A judge has cleared National Envelope to continue borrowing on a $67.5 million loan funding its chapter 11 case while it looks for a buyer to take it out of bankruptcy, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Christopher S. Sontchi on Friday gave approval for the company to borrow the full balance of the $67.5 million loan.
A group of lenders to Philip A. Falcone’s LightSquared Inc. proposed a reorganization plan for the company, saying that its LP unit should be sold at auction with the lead offer from an entity owned by Dish Network Corp., Bloomberg News reported yesterday. L-Band Acquisition LLC, wholly owned by Dish, raised its offer for LightSquared’s assets to $2.2 billion by adding $220 million in cash under certain conditions, Tom Lauria, a lawyer for the lenders, said yesterday in court. LightSquared has refused to meet with L-Band. Bankruptcy Judge Shelley Chapman admonished lenders’ lawyers for not telling her in advance that they intended to file the plan before yesterday’s hearing. The hearing was scheduled to consider a timeline for LightSquared to receive proposals. Judge Chapman approved a timeline that requires competing bids by the end of the day on Dec. 6 and sets a hearing to confirm a final plan to begin Dec. 10.
Maxcom Telecomunicaciones SAB, a Mexico City-based carrier, filed for chapter 11 protection in the U.S., Bloomberg News reported yesterday. Maxcom listed $11.1 billion in assets and $402.3 million in debt in its court filing yesterday. Maxcom, which has struggled to compete with billionaire Carlos Slim’s America Movil SAB, said on April 25 that it was considering filing for chapter 11 after a takeover deal with Ventura Capital Privado SA collapsed when the company failed to persuade 80 percent of bondholders to accept its restructuring proposal. The company’s defaulted bonds surged to a 10-week high earlier this month after it unveiled a second restructuring proposal with Ventura Capital. The telephone company said June 18 it missed an $11 million bond payment as it held discussions with Ventura and bondholders.
A group representing the victims in the New England Compounding Pharmacy Inc. chapter 11 case is asking the bankruptcy court to open the door for lawsuits against other potentially liable companies, such as health care providers who administered the injections responsible for a deadly meningitis outbreak last year, the Wall Street Journal reported on Saturday. The company’s unsecured creditors’ committee has requested that a bankruptcy court to formally declare that New England Compounding is insolvent so it can begin that process, according to court documents. Some states—specifically Tennessee, where 153 cases of meningitis linked to the tainted injections were reported and 15 people died as a result—require this declaration of insolvency before permitting litigation against third parties in product liability cases to move forward. However, the committee has asked that the bankruptcy court make this declaration apply exclusively to lawsuits filed as part of the consolidated proceeding in Massachusetts, in an effort to keep all of the litigation and all of the money under one umbrella. The ultimate goal, the committee said in court documents filed Thursday, is to set up a process for these third parties to contribute funds to the bankruptcy estate in exchange for a release of their liabilities.
The controversial Women In Support of the Million Man March Inc. nonprofit in Newark, N.J., has filed for bankruptcy after federal authorities accused its leader of misspending a $345,325 federal grant, the Wall Street Journal reported on Saturday. The organization filed for chapter 11 protection under the name of its affiliate, Ace Alliance Inc. Executive Director Fredrica Bey and others proposed to help at-risk youth stay out of trouble after school using the 2005 grant. Last year, attorneys for the U.S. Department of Justice sued Bey and the nonprofit, accusing them of fraud, of improperly spending the money and then of attempting to “cover up their actions” during a subsequent investigation, according to court papers. Nonprofit officials have denied the allegations in court papers. The nonprofit’s bankruptcy is expected to halt the dispute before its trial can begin.
Eastman Kodak Co. won bankruptcy-court approval of a crucial request that will help it stay on track to exit chapter 11 protection in September, Dow Jones Newswires reported on Friday. Bankruptcy Judge Allan L. Gropper on Thursday agreed to extend, through Sept. 19, the time in which Kodak may solicit creditors’ votes for its restructuring plan, court papers show. Without the extension, Kodak would have faced a July 31 deadline to do so—weeks before it is scheduled to seek court approval of the plan itself. Creditors eligible to vote currently face an Aug. 9 deadline to cast their ballots, and the bankruptcy court will consider approving the plan at an Aug. 20 hearing. Kodak hopes to exit Chapter 11 in mid- to late-September.
Retirees say they fear a recent proposal from AMR Corp. may let the parent of American Airlines shed nearly $1.37 billion in retiree claims that the bankruptcy court has yet to evaluate, Dow Jones Daily Bankruptcy Review reported today. The retirees are taking aim at a proposal by AMR to set aside $331 million to cover certain claims that are determined eligible for payment after checks have already started going out to other creditors.
Philip A. Falcone’s bankrupt LightSquared Inc., said that it foresees competing proposals to reorganize its assets and asked the court for a deadline of Sept. 4 to take proposals, Bloomberg News reported on Friday. The broadband network services provider, also facing a $2 billion cash offer for its assets from an entity owned by Dish Network Corp. Chairman Charlie Ergen, lost the exclusive right to control its reorganization July 15. It hasn’t been able to get creditor support for a reorganization timeline and is proposing a streamlined process, it said on Friday in court papers. LightSquared asked the bankruptcy court for permission to have outlines of all competing plans filed by Sept. 4, with a Dec. 16 confirmation hearing to approve the best offer.
Eastman Kodak Co.’s bid to clean up air, soil and water pollution at its corporate headquarters ran into trouble this week as the federal government questioned whether the $49 million set aside for cleanup costs is enough, Dow Jones Daily Bankruptcy Review reported today. Kodak said the government's “new concerns,” raised by U.S. Attorney Preet Bharara, prompted it to adjourn Wednesday’s court hearing on the settlement in order to negotiate a solution. The deal calls for the creation of a $49 million trust to clean up air, soil and water pollution at Eastman Business Park, the 1,200-acre campus in Rochester, N.Y., where Kodak has researched, developed and manufactured products for more than a century.
MF Global Inc.’s trustee said that former customers should get “significantly” increased distributions in coming months, and the goal is still 100 percent recoveries, Bloomberg News reported yesterday. Customers who traded on U.S. exchanges may get distributions starting in early September that would bring their percentage recoveries into “the high nineties” while customers who traded on foreign exchanges may get “in the sixties,” trustee James Giddens said yesterday. His projections assume that agreements with MF Global’s U.K. unit and JPMorgan Chase & Co. take effect in mid-August. A prior projection in June estimated customers would get 94 cents on their dollar. Giddens said at the time that disputes including a lawsuit against directors and officers delayed the potential for full recovery.