%1

Bankrupt James River Coal Co., after repeatedly postponing an asset auction, chose a unit of Blackhawk Mining LLC as the lead bidder, with an opening offer of $50 million, Bloomberg News reported yesterday. The Blackhawk unit will be the stalking-horse bidder at the auction to be held today in New York, according to court papers. A sale hearing to consider Blackhawk’s or other possible bids is scheduled for Aug. 20 in Richmond. Blackhawk Mining, based in Lexington, Kentucky, operates mines and coal-processing facilities. James River’s Hamden mining complexes, assets of the Logan & Kanawha Coal Co. and the Triad complex are up for sale, according to court filings. The buyer will also assume some liabilities. James River, based in Richmond, sought bankruptcy protection from creditors April 7, listing more than $800 million in debt and $1 billion in assets. Declining coal prices caused it to idle a dozen mines.

LightSquared lost $51.4 million in July, bringing Philip Falcone's wireless venture's total loss since its May 2012 bankruptcy filing to $1.51 billion, Dow Jones Daily Bankruptcy Review reported today. In a Friday filing with U.S. Bankruptcy Court in Manhattan, the company again attributed the bulk of the losses to interest payments on its debt. The interest accounted for $39.4 million during July, and $903.8 million since the company's chapter 11 filing.

Exide Technologies has been hit with a grand jury subpoena in connection with a criminal investigation involving its Vernon, Calif., lead-recycling plant, Dow Jones Daily Bankruptcy Review reported today. In a filing with the Securities and Exchange Commission, the battery maker revealed that the Aug. 8 subpoena seeks "documents relating to materials transportation and air emissions." Exide itself and "certain unidentified individuals" are targets of the investigation" being conducted by the Justice Department in the Central District of California, the SEC filing says.

Momentive Performance Materials, the quartz and silicone maker owned by Apollo Global Management, will embark Monday on a week of hotly contested hearings seeking court approval of a plan to cut $3 billion in debt and exit bankruptcy, Reuters reported today. The Waterford, N.Y.-based company filed for chapter 11 protection in April with an agreement to transfer control to a class of bondholders, but most other creditors have vigorously opposed the plan. Bankruptcy Judge Robert Drain has set aside four days this week — Monday, Tuesday, Thursday and Friday — to hash out the disputes in his courtroom and decide whether to approve the plan. The deal is premised on a $1.3 billion loan from JPMorgan Chase & Co. and a $600 million rights offering available to holders of second-lien bonds, who would walk away with Momentive's equity.

Bankruptcy lawyers for Crumbs Bake Shop Inc. are preparing to hold an auction on Thursday to see who else has a sweet tooth for the chain, whose 49 cupcake stores closed suddenly on July 7, the Wall Street Journal reported on Saturday. An investor group that includes Dippin’ Dots owner Fischer Enterprises and reality TV show host Marcus Lemonis plan to open the auction with a multimillion-dollar offer. The group’s approximately $6.5 million credit bid would forgive loans Fischer and Lemonis have extended to Crumbs, including a $1.1 million loan that is paying for the company’s bankruptcy.

General unsecured creditors of Lehman Brothers Inc. will receive $4.6 billion in their first distribution, perhaps as soon as next month, the Wall Street Journal reported today. In a notice to creditors filed in bankruptcy court today, trustee James W. Giddens for the first time put a number on the payback amount. These creditors had to wait for years as Giddens repaid those with "customer" status. Customers received 100 percent of their money back, while the general unsecured creditors will receive smaller percentages of recovery. Giddens said that he hopes to make the first distribution on Sept. 10.

Junior creditors of Energy Future Holdings can review company financial records, a judge ruled yesterday, as the bankrupt Texas utility trudges through an increasingly complicated bankruptcy, Reuters reported yesterday. Granting a request from second-lien bondholders of Energy Future's TCEH power generation unit, bankruptcy Judge Christopher Sontchi endorsed broad discovery procedures at a hearing in his Delaware courtroom, mostly centered on transactions that occurred before Energy Future's chapter 11 filing in April. The move could herald future litigation in what is already a tangled case. Wilmington Savings Fund Society, the trustee for the second-lien group, wants to study Energy Future's collapse with an eye toward determining if certain transactions can be unwound due to fraud or other improprieties. Energy Future, the former TXU Corp, is the product of a record-breaking $45 billion buyout in 2007 by KKR & Co., TPG Capital Management and the private equity arm of Goldman Sachs. It filed for chapter 11 after years of lower-than-forecast power prices to restructure more than $40 billion in debt.

GSE Environmental Inc. said on Monday that it had emerged from chapter 11 bankruptcy following the approval of its reorganization plan, the Houston Business Journal reported today. The U.S. Bankruptcy Court in Delaware approved the company's reorganization plan July 25. During its restructuring, which the company said that its lenders had approved in May, GSE opened a manufacturing plant in China. GSE's board of directors will be controlled by Greenwich, Connecticut-based Littlejohn & Co., a private equity firm that focuses on leveraged buyouts and recapitalizations. The firms bought all of GSE's first lien debt for about $172 million to convert the debt into equity.

The struggling 32-bed Monroe Hospital in Bloomington, Ind., filed for bankruptcy, blaming tough competition for why it only cares for an average of eight patients, Dow Jones Daily Bankruptcy Review reported today. Officials put Monroe Hospital LLC into protection in U.S. Bankruptcy Court in Indianapolis on Friday with a "low patient census and high expenses," said Chief Executive Joseph Roche in court papers, adding that the company owes more than $120 million to its landlord and lender.

Philip Falcone’s LightSquared Inc., the bankrupt wireless company, is again the subject of competing plans over how to reorganize its business, with a potential hearing in October to confirm a final plan, Bloomberg News reported yesterday. Bankruptcy Judge Shelley Chapman said yesterday that she would consider a date around Oct. 20 to weigh arguments over how to reorganize the company, which previously narrowed three plans down to one, only to see it fail to win court approval. Judge Chapman said that she may have to “pick between or among two or three confirmable plans” after Falcone’s investment firm, Harbinger Capital Partners LLC, filed a new plan today, four days after LightSquared filed its own. Mast Capital Management LLC has said that it may put forth its own proposal, which would split up the company and separately reorganize debt at the “Inc.” and “LP” divisions, which have different lenders and own different rights to wireless spectrum.