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 / Emerging Markets/International Stocks

Commonwealth of Puerto Rico Bankruptcy Filing Initiated

The Commonwealth of Puerto Rico (a/k/a Government of Puerto Rico) filed a Title III Petition with the U.S. District Court in the District of Puerto Rico. Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) is a specific statutory vehicle that allows Puerto Rico and other U.S. territories to restructure their debt. The Commonwealth is represented by Martin J. Bienenstock of Proskauer Rose and Hermann D. Bauer-Alvarez of O'Neill & Borges. According to the Statement of the Oversight Board filed with the Court, "...Congress recognizes the crisis in the Commonwealth and its instrumentalities, and explains the fiscal emergency that renders the Commonwealth unable to provide its citizens effective services, while suffering the outmigration of residents and businesses. Congress points to lack of financial transparency, excessive borrowing, management inefficiencies, and a severe economic decline as having created the crisis….Negative economic growth has persisted for nine of the last ten years along with population diminution highlighted by exiting young doctors and other professionals." Court-filed documents further explain, " In light of the expiration of the PROMESA stay, and because consensual negotiations seemed to reach an impasse, the Oversight Board and the Commonwealth decided the best path forward was to file a Title III case to protect Puerto Rico and its citizens. The Oversight Board and the Commonwealth intend to continue pursuing consensual negotiations under the protection of the Title III automatic stay, and remain hopeful that continued negotiations (including through mediation) will lead to consensual resolutions such that Puerto Rico will once again be able to experience economic and social prosperity after this difficult process is resolved."

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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."