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 / Bonds

Lone Pine Resources Chapter 15 Petition Filed

Alberta, Canada-based Lone Pine Resources filed for Chapter 15 bankruptcy protection with the U.S. Bankruptcy Court in the District of Delaware, case number 13-12487. The Company, which engages in the exploration and development of natural gas and light oil properties in Canada, is represented by Mark D. Collins of Richards, Layton & Finger. The Company announced that it has reached agreement with holders of approximately 75% of the outstanding 10.375% Senior Notes due 2017 issued byLone Pine Resources Canada on a restructuring plan that, if successfully implemented, will significantly reduce the Company’s debt obligations and materially improve the Company’s overall capitalization and liquidity. Concurrent with the U.S. Chapter 15 proceedings, the Company has also commenced proceedings in the Court of Queen’s Bench of Alberta under the Companies’ Creditors Arrangement Act to implement the restructuring. Lone Pine, LPR Canada and all other subsidiaries of the Company are parties to the CCAA and Chapter 15 proceedings. Tim Granger, president and chief executive officer, comments, “The proposed restructuring is designed to significantly reduce the Company’s long-term debt and improve its liquidity, which will allow Lone Pine to resume investment in its attractive asset base, while at the same time allowing the Company to retain its relationships with its current employees, industry partners and suppliers.” Specifically, the restructuring provides for cancellation of all outstanding shares of Lone Pine common stock, conversion of all senior notes into new common equity and a new equity investment of $100 million by holders of the senior notes through a private offering to eligible noteholders of convertible preferred shares. The preferred shares to be issued under the share offering will be convertible, in aggregate, into such number of common shares as is equal to the 75% of the common shares outstanding on an “as converted” basis on completion of the restructuring. It is a condition to the restructuring that Lone Pine obtain a new secured credit facility, and the Company is engaged in active lender discussions for this purpose.

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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."