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2016 Recap: Bankruptcies Up 25%; 41% of Filings from Oil & Gas/Energy Sector

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BankruptcyData’s analysis indicates that public* company bankruptcy filings increased by more than 25% in 2016 on top of the 46% rise seen in 2015. A
total of 99 publicly traded companies filed for Chapter 7/Chapter 11 protection last year with $105 billion in combined pre-petition assets**, and 2016’s crop of publicly traded filings includes an impressive 25 with assets greater than $1 billion—compared to 19 in the previous year.

Continuing the trend we saw in 2015, 17 of 2016’s 25 largest Chapter 11’s were initiated by companies within the Oil & Gas, Mining and Energy sectors—and 41% of 2016’s total public bankruptcies came from those industries. In fact, during the past two years alone, more than 80 public companies operating within these categories filed for U.S. Bankruptcy Court protection, with 30 of those petitioners listing more than $1 billion in pre-petition assets.

Largest Public Energy, Oil & Gas & Mining Sector Bankruptcies (2015 & 2016)

Company Bankruptcy Date Assets** ($Mils)
Peabody Energy Corporation 04/13/16 $11,021
Alpha Natural Resources, Inc. 08/03/15 $10,736
LINN Energy, LLC 05/11/16 $9,977
Arch Coal, Inc. 01/11/16 $8,430
Samson Resources Corporation 09/16/15 $5,608
Walter Energy, Inc. 07/15/15 $5,386
Breitburn Energy Partners LP 05/15/16 $4,872
Energy XXI Ltd 04/14/16 $4,691
Offshore Group Investment Limited 12/03/15 $3,507
Halcon Resources Corporation 07/27/16 $3,459
Paragon Offshore plc 02/14/16 $3,253
SandRidge Energy, Inc. 05/16/16 $2,991
Molycorp, Inc. 06/25/15 $2,576
Sabine Oil & Gas Corporation 07/15/15 $2,438
C&J Energy Services Ltd. 07/20/16 $2,233
Swift Energy Company 12/31/15 $2,173
Patriot Coal Corporation 05/12/15 $2,072
Hercules Offshore, Inc. 08/13/15 $2,002
Seventy Seven Energy Inc. 06/07/16 $1,903
Atlas Resource Partners, L.P. 07/27/16 $1,731
Magnum Hunter Resources Corp. 12/15/15 $1,670
Allied Nevada Gold Corp. 03/10/15 $1,513
Stone Energy Corporation 12/14/16 $1,410
Key Energy Services, Inc. 10/24/16 $1,328
Energy & Exploration Partners, Inc. 12/07/15 $1,308

It is also of interest to note that these statistics do not include SunEdison, the largest bankruptcy of 2016. With nearly $12 billion in assets, SunEdison categorizes itself within the Electronics industry in SEC filings; however, the renewable power plant operator could certainly be considered an additional Energy sector bankruptcy.

25 Largest Public Bankruptcies of 2016 

Company Bankruptcy Date Assets** ($Mils)
SunEdison, Inc. 04/21/16 $11,500
Peabody Energy Corporation 04/13/16 $11,021
LINN Energy, LLC 05/11/16 $9,977
Arch Coal, Inc. 01/11/16 $8,430
Breitburn Energy Partners LP 05/15/16 $4,872
Energy XXI Ltd 04/14/16 $4,691
Republic Airways Holdings Inc. 02/25/16 $3,494
Halcon Resources Corporation 07/27/16 $3,459
Paragon Offshore plc 02/14/16 $3,253
SandRidge Energy, Inc. 05/16/16 $2,991
China Fishery Group Limited 06/30/16 $2,653
RCS Capital Corporation 01/31/16 $2,467
CHC Group Ltd. 05/05/16 $2,252
C&J Energy Services Ltd. 07/20/16 $2,233
Seventy Seven Energy Inc. 06/07/16 $1,903
Atlas Resource Partners, L.P. 07/27/16 $1,731
Stone Energy Corporation 12/14/16 $1,410
Key Energy Services, Inc. 10/24/16 $1,328
Modular Space Corporation 12/21/16 $1,319
Noranda Aluminum Holding Corp. 02/08/16 $1,318
Dex Media, Inc. 05/16/16 $1,268
Illinois Power Generating Co. 12/09/16 $1,230
Chaparral Energy, Inc. 05/09/16 $1,205
Basic Energy Services, Inc. 10/25/16 $1,161
Hercules Offshore, Inc. 06/05/16 $1,108

Delaware continued to house the largest percentage of public Chapter 11’s, with Delaware seeing 42% of all public filings in both 2016 and 2015. Notably, as a result of the high percentage of Oil & Gas sector restructurings, Texas continued to see more than its typical share of public company bankruptcy activity: The four Texas Districts housed 22% of all of 2016’s public filings, a slight rise from 2015’s already impressive 19%.

Another corporate bankruptcy uptick was seen in 2016’s rise of prepackaged or pre-negotiated Chapter 11 filings. This expedited approach is utilized when a company and its creditors can agree on the key terms of a plan of reorganization before the company files its bankruptcy petition. The advantage to this approach is an expedited, less contentious proceeding, which can benefit both the debtor and its creditors with reduced legal expenses and consumer distress. With a prepackaged filing, the plan of reorganization is drafted, circulated and approved pre-petition then filed with the U.S. Bankruptcy Court concurrently with the Chapter 11 petition.

