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Bankrupt women’s fashion and accessories retailer A’Gaci has canceled an auction of its assets that had been scheduled for today, saying that it received no qualified bids, the San Antonio Express-News reported. “Despite an active marketing process and due diligence from several potential buyers, no acceptable buyer emerged,” said Ian Peck, A’Gaci’s bankruptcy lawyer. “So the company decided to cancel the auction and not move forward with the sale process any further.” A’Gaci now is focused on developing a reorganization plan that will allow it to emerge from chapter 11 protection, he said. The retailer already has received support from various creditors regarding efforts to reorganize, he said. The company listed $37.3 million in assets and $54.7 million in liabilities in a February court filing. A’Gaci had no set minimum price when it solicited offers for the purchase of substantially all of its assets and liabilities, Peck said. No stalking-horse bidder was ever lined up. “You never want to schedule a party and then have no one come,” John Penn, a Dallas bankruptcy lawyer not involved in the case, said of the canceled auction. “You’re on a track for a sale and no one showed up to buy what you were selling.” Read more. https://www.expressnews.com/business/local/article/Bankrupt-retailer-A-…

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EV Energy Partners filed for bankruptcy Monday with a prepackaged restructuring plan that calls for senior bondholders to swap debt for equity in the new business, WSJ Pro Bankruptcy reported. The Houston-based company said yesterday in a Securities and Exchange Commission filing that it plans to complete its restructuring, which had been expected, by June 22. EV Energy Partners LP earlier said the reorganization would, among other things, eliminate $343 million of principal and accrued interest owed on senior bonds due 2019 in exchange for those creditors getting 95 percent of the company’s equity when it emerges from bankruptcy. Its chapter 11 petition, filed in U.S. Bankruptcy Court in Wilmington, Del., the company listed assets of less than $100 million and debts between $500 million to $1 billion in liabilities. EV Energy has assets in New Mexico, Texas, Michigan and Pennsylvania.

The bankruptcy of a fleet of FirstEnergy Corp. power-generation businesses is pressuring an indebted Ohio electric corporation founded during the Cold War, WSJ Pro Bankruptcy reported. The chapter 11 cases filed on Saturday set up a showdown between several FirstEnergy subsidiaries and Ohio Valley Electric Corp. (OVEC) over a power purchasing deal that runs until 2040. FirstEnergy Solutions Corp., one of the bankrupt affiliates, was obligated to buy power under the agreement from two OVEC fossil fuel plants, providing nearly 5 percent of OVEC’s revenue, according to court documents. Now, FES is seeking bankruptcy-court orders to stop those payments, which it said would amount to $12 million a year, or $268 million through 2040. Read more.

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The team winding down the remains of Lehman Brothers Holdings Inc. is planning to pay out $2.6 billion to creditors next week, WSJ Pro Bankruptcy reported. The distribution, the 15th since the investment bank failed in 2008, will bring the total payout in the firm’s bankruptcy to about $124.6 billion. The bulk of the cash has gone to pay so-called third-party, or non-Lehman, claims. Lehman said in a filing in U.S. Bankruptcy Court in New York on Thursday that its senior unsecured creditors — Lehman bondholders who were estimated to receive about 21 cents on the dollar when the bank’s bankruptcy plan went into effect in early 2012 — will have recovered more than double that amount, 44.6 cents, after the next distribution is completed. The chapter 11 payment plan for Lehman treats similarly situated creditors of its subsidiaries better than those of the parent. For example, general unsecured creditors of Lehman’s special finance unit, the heart of the failed investment bank’s derivatives business, have so far recovered more than 39 cents on the dollar, though they are limited to how much they can claim.

The lawsuit brought by family members of those killed in the massacre at Sandy Hook Elementary School has been watched closely over years of winding its way through the court system. But a new hurdle stands in the way of a much-awaited ruling, the New York Times reported. Remington, one of the nation’s oldest gunmakers and a defendant in the lawsuit, recently filed for bankruptcy as its sales have declined and debts have mounted. The company manufactured the AR-15-style weapon used by the gunman in the 2012 attack in Newtown, Conn., in which 26 people, including 20 first graders, were killed. The case is now before the Connecticut Supreme Court, where families brought an appeal with the aim of bringing the case to a jury trial. Remington’s bankruptcy does not guard the company from potential liability, but it has stalled the court from issuing a ruling on the lawsuit until the company emerges from the process. The court has been weighing the case after hearing oral arguments last year.

