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FedEx Corp. has conceded that it needs to clip its wings, and on Wednesday, investors and analysts will see how that process is going, The Wall Street Journal reported today. The company's ground and freight businesses have been growing much faster than its overnight business, and its lucrative international routes have been hurt as customers have switched to its less expensive alternatives and demand weakened for FedEx's premium-priced overnight delivery service earlier this year. FedEx warned in September that second-quarter profits would be lower than what analysts had been forecasting. The question among some industry analysts is whether this is a structural change or a cyclical one. Analysts will be watching to see if FedEx will have made any headway on a restructuring plan laid out in October—though the company has said it won't reap savings until next year. They will try to gauge whether the steps the company has taken—radical for FedEx—will be enough to adapt to changes in the industry and pressures on its express delivery mainstay.

Vitro SAB, Mexico's largest glassmaker, filed a lawsuit seeking damages of as much as $1.6 billion from bondholders including U.S. hedge funds that shunned the company's restructuring plan and tried to force it into involuntary bankruptcy in Mexico, Bloomberg reported today. Under the company's restructuring, approved by a Mexican court in February and subsequently rejected by U.S. courts, a trust holds newly issued bonds and payments for bondholders not accepting the plan. Vitro will seek to collect damages from the trust related to efforts by dissident bondholders to put the company and 17 units into involuntary bankruptcy in Mexico, the company said in a filing yesterday to the Mexican stock exchange. The glassmaker also said the U.S. Court of Appeals in New Orleans lifted temporary restraining orders that suspended bondholders' efforts to collect on judgments against Vitro and its units in the U.S. A three-judge panel of the appeals court last month affirmed a June ruling by a U.S. bankruptcy judge in Dallas who refused to enforce Vitro's restructuring plan.

LodgeNet Interactive Corp., a provider of cable TV, on-demand movies, Nintendo video games and Internet services to hotels and hospitals, said that it will likely have to file for bankruptcy protection by the end of December, Reuters reported yesterday. LodgeNet said that it was unable to pay $26 million due to DirecTV and Home Box Office Inc. (HBO) on Monday but had agreed with them to postpone payment until Dec. 31 to allow it to continue negotiations with its lenders and a potential investor. LodgeNet, which has a market capitalization of $3.8 million, said it was unlikely it will be able to pay on Dec. 31 and would have to file for chapter 11 protection if the deadline was not extended.

Fiat SpA rebutted a report that it was set to raise money from banks to finance its purchase of more of Chrysler, saying it had no need for such funds, Reuters reported on Friday. Instead, Sergio Marchionne, chief executive of Fiat and Chrysler, said on Friday that Fiat could raise cash by selling assets such as its components unit Magneti Marelli, and that Fiat has no need to tap the debt or equity markets to raise cash for the planned purchase of remaining Chrysler shares. Fiat owns 58.5 percent of the No. 3 U.S. automaker. While Fiat has ample cash on hand, Marchionne added, it could raise additional money if needed by selling assets, citing Magneti Marelli, which had revenue of US$7.6 billion last year, as an operation that could be sold. The capital increase, if it goes ahead, could take place in mid-2013. Fiat's need for cash still depends on the outcome of a Delaware court battle with a voluntary employees beneficiary association, which pitches the two sides against each other in a dispute over the price Fiat must pay for part of the health care trust's holding.

4Kids Entertainment Inc. is set to emerge from chapter 11 as a more streamlined licensing agent with a fresh appetite for sports deals, Dow Jones DBR Small Cap reported on Friday. Hon. Shelley C. Chapman cleared 4Kids to make its way out of bankruptcy after more than a year and a half spent dueling, and then settling, with several Japanese companies, selling some assets and devising a creditor-repayment proposal. Under 4Kids's plan, unsecured creditors owed $6.2 million are set to see a full recovery, as are holders of $4.1 million in administrative claims. Stockholders are set to see their common stock canceled and then receive reissued shares of new common stock, representing a recovery of 69 cents on the dollar. 4Kids tumbled into chapter 11 in April 2011 amid a dispute with a pair of Japanese companies, TV Tokyo Corp. and Nihon Ad Systems Inc., over royalties tied to the popular trading card game Yu-Gi-Oh!. After months of fighting, a bankruptcy-court ruling eventually paved the way to a settlement that provided 4Kids with $8 million.

