The price for Dendreon Corp., the bankrupt developer of a drug to treat advanced prostate cancer, rose more than one-third to $400 million before an auction has even been held, Bloomberg News reported yesterday. To retain its place as the stalking-horse bid, Valeant Pharmaceuticals International Inc. boosted its initial offer from $296 million. A bankruptcy judge in Delaware approved Valeant as the stalking horse yesterday. Competing bids for the Feb. 12. auction are due Feb. 10. A sale-approval hearing is set for Feb. 20.
A U.S. judge dismissed the bulk of two lawsuits by bankrupt wireless venture LightSquared and equity owner Harbinger Capital Partners accusing Deere & Co and other GPS firms of misleading them about interference concerns and hastening the company's insolvency, Reuters reported yesterday. In an opinion rendered yesterday in Manhattan federal court, U.S. District Judge Richard Berman threw out Harbinger's lawsuit, and nixed nine of 11 claims asserted by LightSquared, serving a blow to its hope for hefty damages that could help salvage its business. LightSquared has been in bankruptcy since 2012, when the Federal Communications Commission revoked its license to build a planned wireless network over fears it could interfere with GPS systems. Harbinger, the hedge fund run by Phil Falcone, would have to give up much of its equity and all of its operational control of LightSquared under a restructuring plan being voted on by creditors. The lawsuits alleged that Deere, Garmin International, Trimble Navigation Ltd., and a GPS industry group led LightSquared to believe the planned network would not pose an interference risk. It wasn't until LightSquared had pumped $4 billion into the project, the plaintiffs argued, that the GPS industry voiced their concerns. Judge Berman dismissed many claims from both plaintiffs, including breach of contract and civil conspiracy, leaving alive only LightSquared's claims for negligent misrepresentation and constructive fraud.
Electronics retailer RadioShack Corp. filed for U.S. bankruptcy protection yesterday and said that it had a deal in place to sell as many as 2,400 stores to an affiliate of hedge fund Standard General, its lender and largest shareholder, Reuters reported today. Wireless company Sprint Corp. would operate as many as 1,750 of those stores under an agreement with Standard General, Sprint said separately. RadioShack's bankruptcy, which has been expected for months, follows 11 consecutive unprofitable quarters as the company has failed to transform itself into a destination for mobile phone buyers. But its sale agreement with Standard General could spare it the fate most retailers suffer in chapter 11: liquidation. RadioShack said in a statement that the Standard General affiliate, called General Wireless, would acquire between 1,500 and 2,400 of its 4,100 stores. Sprint would occupy about one-third of each RadioShack store, selling "mobile devices across Sprint’s brand portfolio as well as RadioShack products, services and accessories," Sprint said. Other potential buyers will also have the opportunity to bid on RadioShack assets, pending court approval.
With an outstanding debt of more than $6.2 million, Albuquerque, N.M.-based Flying Star Cafe filed for chapter 11 protection and closed two of its restaurants on Friday, the Albuquerque Journal reported on Saturday. Underperforming restaurants in Bernalillo and Santa Fe forced the move, said Jean Bernstein, co-owner of the 28-year-old company, and both were shut down on Friday. Flying Star will continue operating as a debtor in possession of its business under a chapter 11, through which it will attempt to negotiate with its creditors to pay off the outstanding debt. Those plans have the support of St. Louis, Mo.-based US Bank, according to court documents. US Bank is the company’s only creditor with claims secured by cash collateral.
Cache Inc., the women’s clothing chain known for helping popularize Armani and Versace designs in the U.S., is planning to liquidate the company after filing for bankruptcy, Bloomberg News reported on Friday. The retailer has sought bids for firms that can help shut down all its stores and sell assets in a bankruptcy. A liquidation would add Cache to the ranks of other mall-based retailers that have ceased operations since the end of last year, including Delia’s Inc., Deb Stores and Body Central. Unlike those chains, Cache is based in more upscale shopping centers, many of which are still thriving. Still, the company faces pressure from e-commerce sites and fast-fashion rivals such as Hennes & Mauritz AB, which offer a cheaper alternative.
Hedge fund Standard General LP is in talks to serve as the lead bidder at a bankruptcy auction for struggling consumer-electronics retailer RadioShack Corp., the Wall Street Journal reported today. RadioShack, which is running out of cash after reporting losses in each of the last 11 quarters, was aiming to file for chapter 11 protection as early as today. But as of yesterday, the company and its advisers were still working out the details of an agreement with Standard General to serve as the stalking-horse bid at a court-supervised auction for RadioShack’s assets. Standard General last year became the company’s largest shareholder and led a financing that helped RadioShack get through the holidays.
Bankrupt drugmaker Dendreon Corp. has reached a stalking-horse deal with Canada's Valeant Pharmaceuticals International Inc. to sell the worldwide rights to its cancer vaccine, Provenge, and certain assets for $296 million, Reuters reported today. The deal is subject to higher and better bids and extended the bid deadline to Feb. 10 for interested parties to participate in an auction, Dendreon said yesterday. Seattle-based Dendreon filed for bankruptcy protection in November, after sales of Provenge fell short of expectations and left the company deep in debt. After the drug's approval by U.S. regulators in 2010, hopes were high that Provenge would become a blockbuster. But adoption of the drug, which uses an injection to reprogram the immune system to attack advanced prostate cancer cells, was hindered by its hefty price tag and uncertainty over insurance coverage.
