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Duane, Morris & Hecksher Retained as Lead Counsel for Flooring
America
Last week, the U.S. Trustee for the Northern District of Georgia's
official five-member committee of franchisees in the bankruptcy filing
of Flooring America Inc. unanimously voted to retain Duane, Morris &
Heckscher LLP as lead counsel, subject to court approval. Henry
Sewell of Long, Aldridge & Norman in Atlanta will act as local
counsel. Flooring America filed chapter 11 on June 15. The company said
that a liquidity crisis precipitated the filing by the debtor, who
listed more than $342,549,000 in assets and $252,211,000 in liabilities.
Cassandra Group Files Chapter 7
The Cassandra Group, the investment fund run by jailed celebrity money
manager Dana Giacchetto, Friday filed chapter 7 in Manhattan U.S.
Bankruptcy Court, showing assets of less than $25,000, according to a
newswire report. The Cassandra fund is expected to face claims from
creditors in the millions of dollars, representing money that was
diverted out of client accounts. The initial filing, made by the
court-appointed receiver, lists Cassandra's assets as $10,000 in a
Citizens Bank account and $12,991 in Chase Manhattan Bank. Those sums do
not represent client accounts, but rather assets owned by Cassandra as a
business.
Giacchetto was charged by criminal complaint on April 3 of looting
accounts belonging to clients of his Cassandra Fund. On the same day,
the SEC filed a related action and a court froze Giacchetto's assets. At
one time, Giacchetto managed approximately $100 million for about 300
clients, although he claimed to manage more than $300 million in assets.
The government charged that Giacchetto stole money by diverting checks
issued from client accounts at Brown & Co. in an asset-kiting
scheme. He deposited those checks, payable to his clients, into
Cassandra's main account at U.S. Trust, where it was commingled with
Cassandra's operating funds.
The schedule of potential creditors contains names of intimately
involved in the entertainment industry, including actors Ben Affleck,
Cameron Diaz, Courteney Cox Arquette, Ed Burns, Leonardo DiCaprio and
Matt Damon, as well as several children of Bob Dylan. Also listed as
potential creditors are film musician Bruce Broughton, director Kathryn
Bigelow, producer Michael Besman, Marianne Boesky (daughter of Wall
Street investor Ivan Boesky), Christopher Cuomo (son of former New York
Gov. Mario Cuomo), artist Ross Bleckner, Andre Balazs (owner of the
Chateau Marmont Hotel), and members of the rock groups Afghan Whigs and
Phish. Phish is a secured creditor with a judgment against the fund.
Argentine Airline Receives Rescue Capital
Argentina flag carrier Aerolineas Argentinas yesterday received a $208
million capital boost to hold off bankruptcy while a plan was sought,
according to a Reuters report. The Buenos Aires' airline has been
struggling with a debt load equal to equity. The money was pledged by
the Spanish government, which manages the airline, to prevent the
collapse of Aerolineas before shareholders meet again on September 15 to
hash out a larger rescue package. Aerolineas' top shareholders met
yesterday to discuss a much larger $650 million cash injection that is
part of a plan to make the privately held company profitable by the end
of 2001. The meeting ended without a resolution on key terms of the
package, said Alicia Castro, secretary general of Argentina's flight
attendants' union.
Paging Network Files for Chapter 11 Protection
Paging Network Inc. said yesterday it filed chapter 11 in the U.S.
Bankruptcy Court for the District of Delaware to speed up its proposed
merger with Arch Communications Group Inc., according to a Reuters
report. The filing will allow Paging Network, or PageNet, to complete
its reorganization under court supervision. The petition asks the court
to set an early date to consider the reorganization plan. PageNet said
Metrocall Inc.'s offer to buy the New York-based company for $748.6
million cash and stock plus the assumption of $746 million in debt was
not 'superior' to the Arch merger deal. PageNet's board will not discuss
the proposal further with Metrocall.
Woman Admits to Falsifying Bankruptcy Petition
Rosalinda Badah, 43, of Passaic, N.J., pleaded guilty yesterday to
filing a false bankruptcy petition in 1997 that included a phony Social
Security number, according to a newswire report. Badah confessed to U.S.
District Judge Harold A. Ackerman in Newark, N.J., that she filed a
false petition in U.S. Bankruptcy Court. Badah's petition listed assets
of $2,290 and liabilities of about $69,000, according to court papers,
with most liabilities in the form of credit-card debt. Under federal
guidelines, Badah faces between six and 12 months in prison; sentencing
is expected on Oct. 18.
Keathley Aviation Seeking to Dismiss Chapter 11
Thomas Keathley, president of Keathley Aviation, requested that his
company's chapter 11 be dismissed in order to help the company increase
its chances of paying of its debt, according to a newswire report.
Keathley said U.S. Bankruptcy Judge Margaret Mahoney would decide
Friday whether to dismiss the case against the Pensacola, Fla.-based
company. 'We want to file a lawsuit against some people who have
essentially put us out of business,' Keathley said. 'We've looked for
seven months, but we can't find a lawyer that will take the case while
it's in bankruptcy. If we get the bankruptcy dismissed, we can get a
lawyer on a contingency basis, and then we can follow up on a lawsuit.'
If the aerospace engineering and manufacturing company finds a lawyer
before Friday, however, Keathley said the company likely would file for
chapter 7 liquidation, enabling any legal action to be pursued through
the bankruptcy court. Keathley said the company's debt of about $5.2
million has dropped to about $2 million over the past year, including
about $400,000 owed in back pay to employees.
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