A U.S. brain-injury treatment center has filed for bankruptcy following reports of abuse and neglect of patients by their caregivers, Bloomberg News reported on Saturday. The Florida Institute for Neurologic Rehabilitation Inc. (FINR)and three affiliated corporations filed chapter 11 petitions on Friday. They said in court filings that they estimated they owe between $3 million and $30 million to 103 to 346 creditors and that their assets total $150,000 or less. The bankruptcy action came on the same day that a unit of Regions Financial Corp. sued FINR, claiming that it defaulted on $31 million in real-estate loans.
Flowers Foods Inc. and Grupo Bimbo SAB are in discussions to acquire pieces of Hostess Brands Inc.'s bread business, as the maker of Wonder Bread and Twinkies sells off assets and liquidates, the Wall Street Journal reported today. Hostess could disclose Flowers, Grupo Bimbo or others as opening bidders in a looming bankruptcy-court auction for the assets as soon as this week. Hostess, whose bread brands include Wonder Bread, Nature's Pride, Home Pride, Merita and Butternut, is still determining how to split up assets and package them for buyers. Hostess's bread brands could fetch more than $350 million.
Bankrupt Eastman Kodak Co. was sued by Japan's Kyocera Corp. for allegedly infringing more than a dozen U.S. patents with its printers and digital cameras, Bloomberg News reported on Friday. Kodak, based in Rochester, N.Y., will cause “irreparable harm” to Kyoto-based Kyocera if the infringement is not stopped, plaintiff’s lawyers said in a court complaint. Kyocera is seeking a jury trial and unspecified damages from Kodak, which has been trying to sell some of its own patents to pay creditors. Kodak sought bankruptcy protection in January 2012, citing $5.1 billion in assets and $6.75 billion in debt, as the transition to digital photography eroded the company’s film- based business.
U.S. District Judge Jed Rakoff ruled that the bankruptcy judge overseeing Bernard Madoff’s liquidation can hear lawsuits the trustee brought against customers over fraudulent transfers and submit proposed rulings to a higher court, Bloomberg News reported on Friday. The decision Judge Rakoff is a defeat for Madoff defendants in more than 300 lawsuits, who had asked him to take the suits away from Bankruptcy Judge Burton Lifland in light of the Supreme Court's decision in Stern v. Marshall. “Efficiency” will be improved by having recommendations from a bankruptcy judge who has “both intimate familiarity with the underlying liquidation and substantial expertise in the bankruptcy law,” Judge Rakoff said in his ruling.
Confusion over how much legal protection former Dewey & LeBoeuf partners are getting under a settlement with the defunct firm's estate may slow what Dewey advisers hoped would be the swift confirmation of the chapter 11 plan they have drawn up for repaying creditors who say they are owed some $600 million, Law.com reported today. A handful of dissenters raised objections to that plan at a hearing yesterday during which Bankruptcy Judge Martin Glenn asked his own questions about the document and an accompanying disclosure statement. Together, the two filings—which were submitted to the court in November—are intended to serve as a roadmap for how the Dewey estate plans to allocate funds to secured and unsecured creditors and other constituents. Judge Glenn urged Dewey's bankruptcy counsel from Togut, Segal & Segal to describe exactly who can still sue whom if the so-called partner contribution plan reached last year with some 400 partners is approved as part of the larger chapter 11 plan.
The chief executive of American Airlines' parent said yesterday that his company is just a "matter of weeks" away from concluding its evaluation of the potential benefits, costs and risks of a proposed merger with US Airways Group Inc. as a way out of bankruptcy court, the Wall Street Journal reported today. In a memo to employees, AMR Corp. Chairman and CEO Tom Horton cited a proposed memorandum of understanding that the union representing American Airlines' pilots reached this weekend, which would govern the way they would be integrated with US Airways' pilots should a merger occur. Horton said that discussions with the US Airways pilots and with other unions at both companies also are in progress. AMR will review the proposed memorandum of understanding with its pilots union and other factors to make "an informed decision about whether a merger should be pursued," Horton said.
Distressed-debt investors owed $1.5 billion along with unsecured creditors are pleading with a bankruptcy judge to open the doors to competing restructuring plans for ATP Oil & Gas Corp., Dow Jones DBR Small Cap reported today. Investors in ATP's $1.5 billion second-lien debt say that they may want to propose their own reorganization plan but do not want to be "hostage" to a company that has already signed away control to top-ranking lenders.
U.S. Trustee Roberta DeAngelis is objecting to the short timeline videogame company THQ Inc. is proposing for the sale of its assets, Dow Jones Newswires reported yesterday. In rules filed with the bankruptcy court, THQ proposed selling its assets during a Jan. 9 auction with bids due by Jan. 8. THQ filed for chapter 11 protection with an offer from Clearlake Capital Group LP worth roughly $60 million in cash, loan forgiveness and assumed liabilities. It named the offer from Clearlake as the lead bid. DeAngelis in an objection filed yesterday said that "the time table set forth in the Motion denies parties in interest an opportunity to effectively participate in the proposed sale process."
Bankruptcy Judge Robert Gerber could soon rule on whether the 2009 government-led restructuring of General Motors Co. improperly favored hedge funds, and an adverse ruling could cost the automaker nearly $1 billion, Reuters reported yesterday. Judge Gerber must decide whether a "lock-up agreement" in the restructuring sent $367 million to a group of hedge fund noteholders at the expense of other creditors. A trust representing unsecured creditors has sued to undo the lock-up agreement, arguing that it was a last-minute deal secretly folded into GM's bankruptcy to ensure the hedge funds' support. Read more: http://www.reuters.com/article/2013/01/03/gm-bankruptcy-lawsuit-idUSL1E…
In related news, General Motors U.S. sales rose 8.9 percent last month on a daily rate basis, giving the automaker its best December in five years, WardAuto.com reported yesterday. However, market share fell to an estimated 17.9 percent, its smallest portion of annual new-vehicle deliveries in the post-World War II era. GM delivered 245,733 cars and trucks in December, compared with 234,351 year-ago (26 selling days vs. 27 in December 2011). It closed the year with 2.6 million sales in its home market, 3.7 percent ahead of 2011 but trailing an industry up by double digits and reporting its biggest year-over-year gain since the eve of the Great Recession. Read more: http://m.wardsauto.com/sales-amp-marketing/gm-s-us-december-sales-rise-…
