Baker Botts Held Not to Govern Defense of a Receiver’s Fee Request
Brooklyn judge limits Baker Botts to fee allowances under Section 330(a).
Judge Name - Do not use it.
Carla E. Craig
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Core Entertainment Wins Approval to Tap Lenders’ Cash
Core Entertainment Inc., the company behind the “American Idol” TV series, won approval from a bankruptcy judge on Friday to tap its lenders’ cash and move forward with its chapter 11 proceedings, the Wall Street Journal reported today. Bankruptcy Judge Stuart Bernstein approved Core’s first-day motions, including paying its employees and its taxes. Core, as well as Los Angeles-based 19 Entertainment Ltd., and related companies that own and produce content for the global “American Idol” franchise, and “So You Think You Can Dance,” and “Prison Wives,” sought chapter 11 protection on Wednesday. The company has yet to secure a bankruptcy loan, but it is still negotiating with its lenders, Core’s lawyers said in court on Friday.
Penn Virginia Tells SEC a Bankruptcy Filing Is “Highly Likely”
Penn Virginia Corp., the embattled Radnor oil and gas producer, said on Friday in a U.S. Securities and Exchange Commission filing that it is "highly likely" it will seek chapter 11 protection to restructure $1.2 billion in debt, Philly.com reported on Friday. The company, which is among many U.S. oil and gas producers in financial trouble because of low energy prices, acknowledged in its first-quarter earnings report that it is in default under its revolving credit agreement. Its lenders have agreed not to declare default until May 10 if certain conditions have been satisfied. Penn Virginia spent $7.8 million in the first quarter on financial advisers and $3.3 million to banks and unsecured note-holders in an effort to refinance the company.
Ultra Petroleum, Midstates Petroleum File for Bankruptcy
Two more publicly traded oil and natural gas companies, with combined debts of more than $5.8 billion, filed for chapter 11 bankruptcy protection in Texas as the industry continues to suffer amid stubbornly low prices, Dow Jones Newswires reported yesterday. Houston'sUltra Petroleum Corp. and Oklahoma-based Midstates Petroleum Co. separately filed for court protection Friday in U.S. Bankruptcy Court in Houston. Ultra, which has some $3.8 billion in debt — all of it unsecured — filed for bankruptcy after failing to reach a debt-restructuring deal with its lenders and bondholders, according to an affidavit filed by Chief Financial Officer Garland R. Shaw. Both companies, in court filings, pointed to persistently low commodity prices as the reason for their financial woes. Ultra, with 159 full-time employees, operates mainly in Wyoming's Pinedale Field, which produces natural gas. The company also owns properties in Utah, which produce primarily crude oil, and Pennsylvania, which produce natural gas. Midstates, which has 120 full-time workers, drills for crude and natural gas in Texas and Oklahoma. Read more.
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Energy Future Holdings Unveils New Plan to Exit Bankruptcy
Energy Future Holdings Corp, the largest power company in Texas, marked the two-year anniversary of its $42 billion bankruptcy by essentially hitting the reset button and unveiling on Sunday a new chapter 11 exit plan, Reuters reported. The plan comes after investors withdrew their support last week for acquiring Energy Future's crown jewel, its Oncor power distribution business. That deal, valued at up to $20 billion, was led by Energy Future's creditors and Hunt Consolidated Inc of Dallas, and was meant to fund the prior bankruptcy exit plan. The company is seeking an even quicker schedule to exit Chapter 11 and asked for a hearing to confirm its new plan on Aug. 1. Like the original plan, Energy Future proposes spinning off its power plants and retail electricity business to senior creditors. Unlike the prior plan, the new plan allows those creditors to take control of those assets without waiting for a deal for the Oncor side of Energy Future's business. Under the new plan, creditors of the Oncor side of Energy Future could take control of the distribution business, or it could be sold.
