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House Passes Amended Judicial Housekeeping Bill
The House yesterday passed The Federal Courts Improvement Act of
2000 (S. 2915). The bill contains a number of “housekeeping”
items proposed by the judicial branch. Included are several bankruptcy
items: (a) an increase in the chapter 9 filing fee from $300 to the same
rate as the chapter 11 fee (now at $800); (b) an increase in the fees
for debtors who convert cases from chapters 7 or 13 to chapter 11, from
$400 under current law, to the difference between the original filing
fee and the chapter 11 filing fee (now $800), thus making the total fee
paid in such cases equal to $800; (c) allowance for the payment of
quarterly fees in chapter 11 cases in those six Bankruptcy Administrator
districts (in North Carolina and Alabama) not covered by the U.S.
Trustee program. This would make debtors in these districts subject to
the same fees on disbursements that exist in the other 88 federal
judicial districts. The legislation now awaits action in the Senate.
This bill could become a vehicle for the larger bankruptcy bill, if the
problems with the bill can be resolved.
White House, Congress Ponder Delay in FCC Wireless Auction
The Clinton administration and the Senate Republican leadership are
considering ordering the delay of a December auction of wireless
licenses once held by NextWave Personal Communications Inc., according
to a Reuters report. NextWave, which is undergoing bankruptcy
reorganization, bid about $4.8 billion for 90 licenses in 1996 but was
unable to raise the funds to pay the Federal Communications Commission
(FCC) for the licenses and filed for bankruptcy in 1998. The FCC set
aside Dec. 12 to begin auctioning 422 licenses for airwaves designed to
be used for wireless and data services — the so-called C and F
block licenses that include the 90 licenses repossessed from
NextWave.
However, recent conflicting appeals to court decisions have raised
questions as to whether the sale should be delayed until all of
NextWave's court appeals have been exhausted. The administration and
lawmakers are working to delay the auction that could be included in one
of the must-pass bills needed to fund the government or possibly the tax
cut bill as Congress tries to wrap up work for the year. Lawmakers are
also wrangling over possible language that would address how the
government counts ownership in the cable market. In the past, the FCC
has said it opposed any delay of the auction.
Senate Majority Leader Trent Lott (R-Miss.) said that as a general
rule he opposes attaching language to the spending bills but said
NextWave could be a special case. “If there are extenuating
circumstances or something that... would be harmful during the next two
or three months, then certainly we have to weigh that,” Lott said.
One vehicle for the possible instructions ordering the delay — the
spending bill for the Commerce, State and Justice Departments —
did not include the language, but could be attached to other pending
legislation.
Nu-kote Emerges From Chapter 11
Nu-kote Holding Inc. announced yesterday that the U.S. Bankruptcy Court
for the Middle District of Tennessee has confirmed the company's
reorganization plan, allowing the company to emerge from chapter 11,
according to a newswire report. The Franklin, Tenn.-based company will
become an affiliate of Richmont Capital Partners I, LP, a private
merchant banking partnership headquartered in Dallas. The company will
continue operating as a going concern with its existing products and its
current management team.
As part of the plan, the company's outstanding common stock will be
canceled and will no longer be publicly traded. The holders of Nu-kote
stock will receive no distributions or other consideration under the
terms of the plan. Nu-kote is an ink jet, fax, ribbons, copier and laser
printer supplier.
Judge Rejects Mistrial in Playmate Case
Yesterday a judge ruled that a weightlifting injury suffered by former
Playboy Playmate Anna Nicole Smith is not serious enough to force a
mistrial in her lawsuit seeking half of her late 90-year-old husband's
fortune, according to a Reuters report. Probate Judge Mike Wood
rejected a mistrial motion by Smith's lawyers after day-long testimony
from doctors who said she was well enough to attend the trial. Smith has
been in the hospital the past two weeks since a 10-pound dumbbell fell
off a cocktail bar and onto her hand while she was exercising. The
dumbbell injured a nerve that extends up her arm. Even though X-rays
showed no fracture, she said she was in great pain and has been out of
court and in a local hospital for treatment.
The 1993 Playboy Playmate of the Year is seeking a share of the $1.6
billion estate of late oil tycoon J. Howard Marshall, whom she wed in
1994 when she was 26 and he was 89. They met at a Houston club where she
was a stripper. Her attorneys sought a mistrial because they feared her
continued absence from the trial, which began Oct. 2 and is expected to
last until January, could alienate the jury. Last month, a Los Angeles
judge awarded Smith $450 million from the estate in a separate
proceeding in federal bankruptcy court. Marshall’s youngest son,
Pierce, filed an appeal of the ruling on Tuesday.
