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Rhode Island remains on track to make a $2.5 million interest payment next year on bonds that were used to finance the facilities of 38 Studios, a now-bankrupt videogame company founded by former Boston Red Sox pitcher Curt Schilling, Reuters reported yesterday. The state's House Finance Committee approved a budget late Tuesday night that included making an interest payment next May on $75 million of taxable bonds that the state sold in 2010 to make a loan to the company and lure it to Rhode Island. The company's loan payments were originally supposed to secure the bonds. Now the state could wind up paying $89 million for them, according to its director of administration, Richard Licht. Recently, some lawmakers had suggested the state walk away from the debt as it confronts a budget gap of $30 million for the fiscal year starting July 1, raising concerns about Rhode Island's credit rating and also about the willingness of issuers in the $3.7 trillion municipal bond market to honor their debts.

Orchard Supply Hardware Stores Corp. won court permission to access crucial financing as it embarks on a chapter 11 case that it hopes will end in a swift sale to Lowe's Co. or a higher bidder, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Christopher S. Sontchi yesterday cleared the retailer to tap a $176.3 million bankruptcy financing package from lenders led by Wells Fargo Bank. The judge will consider giving Orchard his final approval for the loans at a hearing July 15.

More than 1,000 creditors of the European operations of failed U.S. investment bank Lehman Brothers will share a 3.5 billion pound ($5.5 billion) payout next week, Reuters reported today. The payout means the recovery so far for creditors from one of the banking collapses at the heart of the 2008 financial crisis is 68.5 cents in the dollar. PricewaterhouseCoopers, joint administrators for Lehman Brothers International (Europe), said a dividend of 43.3 percent of what creditors were owed—the second so far—would be paid on June 28. The administrators for what is the biggest bankruptcy in history said in their last progress report in April that unsecured creditors could be paid in full and there could be surplus funds.

Ally Financial Inc.'s proposed $2.1 billion agreement reached last month with creditors of its bankrupt Residential Capital LLC subsidiary cleared a key court deadline with only one vigorous objection, though several warning shots were fired, Reuters reported yesterday. Ally agreed to the settlement last month to end allegations it stripped ResCap of choice assets including the online lender, Ally Bank, before dumping the business into bankruptcy, which left creditors empty-handed. Syncora Guarantee Inc. insured some of the mortgage-backed bonds issued by units of ResCap, which have fallen sharply in value, and it objected for a variety of reasons. Syncora alleged that ResCap did not explain how it decided to split money from the Ally settlement among different bond insurers. The Department of Justice's bankruptcy watchdog, plaintiffs in a class action and government's pension insurer also objected as the deadline passed yesterday. Several parties also let the court know that while they were not formally objecting, they were taking up positions against the yet-to-be-filed reorganization plan. ResCap plans to file a reorganization plan by July 3 that will explain in more detail how creditors will be paid. A hearing has been scheduled for June 26 before Bankruptcy Judge Martin Glenn to approve the Ally settlement plan.

Patriot Coal Corp. is in talks with Aurelius Capital Management LP and Knighthead Capital Management LLC over a potential investment of “hundreds of millions of dollars” that would help fund its reorganization, and seeks court permission to pay them fees, Bloomberg News reported yesterday. Patriot is negotiating with the two investors, who may participate in a rights offering that could serve as the basis for an exit from its chapter 11 case, the bankrupt mining company said in court papers filed on Tuesday. Patriot recently won court permission to change its agreements with unionized workers, and is still trying to reach a consensus on how to do so, Patriot also said.

Mexican telecommunications company Maxcom said yesterday that it was seeking to negotiate new capital and a restructuring through pre-packaged bankruptcy process in U.S. courts, Reuters reported yesterday. The company, which provides phone, Internet and television services, said that it was working on the bankruptcy plan with some of its creditors, shareholders and private equity firm Ventura Capital Privado. Separately, Maxcom said that it had failed to pay about $11 million in interest due on Monday on notes expiring in 2014.

Lenders looking to buy ATP Oil & Gas Corp.'s deep-water drilling assets have increased the cash portion of their $690 million bid, a move that could appease the bankruptcy judge overseeing ATP's chapter 11 case, Dow Jones Daily Bankruptcy Review reported today. In a court filing on Monday, lenders led by an affiliate of Credit Suisse Group AG said they would pay $55 million in cash for the assets—up from $45 million—on top of $645 million in debt forgiveness.

Eastman Kodak Co. said that it will seek court approval for a $406 million rights offering that could give creditors a big equity stake in the company after it emerges from chapter 11 protection, Reuters reported yesterday. Kodak said that creditors agreed to backstop an offering that would let the Rochester, N.Y.-based company issue 34 million common shares at $11.94 each, equal to about 85 percent of the equity of a reorganized company. Kodak has said that it hopes to emerge from chapter 11 in the third quarter of this year.

Two U.S. lawmakers with antitrust oversight have urged the Obama administration to carefully review a planned merger of American Airlines and US Airways Group to ensure that it will not lead to higher prices for air travelers, Reuters reported yesterday. US Airways announced on Feb. 14 that it planned to buy American Airlines parent AMR Corp., which is restructuring in bankruptcy court. The airlines are looking to complete the deal by the end of September. Senator Amy Klobuchar (D-Minn.), who chairs the Senate Judiciary Committee's antitrust subcommittee, and Mike Lee (R-Utah), the top Republican on the panel, said that the deal would mean the top four U.S. airlines would control nearly 90 percent of the U.S. market. The pair acknowledged in a letter yesterday that there could be efficiencies associated with the deal, but also noted concern that flight costs could go up or customer service could deteriorate.

The Tribune Company faces a potential tax bill of more than $500 million over the sales of the Chicago Cubs and Newsday despite efforts to minimize the tax consequences of both deals, the New York Times DealBook reported yesterday. In the footnotes of its financial report for last year, Tribune said the Internal Revenue Service was seeking $190 million in taxes from the 2008 sale of Newsday to Cablevision as well as a $38 million “accuracy-related penalty” and $17 million in after-tax interest. Tribune also disclosed that the IRS might seek $225 million and unspecified penalties and interest for the company’s 2009 fiscal year, when it sold the Cubs to the Ricketts family for $845 million.