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Affiliates of Paul Singer’s Elliott Management are again attempting to thwart the sale of Relativity Media LLC, a Hollywood film and TV studio, at a bankruptcy auction next week, the Wall Street Journal reported today. In preliminary objections filed with the U.S. Bankruptcy Court in Manhattan, the affiliates, Heatherden Securities LLC and Manchester Securities Corp., said the sale process has advanced too quickly and ignores the firms’ rights. Manchester, which is one of Relativity’s biggest lenders and has about $138 million on the line, has also complained that the sale process will likely leave it penniless. Lawyers for Heatherden said in court papers that the firm “continues to believe that [Relativity’s] business has substantially greater value than is likely to be achieved through the proposed sale, and that it is not a foregone conclusion that this value cannot be made available to the estates and their creditors.”

Saratoga Resources Inc.'s shareholders want the chance to propose a restructuring plan for the oil-and-gas producer, citing the allegedly "increasing dysfunction" of the company's board and lenders' iron grip on its bankruptcy, Dow Jones Daily Bankruptcy Review reported today. The official committee of equity holders has asked the U.S. Bankruptcy Court in Lafayette, La., to terminate Saratoga's exclusive restructuring plan filing rights to open the field to rival proposals, expressing a desire to file its own proposal that will preserve the value of Saratoga's equity. In court filings, Saratoga's lawyers have said that it has acted properly in connection with its restructuring, including having an independent committee oversee the process.

Blackhawk Mining LLC said it’s the winning bidder in a bankruptcy auction for most of Patriot Coal Corp.’s assets, Bloomberg News reported yesterday. Patriot in May selected Lexington, Ky.-based Blackhawk as the stalking-horse bidder in an auction to set a benchmark price for most of the bankrupt producer’s assets. Earlier that month, Patriot filed for chapter 11 for the second time in less than three years. Blackhawk has been feasting on defunct companies. The producer, owned by Mitch Potter, son of a Kentucky coal entrepreneur and backed by Stellus Capital Investment Corp., bought assets from James River Coal Co. out of bankruptcy last year.

The natural gas drilling industry's HII Technologies Inc. filed for bankruptcy protection after closing down its Houston operations, which handled the watery solution used in hydraulic fracturing to extract natural gas trapped in rocks below the earth's surface, Dow Jones Daily Bankruptcy Review reported today. Officials who put HII Technologies into chapter 11 protection on Friday said that they plan to look for buyers for its equipment, which helped extract oil and natural gas in Texas, Oklahoma, Ohio and West Virginia. Potential buyers could also recapitalize the company in a way that "preserve[s] the public status of the company and its tax losses," according to court papers filed in U.S. Bankruptcy Court in Victoria, Texas.

A $338 million settlement fund for victims of a fiery train derailment that claimed 47 lives in Canada is poised for final approval, but payments could be held up by a legal challenge from one of that country’s largest railways, the Associated Press reported yesterday. Canadian Pacific, which opposes the settlement fund, declined to contribute because it contends others were responsible for the tragedy. If the settlement is approved, Canadian Pacific would be left open to lawsuits while those the railroad considers to be responsible would be shielded from further legal battles by the agreement. But Robert Keach, the bankruptcy trustee in the case, said that the railroad is engaging in a “cynical” ploy to delay payments to victims to further its own negotiating position in settlement talks. “If they really thought that they were completely innocent and that they had no liability, then they would let the distribution proceed and they would defend themselves in court,” he said.

The operator of the A&P supermarket chain won bankruptcy court approval to sell 95 of its stores for $370 million, Bloomberg News reported yesterday. Acme Markets Inc. is buying 71 stores from Great Atlantic & Pacific Tea Co. for $246 million, while Stop & Shop Supermarket Co. is taking on 24 locations for $124 million. Bankruptcy Judge Robert Drain approved the sales at a hearing yesterday. The deals will keep more than 10,750 people employed. Acme and Stop & Shop expect to reach labor agreements with the union representing workers at those stores, Ray Schrock, a lawyer for A&P, said at the hearing. An auction will be held on Oct. 1 and 2 for other company assets. About 128 bids have been received and an additional auction may be necessary, Schrock said.

A judge yesterday cleared the way for Energy Future Holding Corp. to begin seeking creditor approval for a plan to end its massive bankruptcy, but also warned Texas's biggest power company that last-minute changes may endanger its chapter 11 exit, Reuters reported. The company has spent 18 months hammering out deals with its complicated web of creditors to reduce its $42 billion of debt. On Friday, Energy Future made last-minute changes to its plan to appease more creditors. However, the changes included dropping a proposal to pay cash to holders of some $1.9 billion in bonds, and instead reinstate some of the bonds. The plan also transferred the obligation for the bonds from the corporate parent to the company's power generation business. "The debtors are putting all their eggs in the basket that these creditors are unimpaired," Bankruptcy Judge Christopher Sontchi said yesterday. Hearings to confirm Energy Future's bankruptcy exit plan begin on Nov. 3.

Bankruptcy Judge Kevin R. Huennekens on Wednesday approved True Health Diagnostic $37.1 million purchase of Health Diagnostic Laboratory Inc., Dow Jones Daily Bankruptcy Review reported today. True Health won last week's auction for HDL, which tests for cardiovascular disease and diabetes, attracted multiple bids that drove up the initial True Health offer of $32 million. Texas-based True Health has called the acquisition a significant milestone in its goal to become the premier advanced diagnostic lab for cardiovascular disease and diabetes. Richmond, Va.-based HDL filed for chapter 11 in June after health regulators accused the company of paying illegal kickbacks to physicians who referred patients to HDL for blood tests. The company's bankruptcy filing came several months after it agreed to pay nearly $50 million to settle civil lawsuits over the alleged kickbacks. The company has denied wrongdoing.

Oaktree Capital Group LLC and Blackstone Group LP are gearing up to fight bankrupt Samson Resources Corp.’s plan to hand itself over to lenders led by Cerberus Capital Management LP, Bloomberg News reported yesterday. The holders of Samson’s $2.25 billion of 9.75 percent senior unsecured notes maturing February 2020 argue that oil and gas prices have dropped so low that the $1 billion second-lien term loan held by the Cerberus group is now worthless. Under the plan now in place, Cerberus and other lenders including Silver Point Capital LP and Anschutz Investment Co. would cancel the debt Samson owes them in exchange for ownership. They would then use as much as $485 million to pay down first-lien debt that ranks ahead of them and fund operations. Under that scenario, the bondholders claim that they would be wiped out.

Energy Future Holdings Corp. got the nod from a bankruptcy judge Thursday to sign a pact with creditors that pledged to support a path out of chapter 11, the Wall Street Journal reported today. Approval from Bankruptcy Judge Christopher Sontchi gets Energy Future over the first hurdle in a process that is designed to split the company in two, pay off creditors with equity or cash, and bring the company’s chapter 11 proceeding to a close. Energy Future’s chapter 11 exit proposal still faces a couple of rounds of court tests and a review by tax and energy regulators.