In a pre-negotiated scenario, negotiations on the key terms of a plan are commenced pre-petition; however, a plan is not finalized before the bankruptcy filing is initiated. During 2016, 18% of the year’s public filings were either prepackaged or pre-negotiated, versus just 13% in 2015. The efficiency of this approach is demonstrated by the fact that during 2016, 16 public companies confirmed Plans in three months or less. The average time between Chapter 11 filing date and a U.S. Bankruptcy Court confirmation order declined nearly 25% from 2015 to 2016. In terms of asset totals, 2016’s average pre-petition figure of $1.1 billion climbed just slightly from 2015’s $976 million, Like last year—none of 2016’s bankruptcies were large enough to rank among the largest historic filings.

25 Largest All Time Public Bankruptcies 

Company Bankruptcy Date Assets** ($Mils)
Lehman Brothers Holdings Inc. 09/15/08 $691,063
Washington Mutual, Inc. 09/26/08 $327,913
WorldCom, Inc. 07/21/02 $103,914
General Motors Corporation 06/01/09 $91,047
CIT Group Inc. 11/01/09 $80,449
Enron Corp. 12/02/01 $65,503
Conseco, Inc. 12/17/02 $61,392
Energy Future Holdings Corp. 04/29/14 $40,970
MF Global Holdings Ltd. 10/31/11 $40,542
Chrysler LLC 04/30/09 $39,300
Thornburg Mortgage, Inc. 05/01/09 $36,521
Pacific Gas and Electric Co. 04/06/01 $36,152
Texaco, Inc. 04/12/87 $34,940
Financial Corp. of America 09/09/88 $33,864
Refco Inc. 10/17/05 $33,333
IndyMac Bancorp, Inc. 07/31/08 $32,735
Global Crossing, Ltd. 01/28/02 $30,185
Bank of New England Corp. 01/07/91 $29,773
General Growth Properties, Inc. 04/16/09 $29,557
Lyondell Chemical Company 01/06/09 $27,392
Calpine Corporation 12/20/05 $27,216
New Century Financial Corp. 04/02/07 $26,147
Colonial BancGroup, Inc., The 08/25/09 $25,816
UAL Corporation 12/09/02 $25,197
AMR Corporation 11/29/11 $25,088

George Putnam, Publisher of New Generation Research, Inc.’s The Turnaround Letter and BankruptcyData, anticipates a further increase in U.S. Bankruptcy Court activity in 2017 and beyond. He notes, “While we believe that overall bankruptcy activity will remain at a high level for the foreseeable future, we think that filings in the energy sector may have peaked. They won’t dry up overnight however, and we anticipate that energy bankruptcies will gradually decline over the next 12 to 18 months.” Just a few days into 2017, the Oil & Gas industry has continued to make headlines with Bonanza Creek Energy’s much-anticipated $1.3 billion Chapter 11 bankruptcy.

Although many analysts believe the Oil & Gas/Energy sector has seen its restructuring peak, The Turnaround Letter notes that approximately $1.5 trillion worth of lower quality corporate debt (a combination of high yield bonds and “leveraged” bank loans) will be due over the next five years. Putnam cautions, “Some meaningful percentage of those issuers will not be able to refinance their debt and be forced to restructure when their debt matures, even if the high yield debt market strengthens again. If the junk bond market is weak for a while, the number of defaults and restructurings is likely to be even larger.”

Public Companies/Assets Filing for Bankruptcy 

Year Filings Assets** ($Mils) Avg. Assets** ($Mils)
1980 62 $1,671 $27
1981 74 4,703 64
1982 84 9,103 108
1983 89 12,523 141
1984 121 6,530 54
1985 149 5,831 39
1986 149 13,033 87
1987 112 41,503 371
1988 122 43,488 356
1989 135 71,371 529
1990 115 82,781 720
1991 123 93,624 761
1992 91 64,226 706
1993 86 18,745 218
1994 70 8,337 119
1995 85 23,107 272
1996 86 14,201 165
1997 83 17,247 208
1998 122 29,195 239
1999 145 58,760 405
2000 187 100,882 539
2001 265 267,203 1,008
2002 229 401,063 1,751
2003 176 100,214 569
2004 93 47,802 514
2005 86 133,843 1,556
2006 66 22,257 337
2007 78 70,525 904
2008 138 1,159,351 8,401
2009 211 593,733 2,813
2010 106 89,109 840
2011 86 103,990 1,209
2012 87 70,843 814
2013 71 42,641 600
2014 54 71,918 1,332
2015 79 77,138 976
2016 99 104,666 1,057

* BankruptcyData defines publicly traded as those companies with common stock and/or bonds that are publicly traded on U.S. markets.

** Total asset figures are pre-petition and taken from each debtor’s most recent Annual Report filed with the Securities and Exchange Commission (SEC).

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The post 2016 Recap: Bankruptcies Up 25%; 41% of Filings from Oil & Gas/Energy Sector appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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