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Ballenger Construction Co. filed for chapter 11 protection on Friday after defaulting on 22 statewide construction projects, listing liabilities of up to $50 million and more than 1,000 creditors, The (Texas) Monitor reported yesterday. The financial crisis faced by the firm, whose business has been the construction of highways, streets and roads, could affect hundreds of employees, according to bankruptcy court records filed Sunday. Some of its contracts were for Texas Department of Transportation projects. "(Ballenger Construction Company) has ceased business operations, told its employees to go home, and has no ability to complete construction of its jobs," attorney Keith A. Langley of Langley Weinstein LLP in Dallas, who represents Liberty Mutual, told U.S. Bankruptcy Judge Richard S. Schmidt in requesting emergency relief from the automatic stay and authorization to coordinate completion of the projects. Founded in 1937, Ballenger Construction had touted on its business website a workforce of 550 employees with offices in San Antonio, Corpus Christi and Harlingen. According to court records, Ballenger began shutting down its business operations on Dec. 3. According to court records, consultants for Liberty Mutual project that the insurance company will lose about $50 million, according to court records. Judge Schmidt granted Langley's motion for emergency relief from the automatic stay following a hearing Monday in Corpus Christi.

South Florida investors with claims on small-cap company Vicor Technologies are attempting to push the company into chapter 7 involuntary bankruptcy, alleging mismanagement by current executives, the South Florida Business Journal reported yesterday. The investors include the company's former CEO. Based in Boca Raton until recently, Vicor is a relatively new medical technology company that collected $30 million from investors starting in 2000. Vicor ran out of cash around May 2011 following the settlement of a shareholder derivative lawsuit. Several executives resigned in December 2011, and they are among the petitioners seeking to put Vicor into bankruptcy. The company's current CEO has rejected their claims, indicating that he is working toward turning the company around. The creditors are also seeking the appointment of a trustee to take over the company, alleging that Vicor has $13 million in outstanding debts.

Baristas Coffee Co. announced yesterday that it has made a bid to purchase the assets of TC Global, doing business as Tully's, out of bankruptcy, according to Daily Finance yesterday. Tully's is a coffeehouse chain with more than 100 company-owned and franchised locations throughout the western United States. Baristas CEO Barry Henthorn said that his company's offer enjoys both "emotional and financial" support from Tully's existing shareholders "and many other members of the community" and expressed confidence that Baristas will be the winning bid. A bankruptcy court will conduct a hearing on bids for Tully's assets on Jan. 11.

American Airlines CEO Thomas Horton suggests that his management team has earned the right to keep leading the company even if it merges with US Airways, The Associated Press reported yesterday. The approval of a new labor contract by pilots last week was the last major hurdle American and parent AMR Corp. needed to clear before emerging from bankruptcy protection in the next few months. American is positioned to finish its chapter 11 restructuring faster than Delta Air Lines and United Airlines did theirs last decade. "If you look at the speed and the result of this restructuring, I think it stands apart from all the others," Horton said Monday. "This team has done an outstanding job, and I'm very proud of them." American's unions, however, are pushing for new management, and some analysts agree with them. Other airline industry observers believe Horton should run AMR, whether or not there is a merger. American and AMR filed for bankruptcy protection in November 2011. US Airways has been pushing for a merger that would put its executives in charge. But Horton said that a deal could happen after his airline emerges from bankruptcy, which raises the possibility that American could buy US Airways.

Drugmaker Pfizer Inc. is asking the U.S. Supreme Court to review a federal appeals court's ruling that allows certain asbestos-related lawsuits against the company, even though the subsidiary that was the main target of the suits went through bankruptcy reorganization, Westlaw Journals reported yesterday. The ruling by the Second U.S. Circuit Court of Appeals "frustrates the congressional purposes" of the law written to deal with asbestos-related bankruptcies, Pfizer said in its petition for a writ of certiorari. In April, the Second Circuit said that Pfizer can face suits over asbestos-containing products made by its unit Quigley Co. Quigley, which Pfizer bought in 1968, at one time faced suits by more than 160,000 plaintiffs, and it filed for bankruptcy in 2004. Although Pfizer made no asbestos-containing products of its own, it had been argued that Pfizer was liable because it put its logo on some advertisements for Quigley products, identifying both companies as manufacturers of the asbestos-containing products. In 2008, the U.S. Bankruptcy Court for the Southern District of New York enjoined the claims, saying that Pfizer's alleged liability arose from its ownership of Quigley, and that the claims must be channeled toward the trust created out of the bankruptcy. The U.S. District Court for the Southern District of New York reversed the bankruptcy court, and the Second Circuit affirmed. Pfizer says that if the Second Circuit's ruling stands, corporate parents will be discouraged from contributing the funds needed to make § 524(g) trusts effective for compensating asbestos victims.

