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SandRidge Energy Inc. won court approval for a plan to exit bankruptcy on Friday, overcoming opposition from shareholders who had accused the oil and gas producer of misrepresenting its value, Reuters reported. Bankruptcy Judge David Jones said that he read every letter he received from individual shareholders, some of whom lost their entire savings, when SandRidge filed a prepackaged bankruptcy in May with $4.4 billion of debt. Judge Jones said he understood the pain that comes with losing an investment but was also aware that the reorganization plan was not to blame for the lost equity. "Equity was lost long ago," he said. Even though it is normal for shareholders to lose their investment during a bankruptcy, SandRidge's shareholders were hoping to prove its assets were valuable enough so they would recoup some money after repaying creditors. SandRidge said that it hoped to emerge from bankruptcy within the next month, eliminating $3.7 billion in pre-petition debt. Read more.

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Samsung Electronics Co. Ltd. yesterday asked a U.S. judge to allow the South Korean company to pay cargo handlers to remove its goods from Hanjin Shipping Co Ltd's vessels stationed near U.S. ports after the world's seventh-largest container carrier filed for bankruptcy, Reuters reported. Hanjin's collapse last week came during the peak shipping period ahead of the year-end holiday season, stranding cargo for the likes of HP Inc. and Samsung. Around $14 billion of cargo has been tied up globally as ports, tug boat operators and cargo handling firms refuse to work for Hanjin because they fear they will not be paid due to uncertainty over plans to provide new financing. Samsung said an order this week by a U.S. bankruptcy judge did not encourage the Hanjin ships to enter U.S. ports as intended, which the company blamed on a misunderstanding of maritime law, the Bankruptcy Code and Korean law. The maker of electronic goods including Galaxy smartphones said that the judge should issue an order barring the seizure of ships and allow it and other cargo owners to retrieve their goods by paying cargo handlers, who have been demanding payment guarantees.

Apollo Global Management LLC and TPG Capital offered to pay $250 million to help get Caesars Entertainment Operating Co. out of bankruptcy, according to two Apollo executives, contradicting claims that the casino company’s private-equity sponsors refused to spend their own money to make peace with creditors, Bloomberg News reported today. A mediator working to foster agreement between bondholders and parent company Caesars Entertainment Corp. asked Apollo and TPG whether they “would fund up to $250 million to reach a ‘best and final’ deal” that paid the bondholders 58 percent of what they are owed, Apollo executives Marc J. Rowan and David B. Sambur said in a filing on Wednesday in Chicago federal court. The mediator “was advised that the sponsors would provide the incremental funding,” Rowan and Sambur said in the filing, which asks U.S. Bankruptcy Judge A. Benjamin Goldgar to block the bondholders’ request for personal financial information. Settlement talks involving Rowan and Sambur last month failed to produce a deal, according to Wednesday’s filing. The executives said the bondholders demanded “several times” the $250 million offered.

Creditors of Oi SA, the Brazilian phone company that filed for bankruptcy with $20 billion of debt, view the restructuring plan the company presented on Monday as unfairly benefiting shareholders, Bloomberg News reported yesterday. The main issue is the right Oi has to redeem bondholders’ convertibles anytime it wants. Creditors argue that the option for early redemption gives current shareholders power to avoid dilution if the company manages to stage a turnaround, but leaves bondholders with a large stake if things go badly. The Rio de Janeiro-based operator proposed converting up to 32.3 billion reais ($10.1 billion) of bondholders’ debt into convertible bonds with a face value of 10 billion reais. Lenders would get 85 percent of the company if Oi doesn’t pay off the debt in three years — leaving current shareholders in control of the company for that time span, and potentially benefiting from any recovery. The creditors also oppose the 10-year grace period suggested for bank debt, considered too long, and the option shareholders have of using proceeds from asset sales to pay bondholders’ convertibles, which could avoid dilution.

The financial woes of one of the world’s biggest shipping lines have left as much as $14 billion worth of cargo stranded at sea, sending its owners scurrying to try to recover their goods and get them to customers, according to industry executives, brokers and cargo owners, the Wall Street Journal reported today. Since Hanjin Shipping Co. of South Korea filed for bankruptcy protection there last week, dozens of ships carrying more than half a million cargo containers have been denied access to ports around the world because of uncertainty about who would pay docking fees, container-storage and unloading bills. Some of those ships have been seized by the company’s creditors. Samsung Electronics Co., which makes the Galaxy smartphone and other devices, said it has cargo valued at about $38 million stranded on Hanjin ships in international waters. About 95 percent of the world’s manufactured goods — from dresses to televisions — are transported in shipping containers. Though Hanjin accounts for only about 3.2 percent of global container capacity, the disruption, which comes as retailers prepare to stock their shelves for the holiday season, is expected to be costly, as companies scramble to book their goods on other carriers.

