Posted by Dale Buss on March 15, 2013 11:08 AM
Just a couple of days after seeing its former mayor trundled off to jail in a conspiracy conviction, Detroit is considering whether to rally behind a new emergency manager appointed by Michigan Gov. Rick Snyder.
Kevyn Orr became Detroit's emergency financial manager this week, sharing a dais on Thursday not only with Snyder but, significantly, with Detroit Mayor Dave Bing, who has graciously partnered with Snyder and other state officials in the top-down takeover of a Motor City that Bing had hoped to turn around.
Orr is a 54-year-old, "high-powered Washington, D.C., lawyer," according to the Detroit Free Press, and University of Michigan graduate who worked on Chrysler's 2009 bankruptcy restructuring in his role at the Jones Day legal firm—a background that helped him land the job, and will give him what he'll need to tackle the unparalleled woes of Detroit. His new role will also him a $275,000 fee for spending the next 18 months trying to solve the financial puzzle that is Detroit.
"This is the Olympics of restructuring," said Orr to the Detroit Free Press. "Bankruptcy's been my stock in trade for the past several decades."Continue reading...
Posted by Sheila Shayon on March 13, 2013 03:07 PM
Reader’s Digest’s two trips to bankruptcy court in under four years seem to be paying off.
The magazine’s parent, RDA Holding, filed for Chapter 11 last month, (the first round was in 2009) hoping to convert nearly $465 million of debt into equity held by creditors as the 91-year-old publisher struggles to survive.
"After considering a wide range of alternatives, we believe this course of action will most effectively enable us to maintain our momentum in transforming the business and allow us to capitalize on the growing strength and presence of our outstanding brands and products," said CEO Robert E. Guth.Continue reading...
Posted by Alicia Ciccone on March 12, 2013 05:08 PM
The world has been restored to its rightful order, folks. The snack-cake division of Hostess has accepted a buyer bid from Apollo Global Management Group and Metropoulos & Co. for $410 million.
Hostess was to conduct an auction later this week for snack brands including Twinkies, CupCakes, Ho Hos and Ding Dongs, however no competing bids were received by the deadline. Apollo, in partnership with veteran food executive Dean Metropoulos, has reportedly said that they are aiming to have the snack cakes back on shelves by summer, according to the Chicago Tribune.Continue reading...
Posted by Sheila Shayon on February 19, 2013 01:26 PM
Reader’s Digest is filing for bankruptcy for the second time in three and a half years.
"Under a restructuring agreement supported by Wells Fargo & Co., $465 million of remaining senior notes will all convert to equity," explained CEO Robert Guth to Bloomberg. "The key message here is that we have a lot of confidence in the future of the business based upon the success of the ongoing operational transformation, but we haven’t had as much success with the balance sheet side of it and we need this process to help accelerate that."
"The Chapter 11 process, which will facilitate a significant debt reduction, will enable us to continue to redefine our business by focusing our resources on our strong North America publishing brands, which have shown a new vitality as a result of our transformation efforts, particularly in the digital arena," Guth stated in the press release announcing the restructuring.Continue reading...
Posted by Barry Silverstein on February 13, 2013 05:40 PM
UK retailers are not having an easy time of it, as the systematic shuttering of 164 Blockbuster stores is added to the list of foundering UK businesess.
The high-profile failing of music retailer HMV—which operates some 240 stores in Britain, Ireland, Singapore and Hong Kong—has already shut down all 16 of its Irish posts. The chain's owner, Hilco Consumer Capital, which specializes in buying bankrupt brands and owns Borders and Polaroid, is expected to decide the fate of HMV's other stores sometime this month. HMV's woes came on the heels of the bankruptcy of Jessops, a UK camera retailer, last week.
For Blockbuster, whose U.S. retail arm has been belly-up since 2010, the closure of UK stores comes as no surprise.Continue reading...
Posted by Mark J. Miller on January 30, 2013 12:07 PM
What will Hilco Consumer Capital do now that it has iconic music retailer HMV in its hands?
The company, which has previously acquired several other struggling brands like Polaroid, Borders and Linen 'n' Things, recently took over the bankrupt firm, paying off its £176m ($277.45 million) in debt to Lloyds and Royal Bank of Scotland.
The long-enduring HMV chain has 240 stores in Britain, Ireland, Singapore and Hong Kong, with about 4,000 employees in all. (In 2011, Hilco took in HMV's Canadian operations.) Its struggles come after Blockbuster, Tower Records and other once-dominant music and video retailers have declined or died off as digital delivery and online ordering continues surged.
Hilco is supported by media companies like Sony Pictures, 20th Century Fox, Universal Music and Warner Music, all of which will likely play a big part in the next step. Retail-Digital.com reports that those companies “have offered to cut the price of DVDs and CDS and are even considering offering the retailer better credit terms.” That could soon mean good deals for consumers.
Posted by Mark J. Miller on January 21, 2013 12:05 PM
Atari once ruled the home video-game console industry. First kids sprinted home after school to play Pong in the mid-’70s and then they threw their books down to grab their joysticks and take all the bricks of Breakout, blow up oncoming Asteroids, or take Activision’s Pitfall Harry through a jungle maze.
These days, of course, digital games are everywhere and Atari has been feeling the financial strain for more than a decade, as hinted on its Facebook page on January 17th (above).
Fast forward to January 21st, when its U.S. division announced it's filing for bankruptcy in order to separate itself from the French-owned Atari S.A. (formerly known as Infogrames), which is deep in debt, and focus on digital and mobile gaming.Continue reading...
Posted by Mark J. Miller on January 15, 2013 02:12 PM
While some version of HMV has been fighting the good fight for recorded music since the late 1800s, it looks like the retail chain’s ability to lift its fist to the air could soon be coming to an end.
While the brand outlasted plenty of other music retailers (Tower and Virgin come to mind), HMV is finally joining all those that have gone before it, seeking the British equivalent of bankruptcy protection and halting trading of its shares on Tuesday in the hopes that it will find a way to survive.
Not much has worked for the company since it started attempts to adapt back in 2007. Books, DVDs, and computer games are all not selling well there, either. As the BBC reported, the company failed to draw new customers as it broadened its offerings, causing disappointment among its core consumer base as CDs made room the number of CDs they could offer because of all of the new products.Continue reading...