House Attaches Bankruptcy Bill to State Department
Authorization
Republican leaders last night launched a last-ditch effort to secure
passage of legislation to overhaul the U.S. bankruptcy system to make it
harder for individuals to wipe out their debts, according to a Reuters
report. In an unusual move, a final bankruptcy measure will be
substituted for an unrelated State Department funding bill (H.R. 2415)
and brought up for votes in the House and Senate as soon as
possible. The work of the conference — pouring the contents
of bankruptcy reform into H.R. 2415 —would be a formality and
could be completed overnight and returned to the House as soon as
Thursday.
Most House Democrats decried the maneuver as a “blatant misuse
of the rules of the House,” according to Judiciary Committee
Ranking Member John Conyers (D-Mich.). Other objections were filed
by Reps. Jerrold Nadler (D-N.Y.) and Sheila Jackson Lee (D-Texas).
However, not all Democrats opposed inclusion of the bankruptcy bill on
the State Department authorization measure. Rep. Rick Boucher
(D-Va.), a cosponsor of bankruptcy reform and member of the House
Judiciary Committee, applauded the procedural move as being necessary
due to the problems encounted in the Senate.
Despite the new push, the legislation's chances of enactment are
unclear. Opponents in the Senate could force lengthy debates
congressional leaders can ill afford as they struggle to pass the
federal budget and adjourn for the year. And while it is not clear
what form the final bill will take, President Clinton has repeatedly
threatened to veto earlier versions, saying that they failed to strike
an appropriate balance between preventing abuses of the bankruptcy
system and ensuring truly needy debtors can still get a fresh start.
General Cinema Seeks Bankruptcy Protection
GC Cos Inc., parent company of General Cinema Theaters Inc., yesterday
said it filed for bankruptcy protection and that its chief executive and
its president have resigned, according to a Reuters report. The
company blamed oversaturation of the market as the cause of its
financial problems as well as those of other troubled companies,
including United Artists Theater Circuit Inc., Edwards Theaters Circuit
Inc. and Carmike Cinemas Inc.
GC said it and some of its subsidiaries were voluntarily filing
chapter 11 and that certain of its subsidiaries were filing for chapter
7 liquidation proceedings. The filings were made in the U.S.
Bankruptcy Court for the District of Delaware. The company said it
would report total assets of $328.9 million and total liabilities of
$195.1 million as of Aug. 31 in its filings. GC plans to continue its
operations while it completes its restructuring program, which includes
plans to close 17 additional theatres with 103 screens in October.
The company will receive up to $45 million of debtor-in-possession (DIP)
financing to provide the company with resources to fund its operations
during the proceedings.
Sunterra Expected to Name Rayburn As CEO
The Orlando, Fla.-based Sunterra Corp., owner and manager of
time share resorts, is expected to name shortly a new chief executive to
help pull it out of bankruptcy and prime it for a merger, according to a
Reuters report. The company's board of directors, with the support of
the creditors, yesterday was expected to name Greg Rayburn, from Jay
Alix and Associates, a New York consulting firm, as the new CEO and
president. Rayburn will replace former CEO Lin Morison, who will become
vice president of the board.
Sunterra, which owns about 90 resorts around the world, has about $1
billion in total assets and has $850 million in debt. But Sunterra needs
to sell its bad assets, possibly some good ones and some undeveloped
land to become a viable merger candidate, said Steve Altman, an analyst
with the credit rating agency, Fitch. The company must also prove
that it can stabilize its operations. Sunterra filed chapter 11 on
May 31 after a substantial mortgage receivable write-off. Prior to the
chapter 11 filing, Sunterra made major reductions in its U.S. sales and
marketing activities to conserve cash.
Store Closing Sales Commence at Four Levitz
Furniture Stores
Hilco Merchant Resources and the Professional Sales & Consulting
Company were recently appointed as joint agents by the U.S. Bankruptcy
Court in Delaware to liquidate the inventory in four Levitz Furniture
Stores, according to a newswire report. The four stores are located in
Massachusetts and New Hampshire. Store Closing Sales will start at
the four stores today.
“We are extremely pleased to have been selected by
Levitz,” said Michael Keefe, Chief Executive Officer of Hilco
Merchant Resources, “our group comprises the foremost specialists
in retail liquidation and furniture liquidation in particular.
This combination of firms has afforded a very high recovery to Levitz
and will also provide the retail consumer excellent deals.”
Hilco Merchant Resources and its affiliates provide strategic financial
services for retailers, distributors, manufacturers, lenders, venture
capitalists, investment bankers and the professionals that serve
them.
Chipshot.com Bogeys Into Bankruptcy
Chipshot.com, the online golf shop,
filed chapter 11 bankruptcy protection yesterday and has laid off all
but a handful of its employees, according to a newswire report.
Although the web site is still accepting orders, executives say the
Sunnyvale, Calif.-based
href='http://rd.yahoo.com/Dailynews/inlinks/cn/*http://www.chipshot.com/'>Chipshot
is no longer shipping items and may shut down its site later this
week. Chipshot chief executive Brian Sroub attributed the
company's struggle to the bear market for technology stocks.
Chipshot filed chapter 11 last month in the U.S. Bankruptcy Court for
the Northern District of California in San Jose. Chipshot launched in
1995 and raised some $50 million in four rounds of financing, including
$29 million in fourth-round funding in June. Among the company's backers
were Sequoia Capital and Oracle Venture Fund. In the past several
months, 'three or four' investors have expressed interest in buying the
company or its assets, Sroub said, but it is not known if or when
Chipshot would be acquired.
Unidigital Gets Interim Approval To Use Cash
Collateral
Unidigital Inc. (UDGI) has received interim bankruptcy court
authorization to use its pre-petition secured lenders' cash collateral.
Judge Mary F. Walrath of the U.S. Bankruptcy Court in Wilmington, Del.,
also granted the media services company's pre-petition lenders adequate
protection, which guards against any decrease in the value of their
collateral during the bankruptcy case. Judge Walrath scheduled a hearing
for Oct. 30 to consider final approval of the cash collateral use and
grant of adequate protection.
Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The Daily
Bankruptcy Review Copyright © October 12,
2000.
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