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Almost two years after Flying Star filed for bankruptcy protection, its owners have earned creditor approval to move the company forward, the Albuquerque (N.M.) Journal reported on Saturday. Jean and Mark Bernstein still need a bankruptcy judge’s order to execute their reorganization plan, but it received a critical endorsement from creditors in a recent vote. Every class of creditors in the Chapter 11 case either actively voted to approve the plan or was deemed to have accepted by not casting ballots, according to a tally report the Bernsteins filed in court this week. Confirmation will allow the Bernsteins to initiate their plan to keep control of the company by buying all Flying Star equity at auction for at least $2.8 million. There was a creditor-backed plan to sell the company to Southwest Brands, which owns Garduño’s and Keva Juice. But the creditors committee recently withdrew that plan after negotiations that led the Bernsteins to dramatically increase their own bid.

SunEdison filed a motion for an order approving the sale of certain equity interests in its Atlantic Power Warehouse, free and clear of all liens, claims and liabilities to DIF Infra 4 US and DIF IV Co-Invest (as buyer) and approving certain releases in connection with the sale, BankruptcyData.com reported today. The bankruptcy court has scheduled a January 12, 2017 hearing on the sale motion. In addition to filing the sale motion, SunEdison subsidiary TerraForm Private Holdings initiated its own chapter 11 filing in the Southern District of New York, case number 16-13523, and seeking joint administration with the SunEdison proceeding. 

Gracious Home, the luxury home-goods chain, is paying its second visit in six years to bankruptcy court, the New York Post reported today. The 53-year-old retailer, which describes itself as possessing “timeless New York elegance,” said in the chapter 11 filing “there is a viable business remaining, albeit on a smaller scale.” The filing in Manhattan bankruptcy court indicates that six of its top creditors are landlords. Sales in 2016 are expected to reach $43 million, down 20 percent from 2015, according to the filing.

A New Mexico diocese is a step closer to resolving its bankruptcy case after a federal judge rejected a claim that had stalled the proceedings, the Associated Press reported yesterday. The Gallup Independent reports that the Sisters of the Blessed Sacrament filed a claim against the Diocese of Gallup as it was concluding its chapter 11 reorganization case. Attorneys for the diocese say the claim wasn't filed in a timely matter. The Sisters' attorney says that the organization did not know of the diocese's bankruptcy case until December 2015, more than two years after its chapter 11 petition was filed, but the attorneys for the diocese say the Sisters were sent legal notices at the time the claim was filed. Bankruptcy Judge David T. Thuma concluded a Monday hearing by disallowing the claim by the Sisters.

Core Entertainment Inc.’s lenders aren’t happy with the outcome of the “American Idol” producer’s bankruptcy restructuring, the Wall Street Journal reported today. In a lawsuit filed on Monday in U.S. Superior Court in Los Angeles, a trustee for Core’s pre-bankruptcy lenders accused the production company’s private-equity backer Apollo Global Management as well as 21st Century Fox Inc., of scheming to strip the company of its cash and most valuable assets while leaving them holding the bag. A spokesman for the trustee said yesterday that the trust was formed to pursue claims to the benefit of all pre-bankruptcy general unsecured creditors. Core Media Group, the reorganized entity that emerged from bankruptcy and is still in business, isn’t a plaintiff in the lawsuit. Among Core’s unsecured creditors are pre-bankruptcy lenders including Crestview Media Investors LP as well as Tennenbaum Capital Partners LLC, Bayside Capital Inc, Hudson Bay Capital Management LP, Credit Suisse Asset Management LLC, CIT Bank NA and Oaktree Value Opportunities Fund Holdings LP.

Optima Specialty Steel filed for chapter 11 bankruptcy protection yesterday, as nearly $172 million in senior secured note debt came due, the Wall Street Journal reported today. The bankruptcy filing is designed to keep the specialty steelmaking operations in business, while Optima works out a reorganization plan that gets its debt in line with revenue, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Del. In the past decade, the Miami company collected U.S. steelmaking operations, some of them with decades of history, in leveraged buyouts. Optima has been grappling with low prices and weak demand from the energy, agriculture and mining sectors, according to Moody’s Investors Service, which downgraded the notes in October 2015. In addition to the Dec. 15 maturity on senior secured notes, Optima also faced a Dec. 30 deadline on $87.5 million of senior unsecured note debt. Optima also estimates it owes more than $37 million in other unsecured debt, such as trade bills.

Multiple suitors are weighing bids to challenge the $575 million offer for Performance Sports Group Ltd. made by a financial consortium in the bankruptcy court auction of the Bauer hockey gear maker, Reuters reported yesterday. Private equity firms Thomas H. Lee Partners LP, Bain Capital LP, KKR & Co LP, KPS Capital Partners LP, and Sycamore Partners have indicated their interest in the sporting goods company, the people said. The sources could not be named because the talks are private. The auction is scheduled for Jan. 30. British retailer Sports Direct International plc and Canadian pension fund Caisse De Depot et placement du Quebec have also submitted letters of interest. Finnish sporting goods company Amer Sports, which makes Wilson sporting equipment, is interested in acquiring Performance Sports' baseball business.

Houston-based Illinois Power Generating Co., a subsidiary of Dynegy Inc., has filed for chapter 11 protection with a pre-packaged restructuring plan, the Houston Business Journal reported today. Illinois Power Generating Co., also called Genco, reported $970.41 million in debts and $450.14 in assets, according to a filing it made with the Southern District of Texas bankruptcy court. Genco intends to continue its business operations through the course of the restructuring, it said.Genco was originally Ameren Energy Resources before Dynegy acquired the subsidiary from Ameren Corp. in 2013. Dynegy recently closed on the sale of its interest in a joint-venture power plant in Elwood, Illinois, in order to help pay for its acquisition of the remaining interest in Atlas Power, another joint venture.

A leading U.S. subsidiary of Abengoa SA received U.S. court approval to exit its chapter 11 bankruptcy, according to court records filed yesterday, putting the Spanish renewable energy group closer to achieving a global debt-cutting plan, Reuters reported. Abeinsa Holding Inc. was one of dozens of U.S. Abengoa subsidiaries that filed for U.S. bankruptcy protection while the Seville-based parent worked out a high-stakes plan to cut $10 billion of debt and avoid its own bankruptcy in Spain. Under Abengoa's master restructuring agreement, big bank lenders such as Santander will take equity in exchange for debt in the family-founded engineering company that invested heavily to finance a quick expansion in global renewable energy. As part of the U.S. reorganization, Abengoa will retain its control of the U.S. businesses, which range from engineering and construction firms to biofuel and solar energy plants, thanks to a $23 million cash payment by its new bank owners. Abengoa will also put funds into a litigation trust to resolve potential lawsuits and a separate reserve pool for potential insurer claims. Read more. 

To read more about litigation or liquidation trusts in bankruptcy, be sure to pick up a copy of ABI’s A Practitioner's Guide to Liquidation and Litigation Trusts.