Supreme Court Won't Hear NextWave Appeal
Bankrupt wireless provider NextWave Telecom continued its losing streak
in federal court yesterday, according to a newswire report. The
U.S. Supreme Court declined for the second time to hear NextWave's
appeal of its forfeiture of 90 wireless licenses to the Federal
Communications Commission (FCC), which occurred in 1988 after NextWave
defaulted on payments to the FCC and filed for bankruptcy
protection. On Dec. 12, the FCC plans to auction those 90 licenses
and about 400 others, which cover most of the major U.S. markets and are
highly sought after by large wireless network operators.
NextWave still has a lower-court appeal pending and could receive
relief from a lame-duck Congress next month. While the Supreme Court
ruling makes it more likely that the auction will occur as scheduled,
the possibility of a delay still exists. In addition, the overall
price at which the licenses are sold at auction could be depressed,
analysts said, providing NextWave the opportunity to win them back.
“Bid winners and the FCC could either be big winners or big
losers, with no safety net in between,” said Current Analysis
analyst Todd Harrington. “NextWave's unresolved litigation will
definitely have a chilling effect on potential bidders both as to how
much they are willing to spend on these licenses and also if they will
bid at all.”
Creditrust’s Creditors Seek to Sell Firm in ‘Hostile
Takeover’
The dissatisfied creditors of the bankrupt Creditrust Corp. are
proposing a plan to sell the company to a competitor in what a top
Creditrust executive called “a hostile takeover” attempt,
according to the Baltimore Sun. Under the creditors' plan,
the Woodlawn, Md.-based company would be sold for $24.5 million in cash
to Worldwide Acquisitions LLC of Atlanta. “We found our own
white knight,” said Joel I. Sher, an attorney with Shapiro Sher
& Guinot who represents the creditors in the bankruptcy. “We
have the authority to file our own plan.”
Creditrust, which filed for chapter 11 in June, listed $116 million
in assets and $27.6 million in debt. Sher said creditors want to
be paid in cash, and that under Creditrust's reorganization plan they
could also receive notes in a new company called NCO Portfolio
Management Inc.
Joseph K. Rensin, Creditrust's chairman and chief executive officer,
called the creditors' plan “inferior” and expects creditors
to be paid in full with cash. He acknowledged, however, that there
is a chance they could receive some notes as payment. “We
think that it [our plan] is in the best interest of all of our creditors
as well as our shareholders,” Rensin said. “They have
launched what is essentially a hostile takeover. We do not believe they
will be successful.”
Judge Approves CRIIMI MAE Plan to Pay
Creditors, Emerge From Bankruptcy
Judge Duncan W. Keir of the U.S. Bankruptcy Court for the
District of Maryland, Greenbelt Division, yesterday signed an order
confirming the reorganization plan under which CRIIMI MAE Inc. and two
affiliated companies will emerge from bankruptcy, according to a
newswire report. The order provides for an effective date for the
reorganization of no later than March 15, unless the parties and the
court agree to extend the date or the court itself extends the
date.
The Rockville, Md.-based company's confirmed reorganization plan
provides for the payment of all allowed claims of secured and unsecured
creditors in full. The plan calls for paying the creditors through
recapitalization financing of about $847 million, consisting of about
$267 million of secured financing from its two major secured creditors,
Merrill Lynch and German American Capital Corp. (GACC), about $161
million of secured financing from certain existing unsecured creditors
and about $419 million of proceeds from already completed sales of
commercial mortgage-backed securities.
CenterSpan Announces Conference Call to
Discuss Potential Acquisition of Scour
CenterSpan Communications yesterday announced that the company
will host a conference call tomorrow to discuss its potential
acquisition of Scour Inc., according to a newswire report. Scour
is the digital entertainment portal that CenterSpan will bid on to
acquire out of bankruptcy on Dec. 12. The Hillsboro, Ore. company
will also provide details concerning its new secure and legal digital
distribution channel, scheduled to be launched in the first quarter of
2001.
