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A Delaware bankruptcy court on Monday approved supermarket Haggen’s plan to auction off the bulk of its stores in early November, in a process underpinned by tentative deals with two California grocery chains, the Seattle Times reported today. Haggen agreed to sell 36 stores to Gelson’s Market and to Smart & Final in two stalking-horse deals, designed to set a baseline price for the auction. The United Food and Commercial Workers International Union (UFCW) objected to the plan last week, in part because Smart & Final, which operates no-frills warehouses in southern California, does not have a collective bargaining agreement with the union’s local affiliates. UFCW, which does not object to the deal struck with union-friendly Gelson’s, wanted more time to find other buyers for the 28 stores Smart & Final agreed to purchase. Others, including potential landlords, also filed objections with the court.

A New York state judge has sided with a group of lenders that are blocking an Arch Coal Inc. debt-swap deal, effectively halting a transaction that advocates have said would keep the coal company out of bankruptcy, the Wall Street Journal reported today. Judge Saliann Scarpulla of the New York State Supreme Court denied a request by an affiliate of GSO Capital Partners that she prevent a group of majority lenders from freezing the debt swap. The standard for granting such a request is that the judge must find that allowing the lenders to proceed would do “irreparable harm.” She didn’t find that to be the case. “Because I find that Plaintiff’s alleged harm can be fully compensated by money damages by the Directing Defendants, Plaintiff’s harm is not irreparable. Plaintiff argues that, if Arch enters bankruptcy, any claim for money damages against the Directing Defendants would be more complex to prove. This, however, is not sufficient to establish irreparable harm,” she said in her ruling issued on Friday. Arch Coal, one of the country’s largest coal producers, is trying to get creditors to swap their debt in exchanges designed to improve Arch’s balance sheet as the coal market faces continued weakness.

The trustee in the bankruptcy of Hutcheson Medical Center is asking a judge to authorize the sale of financially ailing Fort Oglethorpe Hospital at auction, the Chattanoogan reported today. Trustee Ronald Glass said there would be more value if the hospital is sold as a going concern (still operating) rather than it having closed due to mounting debt. He is proposing that bidders for the hospital and its assets, including a nursing home and a surgery center, be pre-qualified to determine that they have the financial ability to make the acquisition and the ability to operate the facility. There would be an auction date set that would be attended by only qualified bidders, the trustee, Regions Bank, the creditors’ committee and attorneys. The motion says that it is anticipated that a winning bidder would want to retain current Hutcheson employees, but that is not a requirement. Read more. 

Explore the intricacies of the health care profession and bankruptcy with ABI’s Health Care Insolvency Manual, Third Edition. 

Relativity Television’s employees, including chief executive Tom Forman, are expected to remain in place when senior lenders buy the TV studio from the ailing company later this month, the Wall Street Journal reported yesterday. In bankruptcy court papers filed on Monday, the group of senior lenders that are buying the TV studio out of bankruptcy sought to reassure its employees, the bankruptcy judge and a handful of remaining objectors that they can expect “business as usual” after the deal is completed. The company’s lenders will go before Judge Michael Wiles today to face the remaining objectors and to address lingering questions before the sale closes Oct. 20.

Forest Park Medical Center San Antonio’s landlord has filed for bankruptcy protection after the hospital stopped paying rent, the San Antonio (Texas) Express-News reported on Saturday. FPMC San Antonio Realty Partners LP, which owns the real estate and building where the hospital operates, filed for chapter 11 on Tuesday in the U.S. Bankruptcy Court in San Antonio. The partnership has already hired commercial real estate firm CBRE to find a buyer for the property, said Todd Furniss, an executive with the landlord’s general partner. The approximately $100 million surgical specialty hospital opened its doors a year ago. It features 54 private patient rooms, 12 operating suites and six intensive care rooms. Read more. 

Read more about issues surrounding a hospital bankruptcy in ABI’s Health Care Insolvency Manual, Third Edition. 

A bankruptcy judge on Wednesday declined to order a new sale of properties belonging to the Diocese of Gallup, N.M., even though auctioneers made an “error in judgment” by turning away a newspaper reporter and a graduate student from what had been billed as a public auction last month in Albuquerque, the Albuquerque Journal reported on Thursday. Bankruptcy Judge David T. Thuma said that ordering a new auction could harm victims of sexual abuse by priests by reducing the money available to settle the diocese’s chapter 11 case. Auctions held last month in Albuquerque and Phoenix netted the diocese about $160,000 after fees were paid to real estate brokers handling the sales. As of June 30, legal and professional costs in the case had mounted to more than $2.6 million. Ordering a new auction “would cost money,” Judge Thuma said at the end of a hearing in Albuquerque. “There is a risk that ordering a new auction would harm the creditors, who are abuse victims.” Read more.

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Texas’s Quicksilver Resources Inc. will go on the auction block in December, hoping to line up a sale that eluded it before it filed for bankruptcy protection, The Wall Street Journal reported yesterday. Judge Laurie Selber Silverstein signed off on rules to govern the bidding on the oil-and-gas company and Quicksilver’s Canadian assets, which aren’t caught up in the bankruptcy action, are also being offered for sale. Creditors are worried the auction might fail to produce a valuable offer, so they are pressing for continued discussions about a chapter 11 reorganization plan for Quicksilver. The company is willing to pursue a reorganization plan but believes that the renewed sale effort may succeed.