Exide Technologies' unsecured creditors say they have lost confidence in the company's management to guide the battery maker safely through bankruptcy, Dow Jones Daily Bankruptcy Review reported today. The company’s unsecured creditors’ committee at a hearing yesterday asked a judge to help them get information about plans to sell the company, which has been struggling in chapter 11 since June 2013. The panel says that it suspects Exide is being steered into a sale that will put the company into the hands of senior lenders, leaving most creditors out in the cold.
A pension fund said yesterday that GT Advanced Technologies Inc. shouldn’t be allowed to destroy papers filed under seal in its bankruptcy because shareholders may need the information in lawsuits, Bloomberg News reported yesterday. A sealed declaration by GT Advanced’s chief operating officer, Daniel Squiller, “details the reasons precipitating and necessitating” the bankruptcy, information litigants in at least nine federal securities lawsuits will need, the City of Pontiac General Employees’ Retirement System said in a filing yesterday in U.S. Bankruptcy Court in New Hampshire. GT Advanced filed for bankruptcy this month without specifying why. The Merrimack, N.H.-based company, which makes synthetic sapphire used to strengthen smartphone screens, later cited a burdensome supply agreement with Apple Inc. but continues to keep many of the details secret. The company has since reached a settlement with Apple that originally called for the destruction of Squiller’s declaration once the bankruptcy court approved the deal. Securities law requires all documents that may be relevant to a case be preserved, the retirement fund said in its filing.
GT Advanced Technology Inc., which struck an agreement with erstwhile partner Apple Inc. last week that allowed it to proceed with its bankruptcy, said that the iPhone maker had threatened to seek damages of more than $1 billion against the company. Former stock market darling GT Advanced, once set to become the main supplier of scratch-resistant sapphire to Apple, surprised markets when it filed for chapter 11 earlier this month. It failed to meet performance targets set out in its supply agreement with Apple, setting the stage for its failure, according to court filings. GT Advanced said in a court filing late on Monday that it needed to settle with the iPhone maker to avert a costly legal battle it might not win. "The alternative to the settlement agreement would be months, if not years, of costly, time-consuming, and distracting litigation with Apple over a wide range of contested issues, the success of which GTAT could not guarantee," the company said in a court filing late on Monday. http://www.reuters.com/article/2014/10/28/gt-advanced-tech-bankruptcy-a…
In related news, Dow Jones & Co. Inc., publisher of the Wall Street Journal, has asked a court to deny a request by Apple Inc. and GT Advanced Technology Inc. to keep under seal some documents relating to GT Advanced's bankruptcy. Dow Jones, owned by News Corp., said that keeping the documents under seal is an offense to constitutional principles of public access, according to the publisher's court filing yesterday. GT Advanced, which supplied sapphire material to Apple to make smartphone screens, filed for chapter 11 protection earlier this month under mysterious circumstances. GT refused to explain why it had imploded, citing confidentiality clauses in its Apple contracts. http://www.reuters.com/article/2014/10/29/gt-advanced-tech-bankruptcy-d…
Clark Appliance, a high-end home appliance retailer in business for more than 100 years, filed an emergency voluntary petition for chapter 11 relief on Friday, the Indianapolis Star reported yesterday. In a letter to customers, owner Bob Clark said that the move was motivated by a number of financial problems that have plagued the company since 2008. Court documents state that Clark Appliance owes about $2.2 million to its largest single creditor, General Electric. First Business Capital Corp., an asset-based lender in Madison, Wis., is owed about $2 million.
The operator of the Indiana Toll Road, which paid $3.8 billion for a 75-year operating lease, won court approval of a plan to exit bankruptcy protection in just over a month after working with creditors for years, Bloomberg News reported yesterday. Bankruptcy Judge Pamela S. Hollisin Chicago yesterday granted ITR Concession Co. approval of the reorganization plan, which is supported by more than 87 percent of senior secured debtholders and enjoys unanimous acceptance by equity owners. Under the proposal, the company would either be sold through a competitive process or restructured using $2.75 billion in new debt, with almost all the equity going to the secured creditors, according to a court filing. ITR Concession's unsecured creditors, owed about $8 million, its only other listed debt, will be paid in full under either scenario.
