Privately-held GST AutoLeather and five affiliated Debtors filed for chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, BankruptcyData.com reported yesterday. The company, which supplies automotive leather products, has obtained a commitment from its senior secured lenders for a $40 million debtor-in-possession facility, the proceeds of which will be used to fund ongoing business operations. This facility will allow GST to continue business as usual during the reorganization process, while pursuing a court-supervised going concern sale.
Key Safety Systems has agreed to terms on the $1.6 billion purchase of assets of Takata Corp., stricken by a recall of its faulty vehicle air bags, and final documents will be signed in less than two weeks, a lawyer for Takata’s U.S. unit said on Monday, Reuters reported. Takata and its U.S. unit, TK Holdings Inc., filed for bankruptcy in June and the asset sale to Key Safety Systems, or KSS, is the cornerstone of its plan to raise funds to compensate automakers and drivers. <b>Marcia Goldstein</b>, a lawyer for TK Holdings, told a U.S. bankruptcy judge on Monday that a U.S. deal had been reached and was being reviewed by lawyers in Japan, Germany and elsewhere. The sale must be approved by the U.S. Bankruptcy Court in Delaware, as well as regulators.
A U.S. bankruptcy judge last week ordered a hearing intended to map out the remaining settlement proceedings between the Great Falls-Billings Diocese and the 86 victims claiming they were abused by eastern Montana priests through the 1990s, the Great Falls Tribune reported today. Last month, settlement negotiations ended after a two-day session without resolution. The impasse reportedly came as the parties disagreed about whether or not certain church assets are available to the settlement fund. In the order setting the Nov. 2 hearing, Bankruptcy Judge Jim Pappas asked the diocese to provide a summary of the church's income and expenses since it filed for bankruptcy in March. Primarily, the judge hopes to discuss "the factors leading to the filing of this chapter 11 case; (the diocese's) objectives in the case, and the means by which (the diocese) hopes to achieve those objectives." The hearing also gives the diocese a chance to discuss any other topic of significance that affects the bankruptcy case.
Cumulus Media Inc. recently started talks with two separate groups of creditors who own big chunks of the company’s $2.4 billion in debt, the Wall Street Journal reported. The radio broadcaster faces key deadlines when most of its debt matures in early 2019. Cumulus, the second-biggest radio broadcaster in the U.S. by revenue, has been grappling with how to restructure its debt load for a couple of years as advertising revenue and audience numbers have slid. Cumulus is holding talks with a group of holders of its $1.8 billion in term loans as well as with a group of bondholders. In February, a judge in the Southern District Court in New York struck down a deal the company had reached with its bondholders to extend the maturity on its unsecured notes in exchange for a one-third equity stake in the company and up to $305 million in new secured debt. The ruling came after a group of holders in the company’s $1.8 billion in term loans successfully challenged the debt exchange.
Citigroup Inc. and the remnants of Lehman Brothers Holdings Inc. have resolved a fight over $2.1 billion that dates to the financial crisis, while quietly burying a key question about derivatives-trading practices, Bloomberg News reported. Citigroup agreed on Friday that it will give back $1.74 billion to the estate of the failed New York-based investment bank. Citigroup had kept about $2.1 billion that Lehman had on deposit with it for trades on everything from interest rates to corporate and sovereign debt at the time of the 2008 bankruptcy. That will be a boon for Lehman’s unsecured creditors in the 10-year-old bankruptcy case. The settlement came 40 days into an epic trial in New York that began last April, and was shedding new light on the frenzied weekend before Lehman’s bankruptcy filing on Sept. 15, 2008. Lehman brought up phone recordings and messages from Citigroup traders, saying comments like "ringing the register, homey” showed how the bank tried to feast on Lehman’s carcass. Citigroup said that it was following accepted standards on closing out trades.
