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The U.S. Trustee's Office and Erlanger Health System are both raising numerous objections to a plan by bankruptcy trustee Ronald Glass to auction off the financially failing Hutcheson Medical Center, The Chattanoogan reported today. The Fort Oglethorpe, Tenn.-based hospital has laid off a number of additional employees since the auction plan was presented. Assistant U.S. Trustee Martin Ochs said, "If the nursing home assets are sold, but there is not a sale of the hospital facility without sufficient funds reserved from the sale proceeds, the trustee will be left with inadequate funds to operate the hospital." A hearing on the proposed auction is set for Wednesday morning in the bankruptcy court in Rome, Ga.

For more information on hospital and health care bankruptcies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition.

Endeavour International Corp. Friday won approval for its debt-for-equity swap with bondholders, the latest company to use a structured dismissal to end its stalled bankruptcy case, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Kevin Carey signed off on the oil and gas company's proposal to hand control of its U.K. assets — which make up more than 90 percent of its business — to a group of senior bondholders and wrap up its affairs outside of chapter 11. Instead of ending its bankruptcy case with a chapter 11 plan that follows specific rules for debt repayment prescribed by Congress, Endeavour and its senior creditors have agreed to set aside money and settle their differences outside the bankruptcy courtroom.

Club One, a popular downtown Fresno, Calif., casino and restaurant, has filed for bankruptcy, the Fresno Bee reported today. The chapter 11 filing was made on Wednesday by its ownership group, led by Kyle Kirkland, Club One Casino Inc.’s president, who says that the lucrative casino will stay open and continue to pay fees it owes the city. The bankruptcy filing comes after a ruling last week in New York favoring two Fresno residents, former owner Elaine Long and minority owner George Sarantos, who are the casino’s biggest creditors after a 2008 sale. In total, Long and Sarantos are owed nearly $12 million combined, their lawyers said.

Quiksilver Inc. received bankruptcy-court approval Thursday to continue on its preferred path with private equity firm Oaktree Capital Management sponsoring the surf-retailer's restructuring, Dow Jones Daily Bankruptcy Review reported today. The ruling from Bankruptcy Judge Brendan Shannon comes at the end of a two-day hearing on the matter, during which the committee representing unsecured creditors opposed the surfwear retailer's proposed restructuring path and brought to the table fresh bankruptcy financing from Brigade Capital Management. However, Judge Shannon's approval of the Oaktree bankruptcy financing and plan support agreement executed with Oaktree came with some significant changes, made in an effort to create a better opportunity to find another, better deal.

If American Apparel gets the bankruptcy turnaround it envisions, the fashion chain will soon have its most profitable years ever, according to court documents filed on Thursday, Reuters reported. The company projected in a court filing that it would return to profit in 2018, its first money-making year since 2009. By 2020, the company projected a net profit of $23.7 million, well above its previous peak in 2007. The company warned in the court filing that ongoing legal battles with Dov Charney, the founder who was fired as chief executive last year, remained one of the risks to its future. The company accused Charney of orchestrating protests at its headquarters and said that he could undermine the company’s ability to hire staff and executives. Separately on Thursday, American Apparel sought to reassure suppliers and other creditors that they were key to its future, even though they were going to get next to nothing on what the company owes them.

Oaktree Capital Management LP may consider combining bankrupt surfwear retailer Quiksilver Inc. with Billabong International Ltd., a brand the investment firm already owns a stake in, a judge in Delaware was told, Bloomberg News reported yesterday. Durc Savini, an investment banker at Peter J. Solomon Co. who is working with Quiksilver, testified that “at some point” Oaktree may put the clothing companies together if it’s able to bring Huntington Beach, Calif.-based Quiksilver out of bankruptcy under its control. Savini added that he never directly approached Oaktree about a transaction with Billabong and that he doesn’t believe Billabong “has the balance sheet to support” such a deal. Oaktree owns about 20 percent of Australia-based Billabong. Quiksilver is in court defending its proposal to borrow as much as $175 million from Oaktree and Bank of America Corp., part of a broader plan to have Oaktree convert its debt into equity and assume control of the company. 

Molycorp Inc.’s unsecured creditors want to investigate lender Oaktree Capital Management LP, which they ‎say loaded the rare-earths miner with debt in transactions the creditors may sue to challenge in court, the Wall Street Journal reported today. Molycorp’s unsecured creditors’ committee is asking the bankruptcy court to let it question Oaktree employees and review various documents about transactions between the Los Angeles-based private-equity firm and Molycorp that took place in the months before Molycorp’s chapter 11 filing. Oaktree provided funding to Molycorp before the chapter 11 filing and has since provided the company with a $130 million bankruptcy-financing package. The committee said that it is investigating potential claims and litigation against Oaktree related to these transactions, including possibly seeking to unwind them. Other possible claims include aiding and abetting breaches of fiduciary duty, the committee said, as well as reviewing whether Oaktree may have violated securities laws with respect to its trading of Molycorp securities.

More than two years after a train laden with crude oil derailed in Canada, killing 47 people and destroying part of a small town in Quebec, a U.S. judge approved the railway’s multimillion-dollar bankruptcy-exit plan and cleared the way for victims to begin receiving payment from a $343 million fund, the Wall Street Journal reported on Saturday. Bankruptcy Judge Peter G. Cary on Friday approved Montreal, Maine & Atlantic Railway’s bankruptcy-exit plan, a day after a Canadian judge gave it conditional approval. The plan earmarks about $86 million for the families of those who died in the explosive crash in the town of Lac-Mégantic. The railway is now defunct, its assets sold off as part of the bankruptcy case, but the remnants of the company under the control of Robert Keach, the bankruptcy trustee in the U.S. case, have been working with parties on both sides of the border on a compensation plan for victims and creditors.

Creditors objected to elements of the city of San Bernardino's initial debt payment plan at a bankruptcy court hearing on Thursday, saying that the city was not being forthcoming about what assets it had and complaining about the lengthy process, Reuters reported on Friday. San Bernardino has proposed paying a penny on the dollar on nearly $50 million in pension obligation bonds held by EEPK, the Luxembourg-based bank and the city's second largest creditor behind the California Public Employee Retirement System. Representing EEPK at the hearing in Riverside, Calif., Vince Marriott said that the city had failed to reveal to creditors how much property it owned, its value, and whether it could be liquidated. Representing the city of San Bernardino, Paul Glassman said that the city would identify any excess properties but said the creditors were misguided if they thought there were great sums of money to be had through their sale.

The Supreme Court yesterday rejected an appeal by longtime investors with Bernard Madoff who argued the formula used to return money to clients should have treated them more favorably, Dow Jones Daily Bankruptcy Review reported today. By declining to hear the appeal, the high court's move clears the way for court-appointed trustee Irving Picard to distribute more than $900 million to customers defrauded by Madoff's Ponzi scheme. Those funds had been held in reserve while the investors' appeal worked its way through the courts. The investors, some of whom had invested money with Mr. Madoff for several decades, argued that the amount of their recoveries should be adjusted upward for interest or inflation to reflect the time value of money. Lower courts disagreed, ruling the Securities Investor Protection Act didn't permit such adjustments. Read more. (Subscription required.) 

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