Rapper Petey Pablo Files for Bankruptcy Again
Petey Pablo, the Freek-a-Leek rapper, previously declared bankruptcy twice in 2009, and earlier this month (April 16), he filed for chapter 13 in North Carolina, according to contactmusic.com today. Petey, whose real name is Moses Barrett, has less than $50,000 in assets and liabilities around the same amount. Among the creditors listed in the papers are the Internal Revenue Service, Planet Fitness, Enterprise and Ford Motor Credit. When Petey first filed for bankruptcy in 2009, his liabilities were around $850,000, with his assets worth $560,000. Those two bankruptcy attempts were dismissed due to failed repayment plans. The filing comes two years after Petey was released from jail following a three-year sentence for trying to smuggle a gun through an airport.
“American Idol” Owner Files for Chapter 11
Core Media Group, the company behind “American Idol” and “So You Think You Can Dance,” has filed for chapter 11 protection in New York, Billboard reported yesterday. Core was founded a decade ago and was recently brought into a joint venture owned by 21st Century Fox and Apollo Global Management. But as “Idol” has now aired its last show, it appears as though Core envisions some restructuring. In the bankruptcy filing, the company says it owes $398 million to third parties, including from two matured loans from Tennenbaum Capital Partners, Crestview Media Investors, Bayside Capital and Hudson Bay Capital Management. The company reports about $73 million in assets but less than $10 million in cash on hand. “Idol” creator Simon Fuller is the company’s top unsecured creditor and is owed $3.37 million. A payment demand on April 11 from Fuller is one of the factors cited in the bankruptcy papers as contributing to the decision to file for chapter 11.
Roscoe’s to Propose Bankruptcy-Exit Plan by Oct. 1
The company behind Los Angeles’s iconic Roscoe’s House of Chicken and Waffles restaurants has promised to come up with a plan by Oct. 1 that explains its path out of bankruptcy, The Wall Street Journal reported yesterday. The pledge came from restaurant officials who put four Roscoe’s locations into bankruptcy on March 25 while they appeal a $3.2 million award to a former employee who said he was a target of racial discrimination and sexual harassment. The restaurant locations — three in Los Angeles and one in Pasadena — employ nearly 400 people. A successful appeal could lower the amount that the restaurant operator owes to ex-Roscoe’s worker Daniel Beasley, a black man who sued in 2013 saying he worked later shifts and got fewer schedule requests than his Hispanic coworkers. Beasley’s lawyer said one of his managers, a Hispanic woman, commented that black workers were lazier. Documents filed in U.S. Bankruptcy Court in Los Angeles show that the restaurant operator transferred the trademark rights to an entity called Roscoe’s Intellectual Properties in January. The new payments will boost the restaurant’s revenue. Last year, its operations pulled in $17.5 million in revenue, a slight decline from $18 million in 2014. (Subscription required.)
Energy Future Holdings Likely to Ditch $18B Hunt-Led Play for Oncor
Energy Future Holdings Corp. will likely abandon the $18 billion sale of its Oncor power transmission company to an investor group led by Dallas billionaire Ray Hunt, the bankrupt power goliath told a bankruptcy judge Thursday and the Dallas Business Journal reported today. The deal was supposed to be Energy Future Holdings’ ticket out of bankruptcy court, where the case has lingered for two years at a cost to EFH estimated at $1 million a day in legal fees. The sale of Oncor could die within weeks unless the Texas Public Utility Commission reconsiders conditions the commission placed on the deal in March. In mid-April, Hunt and the group of proposed investors asked the PUC for a new hearing, saying the commission’s restrictions made the deal unprofitable and saying they couldn’t close the deal unless the PUC loosened them. Energy Future had hoped that the sale of Oncor would provide the cash to appease creditors and hasten the end of bankruptcy proceedings. Energy Future lawyer Marc Kieselstein of Kirkland & Ellis LLP told a bankruptcy judge in Delaware that the company is choosing an alternate route for exiting bankruptcy because of talks with investors that make it clear the deal is dead. “This is not the outcome anyone wished for or hoped for,” he said. Hunt Consolidated Inc., which is still trying to save the deal, gained the backing on Wednesday from powerful business leaders, including Ross Perot Jr., former U.S. Sen. Kay Bailey Hutchison and real estate magnate Roger Staubach.
