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The collapsed Hanjin Shipping Co Ltd. could not compete against global rivals that were supported by their governments, the chairman of its parent firm told a South Korean parliamentary hearing today, Reuters reported. The world's seventh-largest container shipper sought court receivership in late August after its creditors led by a state bank halted further support, stranding $14 billion in cargo and sending waves through global trade networks. "Hanjin Shipping lost the game of chicken played among large shippers," Hanjin Group chairman Cho Yang-ho told the hearing. Hanjin Shipping is due to submit a rehabilitation plan to a Seoul court in December, although many in the industry expect it to be liquidated in the largest-ever bankruptcy in an industry battered in recent years by overcapacity and sluggish trade.

Bankruptcy Judge Craig Gargotta has ruled against San Antonio businessman Brian K. Alfaro, allowing a group of investors to pursue most of their fraud claims against him and his oil and gas businesses in court, the San Antonio Express-News reported today. Judge Gargotta last week denied Alfaro’s request to dismiss allegations of fraud, civil conspiracy, negligent misrepresentation, and violations of securities laws, among other claims. Claims for breach of fiduciary duty against some entities connected with Alfaro were dismissed, but not against Alfaro himself or three of his companies. The more than 40 investors, including former Major League Baseball player Freddie Patek, allege that they were defrauded in various Alfaro investment deals involving oil and gas wells in the Eagle Ford Shale and elsewhere. Read more. 

For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case. 

Horsehead Holding has emerged from bankruptcy with plans to restart its state-of-the-art North Carolina zinc production facility idled just before the company went into chapter 11 bankruptcy proceedings in early February, the Pittsburgh Business Times reported yesterday. The Pittsburgh-based manufacturer announced late Friday that it's under new ownership and under a bankruptcy plan approved by a Delaware court on Sept. 9, along with a new name, Horsehead Holding LLC instead of its previous name, Horsehead Holding Corp. Horsehead’s environmentally sustainable zinc plant in Mooresboro, N.C., cost upward of $550 million but now stands idled. The new ownership — a group led by Greywolf Capital Management LP — will provide the money to restart the plant, which replaced a longtime zinc smelter that employed more than 500 people in Beaver County before it was closed and the property sold to Royal Dutch Shell for its ethane cracker. While the North Carolina plant was expected to be a boost for Horsehead, the company wasn't able to fix all of the issues that plagued it in two years of operation or get it to its expected annual output.

The legal bill for Caesars Entertainment Operating Co.’s year-and-a-half-long battle with creditors has come in at $301.3 million, the Wall Street Journal reported today. The casino company disclosed the cost in a bankruptcy court filing on Friday, days after announcing a settlement that will bring peace to the $18 billion restructuring. The fees and expenses, which Caesars paid between the date of its Jan. 15, 2015, bankruptcy filing through Aug. 31, 2016, have gone to the roughly two dozen law, investment-banking, consulting and other professional firms on its chapter 11 payroll. The chapter 11 case of CEOC, the operating unit of Caesars Entertainment Corp., has been a battle from the start, when a group of junior bondholders, including hedge funds Appaloosa Management LP and Oaktree Capital Management LP, sought to force CEOC into involuntary bankruptcy.

The owner of the Souplantation and Sweet Tomatoes buffet chains filed for bankruptcy yesterday to facilitate a sale of the brands amid the continuing tough environment for restaurants, CFO.com reported yesterday. Garden Fresh Restaurant Corp. plans to close between 20 and 30 underperforming restaurants as part of its chapter 11 reorganization. It currently operates 124 units, primarily on the West Coast and in the Southwest. Garden Fresh, which is owned by private-equity firm Sun Partners, is the ninth restaurant operator to be pushed into bankruptcy since November 2015. 

Swiss-based ARG International AG, the trading house set up by Glencore Plc's former No. 2 aluminum trader Matt Lucke, is buying a bankrupt smelter in the U.S., its first acquisition since its founding nearly three years ago, Reuters reported on Friday. Noranda Aluminum Holding Corp said on Friday that it sold its 263,000 tonne-per-year New Madrid primary aluminum smelter in Missouri to ARG for $13.7 million in a court-approved auction. Noranda filed for bankruptcy in February after struggling with a sharp downturn in aluminum prices amid a global glut. Lucke founded ARG six months after leaving Glencore in the summer of 2013 alongside chief Gary Fegel, in a shakeup of the world's biggest aluminum trading desk.