Fertilizer company Mississippi Phosphates Corp. filed for chapter 11 protection on Monday with plans to remain open but eventually sell its assets, Dow Jones Daily Bankruptcy Review reported today. Mississippi Phosphates said in its court filing that it has between $100 million and $500 million in both assets and liabilities. The company said in a separate filing that it plans to file motions establishing a "formal sales process" within a week. Mississippi Phosphates blamed its bankruptcy filing on several things, including natural disasters, unplanned shutdown of its production plants and "unsuccessful planned turnarounds."
Trump Entertainment Resorts Inc. idled 353 slot machines with names such as Top Dollar, Jackpot, Loveboat and Dangerous Beauty when it closed its Plaza casino in Atlantic City, N.J., after declaring bankruptcy, Bloomberg News reported yesterday. Now the company is betting it can squeeze a bit more value from the slots by selling the machines and unloading the cost of securing, maintaining and storing them. The company asked Bankruptcy Judge Kevin Gross for permission to sell the slots for $146,650 to Patriot Gaming & Electronics Inc., with offices in New Gretna, New Jersey. That works out to about $415 each for Patriot, which repurposes and distributes used slot machines, according to its website. The slots “are no longer necessary” for business and will help “obtain meaningful value” for creditors, Trump Entertainment said in an Oct. 24 filing.
A bankruptcy judge will rule next week if Energy Future Holdings Corp., a bankrupt Texas power company, can conduct an auction for its power distribution business, which is likely worth billions of dollars, Reuters reported yesterday. "I believe the record is sufficiently dense and the issues sufficiently important that I need some time to digest that and make a reasoned ruling," said Bankruptcy Judge Christopher Sontchi. His comments concluded four days of testimony and arguments on the company's request to start an unusual auction process. The judge said he will read his decision from the bench on Nov. 3. The company framed the proposed process as an opportunity to maximize the value of its 80 percent indirect stake in Oncor, a non-bankrupt affiliate that operates the largest network of power lines in Texas.
The owner of two Arizona dairy farms has filed for chapter 11 protection, accusing its lender of fraud and saying that the years following a historical drop in milk prices during the 2009 recession have been difficult for independent farms, Dow Jones Daily Bankruptcy Review reported today. D&E Dairy Farms LLC, which owns Rio Bravo Dairy and JDF Dairy, specifically blamed its need to file for chapter 11 bankruptcy on an aggressive lending approach in the wake of the recession by Farm Credit Services Southwest, an approach that included fraudulent misrepresentations, D&E alleges. Alongside its chapter 11 filing, D&E filed a lawsuit against Farm Credit Services Southwest, which is part of the Farm Credit System, over these allegations, requesting actual and punitive damages to be determined by a jury.
David Boies spent much of the past month interrogating the architects of the 2008 Wall Street bailout, making the case that the U.S. cheated American International Group Inc. (AIG) shareholders of at least $25 billion partly for the benefit of an elite club of banks, Bloomberg reported today. This week, the government is set for its turn to respond to claims by Boies and his client, former AIG Chairman Maurice “Hank” Greenberg, describing the lawsuit as the ultimate case of biting the hand that feeds you. Boies represents Greenberg’s Starr International Co. in a trial challenging the government’s demand for AIG equity in consideration for an initial $85 billion loan. He has framed the rescue as a series of deals rigged by regulators in favor of Goldman Sachs Group Inc. (GS) and other investment banks at the insurer’s expense. Goldman Sachs, Morgan Stanley and other banks borrowed tens of billions of dollars at rates of no more than 4 percent, while New York-based AIG was saddled with a 14 percent interest rate and was forced to surrender 80 percent of its equity.