Interested parties can access the CenterSpan/Scour
bid conference call at 1:30 p.m. Pacific time by dialing (212) 346-6402,
or by going to CenterSpan's web site at
href='http://www.centerspan.com/'>www.centerspan.com for a live web
cast. A replay of this conference call will be available via the
Internet through CenterSpan's web site, and for 48 hours after the call
(800) 633-8284 with pass code 17024842.
Grand Union Names Jeffrey Freimark As CEO
Supermarket chain Grand Union, which filed for bankruptcy protection
last month, yesterday announced that it named Jeffrey Freimark as
president and chief executive, according to a Reuters report. The
Wayne, N.J.-based company said Freimark will continue to serve as chief
financial officer, treasurer and chief administrative officer.
Freimark succeeds Gary Philbin, who resigned as president and CEO and
as a company director. On Oct. 3, Grand Union filed for voluntary
chapter 11 protection in U.S. Bankruptcy Court in Newark, N.J. On
Nov. 17, the company said it would sell most of its assets to C&S
Wholesale Grocers Inc. for $301.8 million in cash.
Fife, Wash. Leasing Company Files for Bankruptcy
After months of delay, T&W Financial Services has filed chapter 11
and will appear at a hearing on Dec. 4 at the U.S. District Court in
Tacoma, Wash., according to a newswire report. Records indicate
that hundreds of the Fife, Wash.-based company’s creditors are
owed millions of dollars by the leasing company. Records show
assets of $2.45 million, but a debt of $101.7 million, with the top 10
creditors owed a total of $49.1 million. Creditors include
numerous banks, including First Union National Bank in Philadelphia
($29.3 million), Lehman Commercial Paper in New York ($9.5 million), and
First Community Bank in Lacey, Wash. ($3 million).
GMAC Asks Court to Convert Tower Air Bankruptcy to Chapter
7
GMAC Business Credit LLC, a unit of the General Motors Corp. (GM), is
seeking to have Tower Air Inc.’s chapter 11 bankruptcy converted
to a chapter 7 liquidation, according to a newswire report. GMAC
is the Jamaica, N.Y., airline’s largest creditor and also provides
the company with debtor-in-possession (DIP) financing. If the
conversion request is denied, GMAC will ask the court to grant it relief
from the Bankruptcy Code’s automatic stay provisions and permit
GMAC to recover its inventory and accounts receivable collateral.
GMAC officials claim that the value of Tower Air’s assets
continues to dwindle and that there’s no reasonable chance that
the company will be able to reorganize and emerge from bankruptcy.
Before Tower Air’s February bankruptcy filing, GMAC loaned the
airline about $15 million. As of Nov. 20, the outstanding balance
on GMAC’s loans was around $21.4 million. Chapter 11 Trustee
Charles A. Stanziale Jr. has requested that GMAC provide more than $1
million in additional financing for Tower Air to cover expenses from
November through March.
U.S. Restaurant Properties to Transfer 12 Gas Stations
U.S. Restaurant Properties Inc. (USV) will transfer 12 gas stations,
previously operated by B.C. Oil Ventures LLC, to six new tenants,
according to a newswire report. The gas stations are located in
Texas and California and have annual revenues of about $1.5
million. USV said in an August press release that B.C. Oil filed
for bankruptcy in the Central District of California. Yesterday,
USV announced that it expects seven of the stations to be sold later for
about $10 million to one of the tenants. The transaction was made
possible after a bankruptcy court action allowed USV to take back the
properties from B.C. Oil.
WHX Announces Loss
WHX Corp., the parent of Wheeling-Pittsburgh Steel Corp., reported a
third-quarter loss of $21.1 million today, one week after the steelmaker
filed for chapter 11 bankruptcy protection, according to a newswire
report. The net loss for the third quarter was based on sales of
$446.9 million, compared with a net gain of $11.1 million on sales of
$447.6 million in the same quarter last year. WHX had warned of
its poor performance last week when it reported to the Securities and
Exchange Commission its third-quarter report, which ended Sept. 30,
would be late.
