%1

In a step that potentially could ease the way for a merger of American Airlines parent AMR Corp. and US Airways Group Inc., the board of American's pilots union approved an interim labor framework should the two carriers proceed with a combination to take AMR out of bankruptcy court protection, the Wall Street Journal reported today. After three weeks of confidential negotiations overseen by AMR's creditors committee, the Allied Pilots Association board on Saturday voted 11-5 in favor of a proposed accord, the union said, though terms were not disclosed. The proposal requires the assent of the other parties to the talks, including both carriers and US Airways' pilot union.

Tribune Co., owner of the Chicago Tribune, Los Angeles Times and six other daily papers, emerged from bankruptcy, four years after a doomed leveraged buyout by billionaire Sam Zell led to chapter 11 proceedings, Bloomberg News reported today. Distributions to creditors have been initiated, the Chicago-based company said today. As part of its exit from bankruptcy, Tribune Co. also closed on a new $1.1 billion term loan and a $300 million revolving credit line. Tribune Co. filed for bankruptcy after Zell, a real-estate developer, orchestrated an $8.3 billion leveraged buyout of the company in 2007, just before a global recession and a slump in print advertising devastated the newspaper industry. The buyout loaded Tribune with debt, and Zell failed to pull off a turnaround of the newspapers.

Lehman Brothers Holdings Inc., which is due to make a third payment to creditors in March, had $5.6 billion in free cash on Nov. 30, an increase of $1.1 billion during the month, Bloomberg News reported yesterday. Cash that was restricted, or unavailable at Lehman and its affiliates was $13.7 billion, including $5.8 billion set aside for disputed claims, according to a post-bankruptcy report filed in court yesterday. The defunct investment bank, which has already paid creditors half of the $65 billion it aims to pay by 2016 or so, last month agreed to sell its Archstone Inc. unit for $6.5 billion to AvalonBay Communities Inc. and Sam Zell’s Equity Residential, scrapping plans for an initial public offering after a four-month slide in U.S. apartment stocks. Lehman also has been whittling down claims by some creditors, which would potentially add cash for distribution.

American Realty Trust wants more time behind the shield of bankruptcy to figure out how to pay off a judgment from a failed apartment building sale, Dow Jones DBR Small Cap reported today. Lawyers for American Realty are seeking a six-month extension of its exclusive right to file a chapter 11 plan explaining how it intends to pay off creditors, including a disputed $73 million judgment to a Michigan real estate developer.

Beartooth Electric Cooperative can continue its legal fight to cut ties with its bankrupt wholesale supplier, Bankruptcy Judge Ralph Kirscher ruled on Dec. 20, the Billings (Mont.) Gazette reported on Tuesday. Judge Kirscher's ruling allows Beartooth to pursue its claim that its contract with Southern is invalid because the Wyoming Public Service Commission did not approve it as required and because Southern failed to get a valuation of Beartooth’s contract before pledging it as security. Beartooth is seeking to end its 2008 amended contract with Southern because of the risk to the co-op’s financial security, say its board members. The contract runs until 2048.

Hawker Beechcraft Inc., which plans to exit bankruptcy protection under the control of a group of hedge funds that includes Bain Capital's Sankaty Advisors, is jettisoning two underfunded pension plans covering thousands of nonunion workers and retirees, the Wall Street Journal reported today. The Kansas-based aircraft manufacturer, which hopes to exit bankruptcy protection in the first quarter of next year, also said that it struck a deal with the Pension Benefit Guaranty Corp. (PBGC) to retain a third "hourly" plan covering more than 8,200 current and former union workers. In court papers filed on Feb. 21, Hawker said that it was terminating its so-called salaried and base pension plans covering nearly 9,500 employees and retirees as part of a comprehensive deal with the PBGC and the International Association of Machinist and Aerospace Workers, the union representing its hourly workers.

Bankruptcy Judge Brendan Shannon approved the sale of three Digital Domain Media Group Inc. patents to three-dimensional-technology licensing company RealD Inc. for $5.45 million, Dow Jones DBR Small Cap reported today. The sale was one component of a second set of assets Digital Domain is auctioning after having sold the majority of its assets in September for $30.2 million to a joint venture formed by Beijing Galloping Horse Film Co. and Reliance MediaWorks Ltd.

The pharmacy linked to a deadly U.S. meningitis outbreak said on Friday that it filed for chapter 11 protection, Reuters reported. New England Compounding Center, the specialty pharmacy shut down after shipping tainted vials of a steroid, said it will seek to establish a fund to compensate meningitis victims. NECC, based in Framingham, Massachusetts, said it made the filing in U.S. Bankruptcy Court for the District of Massachusetts.

Lehman Brothers Holdings Inc., which aims to pay creditors $65 billion by 2016 or so, enters the 2013 with statistics to match the biggest-ever bankruptcy it filed more than four years ago, Bloomberg News reported on Saturday. The defunct investment bank added 10,000 filings to its court docket in 2012, bringing the total toward 33,000, as it slashed 67,000 payment demands for $1.2 trillion by almost 70 percent to $370 billion. It paid advisers $600 million in its last year of bankruptcy, or a total of $1.8 billion since 2008.

Embattled money-management firm Aletheia Research and Management Inc. has reached a deal with its unsecured creditors that would see an independent trustee appointed to manage the company while it attempts to restructure in chapter 11, Dow Jones DBR Small Cap reported today. In court papers filed on Thursday, Aletheia and its unsecured creditors' committee agreed to the appointment of a chapter 11 trustee to "avoid the uncertainty and costs arising from litigation."