Hostess Brands Inc. said that it used wages that were supposed to help fund employee pensions for the company's operations as it sank toward bankruptcy, the Wall Street Journal reported Sunday. It isn't clear how many of the Irving, Texas, company's workers were affected by the move or how much money never wound up in their pension plans as promised. After the company said in August 2011 that it would stop making pension contributions, the foregone wages weren't put toward the pension fund. Nor were they restored. The maker of Twinkies, Ho-Hos and Wonder Bread filed for bankruptcy protection in January and shut down last month following a strike by one of the unions representing Hostess workers. A judge is overseeing the sale of company assets. Hostess hasn't previously acknowledged that the foregone wages went toward its operations. The maneuver probably doesn't violate federal law because the money Hostess failed to put into the pension fund didn't come directly from employees, experts said. The decision to cease pension contributions angered many employees. After the bankruptcy filing, Hostess tangled with the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco and Grain Millers International Union to renegotiate labor contracts. Halted pension contributions were a major factor in the bakers union's refusal to make a deal with the company. After a U.S. bankruptcy judge granted Hostess's request to impose a new contract, the union's employees went on strike. Hostess then moved to liquidate the company.

The U.S. Bankruptcy Court on Friday approved a deal between Eastman Kodak Co. and CVS/pharmacy that extends the firms' relationship for four years, the Rochester (N.Y.) Business Journal reported Friday. Kodak had announced Nov. 16 the extension with CVS/pharmacy, which is the largest customer of Kodak's Retail Systems Solutions (RSS) business. RSS is part of Kodak's Personalized Imaging business, which the company is trying to sell. Because the agreement resolves certain pre-chapter 11 issues between the two companies, it was brought before the court for approval at Friday's hearing, Kodak said. The deal extends through 2016 Kodak's relationship with CVS/pharmacy, the retail division of CVS Caremark Corp. CVS/pharmacy operates 7,400 stores across the country. Its stores have more than 15,000 Kodak kiosks. As part of the agreement, CVS/pharmacy will be upgrading and expanding its fleet of Kodak Adaptive Picture Exchange dry lab systems. Kodak in August announced plans to sell both its Personalized Imaging and Document Imaging businesses. The company said it aimed to complete the transactions in the first half of 2013. Kodak in August reported that the segment generated $1.3 billion in revenues in 2011 and projected its sales would dip to $1.1 billion this year.

A debt-laden natural gas drilling company that had counted on tapping the riches of New York's part of the Marcellus Shale has filed for chapter 11 bankruptcy protection while the state's four-year-old moratorium on hydrofracking remains in place, The Associated Press reported Saturday. Norse Energy Corp., based in Oslo, Norway, has 130,000 acres under lease for natural gas drilling in New York. But the state's Department of Environmental Conservation (DEC) has had a moratorium on drilling permits since it launched an environmental impact review in 2008. The DEC is developing new regulations for fracking, or high-volume hydraulic fracturing, a controversial technology used to free natural gas from shale. "It isn't just regulatory delays. We had debts incurred outside of New York that we're paying back," said Dennis Holbrook, Norse's Buffalo, N.Y.-based chief legal officer. "But clearly the regulatory delays in New York have had a negative impact on this company." Norse has been selling off assets, primarily oil and natural gas leases and some production properties, to pay debts and meet operating expenses. The chapter 11 filing may "likely constitute an event of default" on a $21 million bond, the company said. Norse has been operating in central New York since 1996 and has drilled hundreds of vertical gas wells in sandstone formations. It had applied for dozens of permits to drill in the Marcellus Shale, a gas-rich region underlying southern New York, Pennsylvania, Ohio and West Virginia. New York has had a moratorium on permits while its DEC studies environmental, health and safety concerns related to shale natural gas development.

Hon. Bill Parker of the U.S. Bankruptcy Court for the Eastern District of Texas has ruled in favor of Lon Morris College's bankruptcy estate by giving interim approval for a $500,000 debtor-in-possession loan to help complete the sale of the school's remaining assets, according to a newswire report yesterday. The 158-year-old college, Texas's oldest junior college, filed for bankruptcy protection earlier this year. In addition to approving the loan, the bankruptcy court also cleared the way for an asset auction in Dallas on Jan. 14, 2013, when the majority of the school's 112-acre campus will be sold. In his decision issued yesterday, Judge Parker denied attempts by the Texas Attorney General's Office to prevent the bankruptcy estate from securing the debtor-in-possession loan. The auction will include approximately 50,000 square feet of academic lecture halls, dormitory buildings, a technology center, a gymnasium, and fields for football, baseball and other sports.

The American Suzuki Motor Corp. has reached settlement agreements with 213 of its 219 automotive dealers nearly a month after the unit filed for bankruptcy, the New York Times reported yesterday. The agreements are intended to compensate dealers and smooth their transition from automobile sales to warranty-and-repair providers for hundreds of thousands of Suzuki owners. The process "makes the dealers whole and puts them at the head of the line in terms of getting paid" during reorganization, said Rachel Rosenblatt of FTI Consulting. The final deadline for agreements that cover dealers in the continental United States, which are subject to bankruptcy court approval, is Dec. 28. The automaker said that it is hopeful that it will be able to reach agreements with the remaining six dealerships. "Based on dealer acceptances, we continue to believe our restructuring and realignment will be completed in a timely manner," said M. Freddie Reiss of FTI Consulting, American Suzuki's chief restructuring officer. Suzuki plans to market and sell its remaining inventory of vehicles through its dealer network. Although low sales volumes caused its exit from the North American car market, Suzuki's sales in the United States were up 22 percent in November from a year ago. The company filed for chapter 11 bankruptcy protection on Nov. 5 in the U.S. Bankruptcy Court for the Central District of California, citing $346 million in debt.