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The government's bankruptcy watchdog is objecting to a California developer's plan to bring a long-stalled Hawaii development project known as Hokuli'a out of bankruptcy under the control of an investment group that includes the chairman of retailer Wal-Mart Stores Inc., Dow Jones Newswires reported yesterday. Acting U.S. Trustee Tiffany L. Carroll is objecting to the disclosure document of developer 1250 Oceanside plan to exit bankruptcy under the control of SunChase Holdings, a California real-estate investment firm. Carroll said in a court filing on Friday that the developer's disclosure statement failed to explain how the plan's backers intend to pay the project's unsecured creditors.

The unsecured creditors' committee of Personal Communications Devices LLC is asking a bankruptcy judge to toss the $105.3 million offer set to lead bidding at an auction for the wireless device supplier's assets, Dow Jones Daily Bankruptcy Review reported today. The offer's high value is "pure fiction," the committee said in court documents filed Friday, because only a small portion of it is cash, just enough to repay Personal Communications' $46 million bankruptcy loan and some transaction expenses. The rest of the value comes from assuming and refinancing two second-lien notes worth $25 million and $36.3 million respectively, the committee said.

Patriot Coal Corp. on Friday filed a restructuring plan that would pay back secured creditors and wipe out shareholders, four weeks after reaching new, cost-saving labor contracts with unionized workers, Reuters reported on Friday. In court papers, Patriot detailed a plan that would pay back secured creditors in cash while cutting recoveries for unsecured creditors, who would be given equity in the restructured Patriot. Current equity holders are not expected to recover anything. Patriot said that it will provide more detail on the plan this week. The plan still needs the support of creditors, along with approval by Judge Kathy Surratt-States.

During the final six months before its dissolution, Dewey & LeBoeuf billed $4.6 million in fees and expenses for work as special counsel to bankrupt American Airlines parent company AMR Corp., American Law Daily reported today. Now, AMR attorneys are trying to trim $644,000 off that bill, citing what they view as unnecessary diligence completed by a partner as he prepared to leave then-foundering Dewey, as well as overpriced FedEx bills and charges for first-year associates prohibited by a contract covering the assignment. In an eight-page objection filed on Sept. 5, AMR lays out the allegedly extraneous charges submitted by Dewey, which represented the airline in several litigation and antitrust matters unrelated to the bankruptcy. A hearing on the objections is scheduled for September 12.

Edison Mission Energy and its creditors say that parent Edison International is blocking their probe into allegations that the parent orchestrated a value-grabbing scheme ahead of Edison Mission's bankruptcy filing, Dow Jones Daily Bankruptcy Review reported today. Edison Mission and its unsecured creditors are urging a bankruptcy to force Edison International to cooperate with their investigation, arguing that its refusal to do so has "severely prejudiced" their efforts.

Edge Products LLC, a manufacturer of electronics for vehicle manufacturers, filed for chapter 11 protection, Reuters reported on Friday. The company estimated liabilities of between $100 million and $500 million and assets of $50 million to $100 million. Edge Products makes products such as ignition systems and monitors for major vehicle manufacturers. The case is In re Edge Products LLC, Case No. 13-12295, U.S. Bankruptcy Court, District of Delaware.

When a bank holding company files for bankruptcy, it usually occurs after the Federal Deposit Insurance Corp. has taken away its banking subsidiary, according to commentary in the The New York Times's DealBook from Prof. Stephen J. Lubben. In such a chapter 11 case, the only thing left for the company to do is marshal the assets and pay out the results to creditors before liquidating. Washington Mutual provides the most obvious example of this basic model. However, Anchor BanCorp Wisconsin plans to use chapter 11 to recapitalize rather than liquidate, which a judge approved late last week. It filed for chapter 11 on Aug. 12 before its bank, AnchorBank, was taken over by regulators. Indeed, it hopes that its chapter 11 case will avoid such a takeover. By filing for chapter 11, it could take three crucial steps. First, it would be able to pay off more than $180 million in debt owed to other banks for just $49 million. Second, it could convert the U.S. Treasury’s preferred stock into a small equity stake, worth about $6 million, in the holding company. Lastly, Anchor said that it would cancel its existing shares and sell the remaining new equity to investors, leading to the recapitalization of the holding company. Federal regulators still need to officially sign off on the plan, but Anchor said that it had been in contact with those regulators and that they “have not raised any objection.”

IBahn Corp., a provider of Internet services to hotels, sought bankruptcy protection in Delaware, citing a loss of contracts with largest customer Marriott International Inc. and patent litigation costs, Bloomberg News reported today. IBahn Chief Financial Officer Ryan Jonson said that the company had assets of $13.6 million and it listed liabilities of as much as $50 million in the chapter 11 filing in U.S. Bankruptcy Court in Wilmington, Del., on Thursday. Salt Lake City-based IBahn said that it has appointed Edward Helvey as its new chief executive officer and that it will continue to operate as it restructures. The case is In re iBahn Corp., 13-12285. U.S. Bankruptcy Court District of Delaware (Wilmington).

GateHouse Media Inc., which owns more than 400 community newspapers and hundreds of local websites, is restructuring its $1.2 billion debt in a prepackaged chapter 11 filing, The Associated Press reported yesterday. Newcastle Investment Corp., which owns 52 percent of GateHouse's debt, then plans to combine GateHouse's media empire with the 33 Dow Jones Local Media publications that it recently bought from News Corp. for $87 million. Newcastle would then spin off those operations to form a new publicly traded company called New Media. GateHouse became overleveraged during the 2008 financial crisis, but over the past four years has doubled digital revenue and cut $150 million in costs. The prepackaged reorganization already has the support of other creditors, who will have the option to convert their positions to stock in GateHouse or cash at terms of 40 cents on the dollar. Both GateHouse Media and Newcastle Investment are affiliates of Fortress Investment Group LLC, which specializes in buying troubled businesses.

A bankruptcy judge said that Longview Power, LLC, a private-equity-backed West Virginia power plant that filed for chapter 11 protection Friday, can use its lenders' cash to fund its bankruptcy case, setting up showdown between the company and a group of contractors over disputed letters of credit, according to a Dow Jones newswire report yesterday. Judge Brendan Linehan Shannon said Tuesday at a hearing in U.S. Bankruptcy Court in Wilmington, Del., that he'd give Longview interim approval to use its lenders' cash to pay its employees and vendors over objections from a trio of contractors about the company's intention to draw on $59 million in disputed letters of credit. Contractors Siemens Energy Inc., a unit of Siemens AG, the North American arm of Norwegian construction firm Kvaerner ASA, and German engineering firm Foster Wheeler AG claim that the letters of credit were assigned to them, and that Longview is trying to circumvent the arbitration proceedings by finding a safe haven in bankruptcy court. Lawyers for Longview said that the company would likely breach cash-balance covenants with its lenders if it is unable to draw on the letters of credit. Judge Shannon said that he would approve an order that bars Longview Power from drawing down on the letters of credit absent an order of the court, and scheduled a hearing on matter for Oct. 7.