%1

The rail company whose oil tanker train blew up in a Quebec town last month, killing 47 people, will be allowed to continue operating through Oct. 1 after providing insurance documentation demanded by Canadian authorities, Reuters reported on Friday. The Canadian Transportation Agency (CTA) said on Friday it would allow Montreal, Maine and Atlantic Railway (MMA) and its Canadian subsidiary keep trains moving for now. Earlier this month it had ordered MMA to cease operations, saying the railway lacked adequate insurance. On July 6, a runaway MMA train hauling tankers of crude oil derailed in the center of the tiny Quebec town of Lac-Megantic, exploding in giant fireballs in what was North America's deadliest rail accident in two decades. The CTA ordered the railway on Aug. 13 to halt operations as of Aug. 20 because it did not have adequate insurance. The insurance that MMA had in force in July will not come close to meeting the costs of cleanup and restoration after the Lac-Megantic crash.

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.

The U.S. Bankruptcy Court for the District of Arizona granted conditional approval to Swift Air of its proposed second amended disclosure statement and authorized the company to immediately begin the process of soliciting creditor acceptances of its proposed plan of reorganization, PRNewswire reported today. The bankruptcy court has also scheduled a confirmation hearing on the company's reorganization plan for Sept. 30. The creditors' committee in the company's chapter 11 case has given its full support and endorsement of the company's plan and strategies for emergence from bankruptcy, anticipated to occur by mid-October. In addition, the court has authorized the company to secure additional Boeing 737 aircraft to support s current clientele and to serve new customers with its planned diversification into the ACMI (aircraft, crew, maintenance and insurance) market.

A mobile home company filed for bankruptcy and left several families without homes and without the money they paid for them, KFOR-TV (Oklahoma City) reported yesterday. Rodney Wilcox and his fiancée spent thousands of dollars on a mobile home that they do not have. According to court documents, Wheeler Rental and Mobile Home Sales filed for bankruptcy days before the couple closed on their home. “It makes me feel like I’ve been robbed,” said Wilcox. Sixteen complaints have been filed from all over the state. “Some of [these people] were in fairly dire straits to begin with,” said John Maile, director of the Used Motor Vehicle and Parts Commission, which regulates the mobile home industry. While the company hasn’t paid the 16 customers their $80,000, it was able to pay a bankruptcy attorney $20,000. The company has a $30,000 bond, but that’s not enough to pay all of the creditors. There is a bankruptcy hearing scheduled for Monday, after which the commission will determine whether it will revoke the company’s license.

Lehi Roller Mills, a longtime prominent feature of the Utah County, Utah, landscape and a source of flour and baking products, has been purchased out of bankruptcy by KEB Enterprises, the (Ogden, Utah) Standard-Examiner reported yesterday. The company’s offer was accepted by the courts without contention, allowing the new owners to assume all assets and operations of the mill. KEB Enterprises got involved early on in the bankruptcy process and quickly injected capital into the business in order to keep it going. From the memorable scenes in the original Footloose movie to the prominent silos visible from Interstate 15, Lehi Roller Mills has long been a Utah institution.

Charles and David Koch, two of the world's richest men, have walked away from talks to buy the Tribune Co.'s newspaper assets, concluding that the papers were not economically viable, Reuters reported yesterday. Their company, Koch Industries, continues to have an interest in the media business and is exploring a broad range of opportunities. The Daily Caller said that the brothers had decided not to pursue the newspapers, which include the Chicago Tribune and Los Angeles Times, as Tribune Co. plans for them to be separated from websites like CareerBuilder.com, which is owned by Tribune Co. This could leave the newspapers without an important source of revenue.

In a courtroom packed with dozens of lawyers yesterday, the judge presiding over the Montreal, Maine & Atlantic Railway’s bankruptcy proceedings expressed concern that attorneys’ fees will suck the company dry of funds before victims of last month’s deadly train derailment in Quebec can be compensated, the Morning Sentinel reported yesterday. “What’s concerning me is a run-up of administrative expenses that would make operation of the railroad impossible,” said Hon. Louis Kornreich. “There’s not a lot of extra revenue.” If legal fees drain the company of its cash, nothing will be left to compensate victims of the accident on July 6, in which an unmanned train loaded with crude oil rolled downhill into the town of Lac-Megantic, Quebec, derailed and exploded, killing 47 people and destroying 40 buildings in the heart of town. The court-appointed trustee is Robert J. Keach, who also serves as co-chair of ABI’s Commission to Study the Reform of Chapter 11 and is a former ABI president. He has assumed all responsibility for managing the company’s finances, and his firm, Bernstein Shur, will represent the railroad in court. “It’s certainly conceivable that this case is administratively insolvent as we stand here,” Keach said. The bankruptcy case is complex because it spans two countries and is connected to a human tragedy with numerous victims. In addition, it involves a railroad, which by federal law cannot be shut down.

A Manhattan bankruptcy judge has approved a plan for Eastman Kodak to emerge from chapter 11 as early as Sept. 3, ABC News reported yesterday. The new company will not bear much resemblance to the film-and-camera company of yesteryear, though, as it will not be making or selling any products to consumers. Hon. Allan Gropper, in approving the plan, called it necessary to Kodak's regaining what he called "its position in the pantheon of American business." Kodak said in a statement that it is transforming itself into a seller of digital printing services to other businesses. The company’s traditional consumer products will be made by another entity, which is owned by a U.K. pension fund and yet to be named. In order to settle $3 billion worth of pension obligations to its former workers in the U.K., Kodak is selling its consumer film and camera business to the workers' pension fund. Kodak’s spokesperson said that the fund has not yet settled on a name but that it has the legal right to continue using the name Kodak.

American Airlines and US Airways are seeking a 10-day trial that would begin Nov. 12 in U.S. federal court to fight the challenge by the U.S. Justice Department to their proposed merger, which would form the world's biggest carrier, Reuters reported yesterday. In a court filing on Thursday, the carriers said the proposed date would give the Justice Department 90 days of trial preparation. By contrast, the 180 days requested by the government would be "far longer than any of its other merger trials in the century," the filing added. The bankruptcy status of American adds to the airlines' urgency to have the lawsuit heard. The merger would be the mechanism by which American parent AMR Corp. exits bankruptcy. The Justice Department sued last week to block the merger, saying it would reduce competition and lead to higher airfares.

Bankrupt National Envelope agreed yesterday to sell its operating assets, including a plant in Fayette County, Pa., to competitor Cenveo Inc., the world's largest envelope manufacturer, for $25 million, The Tribune Review reported yesterday. Both companies have been affected by the rise of email and online bill paying, reducing the demand for paper envelopes. National Envelope, based in Frisco, Texas, said that it reached a definitive agreement with Stamford, Conn.-based Cenveo to sell most of its assets for $20 million in cash and $5 million in stock, which is expected to occur by the end of September, subject to bankruptcy court approval. The company's parent, NE Opco Inc., sought chapter 11 protection on June 10 for the second time in three years. Cenveo said that it expects that the acquisition of National Envelope will increase sales by about $300 million and operating profits by about $30 million once the two companies have been combined.