The Hollywood Park, Texas-based owners of the Zio’s Italian Kitchen restaurant chain sought bankruptcy protection yesterday, blaming the downturn in the oil and gas industry and weakness in the casual dining sector for its financial woes, the San Antonio Express-News reported today. Zio’s Restaurant Co. operates 15 restaurant locations, including four in the San Antonio area and six overall in Texas. The restaurants are managed by FMP SA Management Group LLC, which is affiliated with Food Management Partners Inc. of Hollywood Park. In court papers filed in U.S. Bankruptcy Court in San Antonio, Zio’s Restaurant estimated its assets at less than $50,000 and liabilities ranging from $1 million to $10 million.

A settlement could be reached within a month in one of the longest running and most expensive bankruptcies on record, a lawyer for Nortel Networks Corp.’s U.S. unit told an appeals court yesterday, the Wall Street Journal reported today. Nortel U.S. has been battling Canadian parent Nortel and British pensioners over how to divide $7.3 billion raised in the bankruptcy liquidation of the onetime telecommunications giant. A settlement would break an impasse that has lasted more than five years. Speaking at a hearing in the U.S. Court of Appeals for the Third Circuit, James Bromley, lawyer for Nortel U.S., said that the Nortel combatants will know by Oct. 7 whether the latest in a long series of mediation efforts will produce a deal. “We don’t have resolution yet,” Bromley said. If there is no settlement by Oct. 7, Nortel Canada, Nortel U.S. and European creditors will continue the court fights that have, over the years, pushed the professional fee totals to the $2 billion mark.

Chief Bankruptcy Judge Jeffery Deller yesterday approved a reorganization plan that will allow the amusement park Conneaut Lake Park to continue operating while it pays nearly $3.5 million in debts, GoErie.com reported yesterday. The mediated plan filed jointly by park trustees and creditors in July will allow the park to sell property and make quarterly payments from operating revenues to pay debts. A majority of park creditors approved the plan in August balloting. Conneaut School District, Crawford County and Sadsbury and Summit (Pa.) townships each voted to accept the repayment plan. The local taxing authorities are owed more than $1.3 million in delinquent park property taxes. Approval by a majority of creditors and repayment plan feasibility were factors in the plan's confirmation, said Judge Deller.

Korean shipping line Hanjin Shipping Co. Ltd. won an order yesterday from a U.S. judge extending bankruptcy protections so its vessels can dock at U.S. ports without fear creditors will try take actions against the ships, as they have in other countries, Reuters reported today. Bankruptcy Judge John Sherwood approved a motion by the world's seventh largest container carrier that sought to extend to the United States the protection from creditors that it has under receivership in South Korea. The order is temporary and Hanjin will need to return to court on Friday for a final order after talks with stakeholders to try to resolve complex problems involving ports, terminal operators and retailers, Judge Sherwood said. Hanjin filed for chapter 15 protection in the U.S. and sought an order recognizing proceedings in South Korea and protecting its U.S. assets. Some Hanjin vessels have not docked due to uncertainty about the company's finances. As of Monday, 70 Hanjin ships had been denied access to ports and three had been seized in Singapore and China by creditors through court orders. Read more. 

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Pacific Sunwear of California Inc. won court approval to exit bankruptcy after cutting debt, closing some stores and pressuring landlords to reduce rent at the malls where the teen-clothing chain does business, Bloomberg News reported yesterday. Under the reorganization plan approved yesterday by Bankruptcy Judge Laurie Selber Silverstein, PacSun will give all its stock to affiliates of private equity firm Golden Gate Capital, its senior lender. In exchange, Golden Gate will reduce the amount it’s owed by PacSun to about $30 million initially from $88 million, Gary Schoenfeld, the retailer’s chief executive officer, said in an interview. Golden Gate has also agreed to invest $20 million in the company, most likely in form of new debt, he said. Read more. 

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