Liquid Audio to Bid for Scour Inc.'s Tech Assets
Liquid Audio Inc., a company that provides software for Internet music
delivery, announced on Friday that it will bid for the technology assets
of bankrupt Scour Inc., according to a Reuters report. The Redwood
City, Calif.-based Liquid Audio said it was filing with the U.S.
Bankruptcy Court for the Central District of California in Los Angeles
for court approval. If its bid is successful, Liquid Audio
anticipates that it would integrate the privately-held Scour's
file-sharing technology into the Liquid Music Distribution System. This
would enable online retailers and music destinations in Liquid Audio's
global distribution network to add peer-to-peer music services.
Belgian Court Refuses to Grant Bankruptcy Protection for Lernout
& Hauspie
A commercial court on Friday refused the request of Lernout &
Hauspie Speech Products NV (L&H) to seek bankruptcy protection,
according to the Associated Press. In its ruling, the court in
Ieper, Belgium, where the company is based, said it rejected the request
because of a lack of accounting information and called the proposed
restructuring measures insufficient.
“The proposed restructuring measures stand in sharp contrast
with the boastfulness of founder Jo Lernout,” Judge Michel
Handschoewerker said. “Such boastfulness is totally out of
place. What we need is correct and full financial information,
which isn't there.” The judge said Lernout & Hauspie
could file a new request for bankruptcy protection but must supply more
and better information.
L&H also filed for protection from creditors under chapter 11 of
U.S. bankruptcy law to give it time to develop a plan to reorganize its
business in the wake of scandals which have sent its stock from a peak
of $70 a share in March to $3.50 last month before trading was
suspended.
Startup Airlines Face Bumpy Skies as Economy Slows
A likely downturn in demand for air travel and high fuel costs could
cause small airlines already hobbled by their size to go under,
according to a Reuters report. Recent bankruptcy filings by
Dallas-based Legend Airlines and Las Vegas-based National Airlines
highlight the dangers newer carriers face as they seek to challenge the
considerable assets and extensive route networks of major airlines.
Already, there are only a handful of small competitors outside of the
majors and their regional feeder-airlines, fewer than at any time since
the airline industry was deregulated in 1978, said Ed Faberman,
executive director of the Air Carrier Association of America, a
coalition of smaller airlines. The small airlines, most of which
operate fewer than 25 jets, account for less than 2 percent of domestic
air travel. But new entrepreneurs still flock to the industry with hopes
of wooing customers and lowering fares in their respective markets.
Vanalco To Shut Aluminum Operations By Year End
Vanalco Inc., a privately-owned aluminum producer in Washington state,
will completely shut down its 115,000-tonne-per-year aluminum smelter by
the end of December, according to a Reuters report. General
Manager Chuck Reali said he does not know if the closure will be
permanent, and declined to say whether the company would be filing for
chapter 11.
Three Banks Settle Suit for $52 Million
Mellon Financial Corp. and two other banks will pay $52 million to
settle claims that they received a hefty loan payment just before the
now-defunct Allegheny Health, Education and Research Foundation (AHERF)
filed for bankruptcy, according to the Associated Press. In a
lawsuit brought last year, AHERF trustee William Scharffenberger claimed
Mellon had an unfair advantage over other creditors when it and three
other institutions received a payment of $89.5 million.
Scharffenberger said the demise of the system was in part sparked by the
decision of AHERF officials to repay a loan from Mellon and three other
lenders even though the lenders had made no formal notice of
default.
AHERF filed for bankruptcy in July 1998, citing $1.4 billion in
debts. Once the largest non-profit health chain in the state,
AHERF controlled 14 hospitals, including 10 hospitals and a medical
school in the Philadelphia area. Mellon spokesman Ron Gruendl said
the bank would pay about $14.6 million, or 28 percent, of the $52
million. The rest will come from the three others banks that were part
of a Mellon-led consortium at the time — Toronto-Dominion, Bank
One and First National Bank of Chicago. The payment was announced
Thursday before U.S. Bankruptcy Court Judge Bruce
McCullough.
EMC Tycoon Possible Red Sox Buyer
Roger Marino, a high-tech tycoon who previously owned the Pittsburgh
Penguins, says he is one of the bidders to buy the Boston Red Sox,
according to the Associated Press. Marino made his fortune as
co-founder of EMC Corp. of Hopkinton, a computer company. In
recent years, he has invested in a variety of ventures, including
StorageNetworks Inc., a data storage firm. He owned the NHL's Penguins
for 2 1/2 years. Marino took the Penguins into bankruptcy court in 1998
for protection from creditors. The team was eventually bought by hockey
great Mario Lemieux. At the time of the bankruptcy filing, Marino,
who was co-owner of the team with movie producer Howard Baldwin, cited
losses of $37.5 million from the previous two seasons.
TSR Wireless Files for Bankruptcy
TSR Wireless LLC, a pager service provider and retailer of wireless
devices, declared bankruptcy on Friday, five days after it halted
business and left nearly 2.6 million subscribers in limbo and 1,700
workers jobless, according to the Associated Press. The company,
which billed itself as the nation's sixth-largest pager carrier, seeks
to liquidate its assets under chapter 7 of the federal Bankruptcy
Code. Its petition was filed in U.S. Bankruptcy Court in Newark
and assigned to Chief Bankruptcy Judge Rosemary Gambardella.
Sale of Big Boy Rights OK'd
A federal bankruptcy judge Friday signed off on an investor's plan to
buy trademark and franchise rights to Big Boy restaurants in a $24.8
million cash deal, preserving one of dining's best-known logos,
according to the Associated Press. In addition to the rights to
the Warren, Mich.-based chain of 455 Big Boy eateries, Robert Liggett
Jr. also will buy the commissary-and-concession division from Elias
Bros. Corp., which filed for chapter 11 bankruptcy in October.
Liggett also acquires 19 company-owned Big Boys. The deal,
endorsed by U.S. Bankruptcy Judge Steven Rhodes, will close Dec.
21. Liggett said he would change the Elias Bros. name to Big Boys
Restaurants International and keep the company based in Warren, a suburb
of Detroit.
Lukewarm Reception Seen for Wireless Auction
A government auction of wireless licenses tomorrow is expected to
receive only marginal interest, according to a newswire report.
The Federal Communications Commission (FCC) and its auction of wireless
licenses is expected to garner a record of around $18 billion for the
U.S. Treasury, according to a recent Merrill Lynch prediction. Still,
industry watchers have seen a dramatic decline in interest in the
auction among the larger wireless companies in recent weeks.
“I do not expect the auctions to raise tremendous amounts of
money,” said The Strategis Group Senior Vice President Elliott
Hamilton.
For sale are no fewer than 422 wireless licenses in 195 markets,
including New York and Los Angeles. Ninety-five of the licenses up
for auction once belonged to NextWave Telecom, a company that forfeited
its licenses in 1998 when it defaulted on its payments to the FCC and
entered bankruptcy. NextWave thus far has exercised a futile
campaign in federal court to win the licenses back, including two
setbacks in the U.S. Supreme Court. There is one federal case
still pending that won't be resolved until after the auction. If
NextWave prevails, whichever companies won NextWave's licenses will have
to give them back to NextWave. The government will reimburse the
purchase price, but the carriers will have to write off any work done
with the spectrum.