Pacific Andes Resources Development (PARD), a Singapore-listed division of the beleaguered Ng-family controlled group, has filed for chapter 11 protection in the U.S., UnderCurrentNews.com reported on Friday. The filing comes after a creditor, Malayan Banking Berhard, known as Maybank, filed in the supreme court of Bermuda to wind up PARD, in addition to an application for the appointment of provisional liquidators over the company. These filings have the support of Rabobank, another lender to the group. Pacific Andes had previously applied for protection under the Singapore companies act while a restructuring process supervised by the Singapore court could proceed. On Sept. 26, the Singapore high court allowed the group’s application to extend the protection in order that the restructuring process could continue.

A U.S. judge has ordered a former luxury real estate mogul to pay $286 million to the creditors of a Montana club for the ultrarich that he is accused of fleecing for personal gain before driving it into bankruptcy, the Associated Press reported yesterday. The order on Wednesday from U.S. Bankruptcy Judge Ralph Kirscher is the latest turn in a yearslong hunt for assets of Timothy Blixseth, the founder of the Yellowstone Club, a private ski and golf resort near Big Sky with an elite group of members including Microsoft co-founder Bill Gates. Blixseth diverted hundreds of millions of dollars from a 2005 Credit Suisse loan to the club, using the money to buy jets, yachts and luxury properties around the globe. His ex-wife received the club as part of their divorce settlement in 2008 and it went bankrupt within months after its huge liabilities were uncovered. The club later emerged from bankruptcy under new ownership. Blixseth is now representing himself in the case and said in a court filing last week that blame for the club's bankruptcy should be shared by Credit Suisse, which he claimed unfairly enticed him into accepting a reckless loan. Judge Kirscher agreed with that claim in 2010, when he issued a reduced, $41 million judgment against Blixseth. But the Ninth Circuit Court of Appeals reversed that ruling in July, saying Credit Suisse's wrongdoing paled against Blixseth's and he should have to relinquish his "ill-gotten gains."

The president of Los Angeles’s famed Roscoe’s House of Chicken and Waffles has been ousted by a federal judge who said she doesn’t trust him to run its four bankrupt restaurants “in accordance with the law,” the Wall Street Journal reported today. Bankruptcy Judge Sheri Bluebond said on Wednesday that under the management of President Herbert Hudson, who also founded the chain, Roscoe’s lost a $3.2 million employee discrimination lawsuit, faced immigration law sanctions, underpaid state taxes and kept informal accounting system with missing records. Judge Bluebond said that Hudson also inappropriately transferred money from Roscoe’s operations to his other businesses, returning it only after a court-filed report revealed the transfers to the court. Roscoe’s bankruptcy lawyer Vahe Khojayan didn’t respond to requests for comment on Judge Bluebond’s decision to put new management in charge. At Wednesday’s hearing, he argued that the bankrupt restaurants are profitable — making more than $200,000 a month — diffusing the need for outside leaders. Judge Bluebond rejected that argument.

Pacific Exploration & Production Corp.’s plan to wipe some $5 billion in debt from its books cleared a final hurdle on Wednesday, putting the company on track to emerge from bankruptcy within two weeks, the Wall Street Journal reported today. Following a hearing in Manhattan, Bankruptcy Judge James Garrity Jr. said that he would sign off on a global restructuring plan, which has already won approval in courts in both Canada and Colombia. Pacific, an oil and natural gas producer, is based in Canada but operates primarily in Colombia, where it is the largest independent oil and natural gas company, court papers showed. Much of the company’s mountain of debt, however, is held in the U.S. Judge Garrity, who is overseeing Pacific’s U.S. bankruptcy proceeding, had already agreed to formally recognize the Canadian court as Pacific’s primary restructuring venue, but he had asked lawyers for the company to return to his courtroom on Wednesday to present the final version of the plan before he would agree to discharge any debt. The restructuring plan, which the company says is one of the largest and most complicated restructurings ever attempted in Latin America, erases $5.3 billion, court papers showed. Pacific, which is continuing normal operations during the bankruptcy, said the strategy not only aims to cut debt but will also save it $253 million in annual interest expenses. Read more. (Subscription required.) 

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