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House Banking Committee to Mark Up Bill Dealing with Bankruptcy
Contracts
The Housing Banking Committee is expected to consider a bill that would
change how derivatives contracts are handled in bankruptcies, according
to the CQ Monitor. The Banking Committee also is scheduled to
mark up H.R. 1161, which would end a controversial effect that
bankruptcy filings have on derivatives contracts. Under current
bankruptcy law, if one side of the contract declares bankruptcy, that
party could receive money from the second company. The solvent company,
however, would have to wait in line with other creditors to receive
payment from the bankrupt company. The legislation would simply dissolve
the contract when one side declares bankruptcy. The Clinton
administration supports the bill, and little opposition is expected.
Information Management Associates Files Chapter 11
Information Management Associates Inc. announced yesterday that it has
filed chapter 11 in the U.S. Bankruptcy Court for the District of
Connecticut, according to a newswire report. The Shelton, Conn.-based
company had previously announced that it was seeking to raise additional
cash to fund its ongoing operations as well as examining ways to reduce
its ongoing needs for cash. The company filed chapter 11 to further its
efforts to address its liquidity needs, explore strategic alternatives
for the business and preserve value for its creditors and shareholders.
Creditors to Take Over Southern Mineral
Southern Mineral Corp. said yesterday the U.S. Bankruptcy Court for the
Southern District of Texas in Victoria approved the company's second
amended plan of reorganization Friday, giving control of the exploration
and production company to creditors, according to a Reuters report. The
company filed chapter 11 on May 2 and the plan is expected to become
effective on August 1. The plan calls for the issuance of common stock
to debenture holders that will represent about 78 percent of the
company's stock after the reorganization. In addition, a $5 million
payment will be made on a pro rata basis to the debenture
holders. The plan also calls for a new seven-member board comprised of
two present directors and five members selected by creditors.
Houston-based Southern Mineral owns interests in oil and gas properties
located along the Texas Gulf Coast, Canada and Ecuador. The company's
principal assets include interests in the Big Escambia Creek field in
Alabama and the Pine Creek field in Alberta, Canada.
Attorneys General Urge Judge to Reject Toysmart Settlement
In unusual opposition to the Federal Trade Commission (FTC), attorneys
general in 40 states will urge a U.S. bankruptcy judge to reject
Toysmart's proposed settlement with federal regulators that would allow
the conditional sale of the company's customer list, according to The
Wall Street Journal. In a 3-2 vote last week, the FTC agreed to
submit the deal today in Boston to U.S. Bankruptcy Judge Carol J.
Kenner. Massachusetts Attorney General Tom Reilly said the states
would permit the auctioning of the Toysmart customer list only if
customers are notified and agree to the sale. Massachusetts and 38 other
states filed formal objections last week.
AmeriServe Says Much Work Remains Before Sale
AmeriServe Food Distribution Inc. (AMSV) received several indications
from potential buyers showing interest for all or substantially all of
its assets, and said that a great deal of work remains before such a
sale, if that is the form of transaction that maximizes value for the
benefit of the
estate, could close. Accordingly, the foodservice distributor is seeking
a three-month extension of its exclusive periods for filing a
reorganization plan through Nov. 10 and for soliciting plan votes
through Jan. 9, 2001.
Singer Gets $35M Bid For Shares Of Portugal Affiliate
Singer Co. on Wednesday will ask a bankruptcy court to approve
procedures through which interested parties could attempt to top a $35
million offer the sewing machine manufacturer received for all the
outstanding stock of one a nonbankrupt affiliate in Portugal. Sociedade
Portuguesa De Capital De
Risco S.A. and Antonio Costa have offered $35 million for the shares of
Singer Europa S.G.P.S., S.A., a wholly owned subsidiary of Singer's
bankrupt Singer B.V. affiliate. The purchasers' bid was determined to be
the best of three final bid proposals Singer received for the shares.
Bids had been
solicited by The Blackstone Group, which serves as Singer's investment
bankers.
Courtesy
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