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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IBM: Not Yet Time to Swing at this Pitch

IBM’s stock underperformance since IBM’s current CEO took the helm in 2012 has been stark, with the shares declining 23% while the S&P500 Index has more than doubled. One big problem: revenue growth rate is zero, at best. Without revenue growth, what’s left to entice investors? The real driver of value at IBM – free cash flow that is used to repurchase shares. Can IBM borrow its way to shareholder prosperity as its cash flows shrink? What to do with IBM shares? Wait for a better pitch in the form of a catalyst or much lower valuation. Read More.

Comparing Stocks Vs. Bonds

While the common stock of a turnaround candidate usually has the greatest upside potential, other classes of securities, such as bonds or preferred stock, may offer attractive profit possibilities with less risk. Many turnaround companies have only one class of securities available to investors but where there are different classes to choose from, it can pay to do a little extra analysis of the various options.

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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."