Bill on Bankruptcy: The Market’s Unquenchable Thirst for Junk
May 22 (Bloomberg) — AMF Bowling Worldwide Inc. and Ahern Rentals Inc. are prime examples of the frothy market where junk-bond investors are fearless in the face of risk, as Bloomberg Law’s Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss on their video. Rochelle says that more “covenant-lite” junk debts has been sold so far this year than in all of 2012 combined.
After a dearth of new filings, three hit the books in the space of 24 hours in the printing, construction, and health care industries.
For her thankless job in riding herd over the country’s major asbestos bankruptcies, U.S. Bankruptcy Judge Judith K. Fitzgerald is the “Judge of the Week” following her mammoth opinion pinning down the present and future liability encumbering Specialty Products Holding Corp. and Bondex International Inc., subsidiaries of Rust-Oleum maker RPM International Inc.
The U.S. Court of Appeals in Philadelphia handed down the “Opinion of the Week” in a complex case at the intersection of bankruptcy and tax law. Arising from the completed reorganization of Majestic Star Casino LLC, the circuit court differed with lower courts and ruled that status as a subchapter S corporation isn’t an asset of the company in bankruptcy. The opinion by Circuit Judge Kent A. Jordan contained an important pronouncement in saying that there’s not a property interest for bankruptcy purposes simply because a set of facts tend to create value.
Jordan also ruled that whether a tax attribute constitutes “property” is a question of federal, not state law.