A Utah gun manufacturer, locked in a three-year legal battle with convicted felon Ralph Merrill, has filed for bankruptcy, the Wall Street Journal reported on Saturday. Vector Arms Corp. — the “source for the best AK47 and *UZI’s on the market” — faces big legal bills in a dispute over whether Merrill sold the company’s gun-making equipment and inventory to current owner and president Jason Maughn in 2011. That sale came after Merrill lost his firearms manufacturing license in an illegal scheme to use China-made bullets to fill a $298 million ammunition order for Afghanistan Security Forces.
Cayman Islands-based Caledonian Bank Ltd. filed for bankruptcy in New York, saying that a federal court’s freeze on its U.S. assets triggered a run on the bank by customers, Bloomberg News reported yesterday. The U.S. Securities and Exchange Commission sued the bank Feb. 6 over claims that it profited from stock sales of invalidly registered shell companies. The SEC won a court order the same day temporarily freezing the bank’s accounts at Northern Trust International Banking Corp. and Morgan Stanley Smith Barney LLC. A subsequent waiver of the freeze didn’t calm customers who made “a substantially larger number of withdrawal requests than expected,” Caledonian said in court papers filed yesterday in bankruptcy court.
Energy Future Holdings Corp. has asked court permission to start paying down some of its debt as it moves ahead in discussions with creditors to formulate a chapter 11 exit plan, Dow Jones Daily Bankruptcy Review reported today. The proposed payoff of as much as $750 million against a $2.15 billion issue of bonds involves debt linked to the division that owns a majority stake in Oncor, a valuable Texas transmissions business. The Oncor stake is going up for auction, and "it is almost certain" that investors have more than enough collateral to secured the debt of the division, Energy Future Intermediate, company lawyers wrote.
The Family Christian chain has filed for bankruptcy protection, saying that sales of its religious books, music and church supplies at its 266 retail stores have steadily fallen for years, Dow Jones Daily Bankruptcy Review reported yesterday. Officials who put the Michigan-based chain into chapter 11 protection on Wednesday said that they already have a buyer who promised to keep the 3,100-worker chain — which is one of the country's largest retailers of Christian products — open for business. Its stores are located in 36 states.
A lawyer who represented Apollo Global Management LLC in the Momentive Performance Materials Inc. bankruptcy said the judge’s ruling in that case will let private-equity firms negotiate more aggressively with creditors, Bloomberg News reported yesterday. Apollo, which owned Momentive, was allowed to impose a reorganization plan on the chemical company’s senior secured creditors that gave them new notes for the full amount of their debt at lower-than-market interest rates. Bankruptcy Judge Robert D. Drain also denied them their make-whole payments, which compensate bondholders for early redemption of their notes. The precedent will allow private-equity owners to push secured creditors to accept less favorable terms than they might otherwise seek, using the threat of the cramdown ruling, said Ira Dizengoff, a partner at Akin Gump Strauss Hauer & Feld LLP.
Missouri Attorney General Chris Koster said that the state will receive $43.9 million as part of a $5.15 billion bankruptcy settlement involving Anadarko Petroleum Corporation, Legal Newsline reported yesterday. A portion of the money will go toward helping the state clean up two sites in Missouri. Each clean-up project will receive approximately $19 million, with another $5 million going to Missouri’s Natural Resource Damages program. The two sites in Missouri were used for creosote wood treatment by energy company Kerr-McGee. The sites now have contaminated soil and groundwater. Tronox, a spin-off of Kerr-McGee, inherited the environmental liabilities after Kerr-McGee was sold to Anadarko, Koster says. After Tronox filed for bankruptcy, Anadarko was found to be responsible for the debt. "This case is the largest environmental bankruptcy settlement in U.S. history," Koster said. "Missouri's share of the settlement will cover the cost of remediation at the former Kerr-McGee sites in our state and result in millions more for reclamation of other damaged sites for public use." Read more: http://legalnewsline.com/news/254908-missouri-getting-44m-from-anadarko-petroleum-bankruptcy
Such environmental cleanups are commonly funded through liquidation trusts. To learn more about such trusts, including a detailed analysis of the Tronox case, order your copy of ABI’s A Practitioner's Guide to Liquidation and Litigation Trusts available for pre-order in the ABI Bookstore.
Bankrupt electronics retailer RadioShack Corp. kicked off a process to auction leases of about 1,700 stores to avoid paying an estimated $7 million in rent next month, Reuters reported yesterday. The company, which filed for bankruptcy protections last week, filed a motion yesterday in bankruptcy court to approve the procedures for the sale of the leases. RadioShack had a tentative deal to sell as many as 2,400 of its 4,100 stores to an affiliate of hedge fund Standard General, one of its lenders and largest shareholders. But that agreement is subject to higher bids. As part of that deal, Sprint Corp. is working with Standard General to sell mobile devices as well as RadioShack products, services and accessories in at least 1,750 of those stores. RadioShack had received court approval on Monday to borrow $10 million to support operations until it opens the bidding for its best-performing stores.
A group of investors led by a California real estate firm has purchased 127 acres at Lake Las Vegas from hedge fund manager John Paulson's real estate investment arm for $12.5 million, Dow Jones Daily Bankruptcy Review reported today. R.Y. Properties, an Alhambra, Calif.-based developer, said Wednesday that it had bought 344 lots from Paulson's real estate unit and plans to develop three communities on the site of what was formerly The Falls golf course at Lake Las Vegas.
The sale of Atlantic City's shuttered Revel Hotel and Casino was hanging by the thinnest of threads on Wednesday after a U.S. bankruptcy judge denied a move to extend the closing date but left in limbo a motion to terminate the deal, Reuters reported yesterday. Bankruptcy Judge Gloria Burns put off ruling on whether Revel AC could terminate its deal with Florida developer Glenn Straub, who made a $95.4 million bid for the casino, which has never turned a profit since it opened in 2012 with a $2.4 billion price tag. Judge Burns will hear arguments on Feb. 17 about whether Revel can solicit a new buyer and keep Straub's $10 million deposit.
Valeant Pharmaceuticals International Inc. said that it will buy bankrupt cancer vaccine maker Dendreon Corp. after no additional qualified bids came forward by yesterday’s deadline, Reuters reported. Valeant, of Laval, Quebec, will get Seattle-based Dendreon's Provenge cancer treatment and other assets for $400 million in cash. Dendreon and Valeant will seek court approval of the sale on Feb. 20, Valeant said. It expects to close the deal by the end of this month.
