe that our Chapter 11 process represents the best long-term solution for Furniture Brands to address its liquidity challenges, strengthen its operations and continue to provide our customers with the highest quality products and service that they have come to expect from us,” said Ralph Scozzafava, chairman of the board and C.E.O. of Furniture Brands International. “Our portfolio includes some of the most well respected brands in the furniture industry, and we are pleased to be partnering with Oaktree, which has deep experience working with Furniture Brands and other companies in our industry. We are highly confident that as a result of these actions, we will protect our valuable franchise and emerge as an even stronger company.” The Company (while still known as Interco) emerged from a previous Chapter 11 filing in August 1992.

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Amazon = US GDP 1970

Amazon joined Apple in reaching a $1 trillion market capitalization. $1 trillion is about the same as the total value of New York City property and the total value of loans at JP Morgan, the nation’s largest bank in terms of assets. Jeff Bezos’ $160 billion stake would place him (personally) as the #33 largest company in the S&P 500 in terms of market cap, next to Coca-Cola, Disney and Netflix. We aren’t bold enough to predict whether the shares will continue upwards or if they are in a bubble reaching maximum inflation. Setting aside for a moment their investment prospects, let’s admire the truly remarkable milestone that these two companies have reached. Read More.

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."