Tokheim's Restructuring Plan Becomes Effective
Tokheim Corp. announced yesterday that it has completed its financial
restructuring plan and that the plan became effective Oct. 20, according
to a newswire report. The company previously announced that the U.S.
Bankruptcy Court for the District of Delaware has confirmed prepackaged
financial restructuring plan under chapter 11, only 38 days after
Tokheim filed the plan. The Fort Wayne, Ind.-based company also
announced that the common stock of the reorganized company has been
issued to its bondholders and certain other creditors under the terms of
the plan. The new common stock's trading symbol should be assigned
shortly. Tokheim is the world's largest producer of petroleum dispensing
devices.
Microbest Inc. Petitions for Dismissal Under Chapter
11
Microbest Inc. announced yesterday that it filed a motion to dismiss
under chapter 11 in the Southern District of Florida, according to a
newswire report. The Boca Raton, Fla.-based company filed its voluntary
petition on June 1 to ward off a hostile attempt made to take over the
company by two former insiders. A signed resolution has been executed,
resolving the dispute, and protection by the court is no longer
necessary.
“This action confirms that Microbest's strategy to use the
protection of the bankruptcy court effectively allowed us to work out
the settlement, bringing this matter to closure,” Michael J.
Troup, Microbest CEO said. “The timing could not be better as the
company is poised to close some of the most significant opportunities in
its history both with private enterprise and government.”
Xerox Shares Fall Despite Restructuring Plan
Xerox Corp. shares fell yesterday, the day after the troubled copier
giant unveiled an ambitious turnaround plan, according to a Reuters
report. The Stamford, Conn.-based office equipment maker, which has been
struggling with a plummeting stock price and stiff competition, said it
lost $167 million or 20 cents a share for its third quarter, slightly
worse than analysts had been expecting. The company pledged to cut $1
billion in expenses by the end of 2001, and raise up to $4 billion by
selling assets including half of its 50 percent stake in Fuji Xerox, a
joint venture with Japan's Fuji Photo Film Co. Ltd.
A rumor in European markets that Xerox might be considering seeking
bankruptcy protection drove the stock down, although it rebounded
slightly in the days before the announcement. “The immediate
crisis has passed,” Pete Enderlin, an analyst at Ryan, Beck, said,
referring to concerns about a cash crunch and possible bankruptcy filing
by the former blue-chip stalwart. “Even if they can pull it all
off, it's going to take quite a while.”
Lack of Funding Closes Milwaukee Hospital
Milwaukee’s Northwest Memorial Hospital closed its doors for good
Tuesday night, less than a week after announcing its intent to close in
60 days, according to a newswire report. The hospital, which cared for
residents from some of the city's poorest neighborhoods in recent years,
opened its doors 35 years ago and filed for chapter 11 in 1989. The
hospital transferred its four remaining bed patients to other hospitals
and closed its doors, citing it did not get the funding it needed to
stay open the entire 60 days and to pay its employees.
Champion Industries to Acquire Assets of West Virginia
Cordage Paper Division
Champion Industries Inc. yesterday announced that its bid to
purchase the Huntington, W.Va. paper distribution division of The
Cincinnati Cordage Paper Company was accepted by Cordage at an auction
held by the U.S. Bankruptcy Court for the Southern District of Ohio,
according to a newswire report. The accepted bid covers the building,
leased real property, fixed assets, receivables and inventory of the
Huntington Cordage operation. Net sales for the Huntington Cordage
operation for calendar year 1999 were approximately $7 million. The
final purchase price will be determined at closing, based on various
adjustments calculated as of closing. Champion is a commercial printer,
business forms manufacturer and office products and office furniture
supplier.
Chromaline's Master European Distributor Files for
Bankruptcy
The Chromaline Corp. announced yesterday that its European master
distributor, Chromaline Europe SA, filed for bankruptcy under French law
and is in liquidation, citing financial problems primarily caused by a
weak Euro, according to a newswire report. The Duluth, Minn.-based
Chromaline Corp. owns 19.5 percent of the stock of Chromaline Europe SA,
a French Corporation located in Saverne, France. The bankruptcy of the
SA will result in a one-time charge against Chromaline's earnings for
its $54,000 investment in the SA and a portion of a $150,000 accounts
receivable. In spite of this non-recurring charge, the company
anticipates the third quarter to be profitable and other segments of
Chromaline's business remain healthy.
