PennySaver has filed for chapter 7 bankruptcy, a week after it shut down and in the wake of lawsuits claiming nearly 700 workers were abruptly laid off without notice or final pay, the Orange County (Calif.) Register reported yesterday. A bankruptcy judge in Delaware on Friday granted a lawyer representing the company and several of its affiliates a 14-day extension to file a list of assets and liabilities. The chapter 7 petition filed by PennySaver, based in Brea, Calif., lists debts between $10 million and $50 million against the same range in assets.
Colt Defense LLC, the hand-gun maker that skipped an interest payment last month, has entered into a restructuring agreement with loan lenders to provide the necessary funding for a prepackaged bankruptcy plan, Bloomberg News reported today. The agreement includes $15 million in debtor-in-possession loans as well as exit financing should Colt go ahead with a prepackaged chapter 11 case, the company said yesterday. Colt also amended terms of its bond exchange offer and will consider commencing the bankruptcy plan if conditions aren’t met. The West Hartford, Conn.-based weapons maker has been asking creditors since April to choose between a debt-for-debt exchange that Standard & Poor’s called “deeply distressed” or bankruptcy. Colt didn’t pay the $10.9 million due May 15 to holders of its $249.4 million of 8.75 percent unsecured notes due November 2017, S&P said last month in a report.
As the second week of testimony in the criminal fraud trial of three former Dewey & LeBoeuf executives got under way yesterday, defense lawyers attempted to put the most damaging evidence introduced by prosecutors into a context more favorable to their clients, the American Lawyer reported today. In several hours of cross-examination yesterday, former Dewey & LeBoeuf executive committee member Jane Boisseau admitted that the firm’s partnership agreement didn’t require former chair Steven Davis to seek the executive committee’s approval — or even to inform that committee — about employment terms he set with senior staffers, including executive director Stephen DiCarmine and CFO Joel Sanders, the two nonpartner defendants in the case along with Davis. Jurors learned last week that DiCarmine's and Sanders’ compensation doubled to more than $2 million a year after LeBoeuf, Lamb, Greene & MacRae merged with Dewey Ballantine in October 2007. Prompted by Peirce Moser, an assistant district attorney with the New York County District Attorney's Office, Boisseau testified last week that the firm’s top governance committee never authorized the firm’s long-term incentive agreements with DiCarmine and Sanders, including multimillion-dollar guarantees if their employment was terminated before Dec. 31, 2013. But under questioning by DiCarmine’s lawyer, Bryan Cave partner Austin Campriello, Boisseau admitted in her third day of questioning that such "golden handcuffs" contracts aren’t unusual in corporate America.
A U.S. bankruptcy judge yesterday granted Energy Future Holdings Corp. more time to round up support for its chapter 11 plan, as creditors and potential bidders circle its valuable transmissions unit, Oncor, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Christopher Sontchi granted Energy Future's request to ward off the threat of competing chapter 11 plans until Oct. 29, the maximum time allowed by law. The decision means all offers for Oncor must go through Energy Future. Making the most of Oncor is Energy Future's chief hope to resolve the $42 billion debt load that pushed it into bankruptcy more than a year ago.
Langermann’s of Baltimore has filed for bankruptcy after the recent unrest in city knocked the restaurant’s finances too far out of balance, the Baltimore Business Journal reported yesterday. The restaurant filed for chapter 11 protection on May 20. The restaurant is open and the owner says he has no plans to close it. Dave McGill, a partner in Langermann’s, said the restaurant had struggled with cash flow problems, but the protests, riots and curfew following the death of Freddie Gray exacerbated those issues. The restaurant owes more than $1 million total to its 20 largest creditors, according to court documents.
The U.S. Department of Justice trustee monitoring Corinthian’s bankruptcy has formed a special committee representing the interests of hundreds of thousands of Corinthian students in negotiations with the school and its unsecured creditors, a group that includes the Department of Education, Bloomberg News reported yesterday. The students say Corinthian duped them into taking on federal loans, and they hope their newfound legal standing will give them leverage to push for debt relief, not only for themselves but for other Corinthian students. Troubles dogged Corinthian Colleges for years, with mounting allegations from state attorneys general and the Education Department that it falsified grades, attendance, and job-placement statistics in reports to regulators and in marketing materials. The Santa Ana, Calif.-based company, which has denied the allegations, in November agreed to sell about half its 107 campuses; on April 26, Corinthian said that it would close its remaining locations, at which about 16,000 students were enrolled.
The operating unit of Caesars Entertainment Corp received court approval yesterday to remain in control of its bankruptcy for another six months, Reuters reported yesterday. The ruling by Bankruptcy Judge Benjamin Goldgar allows the country's largest casino operator to pursue its plan for cutting its $18 billion debt without the threat of a rival plan from creditors. Judge Goldgar cited the size of the case in his decision, and he overruled creditors who pressed him to shorten the period of exclusive control to four months or even to end it now. Caesars will retain control of its bankruptcy through mid-November.
A judge last week approved the $17.25 million sale of Doral Financial Corp.’s insurance arm to Popular Insurance LLC, which won a competitive auction earlier this month for the business, the Wall Street Journal reported today. The order was signed on Friday by Bankruptcy Judge Shelley C. Chapman. According to prior court filings, Popular Insurance won a 28-round auction on May 12 against Anglo-Puerto Rico Insurance Corp., which had served as the opening bidder with a $10.75 million offer. The two companies were the only qualified bidders. The judge had approved procedures for the auction early last month, including a $250,000 breakup fee that goes to Anglo-Puerto Rico since it served as the lead bidder but lost the auction. Doral had told the judge in court filings that Doral Insurance Agency LLC would likely have experienced a “rapid and substantial decline” in value if it wasn’t sold quickly.
EveryWare Global, Inc. announced on Friday that a bankruptcy court confirmed the company's financial restructuring plan, according to a press release. The plan, as supplemented, provides for the cancellation of the company's existing common stock. The company's existing common stockholders and holders of in-the-money warrants (other than the company's pre-petition term loan lenders and their affiliates and certain stockholders affiliated with the company) will receive cash equal to $0.06 per existing share of common stock. The plan provides that the EveryWare's pre-petition term loan lenders will receive approximately 96.3 percent of the reorganized company's common stock in exchange for their term loans.
Patriot Coal Corp. has selected Blackhawk Mining LLC as the potential buyer for its assets in bankruptcy court, Bloomberg News reported on Friday. Lexington, Ky.-based Blackhawk will be the stalking-horse bidder in an auction to set a benchmark price for most of Patriot’s assets. Patriot, which filed for chapter 11 protection last week for the second time in less than three years, is considering spinning off its union liabilities into a separate entity that won’t be purchased by Blackhawk. That structure mirrors Blackhawk’s assets purchase last year from bankrupt coal miner James River Coal Co., in which the buyer didn’t assume the pension plan.
