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A U.S. bankruptcy judge refused to allow a reorganization plan by Breitburn Energy Partners LP to proceed for a creditor vote for the time being, an unusual move for a large chapter 11 case, Reuters. Breitburn, a Los Angeles-based oil and gas explorer and producer, wants to exit bankruptcy by transferring prized assets in the Permian Basin to creditors over the objection of opponents who have called for an auction of reserves. Bankruptcy Judge Stuart Bernstein reviewed the disclosures in the plan at a hearing in Manhattan yesterday but delayed a decision until after a hearing next week. Disclosure statement hearings are normally a formality to clear the way for creditors to vote on a reorganization plan. By delaying a decision on the disclosures, Judge Bernstein indicated he may have qualms about Breitburn’s plan. The company has proposed giving holders of unsecured bonds the opportunity to buy their share of stock in a company to be created with the Permian assets, through a process known as a rights offering. The stock sale would be guaranteed or backstopped by a group of creditors led by the investment firms Elliott Management Corp and WL Ross & Co., founded by U.S. Commerce Secretary Wilbur Ross and now owned by Invesco Ltd. The bondholders guaranteeing the stock sale would receive the opportunity to buy at least 40 percent of the stock and would receive additional stock as a fee. Unsecured creditors and equity investors oppose the plan, which they argue undervalues the Permian assets. They have pressed the company to conduct an open auction which they say would generate a market-tested value of those reserves.

While Toys “R” Us world headquarters are in Wayne, N.J., the struggling retailer chose not to file for bankruptcy in nearby Newark, N.J. Instead, the toy company followed an increasing number of corporations — from Gymboree to a major coal company to a Pennsylvania fracking company — that are choosing to file for bankruptcy in Richmond, Va., according to a New York Times analysis. In recent years, Richmond has become the destination wedding spot for failed companies. The bankruptcy court there offers several features attractive to the executives, bankers and lawyers trying to get an edge in the proceedings. First, Richmond’s bankruptcy court offers a so-called rocket docket that moves cases along swiftly. Second, the legal record in that court district includes precedents favorable to companies, like making it easier to walk away from union contracts. But perhaps one of the biggest draws, according to bankruptcy lawyers and academics, is the hefty rates lawyers are able to charge there. The New York law firm representing Toys “R” Us, Kirkland & Ellis, told the judge that its lawyers were charging as much as $1,745 an hour. That is 25 percent more than the average highest rate in 10 of the largest bankruptcies this year, according an analysis by the New York Times.

A bankruptcy lawyer alleges that more than 100 pieces of civil rights memorabilia, Motown and African-American history have disappeared and Rosa Parks’ lawyer should be jailed until the items are found, the Detroit News reported. The allegation emerged in the bankruptcy case of prominent Detroit attorney Gregory Reed, a case that features claims about mansions with secret rooms, crates crammed full of historical objects and missing artifacts. The list of missing items includes iron slave shackles, an early draft of a Parks book, a century-old book signed by educator Booker T. Washington and gold records awarded to Motown artists including The Marvelettes. Reed should be jailed until he reveals the location of the missing property and returns the items, a lawyer for bankruptcy trustee Kenneth Nathan wrote in a court filing. If the property was sold, Reed should relinquish the money, the lawyer argues. Reed also should be fined every day until he complies with court orders, according to the trustee’s legal team.

Once a darling of the Mojave aerospace start-up scene, space plane builder Xcor Aerospace has filed for chapter 7 bankruptcy, the Los Angeles Times reported. A court document filed last week with the U.S. Bankruptcy Court for the Eastern District of California says the company has more than 100 creditors and assets estimated between $1 million and $10 million. Xcor’s liabilities are estimated in the filing to be between $10 million and $50 million. In a message sent last week to investors and company shareholders, Xcor Chief Executive Michael Blum and Chairman Tom Burbage said their effort to “find a financial future for Xcor has not succeeded.”

J.G. Wentworth Co. announced late last week that it would be filing for bankruptcy and entering into a restructuring agreement with lenders holding over 87 percent of the aggregate principal amount outstanding under the company’s $449.5 million senior secured credit facility, ABL Advisor reported. The agreement, under which current lenders have agreed to exchange their claims under the credit facility for cash consideration and at least 95.5 percent of the equity in the newly-restructured company, will enable the company to enhance its financial flexibility, fortify its balance sheet and accelerate its long-term growth initiatives.

The people in charge of diamond distributor Exelco NV’s bankruptcy case have put the company under chapter 15 protection in hopes of putting Belgian administrators in control after the company allegedly lost diamonds valued at $15 million, WSJ Pro Bankruptcy reported. Two trustees appointed by a Belgian court earlier this year filed court papers on Friday stating the company is now under chapter 15 protection, more than a month after Exelco’s voluntary chapter 11 filing in the U.S. Bankruptcy Court in Wilmington, Del. This summer, Exelco found itself in a nasty litigation battle with creditor KBC Bank NV, after KBC had seized all of Exelco’s assets in its Antwerp headquarters — some of which belonged to international diamond corporation De Beers and Dutch bank ABN Amro Group NV — in an attempt to foreclose on its loans. KBC sought to have Exelco’s assets liquidated, to which Exelco responded by seeking insolvency protection in Belgium. Read more. 

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Bikram Choudhury Yoga Inc., a California-based studio that popularized what is known as “hot yoga,” filed for chapter 11 bankruptcy on Thursday, listing more than $16 million in legal judgments, WSJ Pro Bankruptcy reported. The judgments include one from a high-ranking employee who said she was fired after reporting sexual misconduct by yoga guru Bikram Choudhury. Hot yoga, also known as Bikram yoga, involves twisting into 26 positions with the heat cranked up to more than 100 degrees Fahrenheit. Choudhury pioneered hot yoga in the 1990s, and it has been taught at hundreds of schools world-wide. The chapter 11 filing in U.S. Bankruptcy Court in Santa Barbara, Calif., listed liabilities of $10 million to $50 million, with the biggest creditors being former employees. Also filing for bankruptcy protection were several affiliates including Bikram Inc. and Bikram Yoga College of India LP.

Pacific Drilling S.A. said yesterday that it and certain of its domestic and international subsidiaries have filed for chapter 11 protection, according to a press release. The company intends to use the chapter 11 process to pursue a comprehensive restructuring of the company’s approximately $3.0 billion in principal amount of outstanding funded debt. With approximately $350 million of cash and cash equivalents as of September 30, 2017 and seven of the most advanced high-specification drillships in the world, the company intends to continue its world-wide operations as usual and to perform and pay all obligations incurred during its chapter 11 case in full, subject to court approval. Read more. 

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Hawaii’s Island Air, which flew to remote destinations throughout the state, is shutting down, WSJ Pro Bankruptcy reported. The financially troubled airline said it would end service after nearly 40 years once its final flights land on Friday, according to the carrier’s website. The Honolulu-based airline brought passengers to the islands of Oahu, Maui, Kauai and Hawaii on more than 200 weekly flights. Hawaiian Airlines, the island’s largest carrier, is offering discount flights to stranded Island Air passengers and said that it would begin flying some of them on standby for free starting on Saturday. In an effort to save the business, Island Air officials put its operations into bankruptcy on Oct. 16, preventing the owner of three leased Bombardier airplanes from taking them back. Airline officials had been negotiating a repayment deal with plane owner Wells Fargo Bank N.A., which said the airline had failed to pay nearly $5 million in rent and fees.