%1

Seth Klarman’s Baupost Group LLC and other hedge funds stand to make at least a $400 million profit from a bet on Toshiba Corp.’s bankrupt Westinghouse Electric Co. business, WSJ Pro Bankruptcy reported. Toshiba announced yesterday that it sold its claims in the Westinghouse bankruptcy case to a consortium led by Klarman’s Boston hedge fund for $2.16 billion. Baupost and its allies could make at least $400 million on the claims that it purchased from Toshiba, when the $3.7 billion cash proceeds from the recent sale of Westinghouse to Brookfield Asset Management Inc. is divided among creditors at the close of the bankruptcy process.

Walter Investment Management Corp. is preparing to leave bankruptcy protection by Jan. 31 with a plan that reduces its debt by about $800 million after a federal judge approved its chapter 11 plan, WSJ Pro Bankruptcy reported. The Fort Washington, Pa., company won court approval for a plan that will turn over most of its ownership to bondholders, according to a press release on Thursday. The company, which has more than 4,000 workers, processes payments for mortgages and reverse-mortgage loans. The approval helps bring the company’s chapter 11 case filed on Nov. 30 to a close. Under the plan, roughly $531 million of the company’s debt will be canceled and $275 million will be paid down. Lenders also agreed to extend the maturity date on their loans to June 2022 from December 2020.

Parker School Uniforms, an 87-year-old Houston company that closed unexpectedly during the first week of 2018, has filed for bankruptcy, the Houston Chronicle reported. Employees still haven't received paychecks originally scheduled to be deposited on Jan. 4. According to an email the company sent employees, those "payroll obligations are now likely to be addressed by the bankruptcy court during the liquidation process." A lawsuit has been filed against the company in the District Court for the Southern District of Texas Houston Division for violating Section 2101 of the Worker Adjustment and Retraining Notification Act that requires employers to provide 60 days written notice to each affected employee prior to ordering a plant closing or mass layoff.

Avaya Holdings Corp. shares started trading yesterday on the New York Stock Exchange, the first time the enterprise telecommunications provider has been public in more than a decade, Reuters reported. Avaya spent the past year sorting its financials in a chapter 11 bankruptcy process before listing its shares publicly this week. It was acquired in a leveraged buyout in 2007 for $8.2 billion by Silver Lake Partners LP and TPG Capital LP. One new challenge for Avaya, which now has a market capitalization of about $2.2 billion, as well as $2.9 billion in debt, will be attracting a new set of shareholders after being private for so long. It converted its debt to equity in order to list its shares. “With the debt converting to equity, I would imagine we would transition over the next few months to new value equity shareholders,” said Avaya Chief Executive Jim Chirico.

iHeartMedia Inc. last week filed a claim in U.S. Bankruptcy Court for the Southern District of New York, seeking nearly $186,000 from Cumulus for services provided by some of its radio stations and Premiere Networks, Radio World reported. Cumulus Media entered a prearranged bankruptcy proceeding last November with hopes that the voluntary chapter 11 filing will trim its debt by just over $1 billion. iHeartMedia says that Cumulus owes it for commercial spots placed by Westwood One Radio Network, which is owned by Cumulus, on a number of iHeartMedia radio stations, including WYNR(FM), WHFX(FM) and WQGA(FM) in Brunswick, Ga., according to filings in the docket summary for the bankruptcy proceeding. iHeartMedia also seeks payment for spots Westwood One placed on iHeartMedia stations in Houston and Dallas.

Appvion Creditors Seek Court OK to Sue Banks The committee representing Appvion Inc.’s unsecured creditors is asking a judge for approval to file a lawsuit against the specialty paper maker’s banks, saying the lenders either knew or should have known the company would miss financial projections when the business took on a chapter 11 loan, WSJ Pro Bankruptcy reported. On Monday, the unsecured creditors committee appointed in Appvion’s chapter 11 case submitted a proposed lawsuit in the U.S. Bankruptcy Court in Wilmington, Del. The lawsuit targets a group of senior lenders and investors that have higher priority for repayment in the bankruptcy. If a judge allows the lawsuit to proceed, the committee would be permitted to step into Appvion’s shoes and challenge liens and try to claw back payments that have been made during the bankruptcy to lenders’ advisers. The committee’s allegations concern bankruptcy financing Appvion lined up when it filed for chapter 11 in October. That financing, led by senior lenders, provided Appvion with $85 million in new cash and included about $240 million in existing debt that was “rolled-up,” giving that debt top priority for repayment in the chapter 11.

Toshiba Corp. said today that it had clinched an agreement to sell its claims in bankrupt U.S. nuclear plant maker Westinghouse Electric Co LLC in a deal that would add $3.7 billion to the Japanese owner’s depleted capital base, Reuters reported. The Japanese conglomerate has also agreed to transfer its Westinghouse-related shares to Canada’s Brookfield Business Partners, which earlier this month agreed to buy the unit for $4.6 billion — money that will be used to repay the nuclear plant maker’s creditors. These deals could help clear Westinghouse’s path out of bankruptcy before Toshiba’s financial year ends in March, while also allowing the Japanese firm to resolve its negative net worth and stay listed on the Tokyo Stock Exchange. Toshiba said that it would sell its claims against Westinghouse to a group of hedge funds led by the Baupost Group, and that the deal that would contribute about 410 billion yen ($3.68 billion) to its capital base.

EXCO Resources, Inc. yesterday filed for chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas, according to a press release. EXCO intends to operate in the ordinary course of business during the restructuring process. EXCO continues to engage in discussions with its creditor constituencies regarding the terms of a financial restructuring plan. In conjunction with this process, EXCO said that it will explore potential strategic alternatives to maximize value for the benefit of its stakeholders, including the marketing of the company’s assets, which may result in a sale of certain or substantially all of its assets under §363 or as part of the plan of reorganization. EXCO has received a commitment of $250 million in debtor-in-possession financing from some of its existing lenders including Fairfax Financial Holdings Limited and its affiliates; Bluescape Resources Company LLC and its affiliates, including Cove Key Management; and JPMorgan Chase Bank, N.A., and certain of its affiliates.

David Cassidy‘s estate is being sued by multiple Florida lawyers who claim the late actor owes them money, People has reported. Cassidy’s trustee and personal representative of his estate recently filed paperwork objecting to two claims: One filed by law firm Rodier & Rodier, and one filed by lawyer Damaso W. Saavedra. Rodier & Rodier claims Cassidy owes $102,834 for legal services, and Saavedra claims he owes $19,006.02. Rodier & Rodier reportedly sued Cassidy in 2013, but his 2015 chapter 11 bankruptcy filing put their pending lawsuit on hold. According to The Blast, his bankruptcy was dismissed, but his debt was not discharged.