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Hawaiian Airlines' parent company agreed to purchase Island Air's operating certificate and other assets in a move that could save the failed company from liquidation, the Associated Press reported. The trustee overseeing Island Air's bankruptcy case filed a last-minute motion disclosing Hawaiian Holdings Inc.'s purchase. If the sale is approved, then the trustee's attorney Simon Klevansky said he would convert the case to a chapter 11 reorganization bankruptcy. Hawaiian Holdings Inc. said it would buy the operating certificate for $450,000 and immediately provide cash advances to pay for chapter 7 administrative expenses. Hawaiian Holdings said it would buy other assets, such as ground-service equipment, furniture and frequent-flier lists, for $300,000.

A federal judge has rejected a bid by the U.S. Department of Justice’s bankruptcy watchdog to upend a Washington state landlord’s debt-repayment plan because one of his tenants grew marijuana, WSJ Pro Bankruptcy reported. The decision, issued on Monday, is among a relatively small number of rulings that has grappled with the conflict of administering corporate bankruptcies within a state that has legalized the cultivation and sale of recreational marijuana. The landlord, Michael Cook, placed a group of property management companies he owns into chapter 11 in November 2016 in order to halt Columbia State Bank from appointing a receiver over the companies. The bank had loaned one of the companies $8.5 million in 2006 and in July 2016 said the business was in default of a forbearance agreement. The companies were placed in chapter 11 a few months later following unsuccessful negotiations with the bank, court papers say.

People with injuries or economic damage from Takata Corp.-made air bags will get a fraction of a penny for each dollar they are owed, under a U.S. chapter 11 bankruptcy plan unveiled this week, WSJ Pro Bankruptcy reported. The bankruptcy payment plan for Takata’s U.S. unit sets out a system for distributing the beleaguered company’s assets, including a share of cash from the $1.6 billion sale of the non-air bag businesses to Key Safety Systems Inc. Money from the Key sale won’t go far to address the billions of dollars of damages stemming from Takata’s potentially defective air bags, court papers indicate. Takata U.S.’s chapter 11 plan estimates personal-injury and wrongful-death damages alone will top $1 billion. Add to that economic losses such as the cost of renting vehicles while air bags are replaced, and the money spent by car makers cleaning up after Takata’s defective parts, and the bankruptcy payout falls billions of dollars short of covering the damage from the defective parts. An official overseeing a massive recall of the dangerous safety devices, John Buretta, reported in November that the “words ‘grenade’ and ‘ticking time bomb’ accurately convey the lethal potential” of Takata air bags installed in millions of vehicles around the world.

A committee of unsecured creditors in the bankruptcy of the Roman Catholic Diocese of Great Falls-Billings is suing the church, alleging that more than $70 million in real property and other assets are part of the church’s estate and should be available for creditors and survivors of sex abuse by church officials, the Billings (Mont.) Gazette reported. The adversarial complaint, filed on Monday in U.S. Bankruptcy Court, said that getting the disputed assets issue resolved “is critical” to the church’s estate because it will “determine the magnitude of distributions to its creditors, including survivors of the childhood sex abuse enabled by (the diocese) or whether (the diocese) can continue to avoid being held accountable to the survivors.” Attorney James Stang, of Los Angeles, Calif., who represents the unsecured creditors committee, said yesterday that the committee's goal is to reach a negotiated settlement and that the complaint is "part of the process." The committee represents eight sex abuse survivors, Stang said.

Offshore driller Ocean Rig UDW Inc. is preparing to explore a sale amid pressure from some of its largest shareholders to review its strategic alternatives, Reuters. The move will be a key test of Ocean Rig’s value after it emerged from chapter 15 bankruptcy in September. Its business has suffered as low oil prices have made offshore drilling less economically attractive and pushed more oil exploration onshore. Based in Grand Cayman, Ocean Rig specializes in ultra-deepwater and harsh environment projects undertaken by oil exploration companies in the offshore drilling industry. Within a month of exiting bankruptcy, Ocean Rig’s largest shareholder, hedge fund Elliott Management Corp, called for the company to review strategic options, adding it planned to recruit the company’s second largest shareholder, BlueMountain Capital, in its efforts. It was joined a day later by Avenue Capital Group, the company’s fifth-largest shareholder, in demanding that it evaluates a possible sale. These three funds collectively own 39 percent of Ocean Rig’s stock.

