Bankruptcy News

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

Bonds / Energy

Edison Mission Energy Plan Filed

Edison Mission Energy (EME) filed with the U.S. Bankruptcy Court an Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “The Plan provides for a sale (the ‘NRG Transaction’) of substantially all of EME’s assets, including its direct and indirect equity interests in the Debtor Subsidiaries and the Non-Debtor Subsidiaries (other than any Homer City Debtor and any subsidiary of any Homer City Debtor), to NRG Energy Holdings Inc. (‘Purchaser’ or ‘NRG’), a subsidiary of NRG Energy, Inc. (‘Parent,’ together with Purchaser, the ‘Purchaser Parties’), a Fortune 500 company and the largest competitive power generation company in the U.S., with approximately 47,000 MW of fossil, nuclear, solar, and wind generation capacity. In exchange for this transfer, Purchaser will provide EME’s estate with the Sale Proceeds of $2,635 million (comprised of $2,285 million payable in cash and $350 million payable in Parent Common Stock) to be distributed by the Debtors in accordance with the Plan and assume certain liabilities of the Debtors, including the leveraged leases for Debtor Midwest Generation, LLC’s Powerton and Joliet facilities. The Debtors, the Purchaser Parties, the Committee, the Supporting Noteholders, and the PoJo Parties entered into the Plan Sponsor Agreement, which was approved by the Bankruptcy Court on October 24, 2013, to implement the NRG Transaction pursuant to the Plan. More specifically, the Plan, which will effectuate the NRG Transaction, contemplates the following distributions to Holders of Claims and Interests, among other recoveries: Holders of Allowed Other Priority Claims against EME and Allowed Other Priority Claims against Debtor Subsidiaries shall receive payment in full, in Cash; Holders of Allowed Secured Claims against EME, Allowed Secured Claims against Debtor Subsidiaries, and Allowed Secured Claims against Homer City Debtors shall receive (a) payment in full, in Cash, or (b) such other treatment such that the Holder shall be rendered Unimpaired; Holders of Allowed General Unsecured Claims against Debtor Subsidiaries shall receive payment of principal in full in Cash; Holders of Allowed General Unsecured Claims against EME (Assumed Liabilities) shall receive payment in full in Cash from the Purchaser pursuant to the terms of the Purchase Agreement; Holders of Allowed General Unsecured Claims against EME (Not Assumed Liabilities) and Allowed Joint-Liability General Unsecured Claims shall receive (a) a Pro Rata distribution of the Net Sale Proceeds, and (b) a Pro Rata distribution of the New Interests; and Holders of Allowed Claims against the Homer City Debtors shall be paid in absolute priority from the Homer City Wind Down Proceeds for the applicable Homer City Debtor.” The Court scheduled a December 18, 2013 hearing to consider the Disclosure Statement.

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Turnaround Investing Blog

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Return of Volatility? No, Return of "Normal"

Sizeable market moves can increase the temptation to sell on downdrafts and buy on upswings; however, we strongly advise against attempting to do that. The chances of getting out at the right time and then back in again before the market rebounds are extremely slim. Read More.

Harnessing Activists to Help Find Turnaround Stocks

Activist investors often produce attractive returns for their clients; and you can still use their influence to help your position as a turnaround investor in two ways: Buy a position in a stock with the expectation that an activist will soon follow or buy after an activist takes a stake.


Value Investing


While one of the many dozens of activist funds might find their way to selecting your particular stock, this approach is likely to be frustrating and unrewarding. A better approach is to buy after the activist makes their move. Once an activist takes a stake in a company, how do you evaluate whether it is worthwhile to follow on? Admittedly, this is a bit of an art... Learn how you can harness the power of activist investors to find market-beating turnaround stocks.

Turnaround Letter Stock Pick Named Top Performer of 2017


stock market advicex


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."