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Philip Falcone’s LightSquared Inc. shouldn’t be allowed to run its own bankruptcy auction, a group of lenders said, citing depleted cash, a changing industry and a controlling shareholder who wants to block the sale, Bloomberg News reported yesterday. The lenders, a trustee or an independent committee should conduct the planned asset auction, the lenders said in a filing yesterday in court. Since the chapter 11 case began, LightSquared’s cash has dwindled by $125 million to about $61 million, Steve Zelin of financial adviser Blackstone Group LP said in support of the lenders.

Unsecured creditors yesterday lost a bid to propose a competing restructuring plan for Excel Maritime Carriers Ltd., setting the stage for a November court fight over the company's proposed chapter 11 plan that keeps the current owners in charge, Dow Jones Daily Bankruptcy Review reported today. Leading bondholders, led by Zazove Associates LLC and Fidelity Investments, sought permission to float a rival plan for the distressed shipping operation.

Longview Power LLC filed for chapter 11 protection along with certain of its affiliates, a court filing showed, as the U.S. power plant operator aims to restructure its debts to gain financial and operational flexibility, Reuters reported today. Longview Power, majority-owned by First Reserve Corp., a private investment firm, listed liabilities and assets of more than $1 billion, a court filing showed. Longview said that there will be no interruption to its business and employees will not be affected by the chapter 11 filing.

American Roads LLC, operator of the Detroit Windsor Tunnel linking the U.S. with Canada, moved closer to shedding $830 million in debt from swaps and bonds after a judge denied a bondholder group’s bid to join the case, Bloomberg News reported yesterday. Bankruptcy Judge Burton R. Lifland ruled yesterday that an ad-hoc group of investors didn’t have legal standing in the case and therefore couldn’t object to American Roads’ proposed reorganization. Under the plan, holders of $496 million in bonds will receive nothing and ownership of the company will change hands. Judge Lifland approved the company’s disclosure, and said that he would decide later whether to approve the plan, allowing American Roads to exit court protection.

Real estate investment firm Hackman Capital Partners LLC is betting it can turn a sweet profit by acquiring out of bankruptcy proceedings property and other assets from the former Hostess Brands Inc. empire, the Wall Street Journal reported today. Under the terms of the deal authorized by a bankruptcy court last week, an affiliate of Los Angeles-based Hackman will pay the newly renamed Old HB Inc. $62.5 million for 140 vacant properties. The portfolio of equipment and real estate in 34 states includes about 3,400 vehicles and bread-delivery vans, seven factories as well as warehouses and storefronts that once sold the trademark Twinkies and Wonder Bread. Hackman, which specializes in turning around distressed industrial properties, expects to resell most of the real estate in the next 12 months to companies such as bakeries and manufacturers that will own and occupy them.

As U.S. regulators spent the better part of six months preparing to sue to stop the American Airlines-US Airways Group Inc. merger, the carriers devised a plan to allay some antitrust concerns: an offer to cede flight slots at Washington’s Reagan National Airport, Bloomberg News reported yesterday. While the proposal fell flat, the talks show the stakes at an airport where a merged carrier would control 69 percent of the flights. The airlines’ overtures weren’t enough, and the Justice Department sued on Aug. 13 to block the deal. If there’s a way to settle the case, one element would almost certainly have to be a loosening of the airlines’ grip at National. JetBlue Airways Co. and Southwest Airlines Co. have said AMR Corp.’s American and US Airways should be forced to give up some slots, a step ordered in other mergers.

Bankruptcy Judge Allan Gropper yesterday confirmed K-V Pharmaceutical Co.'s chapter 11 restructuring plan, which is based on a $275 million investment deal with a group of its junior bondholders, Dow Jones Daily Bankruptcy Review reported today. Judge Gropper signed off on K-V's plan after he issued a ruling Tuesday denying $32 million in interest to the company's senior bondholders, including Silver Point Capital LP.

Overseas Shipholding Group Inc. said yesterday that it may owe $460 million or more to the Internal Revenue Service, a finding that is likely to upset its chapter 11 bankruptcy case, Dow Jones Newswires reported yesterday. Revised financial statements filed with the Securities and Exchange Commission said the shipping company's analysis and conversations with the IRS have led it to believe that the "actual amount of the tax" it will ultimately have to pay "will be significant and could be as high as $460,000,000 or potentially higher." The company intends to assert its available defenses "vigorously," according to the SEC filing. However, the filing may be bad news for bank lenders owed $1.5 billion and investors in the company's debt, who have been counting on Overseas Shipholding overcoming a $463 million claim the IRS filed in its chapter 11 case.

Orchard Supply Hardware Stores Corp. is seeking court approval of a settlement the hardware and garden chain says will save it from costly legal battles with its key creditors, Dow Jones Daily Bankruptcy Review reported today. The deal promises Orchard's lenders and unsecured creditors a cut of the proceeds from the company's $205 million sale to Lowe's Cos. or other assets, avoiding a courtroom showdown over the amount of money each creditor group is entitled to receive.

Patriot Coal Corp.’s operating loss widened to $47.8 million last month from $28.7 million in June after revenue dropped 30 percent, the St. Louis Post-Dispatch reported on Saturday. The $95.1 million in revenue for July was $24.1 million less than the month’s operating expenses. Items including $14.7 million in depreciation added to the coal producer’s loss, according to the operating report filed on Wednesday in bankruptcy court. The net loss for July was $69.9 million, compared with $40.1 million the month before. June revenue totaled $136.6 million, for an operating loss of $28.7 million. Revenue in June was 10 percent below May’s sales. The June net loss exceeded the May loss by more than $10 million.