Edison Mission Energy, the unregulated power generation business of Edison International, has filed for chapter 11 protection after being hurt by heavy debts, weak power prices and high fuel costs, Reuters reported today. Under a restructuring plan that needs court approval, Edison International will transfer its 100 percent equity interest in Edison Mission to unsecured creditors including noteholders, who together hold about $3.7 billion of the company's outstanding public debt. A large portion of the debt is held by a group of hedge funds including York Capital Management, which invests in distressed debt. The restructuring aims to substantially reduce the company's existing public debt. The case is Edison Mission Energy, Case No. 12-49219, U.S. Bankruptcy Court (N.D. Ill.).

Federal court records reflect that state contractor Ballenger Construction Co. worried that a bank was going to repossess its equipment, The Valley Morning Star (Texas) reported Saturday. The public record also shows that the principals of the 75-year-old firm based in Harlingen, Joe C. Ballenger Jr. and Joe C. Ballenger Sr., had attempted to sell assets to avoid the bankruptcy action, but the prospective purchases did not materialize. The firm filed for chapter 11 protection in federal court in Corpus Christi, Texas, on Dec. 7 after defaulting on 22 statewide construction projects and listing liabilities of up to $50 million. U.S. Bankruptcy Judge Richard S. Schmidt has ordered Ballenger Construction to file a plan of reorganization within 120 days. The firm’s surety, Liberty Mutual Insurance Co., has taken over the projects, which are mostly with the Texas Department of Transportation, and is coordinating their completion, according to court records.

In August, the U.S. Department of Education revoked Lon Morris College's Title IV status, permanently stripping LMC's access to Higher Education Act funding—including federal Pell grants, teacher education assistance, SMART grants, work study and federal student loans, the Jacksonville (Texas) Daily Progress reported yesterday. Having already started bankruptcy proceedings, the Lon Morris College estate closed the college's doors. But could the funding loss have been avoided? Accounts in LMC's proposed liquidation plan filed in federal bankruptcy court indicate that Chief Restructuring Officer Dawn Ragan was under the impression she could both declare bankruptcy AND keep the college's Title IV status. The plan also indicates Ragan started entertaining the idea of bankruptcy almost as soon as she was hired as CRO—months before the U.S. Department of Education felt it necessary to intervene. "The law is awfully clear: If you declare bankruptcy, you are out of the Title IV program," said Dennis M. Cariello of New York City. "Bankruptcy simply is not an option if you hope to continue operating as a school." LMC attorneys struggled against the order, characterizing the department of education's revocation as "illegal" under the Bankruptcy Code. Ultimately, Judge Bill Parker of the U.S. Bankruptcy Court for the Eastern District of Texas upheld the U.S. Department of Education's ruling.

Bloomberg News bankruptcy expert Bill Rochelle's weekly roundup looks at a split between the Ninth and Sixth Circuits; what Seventh Circuit Chief Judge Frank Easterbrook did to be named Bill's judge of the week; a Milwaukee case with religious overtones; some distressed companies you can pick up as holiday stocking stuffers; and the most important bankruptcy decision from the past week.

KV Pharmaceutical Co., taking a big step toward emerging from bankruptcy, announced Thursday that it has obtained $85 million in financing and reached a settlement with a Massachusetts company over the prenatal drug Makena, the St. Louis Post-Dispatch reported yesterday. The financing and settlement would allow the drug manufacturer to move forward with a reorganization plan, KV officials said. KV plans to file its reorganization plan with the bankruptcy court in the next few weeks. The court is scheduled to consider approval of the settlement with Hologic Inc. at a hearing Dec. 26. Once among the St. Louis region's strongest public companies, the scandal-plagued company filed for chapter 11 bankruptcy in August. The move followed a string of troubles involving oversized morphine tablets, a criminal prosecution of a subsidiary, and the banishment of KV's former chairman from doing business with federal health programs. A crippling blow came last year when the Food and Drug Administration declined to enforce the company's exclusive right to sell Makena, which aims to reduce the risk of premature births, following public outrage about the drug's high price. Court papers indicate that KV will pay Hologic $60 million by the end of the year to satisfy claims related to Makena, which KV had purchased from Hologic. KV's bankruptcy petition, which was filed in U.S. Bankruptcy Court for the Southern District of New York in Manhattan, listed the company's assets as $237 million and its debts as $728 million.