%1

Lawyers for the former RadioShack said Wednesday the defunct electronics retailer had resolved about a dozen objections to its liquidation plan and will return to a bankruptcy courtroom today to seek a judge's order finalizing the proposal, Dow Jones Daily Bankruptcy Review reported today. The former RadioShack also announced an agreement with the U.S. Justice Department over a $72 million tax bill, appearing to clear a major hurdle. Lawyers for both sides asked Judge Brendan Shannon to sign off on the liquidation plan, which distributes proceeds from the company's liquidation to its creditors. But the deal is subject to a lengthy government approval process. Christopher Williamson, a lawyer for the Justice Department, called the agreement announced yesterday "just the first step in the process."

An Arch Coal Inc. creditor sued a group of lenders it says is seeking to block a plan to swap the struggling miner’s existing bonds for new securities with longer maturities, Bloomberg News reported yesterday. GSO Special Situations Master Fund LP, a New York-based investment fund that holds some of Arch’s unsecured notes, accused the defendants of making “improper and legally unsupportable efforts” to block the swap. The deadline for the exchange is Sept. 23. A group of senior lenders — including Oaktree Capital Group LLC, Archview Investment Group and Caspian Capital, which claim to own a majority of Arch’s $1.9 billion in bank loans — have moved to block the deal on concern that it would harm the value of the higher-ranking debt they hold. The lenders said that the bondholders agreeing to the swap would receive preferential treatment, violating provisions of the loan pact.

A bankruptcy judge handed down an interim order telling Primera Energy owner Brian Alfaro "not to dispose of any assets" until a final decision has been made from a five-day hearing spread over three weeks time, the San Antonio Business Journal reported today. Bankruptcy Judge Craig Gargotta handed down the interim order yesterday following almost five full days of testimony that originally started back on Friday, Aug. 28. More than two dozen angry Primera Energy investors are asking Gargotta for an injunction preventing the San Antonio businessman from destroying records and disposing of personal assets. The investors claim that they were milked out of millions of dollars through fraud and deceptive trade practices, but Alfaro denies the allegations. Judge Gargotta ordered that both sides of the case submit their findings of fact, conclusions of law and case citations to his court by 5 p.m. on Wednesday, Sept. 30.

Customers battling Boomerang Systems Inc. over its robotic parking valet system are threatening to derail the company's chapter 11 restructuring, Dow Jones Daily Bankruptcy Review reported today. The owners of parking garages in Illinois and Kansas that were supposed to feature Boomerang's RoboticValet system on Monday filed papers urging a bankruptcy judge to either convert the company's chapter 11 restructuring to a liquidation or to hand control of the company to a trustee. "There is no chance the debtors rehabilitate as a viable entity while providing an equitable return to creditors," the garage owners said in the filing.

The owner of a mothballed refinery on St. Croix in the U.S. Virgin Islands filed for chapter 11 yesterday as part of a plan to sell its assets for $184 million to an affiliate of Boston private-equity firm ArcLight Capital Partners LLC, Dow Jones Newswires reported yesterday. The refinery, known as Hovensa LLC, is a joint venture formed by Hess Corp. and Petróleos de Venezuela, the national oil company of Venezuela. It had warned of the bankruptcy on Monday, the same day half-owner Hess was sued over the shuttering of the refinery. The company said then that the sale and bankruptcy filing would allow the refinery to reopen "under the ownership of a proven and well-capitalized operator."

Arch Coal Inc. is under mounting pressure to get a grip on its dwindling cash, Bloomberg News reported yesterday. The miner is saddled with $5.1 billion of debt and has failed to clinch a deal with creditors to swap existing bonds for new securities with longer maturities, which would help the company cut its obligations and ride out a commodities slump. Arch is two weeks away from an $18.1 million interest payment on some of the bonds it wants to make disappear. With senior lenders not wanting to see that cash used up, they’re likely to pressure the company to skip the payment, according to Spencer Cutter, a credit analyst at Bloomberg Intelligence. That would start the clock on a 30-day grace period that would force the two sides to either reach a compromise or head to bankruptcy court.

The battle is over between the maker of Ultimate Nutrition protein-shake powder and the organizers of country’s largest bodybuilding competition, which starts on Thursday in Las Vegas, who fought over advertising banners that would hang at the entrance to the event, the Wall Street Journal reported today. A new deal between the organizers of the Mr. Olympia contest and Connecticut-based Ultimate Nutrition Inc., which makes workout supplements, has prompted the manufacturer to drop its complaint that the banner advertisements could unfairly highlight the company’s competitors. Earlier this year, Ultimate Nutrition paid to become the “exclusive title sponsor” to the event, which is expected to draw more than 50,000 people. The two sides made peace after Mr. Olympia organizers offered “certain other advertising and promotional opportunities” to Ultimate Nutrition, according to documents filed in U.S. Bankruptcy Court in Hartford. The deal was approved by Judge Ann Nevins on Friday.

Endeavour International Corp.'s bid to have its chapter 11 case tossed out of court in a structured dismissal has come under fire from unsecured creditors, who say that the deal is skewed to benefit Endeavour's foreign affiliates and a handful of top-ranking creditors at their expense, Dow Jones Daily Bankruptcy Review reported today. In court papers filed Friday with the U.S. Bankruptcy Court in Wilmington, Del., lawyers for the unsecured creditors’ committee objected to Endeavour's request for a dismissal and instead asked Judge Kevin J. Carey to appoint a trustee to oversee the company's remaining assets. Endeavour, an oil and gas company, plans to hand control of its U.K. assets — the bulk of its business — to a group of senior bondholders in a debt-for-equity swap. 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.

Caesars Entertainment Corp. seeks to challenge a court ruling it claims would halt out-of-court debt restructurings while defending its decision to abandon a bond repayment pledge, Bloomberg News reported yesterday. The casino owner, which is fighting to avoid being forced into bankruptcy alongside its main operating unit, wants to immediately appeal a judge’s finding that companies cannot impose changes to bond terms that leave creditors with no way to collect. Caesars claims that the judge set too high a standard for out-of-court restructurings. The bid by Caesars stems from a lawsuit winding its way through New York federal court. In it, bondholders claim Caesars violated the federal Trust Indenture Act by abandoning a repayment pledge as part of a restructuring. Caesars argued that its contract with bondholders allowed it to scrap a promise to guarantee payment on $7 billion in debt under certain circumstances. U.S. District Judge Shira Scheindlin in Manhattan said she needs more evidence before deciding whether Caesars broke the law.

The judge in Montvale, N.J.-based A&P’s bankruptcy case said on Friday that he will not approve a $3.9 million retention pay plan for non-union employees unless the company adds another $1.1 million to its severance payments, which would go mostly to union workers, NorthJersey.com reported on Friday. Bankruptcy Judge Robert Drain said that he recognizes the need for retention bonuses for certain non-union employees, but that something needs to be done for the employees not eligible for the bonuses, particularly the union employees in the stores. A&P originally had asked for up to $5 million for bonus payments for 495 employees, but this week reduced the request to $3.9 million for 468 workers, creating a savings of $1.1 million. Judge Drain said that he will approve the retention pay request if it is amended to allocate the unspent $1.1 million to the pool of money being used to pay severance.