Polara Golf, the maker of one of the most controversial products in the modern history of golf, has filed for chapter 11 protection, the Washington Business Journal reported. The company — whose legal name is Aero-X Golf Inc. — has less than $1 million in assets and nearly $3 million in liabilities, according to a chapter 11 petition filed Dec. 13 in U.S. Bankruptcy Court for the Eastern District of Virginia. Polara makes unusually dimpled golf balls the company says will help correct a golfer’s slice by as much as 50 percent. It makes no bones about it: The company’s brand of “ultimate straight” balls are printed with an arrow showing players how to line up the ball for the maximum chance of a perfectly straight drive. Polara's inventors patented their first version in 1974 and began selling the ball in 1977. The U.S. Golf Association wouldn’t approve the ball for use in tournaments, however, prompting Polara to sue the association. The case stretched on for seven years, until the USGA settled the case and agreed to pay Polara $1.4 million to remove it from the market. The bankruptcy case is related to a dispute with one of the company’s former executives. The largest claim is a $1.3 million judgment owed to David Felker, who was listed as the chief executive of Polara in articles about its products from 2011 through 2013.

Rentech, Inc., an owner and operator of wood fibre processing and wood pellet production businesses, announced yesterday that it and its subsidiary, Rentech WP U.S. Inc. filed chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware, according to a press release. The purpose of the bankruptcy filing is to seek to sell the assets of the company’s Fulghum Fibres and New England Wood Pellet subsidiaries and facilitate an orderly wind-down of Rentech Inc. The subsidiaries of the company conducting its Fulghum Fibres business in the U.S., which have not filed for bankruptcy protection, entered into an asset purchase agreement on Dec. 15 with an affiliate of Scott Davis Chip Company, Inc. for the sale of substantially all of the assets of that business. The closing of this transaction is subject to specified closing conditions, including the approval of the bankruptcy court.

Expro International, an offshore-focused oil and gas services company, filed for bankruptcy on Monday with plans to hand control of the business to lenders owed more than $1 billion, WSJ Pro Bankruptcy reported. Expro Holdings US Inc. and several dozen affiliates sought chapter 11 protection at the U.S. Bankruptcy Court in Houston, becoming the latest oilfield servicer to seek help weathering a sustained drop in oil and gas prices. Earlier this month, Expro reached a restructuring agreement with about 65 percent of key lenders that, if approved, would wipe out some $1.4 billion in obligations through a deft-for-equity swap, a common remedy for heavily indebted businesses. The deal would free Expro from about $80 million in annual interest payments.

A District Court judge has upheld a bankruptcy court judge’s order dismissing an involuntary bankruptcy case filed by the state of Montana seeking $219,258 in taxes from Yellowstone Club co-founder Tim Blixseth but will allow the state to amend its case should new information arise, the Great Falls (Mont.) Tribune reported. U.S. District Court Judge Jennifer A. Dorsey ruled Dec. 15 that there were no longer three “qualified creditors” as mandated in the 2011 involuntary bankruptcy filing against Blixseth and disagreed with Montana’s assertion that a bankruptcy court erred when it determined that claims by Idaho were part of a good faith, or bona fide, dispute. And that the bankruptcy court was right to determine that claims by the Yellowstone Club did not meet involuntary bankruptcy standards. Judge Dorsey granted Montana’s motion to file for “supplemental authorities that were filed after the parties briefs were filed in this case.”

For further analysis of the decision and case, be sure to read this column from the Rochelle Daily Wire.

Chinese dairy products maker Feihe International Inc. will acquire Vitamin World Inc out of bankruptcy for $28 million, after the U.S. nutritional supplements retailer received no other bids, Reuters reported. The deal makes Vitamin World, based in Holbrook, N.Y., the latest North American company in the vitamin sector to attract Chinese acquisition interest. Vitamin World, which filed for chapter 11 protection in September, has now canceled an auction for the company which had been scheduled for today. A bankruptcy court judge must still approve the sale to Feihe. Feihe plans to operate Vitamin World’s remaining 156 stores, the sources said. Vitamin World, formerly part of global vitamin maker NBTY Inc, shuttered nearly 200 of its retail outlets while in bankruptcy.