Bankruptcy News

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

Bonds / Post-Bankruptcy Stocks

AMR Plan Confirmed

The U.S. Bankruptcy Court issued a formal order confirming AMR’s Fourth Amended Joint Chapter 11 Plan, filed September 23, 2013. As previously reported, “No creditor of any of the Debtors will be prejudiced by the substantive consolidation of the AMR Debtors, the substantive consolidation of the American Debtors, and the substantive consolidation of the Eagle Debtors, which will benefit all creditors of the Debtors….Pursuant to Section 6.2(a) of the Plan, subject to and in connection with the occurrence of the Effective Date, AMR and US Airways shall take all such actions as may be necessary or appropriate to effect the American Airlines Merger on the terms and subject to the conditions set forth in the Merger Agreement.” The Bankruptcy Court approved this merger agreement in March 2013 (with a related order docketed on April 11, 2013), and the U.S. District Court is scheduled to rule on the Department of Justice’s civil antitrust lawsuit against the merger on November 25, 2013. According to documents filed with the SEC, the ultimate parent company resulting from the merger (“AAG”) is expected to have approximately 1.75 billion shares of common stock and 200 million shares of preferred stock authorized on the Plan’s effective date. All existing AMR shares will be cancelled under the Plan, and, on the effective date, the Company will designate a new series of AAG convertible preferred stock from its authorized preferred stock. This passenger airliner filed for Chapter 11 protection on November 29, 2011, listing $25 billion in pre-petition assets.

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Turnaround Investing Blog

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."