WHX also reported an operating loss of $5.4 million for the third
quarter, compared with a gain of $17.6 million for the same quarter last
year. A federal bankruptcy judge in Ohio last week approved a $290
million loan that will keep Wheeling-Pittsburgh Steel Corp. operating
while it reorganizes. Facing competition from overseas producers,
WHX sought protection from its creditors with nine filings in
Youngstown, Ohio, but said no plant closures or layoffs are
planned. Wheeling-Pitt is the nation's ninth-largest integrated
steel producer.
Furniture Retailer Closes with Major Sale
Shaw Furniture Galleries Inc., a 60-year-old furniture retailer in
Randleman, N.C., is shutting down with a big sale, according to a
newswire report. The furniture retailer closed in August when it
filed for bankruptcy protection along with its parent company,
Living.com of Austin, Texas. Now, Maynards Industries, a Canadian
company that is in charge of liquidating Shaw's remaining inventory, has
discounted prices from 30 to 50 percent off Shaw's prices.
When Living.com filed for bankruptcy protection, it laid off 275
employees, and more than 60 Shaw employees lost their jobs. Industry
experts say that the problems started when the company was unable to
complete a stock offering or raise additional cash over the
summer. The U.S. Bankruptcy Court in Austin is handling the
bankruptcy proceedings. Maynards is also liquidating Living.com
inventory at the Living.com warehouse.
Hedge Fund Founder Pleads Guilty to Securities Fraud
Michael Berger, founder of the Manhattan Investment Fund Ltd., a hedge
fund that bet against high-flying Internet stocks, pleaded guilty
yesterday to sending phony financial statements to investors who lost
more than $400 million in the scheme, according to a Reuters
report. Berger, an Austrian national, admitted during his plea
hearing in Manhattan federal court that he sent misleading statements to
investors between September 1996 and January 2000 when the market turned
against him.
He pleaded guilty to one count of securities fraud that carries a
possible maximum prison term of 10 years and a $1 million fine.
Berger, who is scheduled for sentencing on March 16, can also be ordered
to pay restitution to victims of the scheme.
The fund, registered in the British Virgin Islands, had raised more
than $575 million from investors since its launch in September 1996 by
overstating the performance and market value of the hedge fund's
holdings, prosecutors said. In March a court-appointed receiver
for Manhattan Investment Fund Ltd. filed chapter 11 on behalf of the
fund.
ElderTrust Announces Filing of Motions With
Bankruptcy Court
ElderTrust, an equity health care real estate investment trust,
yesterday announced that Genesis Health Ventures Inc. and The Multicare
Companies Inc. are seeking the U.S. Bankruptcy Court’s approval to
enter into a lease and loan transactions between the entities. The
Bankruptcy Court will hear the motions in January, and during the period
between the filing of the motions and the court hearing, the creditors
for Genesis and Multicare may object to all or any portion of the
agreements. If approved, the transactions should be completed by
January.
ElderTrust, based in Kennett Square, Penn., is a real estate
investment trust that invests in real estate properties used in the
health care services industry, principally along the East Coast of the
United States.
Carmike Cinemas Seeks 9-Month Extension of Plan
Exclusivity
Carmike Cinemas Inc. is shooting for a long-running extension of its
exclusive periods for filing a chapter 11 reorganization plan and
soliciting plan votes — through Sept. 28 and Nov. 27, 2001. The
theater operator's exclusive plan filing and solicitation periods are
set to expire on Dec. 6 and Feb. 5. The U.S. Bankruptcy Court in
Wilmington, Del., will consider the exclusivity request at a hearing
Thursday. The motion picture theater operator says it needs to analyze
the operating results from the summer 2001 season and incorporate them
into financial projections before it will be ready to develop a business
plan that will form the foundation of a reorganization plan.
Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The Daily
Bankruptcy Review Copyright © November 28,
2000.
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