Federal-Mogul Denies Bankruptcy Risk
Shares of auto parts maker Federal-Mogul Corp. hit a new 52-week low
after one analyst downgraded the stock to sell over bankruptcy fears,
but the company denied it faced any liquidity crisis and said the
analyst was exaggerating, according to a Reuters report. Deutsche Banc
Alex Brown analyst Kenneth Blaschke last week downgraded his rating on
the company because of fears it may default on its credit agreement,
citing weak sales combined with asbestos claims payments. He said,
“Bankruptcy is no longer a remote risk. As a result, we are
downgrading the stock to sell.” But Federal-Mogul officials said
Blaschke was exaggerating the Southfield, Mich.-based company's position
and said no major debt payments were due until 2004. “We are not
in the position that he puts us in,” Federal-Mogul spokeswoman Kim
Welch said. “There is no liquidity crisis facing us. We do have
significant debt burden, but we have the blessing of time.”
The CanFibre Group Provides Details on Subsidiary’s Chapter
11 Filing
The CanFibre Group Ltd. announced yesterday that the recent chapter
11 filing of its wholly owned subsidiary, CanFibre of Riverside Inc.,
made in the U.S. Bankruptcy Court in Delaware was the result of failure
of the facility to be completed on a timely basis and its subsequent
liquidity crisis, according to a newswire report. The company will
return to operation following the filing. No such filing was made for
CanFibre's second MDF facility, which should be completed next month
with a six-month start-up period expected to commence soon thereafter.
CanFibre also announced that it has obtained an agreement from some of
its lenders to release, upon bankruptcy court approval, the necessary
funds to meet CanFibre Riverside's future cash needs and fulfill
obligations associated with operating its business on an ongoing basis.
Employees will continue to be paid in the normal manner and their health
benefits will not be disrupted.
Vencor Receives Approval to Extend Maturity of DIP
Financing
Vencor Inc. yesterday announced that the U.S. Bankruptcy Court for the
District of Delaware approved an amendment to the company's
debtor-in-possession (DIP) financing to extend its maturity until Jan.
31, 2001, according to a newswire report. The amendment also revises and
updates certain financial covenants. In addition, the amendment extends
through Nov. 22 the period of time for the Louisville, Ky.-based company
to file the appropriate pleadings to request confirmation and
consummation of its reorganization plan. The DIP financing and existing
cash flows will be used to fund the company's operations during its
restructuring. As of yesterday, the company had no outstanding
borrowings under the DIP Financing.
The court also approved an amendment to the previously announced
commitment letter among the company and certain of the DIP lenders to
extend the date by which court approval must be obtained for the
commitment letter to be effective through Jan. 31, 2001. Vencor, a
national provider of long-term healthcare services primarily operating
nursing centers and hospitals, filed chapter 11 on Sept. 13, 1999.
FindLaw Offers Free Same-Day Summaries of Latest Court
Decisions Via E-mail
FindLaw, the pioneer in online legal information and services,
announced yesterday that it is offering, free of charge, same-day case
law summaries of opinions issued by the U.S. Supreme Court, all 13
Federal Circuit Courts of Appeals, the California Supreme Court and the
New York Court of Appeals, according to a newswire report.
Subscribers to the Mountain View, Calif.-based service can also
receive particular case law summaries from these jurisdictions on a
weekly basis, in newsletters organized according to legal subject. These
subjects include Government Benefits, Civil Procedure, Immigration Law,
Constitutional Law, Injury and Tort Law, Contracts, Intellectual
Property Law, Criminal Law and Procedure Insurance, Environmental Law,
Labor and Employment Law, Family Law, Tax Law, Bankruptcy Law and Social
Security. The case law summary newsletters are organized by
jurisdiction, legal subject area, case title, date and docket number and
are available by subscription at
href='http://newsletters.findlaw.com/'>http://newsletters.findlaw.com.
Mariner Post-Acute Says Chapter 11 Plan Is Likely Months
Away
Although it has developed a business plan and has begun substantive plan
negotiations, Mariner Post-Acute Network Inc. (MPANQ) believes it will
likely be several more months before it can propose and confirm a
Chapter 11 plan. In a request for a three month extension of its
exclusive plan periods, the Atlanta-based nursing home operator says
it's unlikely that any plan could be proposed until after it has
concluded negotiations with federal regulators about the amount of any
reimbursement-related claims that may be owed to or owed by the
company.
Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The Daily
Bankruptcy Review Copyright © October 26,
2000.
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