Hedge fund Cyrus Capital Partners has tried everything it can to stop Sears Holdings Corp. from selling some obscure internal notes to raise cash. Now the judge overseeing the bankruptcy is losing his patience and openly questioning why Cyrus, a major creditor, is standing in the way of a deal that could help salvage the retailer, Bloomberg reported. The dispute pits the hedge fund against Sears as it tries to line up more cash to get through the holiday season and craft a long-term survival plan. The note sale could buy some breathing room for Sears, which faces restive suppliers, landlords and other low-ranking creditors who say they’d be better off if Sears was dead. The hedge fund argued that Sears’s plan to sell up to $900 million of the notes, designed to benefit the company and by extension its lenders, would instead dilute recoveries for creditors. “Your client will have to come here and tell me why it thinks it’s going to be diluted,” Bankruptcy Judge Robert Drain told a lawyer for Cyrus at Thursday’s hearing. “I don’t want you to just lob something in and tell me sotto voce ‘and we’re participants in the CDS market,’ which I think may be the reason they’re objecting.”
The total debt shouldered by Americans has hit another record high, rising to $13.5 trillion in the last quarter, as student-loan delinquencies jumped, Reuters reported. Flows of student debt into serious delinquency - of 90 or more days - rose to 9.1 percent in the third quarter from 8.6 percent in the previous quarter, the Federal Reserve Bank of New York reported on Friday. That propelled the biggest jump in the overall U.S. delinquency rate in seven years. Total household debt, driven by a $9.1 trillion in mortgages, is now $837 billion higher than its previous peak in 2008, just as the last recession took hold and brought on massive deleveraging across the United States. Indebtedness has risen steadily for more than four years and sits more than 21 percent above a trough in 2013. The $219 billion rise in total debt in the quarter ended September 30 was the biggest jump since 2016.
The Catholic Diocese of Winona-Rochester (Minn.) will file for chapter 11 protection by the end of the month following multiple claims of clergy sex abuse, MyFOX47.com reported. The Diocese is facing 121 pending claims of clergy sex abuse by 14 priests who have been credibly accused of sexual misconduct with children from the 1960s through the 1980s. The Diocese of Winona-Rochester ministers 117 parishes in southern Minnesota.
America’s farmers have been shut out of foreign markets, hit with retaliatory tariffs and lost lucrative contracts in the face of President Trump’s trade war. But a $12 billion bailout program Trump created to “make it up” to farmers has done little to cushion the blow, with red tape and long waiting periods resulting in few payouts so far, the New York Times reported. According to the Department of Agriculture, just $838 million has been paid out to farmers since the first $6 billion pot of money was made available in September. Another pool of up to $6 billion is expected to become available next month. The government is unlikely to offer additional money beyond the $12 billion, according to Sonny Perdue, the agriculture secretary.
A bankruptcy judge on Friday said that Treasury Secretary Steven Mnuchin can collect $207,000 in insurance money to cover the cost of defending himself in a now-dismissed lawsuit over the demise of a Hollywood studio he once co-chaired, WSJ Pro Bankruptcy reported. Bankruptcy Judge Michael Wiles, who overruled an objection from the studio’s unsecured creditors, said Mnuchin was contractually entitled to the payout and that the insurance policy limits far exceed what he is owed. Mnuchin, who was at one point co-chairman of Relativity Media LLC, the studio, is covered by an insurance policy commonly purchased to pay legal bills and other defense costs arising from lawsuits targeting a company’s former officers and directors. RKA Film Financing, which sued Mnuchin and other backers of Relativity, including its chief executive, Ryan Kavanaugh, in July of 2015, says that it lent the studio $73.6 million to use on so-called “prints and advertising” expenses. Instead, RKA alleged that the money was misused because of the company’s dire financial state. But the New York Supreme Court later dismissed all claims against Mnuchin, a decision that was upheld on appeal.