Christopher Witkowsky

The publicly listed company is in discussions with its lenders and noteholders seeking relief from covenants on its debt.

The buyout firm has effectively lost its $830m equity investment in the aluminium products provider, which blamed the deteriorating economy and the falling price of aluminium for its bankruptcy. Lenders led by Apollo and Oaktree are providing Aleris with new debt.

Valuation difficulties have prompted the Texas-based mega-firm to cease talks that began more than a year ago with the Kuwait Investment Authority and two California pensions over the potential sale of a single digit stake in its management company.

Liquidations are more common in the bankruptcy world as financing for reorganisations has dried up, writes Christopher Witkowsky.

The two mega-firms officially closed the sale of Alltel to Verizon Friday for $28bn after holding the wireless carrier for about a year. The firms reaped a profit of $1.3bn on the deal.

Ezra Merkin, the chairman of the Cerberus-backed financing company, resigned his position Friday as part of an overall board restructuring required by the US government for the company to become a bank holding company. Merkin is also being sued over links between a separate investment fund he controls and the Bernard Madoff Ponzi scheme.

The European buyout firm has sold Orbiscom to MasterCard, marking its 16th exit since June 2007.

The energy-focused private equity firm will get $19m and take over various ‘greenfield’ development projects under consideration in the US.

The price of the merger, originally valued between $185m and $205m, was reduced to an undisclosed amount due to Kohlberg’s inability to secure financing.

Many global buyout firms may disappear over the next two to three years, according to a recent study that also found a large portion of debt in private equity-backed companies trading at distressed levels.