Caesars Entertainment Corp canceled an investor webcast yesterday following a deadly mass shooting in U.S. casino hub Las Vegas, but a spokesman said its main operating unit’s emergence from a near three-year bankruptcy was still on track for this week, Reuters reported. Earlier, Caesars said its unit, Caesars Entertainment Operating Co. Inc., was set to end a long and costly bankruptcy by Oct. 6 after receiving a series of approvals from gaming authorities and shareholders. The Caesars statement came hours after news that a lone gunman had fatally shot dozens of concertgoers in Las Vegas, where Caesars owns Caesars Palace and the Linq Hotel and Casino. A Caesars spokesman said the company, which owns the Harrah’s, Caesars and Horseshoe brands, would postpone its investor presentation until next week or the following week.
The Hongkong and Shanghai Banking Corp. won a temporary reprieve from an investigation into its collection practices leading up to China Fishery Group Ltd.’s bankruptcy, the Wall Street Journal reported on Friday. During a hearing in New York on Thursday, U.S. Bankruptcy Judge James Garrity Jr. agreed to place the investigation, which he had authorized, on hold while lawyers for HSBC pursue an appeal. William Brandt Jr., a bankruptcy court-appointed trustee currently marketing China Fishery’s Peruvian fishing enterprise, won a court order from Judge Garrity in July allowing him to investigate the bank for aggressive collection efforts that Brandt says may have damaged China Fishery’s business. HSBC says it is being unlawfully burdened by having to litigate in a foreign jurisdiction. The bank says it has no connection to China Fishery in the U.S. and shouldn’t be subjected to a bankruptcy probe by a U.S. court.
Zetta Jet announced that the U.S. Bankruptcy Court for the Central District of California approved the U.S. Trustee’s and its joint request to appoint a chapter 11 trustee, the Aviation Tribune reported on Saturday. The company said that it took this action to ensure a unified direction in the Company’s restructuring efforts amidst continued shareholder disputes. The U.S. Trustee’s Office is expected to appoint the chapter 11 trustee shortly. The company also announced that to facilitate normal business operations, it has received court permission to pay a select group of critical vendors in the ordinary course of business for pre-petition debts owed. Zetta Jet also said that a recent emergency injunction ordered by a Singapore Court to stop the chapter 11 proceedings was null and void given that a Singapore Court has no jurisdiction in U.S. federal bankruptcy court.
Seadrill Ltd’s $12.7 billion debt restructuring faces a critical phase as hold-out creditors prepare to challenge the plan put forward by John Fredriksen, its largest shareholder, as soon as a hearing next week, Reuters reported. The offshore drilling contractor, once the world’s largest by market capitalisation, filed for U.S. Chapter 11 bankruptcy protection in Texas on Sept. 12, presenting a plan backed by holders of 97 percent of its loans and 40 percent of its bonds. Norwegian-born shipping billionaire Fredriksen’s plan will extend by around five years maturities on billions of dollars in loans, giving the company breathing space until an industry recovery gains steam. The company will also raise $1.06 billion in new equity and debt financing from Fredriksen, through his family’s investment vehicle Hemen, investment firm Centerbridge Credit Partners LP and a group of hedge funds. Holders of unsecured claims were offered 14.3 percent of the stock after dilution in the reorganized Seadrill, and current shareholders will get 1.9 percent, but only if unsecured creditors accept the plan. Unsecured creditors can also receive a right to buy newly issued stock and debt if they vote for the plan.
U.S. paper maker Appvion Inc. and some of its subsidiaries said that they filed for chapter 11 protection yesterday, Reuters reported. Appvion listed assets in the range of $100 million-$500 million and liabilities in the range of $500 million-$1 billion, the Delaware bankruptcy court filing showed. The company said that it has obtained a commitment for $85 million in new debtor-in-possession financing from a group of its first lien lenders. Appvion, headquartered in Appleton, Wis., and owned by its employees, said in June it had hired investment bank Guggenheim Partners LLC to address its $440 million debt load amid declining sales due to consumers’ switch to electronic communications. The company has a revolving credit line due in 2018 with its term loan due in the following year which could put Appvion under further financial strain, according to an assessment from credit rating agency Moody’s Investors Service. The company’s net sales fell to $164 million in the quarter ended July 2, from $173.6 million a year earlier.
