OneWeb files for Chapter 11 bankruptcy protection

BY Richard Summerfield

Satellite operator OneWeb has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of New York. The firm, backed by SoftBank Group Corp, aims to build a global network to deliver broadband internet.

OneWeb had already raised £2.6bn to fund its expansion but had been attempting to raise additional funding. In a statement released on Saturday the company noted that it had been close to obtaining financing but that “the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19”.

“OneWeb has been building a truly global communications network to provide high-speed low latency broadband everywhere,” said Adrian Steckel, chief executive of OneWeb. “Our current situation is a consequence of the economic impact of the COVID-19 crisis. We remain convinced of the social and economic value of our mission to connect everyone everywhere.”

He continued: “Today is a difficult day for us at OneWeb. So many people have dedicated so much energy, effort, and passion to this company and our mission. Our hope is that this process will allow us to carve a path forward that leads to the completion of our mission, building on the years of effort and the billions of invested capital. It is with a very heavy heart that we have been forced to reduce our workforce and enter the Chapter 11 process while the Company’s remaining employees are focused on responsibly managing our nascent constellation and working with the Court and investors.”

OneWeb’s network was intended to compete with SpaceX’s ‘Starlink’ project and had launched 74 satellites to date. The company planned a constellation of 648 spacecraft. If no buyer for OneWeb or its assets can be found, the UK government is ultimately responsible for the 74 spacecraft currently in orbit.

News: OneWeb files for bankruptcy protection

Full time for Modell’s

BY Richard Summerfield

Modell’s Sporting Goods has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of New Jersey.

The company, which was founded in 1889, operated over 140 stores across several north-eastern and mid-Atlantic US states and had 3623 employees at the time of the filing.

Modell’s had been in a state of financial distress for some time. In February, the company’s chief executive, Mitchell Modell, announced he was seeking an investor to take a minority stake in the business, calling it “crowdsourcing at the highest level”. However, these efforts were unsuccessful.

In a statement announcing the filing, Modell’s explained it was engaged in discussions with its financial creditors and had been exploring a recapitalisation of the business through a potential sale of some or all of its assets or an equity investment. The company will continue to pursue these discussions, it noted in a statement, though it has started to liquidate its remaining stores, having liquidated 19 stores prior to the filing.

“Over the past year, we evaluated several options to restructure our business to allow us to maintain our current operations. While we achieved some success, in partnership with our landlords and vendors, it was not enough to avoid a bankruptcy filing amid an extremely challenging environment for retailers,” said Mr Modell. “We are extremely appreciative of the support that our lenders (JP Morgan Chase and Wells Fargo), vendors and landlords provided during this difficult period, engaging in extensive renegotiation efforts and allowing us to pursue every possible avenue to preserve the jobs of our loyal associates. I want to thank each and every one of our associates for their support over the years and our customers for their historic support of Modell’s.

“This is certainly not the outcome I wanted, and it is one of the most difficult days of my life,” he continued. “But I believe liquidation provides the greatest recovery for our creditors. We have partnered with Tiger Capital Group to liquidate the remaining stores beginning Friday morning, March 13. The return from the liquidation of the first 19 stores managed by Tiger has been beyond spectacular, and we are confident this performance will continue across the remaining stores, maximizing return for our creditors.”

News: Modell’s Sporting Goods Voluntarily Files for Chapter 11 Bankruptcy Protection

Drilling company Pioneer Energy restructures through Chapter 11

BY Fraser Tennant

A victim of the turbulent economics of the oil & gas industry, drilling company Pioneer Energy Services has filed for Chapter 11 bankruptcy in order to implement a comprehensive financial restructuring.

The Chapter 11 process and restructuring, reached in agreement with Pioneer’s key stakeholders, includes a number of the company’s subsidiaries but does not include Pioneer’s international entities, the majority of which are located in Colombia.

“Over the course of the last several years, Pioneer has been challenged by the difficult economics of the oil and gas industry,” said Stacy Locke, president and chief executive of Pioneer. “We have continued to adapt to the challenging market environment in which we operate, but our strong underlying business has continued to labour under a heavy debt burden.”

Pioneer intends to use the Chapter 11 process to implement a balance sheet restructuring by significantly reducing the company’s long-term debt and related interest costs, providing access to additional financing and establishing a strong capital structure. Pioneer expects to emerge in a stronger financial position, capable of accelerating future growth and better able to serve our valued customers.

“Our objective is to use the restructuring process to implement a balance sheet restructuring and set Pioneer on a path to succeed in the future with a right-sized debt structure and ample liquidity going forward,” continued Mr Locke. “We are confident that these are the right steps to deliver value for the benefit of our stakeholders.”

