An AstraZeneca Plc affiliate that owns a contaminated former acid-factory site in Richmond, Calif., sought chapter 11 protection, Bloomberg news reported yesterday. Cherokee Simeon Venture I LLC, which uses AstraZeneca’s U.S. headquarters address in Wilmington, Del., cited about $50 million each in assets and debt in court papers filed on Monday. The waste site, along San Francisco Bay, was developed in 1897 by Stauffer Chemical Co., later Bayer CropScience Inc., to make sulfuric acid, and until the 1970s was also used to produce agricultural products including fertilizer, according to a 2005 maintenance plan submitted to the California Environmental Protection Agency.
Peabody Energy Corp. and Arch Coal Inc. are being sued by mine workers who contend that the companies have an obligation to pay pension and health care benefits that were transferred to Patriot Coal in a 2007 spinoff, Reuters reported yesterday. Eight mine workers and their union, the United Mine Workers of America, are seeking class action status in a lawsuit filed yesterday. The roughly 10,000 union members whose benefits were transferred in the spinoff are worried that Patriot, in chapter 11 bankruptcy, will try to take advantage of laws allowing bankrupt companies to cut retiree health care and pensions. Some of the workers whose benefits were transferred retired before the spinoff and never actually worked for Patriot. Read more: http://www.reuters.com/article/2012/10/25/patriot-lawsuit-idUSL1E8LOOXT…
In related news, the CEO of bankrupt Patriot Coal is stepping aside less than five months after taking the job, the Associated Press reported yesterday. Irl Engelhardt, a long-time executive at Peabody where he served as chairman and director of one of the world's largest coal producers, took over this year just weeks before the troubled Peabody spin-off sought bankruptcy protection. The company did not provide more details about the change at the top of the company, or about changes to corporate governance announced yesterday. Patriot named Bennett Hatfield to succeed Engelhardt. Read more: http://news.yahoo.com/another-shift-top-patriot-coal-170854051--finance…
The owner of the Reno, Nev., Silver Legacy Resort and Casino received bankruptcy-court approval of its chapter 11 restructuring plan, which will allow the casino to emerge from bankruptcy within weeks, Dow Jones DBR Small Cap reported today. The plan confirmation, filed on Tuesday, comes after majority noteholder Black Diamond Capital Management agreed to support the plan, under threat of having its vote disqualified completely.
Ocwen Financial Corp. and Walter Investment Management Corp. yesterday prevailed in a bankruptcy auction for Residential Capital LLC's mortgage servicing business with a $3 billion bid that topped rival Nationstar Mortgage Holdings Inc., Reuters reported yesterday. Ocwen and Walter teamed up to buy ResCap's mortgage servicing operation that handles payments for 2.4 million home loans with a balance of about $374 billion. ResCap, once a major subprime lender, also has a mortgage lending operation.
Tennessee restaurant chain Back Yard Burgers Inc. is planning to close 20 locations, nearly all of its company-owned locations, after filing for chapter 11 protection last week, Dow Jones DBR Small Cap reported today. Back Yard Burgers operates a total of 25 company-owned stores and franchises another 64.
Philip Falcone's bankrupt LightSquared Inc. won court permission to award bonuses to four key executives under a revised plan that pays them the most if the company sells its assets or exits bankruptcy before July, Bloomberg News reported yesterday. Bankruptcy Judge Shelley Chapman approved the amended plan after LightSquared resolved concerns raised by a group of lenders owning $1.1 billion in debt and the U.S. Trustee in the case. While the executives, including Chief Executive Officer Douglas Smith and Chief Financial Officer Marc Montagner, may be paid more under the new plan, it requires them to exit bankruptcy sooner and keep the company to a strict budget, Matthew Barr, a LightSquared lawyer, told Chapman today. Managers also have an incentive to meet three regulatory milestones by Dec. 31, 2013, Barr said.
Overseas Shipholding Group Inc. warned it is evaluating strategic options, including a potential voluntary filing for chapter 11 protection, while adding certain previously issued financial statements should not be relied on, the Wall Street Journal reported today. Shares dropped 62 in regular session trading as the U.S. tanker company said that it is negotiating with its bank creditors. The company said its previously issued financial statements for at least the three years ended 2011 and for the first half of 2012 should no longer be relied upon as it is in the process of reviewing a tax issue. Overseas Shipholding said that the tax issue has arisen from the fact that it has substantial international operations and relates to the interpretation of certain provisions contained in its loan agreements.
Marathon Asset Management LP, the hedge fund that called on American Airlines to broaden talks with creditors in its bankruptcy case, wants a court-ordered investigation into an inter-company debt deal at the airline, Bloomberg News reported yesterday. AMR Corp.'s American took on $2.26 billion in debt before last year's bankruptcy filing that regional carrier American Eagle owed under aircraft-financing agreements, Marathon said in a court filing yesterday. "The pre-petition transactions raise serious questions as to whether American Airlines received fair value in exchange for incurring the billions of dollars in debt and as to whether these transactions were otherwise improper," Marathon said.
A fourth Texas high-tech startup that received taxpayer money through Gov. Rick Perry's (R) signature economic development fund has filed for bankruptcy, pushing the total losses in the $194 million portfolio beyond what the state says the fund has earned, the Associated Press reported yesterday. The collapse of bioenergy producer Terrabon Inc., which was awarded $2.75 million in 2010 and was backed by large Perry political donors, raises the question of whether the state's Emerging Technology Fund that began in 2006 is now worth less than what taxpayers have put into it. The state's venture capital-like fund has raised concerns about accountability and transparency, including a critical report from the state auditor's office last year. Terrabon's bankruptcy, which was filed in September, is the tech fund's biggest bust to date and brings the total amount of failed investments to $5.25 million.
Authentic Brands Group has offered to pay $70.1 million for men's suit maker HMX Group, according to court documents, Dow Jones DBR Small Cap reported today. HMX plans to hold an auction for its assets on Dec. 3, assuming it receives bids to challenge Authentic's. If Authentic is unsuccessful at auction, it will be entitled to a $2.2 million breakup fee and up to $700,000 in expense reimbursement.
