What’s Booming in this Economy? Bankruptcy & Restructuring Business “Highest Since Great Recession”

[marmar]

What’s Booming in this Economy? Bankruptcy & Restructuring Business “Highest Since Great Recession”
by Wolf Richter • February 8, 2016


[font color="blue"]“Up over 25% from one year ago.”[/font]

It starts like this: Reuters reports that “sources” said that a company has hired “restructuring lawyers.” A sign of an impending debt restructuring, such as a bankruptcy. And shares plunge.

This is what happened Monday morning to Chesapeake Energy, the second largest natural gas producer in the US, after it was reported that it had engaged restructuring advisors Kirkland & Ellis. Shares, already reduced to near-penny-stock territory, plunged another 50% to $1.50, at which point trading was halted.

To soothe our rattled nerves, the company said that it “currently [emphasis mine] has no plans to pursue bankruptcy and is aggressively seeking to maximize value for all shareholders.”

As of September 30, after losing nearly $5 billion in the quarter, Chesapeake had $16.7 billion in liabilities, including $10.7 billion in long-term debt, mostly bonds. It has $1.8 billion in cash. In addition to its operating requirements (losses), the company has to deal with $500 million in debt that comes due in March. OK, that might still work. But it also has commitments to pay about $2 billion per year for space on a number of pipelines, including those owned by Williams Companies, whose shares plunged 34.8% upon the news. ..............(more)

http://wolfstreet.com/2016/02/08/bankruptcy-restructuring-business-booms-highest-since-great-recession/

[Warpy]

1. They've choked off the demand side with starvation wages

so what the hell else do they expect?

You want an economy that works? RAISE WAGES.