Bon-Ton Stores Inc.’s creditors are trying to hold a bank accountable for a paperwork mistake that could cost bondholders millions of dollars, WSJ Pro Bankruptcy reported. In a lawsuit filed on Thursday, Bon-Ton’s unsecured creditors' committee sued Wells Fargo NA, the trustee for its second-lien bonds, for “defects in its liens securing” the bonds due to mishaps with filing paperwork at the right time. Bon-Ton issued $350 million in second lien bonds to investors in 2013. Wells Fargo, the original indenture trustee for the bonds, filed paperwork perfecting the bondholders’ liens on Bon-Ton’s assets and property. However, the trustee didn’t file the paperwork to continue the liens, the lawsuit claims, until earlier this year, just weeks before Bon-Ton’s bankruptcy filing. Since those filings fell within the 90-day preference period under bankruptcy law, the creditors say the bondholders’ claim should be disallowed. Wilmington Savings Fund Society succeeded Wells as the trustee and collateral agent and is also named as a defendant in the lawsuit. WSFS contends that its liens are valid and not avoidable, according to the lawsuit. Read more. 

In related news, Bon-Ton Stores Inc. is in active discussions with a bidder to acquire the company, and had received approval from lenders to extend the deadline for submitting bids for the chain, it said on Friday. The company said that it had received approval to extend the deadline for submitting qualified bids by two days to April 4. Read more. 

A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. To register for the Annual Spring Meeting, please click here.

FirstEnergy Corp. said on Saturday that its nuclear and coal power plant units filed for bankruptcy court protection as the company looks to restructure, sell assets and win government support to cope with competitors using lower-cost natural gas, Reuters reported. The chapter 11 filing was made by FirstEnergy Solutions and FirstEnergy Nuclear Operating Co. The companies said they have over $550 million in cash and “sufficient liquidity to continue normal operations” while restructuring. The legal move came after FirstEnergy urged the federal government on Thursday to evoke little-used emergency powers to help it keep several struggling nuclear and coal-fired power plants open, a move critics described as an appeal for a corporate bailout.

A coal company owned by West Virginia Gov. Jim Justice (R) was sued in bankruptcy court Wednesday for allegedly failing to pay nearly $1 million from a settlement agreement stemming from earlier litigation, the Charleston Gazette-Mail reported. In the chapter 11 bankruptcy proceedings of Dennis Ray Johnson II, Peoples Bank — an Ohio company that took on the credit of Producers Coal Inc. and Moussie Processing — sued Kentucky Fuel Corp., which Justice owns. It filed the lawsuit in U.S. Bankruptcy Court for the Southern District of West Virginia. In December 2014, Producers Coal and Moussie Processing sued Kentucky Fuel in Knott County Circuit Court, in Kentucky, alleging that the company failed to satisfy its end of a coal transaction, and other alleged infractions. All parties settled the lawsuits in April 2015, with an agreement that Kentucky Fuel would pay Producers Coal $2 million, with $1 million paid up front and $1 million paid in 20 monthly installments of $50,000. According to Peoples Bank’s filing, Kentucky Fuel paid the $1 million up front and made its first $50,000 payment, but then stopped.

Independence Blue Cross LLC’s $10.4 million priority claim for unpaid health insurance premiums in North Philadelphia Health System’s bankruptcy could leave nothing for general unsecured creditors if the Philadelphia insurer does not agree to take less, NPHS’s bankruptcy lawyers warned in a filing on Wednesday, Philly.com reported. “NPHS is investigating the extent, validity and priority of this claim,” according to the filing, which laid out the worst-case scenario for creditors. The attorneys are also “engaged in negotiations with Blue Cross to consensually reduce the claim,” it said. In all, the bankruptcy estate is expected to have roughly $1 million to distribute to creditors, NPHS attorney Lawrence G. McMichael said Thursday. Vying for that money are unsecured creditors who say they are owed $29 million. NPHS filed for bankruptcy at the end of 2016. Until this month, Independence was one of four creditors on the committee representing the interests of all unsecured creditors. The firm stepped down from the committee, citing a potential conflict of interest.