Dewey & LeBoeuf yesterday secured an extra two weeks of funding for its bankruptcy, giving the defunct law firm some leeway in trying to convince former partners to accept a settlement and avoid what could be years of litigation, Reuters reported yesterday. Bankruptcy Judge Martin Glenn in a court filing approved Dewey's request to extend its funding deadline - which would have lapsed yesterday - through Aug. 15. The request had the support of Dewey's lenders and it comes as Dewey tries to claw back payments made to its former partners, the proceeds of which would go toward paying back creditors.
Ally Financial Inc., the auto lender 74 percent owned by U.S. taxpayers, reported a second-quarter loss today as it took a $1.2 billion charge related to the bankruptcy filing by its mortgage subsidiary, Reuters reported. The Detroit-based lender said that it lost $898 million after taking the previously disclosed charge, compared with a $113 million profit a year before. Ally, previously known as GMAC Financial, was once the auto lending arm of what is now General Motors Co. Its Residential Capital mortgage unit filed for chapter 11 bankruptcy court protection on May 14 in a move that aims to protect the parent company from mortgage liabilities as it seeks to repay government bailouts.
A bankruptcy trustee sifting through the remains of MF Global Holdings Ltd. expressed confidence that the failed securities firm's U.S. customers will get all their money back, the Wall Street Journal reported today. In written testimony submitted to the Senate Agriculture Committee for a hearing today, trustee Louis J. Freeh said that farmers, ranchers, traders and other investors still owed an estimated $1.6 billion "eventually will be made whole." After MF Global collapsed in October under the weight of a customer panic caused by the New York company's giant bets on European debt, investigators worried they might never recover the missing customer money. The shortfall occurred when MF Global dipped into customer accounts as it scrambled to stay alive. Prosecutors and regulators are trying to determine who is responsible for withdrawing money from the customer accounts, which under U.S. rules should have been kept separate from MF Global's own money. Freeh, former director of the Federal Bureau of Investigation, has been working to recover as much money as possible for creditors of the defunct company, while trustee James Giddens is trying to recoup funds for its U.S. brokerage firm's customers.
A month after a Bankruptcy Judge Eric L. Frank approved its reorganization plan, the Philadelphia Orchestra Association announced yesterday that it has officially emerged from chapter 11 protection, the Associated Press reported yesterday. The Orchestra addressed more than $100 million in claims, debts and liabilities with a settlement of $5.49 million, a statement from the association and its subsidiary, the Academy of Music, said. Of the total, $4.25 million will be paid according to an agreed-upon schedule, the statement said. The rest will be distributed according to a multi-year plan.
Prince Sports Inc., a pioneer of the modern oversized tennis rackets, won court approval of its restructuring plan giving ownership of the company to lenders, Bloomberg News reported on Friday. Bankruptcy Judge Kevin J. Carey gave the racket-maker approval of the plan, allowing it to exit court protection in less than three months, according to court documents. Under Prince's reorganization plan, lender ABG-Prince LLC will get all the reorganized company's equity in exchange for its $67.2 million secured debt. Unsecured creditors owed about $13.8 million will get proceeds from lawsuits and cash for an estimated recovery of 2.7 percent.
American Airlines parent AMR Corp., which recently committed to exploring possible merger scenarios as an alternative to its plan to emerge from bankruptcy reorganization on its own, sent a nondisclosure agreement to suitor US Airways Group Inc., the Wall Street Journal reported yesterday. US Airways late on Friday said that it received the nondisclosure agreement and is reviewing it, but declined further comment. Earlier, in consultation with AMR's creditors committee, the Fort Worth, Texas-based airline targeted deal exploration with US Airways and four smaller carriers: JetBlue Airways Corp.; Alaska Air Group Inc.; Republic Airways Holdings Inc.'s Frontier Airlines unit; and closely held Virgin America.
Solyndra LLC, the solar panel maker that received $535 million in federal loan guarantees before filing for bankruptcy last September, has filed a chapter 11 reorganization plan, Reuters reported yesterday. The proposed plan will take virtually all the remaining assets of the company and put them into the Solyndra Residual Trust. One of the plan's sponsors is Argonaut Ventures I, LLC, one of the company's largest debtors and an investment vehicle of the George Kaiser Family Foundation of Tulsa, Oklahoma. The other is Madrone Partners LP. The case is Solyndra LLC, Case No. 11-12799, U.S. Bankruptcy Court, District of Delaware.
Bankrupt law firm Dewey & LeBoeuf revised its settlement offer to former partners yesterday, dropping its potential recovery to $90.4 million from $103.6 million, Reuters reported yesterday. The estate is seeking the money from the former partners in exchange for releasing the lawyers from potential clawback claims. Under the revised offer, detailed to partners during an afternoon meeting at the New York Hilton & Towers, the minimum amount was reduced to $5,000 from $25,000. The maximum contribution was increased to $3.5 million from $3 million. At the same time, the new plan calls for onetime members of Dewey's executive committee to pay a 20 percent premium on top of what they otherwise might contribute.
Hawker Beechcraft yesterday defended its plan to pay more than $5.3 million in bonuses to eight top executives, the Associated Press reported yesterday. The Wichita, Kansas-based plane maker filed the document just hours before a hearing in New York over the disputed bonus plan for senior management. The company, which filed for bankruptcy in May, also is seeking an additional $1.9 million in bonuses for 31 other management-level employees. U.S. Trustee Tracy Hope Davis and the machinists union have filed objections to the bonus plan. Hawker Beechcraft Corp. is owned by Onex Partners and GS Capital Partners, a Goldman Sachs private equity fund. The bankruptcy court has approved exclusive talks with a Chinese firm that has offered nearly $1.8 billion to buy the company's business jet and general aviation operations.
Rhode Island Economic Development Corp. authorities are collecting the remnants of former Boston Red Sox pitcher Curt Schilling's troubled company out of bankruptcy, Dow Jones DBR Small Cap reported today. Court papers filed this week say that the trustee overseeing the bankruptcy case has agreed to step aside and let Rhode Island Economic Development press for permission to put 38 Studios LLC into the hands of a state receiver.
