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The lack of enough creditors owed enough money could end up blocking Bill Gates from using chapter 11 to reacquire two remaining power plants of which he’s already the secured lender and owner, as a consequence of a technical provision in the Bankruptcy Code, Bloomberg News reported yesterday. Gates’s Optim Energy LLC, once the owner of three electric power plants, has plenty of debt, but mostly to Gates-owned Cascade Investment LLC, a secured creditor still owed $596.5 million following the sale of one of the three plants. The problem for Gates, co-founder of Microsoft Corp., is that Optim doesn’t have enough creditors, because the main one aside from Cascade is a former coal supplier now owned by an affiliate of Blackstone Energy Partners LP that’s adamantly opposed to the plan.

Chassix Inc., the bankrupt auto-parts maker, can send its reorganization plan to creditors for a vote after it changes wording on how the proposal protects its private-equity owner, Platinum Equity LLC, from potential lawsuits, Bloomberg News reported today. Bankruptcy Judge Michael E. Wiles approved a disclosure statement that lays out terms of the debt-for-equity swap Thursday, following hours of debate and negotiation among creditors and the U.S. Trustee. Both protested the releases from potential lawsuits that the plan would give to billionaire Tom Gores’s Beverly Hills, California-based Platinum Equity. “The release is still exceptionally broad,” Judge Wiles said after a first round of changes to the plan’s wording. He approved it after a second batch of edits that allowed creditors to “opt in” to the releases in order to be bound by them.

Creditors of the bankrupt operating unit of Caesars Entertainment Corp. said that they wanted to stop the casino company from extending the period when it has exclusive control of its chapter 11 reorganization so other plans could be proposed, Reuters reported yesterday. The creditors filed objections on Wednesday to the request by the operating unit to extend to Nov. 15 from May 15 its exclusive right to propose a plan to cut its $18 billion in debt. The operating unit filed for bankruptcy in January, and creditors rarely oppose a company extending exclusive control so early in the case. Among those objecting were the company's lone allies, a group known as the first-lien noteholders who preferred an extension to September.

A bankruptcy judge yesterday put the brakes on Optim Energy LLC 's plan to exit bankruptcy through the sale of its two Texas power plants after a unit of private equity company Blackstone Group LP objected to the deal, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Brendan Linehan Shannon of the U.S. said that he would hold off on ruling on Optim's plan disclosure statement, which describes the company's plan to exit bankruptcy protection by selling two Texas power plants, until early next month.

Patriot Coal Corp., the miner that emerged from bankruptcy two years ago, is exploring options to sell itself as prices for its commodity stagnate in the worst downturn in decades, Bloomberg News reported yesterday. The coal company hired investment bank Centerview Partners LLC and restructuring advisory firm Alvarez & Marsal Inc. to help it examine reorganization options that include selling some or all of its assets. Patriot, based in Scott Depot, West Va., emerged from bankruptcy on Dec. 18, 2013, slashing its debt to $545 million from $3.07 billion. Patriot announced the resignation of Chief Executive Officer Bennett K. Hatfield earlier this month and promoted Robert W. Bennett to the position.

Hedge funds Aurelius Capital Management LP and Alden Global Capital LLC objected to efforts by the bankrupt Brazilian construction company OAS SA to halt lawsuits against it in the U.S., Bloomberg News reported on Friday. OAS, which filed for court protection in Sao Paulo last month, is among more than 20 companies that have been banned from bidding on new projects with Brazilian state oil producer Petroleo Brasileiro SA amid an investigation into whether executives received bribes in exchange for work contracts. OAS, which has 9.2 billion reais ($3 billion) in debt, said that it needs court protection in the U.S. to avoid disruptions to its operations and Brazilian restructuring. The hedge funds Friday told a U.S. bankruptcy court the company shouldn’t be granted immediate relief. OAS this month sought protection from creditor actions under chapter 15 of the Code, though the company must show that Brazil is home to the principal bankruptcy and that creditors’ rights are adequately honored under that country’s law. Read more.

For further analysis of chapter 15 proceedings, be sure to pick up a copy of ABI’s latest title, Chapter 15 for Foreign Debtors. 

Women's clothing chain Simply Fashion Stores Ltd. sought bankruptcy protection on Thursday with plans to liquidate, the latest in a long line of women's retailers to fall on hard times in the past year, Dow Jones Newswires reported on Friday. Simply Fashion, which has nearly 250 stores in 25 states, filed for chapter 11 in U.S. Bankruptcy Court in Miami. The family-run company, founded in 1991, built its business by taking advantage of fire sales in retail bankruptcies. Simply Fashion got its start after buying 100 store leases through the bankruptcy of a retailer that sold clothing for $6 or less. It picked up more leases from other bankruptcy cases in 1996 and 2005. In 2014, Simply Fashion began licensing the intellectual property from Dots, another retailer that went into bankruptcy, and reopened 60 Dots stores. The company owes $9 million in secured debt to two of its owners, Swapnil Shah and Shail Shah. Its unsecured debts include $400,000 owed to IberiaBank, $3.7 million in general unsecured claims and $9.9 million in unsecured debt owed to insiders.

Frederick’s of Hollywood filed for bankruptcy protection yesterday with a $22.5 million offer in hand from Authentic Brands Group, LLC, the Wall Street Journal reported today. The agreement with Authentic Brands means the lingerie chain will continue only as an online business, unless a rival steps forward that agrees to reopen the stores. None appeared in the efforts to find a buyer that preceded the bankruptcy, court papers say. If any competing bids are received, Frederick’s is planning a May 28 auction, with Authentic Brands as lead bidder.

Patriot Coal Corp., which emerged from chapter 11 protection less than two years ago, is working with restructuring advisers to address its capital structure amid continued decline in the coal industry, MarketWatch.com reported on Friday. The Scott Depot, W.Va.-based mining company is working with lawyers at Kirkland & Ellis and financial advisers at Alvarez & Marsal and Centerview Partners. Patriot filed for chapter 11 bankruptcy protection in 2012 to slash its $3 billion debt load, much of which was tied to environmental and labor obligations. It emerged the following year, turning over most of the ownership of the company to bondholders including New York hedge fund Knighthead Capital Management LLC. But conditions in the coal industry continued to deteriorate amid a sluggish market for the metallurgical coal used in steelmaking and a decline in natural gas prices that hurt the market for thermal coal used by power producers. Coal producer Xinergy Ltd. filed for Chapter 11 bankruptcy protection earlier this month. Walter Energy Inc. said on Wednesday that it opted to skip an interest payment, entering a 30-day grace period as it works with creditors to help the company "weather a highly competitive and challenging market."