Military cargo mover National Air Cargo Inc. filed for bankruptcy protection on Friday, citing being hit with a multimillion-dollar legal judgment in an airplane leasing dispute just as the industry began to struggle due to slower business from the U.S. military, Dow Jones Daily Bankruptcy Review reported today. National Air Cargo executives said that chapter 11 protection will give them time to fix the New York company's "operations and financial performance" while they continue to appeal a $9.9 million award, according to court documents.
Farmers in Oklahoma and Texas who shipped more than $20 million worth of guar beans last year to the nation's only guar processing plant, which is now in bankruptcy, have struck a deal with the plant's majority owner, a New York hedge fund, Dow Jones Daily Bankruptcy Review reported today. Under the deal, the farmers who agree to the plant's pending sale to an investment firm will recover about 75 cents on the dollar of what they're owed when the plant near Lubbock, Texas, leaves bankruptcy protection. Some farmers will also be able to split another $2.95 million.
Alco Stores Inc., a 198-store retailer largely serving small towns in 23 states, can finance the reorganization it began last week in Dallas with an interim loan capped at $50 million and letters of credit from pre-bankruptcy secured lenders led by Wells Fargo Bank NA, Bloomberg News reported yesterday. A bankruptcy judge on Friday signed an interim order approving the loan and allowing the company to use cash representing collateral for secured lenders’ claims. Alco filed for chapter 11 protection on Oct. 12 with a commitment from the lenders to provide senior secured financing consisting of a $110 million revolving credit and a term loan of about $12.7 million. In addition to funding the chapter 11 effort, the loans will be used to repay pre-bankruptcy debt. A hearing to approve the financing package on a final basis is scheduled for Nov. 12.
Energy Future Holdings squared off against creditors in court on Friday as the bankrupt Texas power company sought approval to begin a multibillion dollar auction of its interest in Oncor, a power transmission business, Reuters reported on Friday. The company anticipates an auction in February, and sources told Reuters that potential bidders include NextEra Energy Inc. of Juno Beach, Fla., Hunt Consolidated Inc. of Dallas and Houston-based Centerpoint Energy Inc. Energy Future is not selling Oncor, but the right to own an 80 percent stake in Oncor, which operates the largest network of power lines in Texas and is closely watched by regulators. Creditors opposed the structure of the proposed auction because they said that it would lock the company into a reorganization that would provide billions of dollars of tax benefits for one group of senior lenders.
A North Carolina resin manufacturer and its affiliates that have been named in numerous asbestos lawsuits have filed for chapter 11 protection in order to address its current and future asbestos liability, the Washington Examiner reported yesterday. Reichhold Holdings US, Inc. voluntarily filed its petition for relief on Sept. 30 and is joined by affiliates Reichhold, Inc., Canadyne Corp. and Canadyne-Georgia Corp. The company announced that it has arranged $130 million in financing from its bondholders to fund continuing operations, of which $100 million will be available to Reichhold, Inc., in the form of debtor-in-possession financing if the court approves.
Chilean bus operator Inversiones Alsacia SA sought bankruptcy protection in a U.S. court, saying fare evasion and declining ridership have made it difficult to meet financial obligations, Bloomberg News reported yesterday. The company, Santiago’s biggest bus operator, listed assets of as much as $500 million and debt of as much as $1 billion in a chapter 11 filing yesterday. Alsacia, which missed an August $39.6 million payment on notes due in 2018, filed in New York because it has assets in the city’s banks. Its filing included a proposed debt exchange that has creditor backing.
LightSquared lost another $64.8 million in September, bringing Philip Falcone ’s wireless venture’s total losses to more than $1.6 billion since the project filed for bankruptcy protection more than two years ago, the Wall Street Journal reported today. In a financial snapshot filed in bankruptcy court on Wednesday, lawyers for LightSquared attributed the bulk of the losses to interest payments on its debt. LightSquared paid $38.6 million on interest costs related to its debt during September, court papers show. The interest payments, which were mostly made to the holders of LightSquared’s bank debt, now stand at $981.8 million since the company filed for bankruptcy. The company also spent $4.6 million on lawyers and advisers who have been trying to figure out how to get the company out of chapter 11 protection. LightSquared filed for bankruptcy in May 2012 after federal regulators refused to approve its plans to launch the wireless network, which they said could interfere with global-positioning systems. Since that point, the company has lost $1.66 billion, court papers show.
The team winding down Lehman Brothers Holdings Inc. is accusing some of the nation's financial institutions of trying to freeze billions of dollars of Lehman cash earmarked for other creditors to "coerce" a favorable settlement in their fight with the failed investment bank over soured mortgage loans, Dow Jones Daily Bankruptcy Review reported today. In a bankruptcy court filing on Wednesday, lawyers for Lehman blasted the trustees responsible for some 255 individual residential mortgage-backed securities trusts that purchased mortgage loans from Lehman before the financial crisis. The trusts have said that Lehman needs to set aside $12.14 billion to settle claims over certain soured mortgage loans, more than double the amount that the failed investment bank has put aside for the dispute.
The judge overseeing the mysterious bankruptcy of an Apple Inc. sapphire supplier yesterday voiced skepticism over the widespread sealing of documents in the case, saying that he is "not seeing the kind of trade secrets" that would warrant sealing, Reuters reported yesterday. Scant information has emerged since GT Advanced Technologies Inc. filed for bankruptcy last week, wiping out most of its market value and triggering speculation as to what may have soured its Apple relationship and torpedoed its prospects. Key court filings revealing the reasons for the bankruptcy, which are routine in most chapter 11 cases, have in this case been filed with the court in secret. GT Advanced cited strict confidentiality requirements in its Apple contracts which, if violated, carry fines of $50 million. http://finance.yahoo.com/news/u-judge-gt-advanced-bankruptcy-200611692…
In related news, New Hampshire and the U.S. Justice Department want to know why GT Advanced Technologies Inc. filed for bankruptcy just 10 months after announcing a multiyear supply agreement with Apple Inc., Bloomberg News reported yesterday. GT Advanced, based in Merrimack, N.H., should be ordered to file a public account of what led to the bankruptcy, including key transactions with Apple, according to both the U.S. Trustee supervising the company’s bankruptcy and the state of New Hampshire. “Public scrutiny of a debtor’s conduct and transparency in the bankruptcy process is essential to fostering confidence among creditors and parties in interest regarding the fundamental fairness of the bankruptcy system,” the U.S. Trustee wrote in court papers yesterday, urging a judge to order disclosure. http://www.bloomberg.com/news/print/2014-10-14/gt-advanced-must-disclos…
Bankruptcy Judge Christopher Sontchi has approved Energy Future Holding’s plan to award $20 million in bonuses to top executives despite objections from the U.S. Trustee’s office, the Dallas Morning News reported today. Judge Sontchi said at a hearing yesterday that the bonus programs met legal standards in that it incentivized performance and was not designed solely to keep executives from leaving the company. EFH, formerly TXU Corp., filed for bankruptcy in April, seven years after it was taken private for $45 billion, the largest leveraged buyout in U.S. history.