Headquartered in Texas, Pioneer provides well servicing, wireline and coiled tubing services to producers primarily in Texas and the Mid-Continent and Rocky Mountain regions.  Pioneer also provides contract land drilling services to oil and gas operators.

The company expects to continue to operate in the normal course during the court-supervised process and the terms of the restructuring contemplate paying all customer, vendor and other trade obligations in full in the ordinary course of business.

Mr Locke concluded: “We appreciate the ongoing hard work and commitment of the entire Pioneer team. I am confident our employees will continue to focus on safety, the day-to-day operations and provide our customers the quality of service they have come to expect from Pioneer.”

News: Pioneer Energy files for bankruptcy protection

McClatchy files for Chapter 11 bankruptcy

BY Richard Summerfield

McClatchy, the major US newspaper chain which owns 30 publications across the country, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of New York.

The company has obtained new $50m debtor-in-possession (DIP) financing from Encina Business Credit, which will allow it and its newsrooms to continue to operate as normal throughout the Chapter 11 process. McClatchy, which plans to emerge from the Chapter 11 process in the coming months, is the second largest publisher of local newspapers in US, behind Gannett.

In a court filing, McClatchy listed the Pension Benefit Guaranty Corporation (PBGC) as its largest unsecured creditor, with a claim of $530m.

“McClatchy’s Plan provides a resolution to legacy debt and pension obligations while maximising outcomes for customers and other stakeholders,” said Craig Forman, president and chief executive of McClatchy. “When local media suffers in the face of industry challenges, communities suffer: polarisation grows, civic connections fray and borrowing costs rise for local governments. We are moving with speed and focus to benefit all our stakeholders and our communities.”

“McClatchy remains a strong operating company with an enduring commitment to independent journalism that spans five generations of my family,” said Kevin McClatchy, chairman of McClatchy. “This restructuring is a necessary and positive step forward for the business, and the entire Board of Directors has made great efforts to ensure the company is able to operate as usual throughout this process. We are privileged to serve the 30 communities across the country that together make McClatchy and are ever grateful to all of our stakeholders – subscribers, readers, advertisers, vendors, investors, and employees – who have enabled our legacy to date. We look forward to the continued success of such an outstanding group of colleagues long into the future.”

The company reported a net loss of $364m in the first nine months of 2019, up from a loss of $52m in the year-earlier period. Revenue in the first three quarters of 2019 fell by 11 percent, or nearly $68m, with a decline in revenue from both advertisers and readers.

News: Newspaper chain McClatchy files Chapter 11 bankruptcy after pension woes, print declines

PG&E files updated Chapter 11 plan

BY Fraser Tennant

In a move that will allow it to exit bankruptcy as a “reimagined utility” and pay more than $25bn to wildfire victims, PG&E Corporation, the parent company of Pacific Gas and Electric Company, has filed an updated Chapter 11 plan of reorganisation.

According to the filing, PG&E is on track to have its plan confirmed by 30 June 2020, the deadline for participating in California’s new go-forward wildfire fund, a settlement for several wildfires in Northern California which killed dozens of people in 2017.

Upon emergence from Chapter 11, PG&E is expected to be a financially stable company positioned to continue prioritising safe operations and customer focus, while meeting California's energy needs and clean energy goals in a changed climate.

The key updated elements of the plan include: (i) regionalising the company's operations and its infrastructure to enhance the company’s focus on local communities and customers; (ii) further strengthening PG&E’s corporate governance by appointing an independent safety adviser: (iii) establishing a newly expanded role of chief risk officer (CRO) who will report directly to the PG&E chief executive and have oversight of risks associated with PG&E’s operations; (iv) paying value in excess of $25bn to wildfire victims through the settlements reached with individual victims, subrogation claimants and public entities; and (v) emerging with a financing structure that protects customer rates and positions the company for long-term success.

"Under our Plan, the company will emerge from Chapter 11 as a reimagined utility with an enhanced safety structure, improved operations, and a board and management team focused on providing the safe, reliable, and clean energy our customers expect and deserve,” said Bill Johnson, chief executive and president of PG&E Corporation. “Our 23,000 PG&E employees are striving every day to deliver that service and to build the utility of the future.”

Headquartered in San Francisco, Pacific Gas and Electric Company serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California.

Mr Johnson concluded: “We are committed to emerge from Chapter 11 in a manner that allows us to help lead California toward the future, meeting the highest safety, governance and operational standards.”

News: Utility PG&E Files Restructured Chapter 11 Plan