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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.

A bankruptcy judge yesterday authorized Love Culture Inc. to sell its remaining assets to investors who plan to keep open between 40 and 45 of the clothing retailer's stores, the Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Novalyn Winfield approved a deal to sell what remains of Love Culture following an earlier sale to United LC Capital LLC for $10.5 million plus several million dollars more to cover the costs of taking over its store leases.

DirecTV and AT&T Inc. would jointly own a Houston sports network under a plan to end the network's bankruptcy, although current part-owner Comcast Corp. warned it may challenge the proposal, Reuters reported yesterday. The Houston Regional Sports Network, which operates as Comcast Sportsnet Houston, broadcasts the games of the Houston Astros baseball and Houston Rockets basketball teams. DirecTV Sports Networks would own 60 percent of Houston Regional Sports Network and AT&T would own 40 percent, according to court documents filed on Wednesday. The plan must be put to a vote of creditors and approved by the U.S. Bankruptcy Judge Marvin Isgur.

Wireless venture LightSquared yesterday overhauled its reorganization plan, and the new proposal appears to spell the end of longtime backer Philip Falcone's ownership of the wireless venture, the Wall Street Journal reported today. In the plan, LightSquared didn't make any references to a prior $3.05 billion restructuring proposal it had touted, which would have given 74 percent of the company to Cerberus Capital Management, Fortress Investment Group LLC and JPMorgan Chase & Co. in exchange for new money. Under the proposal filed yesterday, Dish Network Corp.'s Charlie Ergen, LightSquared's largest secured lender, would receive debt and nonvoting shares on account of his $900 million claim if he votes to accept the proposal. A group of investors holding LightSquared's bank debt would get the company's voting shares, although others could buy that equity from them at an auction. The plan calls for $500 million in new loans backstopped by those bank-debt holders. The company is scheduled to appear in bankruptcy court Monday afternoon.

Eagle Bulk Shipping filed for bankruptcy yesterday, the latest in a string of shipping companies to make a chapter 11 filing, and said it reached agreement with its lenders to cut its debt by $975 million, Reuters reported yesterday. The U.S. company said in a statement that creditors who hold more than 85 percent of its loans have voted in favor of a pre-packaged reorganization plan. Under the plan, lenders would receive nearly all the stock in the company in return for what they are owed. If approved by the court, the reorganization plan would cancel the company's current stock, which trades on the Nasdaq. Shareholders will receive 0.5 percent of the stock in a reorganized Eagle Bulk, plus warrants to acquire an additional 7.5 percent.

Independent power company Entegra Power Group LLC filed a pre-packaged bankruptcy and expects to emerge from chapter 11 under the control of its junior secured lenders, according to court documents, Reuters reported yesterday. Entegra owns El Dorado, Arkansas-based Union River Power Station, which has an operating capacity of 2,100 megawatts, and Trans-Union Interstate Pipeline, a 42-mile natural gas transmission facility that supplies the station. The company is also an indirect co-owner of Gila River, a 2,334 megawatt power plant in Arizona. The company's second-lien lenders, who are owed $237 million, are set to receive a combination of new third-year, Series A second-lien notes and cash that would be raised from new Series B second-lien notes. Entegra's third-lien lenders will exchange their $1.3 billion in claims for $550 million in new third-lien debt and controlling ownership in the company when it emerges from bankruptcy, according to court documents filed on Monday.
http://www.reuters.com/article/2014/08/05/entegra-power-bankruptcy-idUS…

For further analysis of energy company bankruptcies, be sure to pick up a copy of When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, available now in the ABI Bookstore.
http://bookstore.abi.org/when-gushers-go-dry-essentials-oil-gas-bankrup…

In a sweeping rebuke to Wall Street, U.S. regulators said that 11 of the nation's biggest banks haven't demonstrated they can collapse without causing damaging economic repercussions and ordered them to try again, the Wall Street Journal reported today. The Federal Reserve and the Federal Deposit Insurance Corp. said that bankruptcy plans submitted by big banks make "unrealistic or inadequately supported" assumptions and "fail to make, or even to identify, the kinds of changes in firm structure and practices that would be necessary to enhance the prospects for" an orderly failure. The regulators raised the specter of slapping banks with tougher rules on capital and leverage or restrictions on growth — and even eventually forcibly breaking them up — should they fail to make significant progress to address the shortcomings by July 2015. The findings applied to 11 banks with assets greater than $250 billion, including Bank of America Corp., Bank of New York Mellon Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, State Street Corp., and the U.S. units of Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, and UBS AG. The 2010 Dodd-Frank law required banks to submit an annual "living will" detailing their operations and exposures as well as how they could be dismantled without relying on government support in the event they reach the brink of failure.

The U.S. mortgage-bond industry is taking steps toward creating standards meant to help kick-start sales as the government seeks to wean the housing market from its support, Bloomberg News reported today. The Structured Industry Finance Group (SFIG), which represents firms from banks to money managers, plans to release the first in a series of papers today mapping out its effort to create recommended contract language for new securities to address the mistrust that’s plagued the market since the 2008 financial crisis. The SFIG has about 250 members including lenders from Bank of America Corp. to JPMorgan Chase & Co., investors such as BlueMountain Capital Management LLC and Prudential Financial Inc., and issuers such as Redwood Trust Inc., as well as rating firms, trustees, lawyers and accountants. In the paper to be released today, the group is seeking to address mortgage-bond terms ranging from representations that loans aren’t fraudulent to disclosures of underwriting guidelines and criteria for triggering reviews of loan files for breaches. In some cases, they will recommend specific language, while in others they will offer a few options for those terms.

A Blackstone Group LP unit won a bankruptcy auction with a $126 million offer for a coal-fired Texas plant being sold by Optim Energy LLC, the power producer controlled by billionaire Bill Gates’s investment firm, Bloomberg News reported yesterday. Major Oak Power LLC, an investment vehicle created by Blackstone to make the acquisition, beat a unit of ArcLight Capital Partners LLC, which bid $121.5 million at Monday’s auction, according to court papers filed yesterday. The Blackstone unit more than doubled its first offer of about $60 million for Optim’s 305-megawatt Twin Oaks plant, according to court filings. ArcLight’s affiliate replaced Major Oak as the lead bidder for the plant with a bid of about $82 million.

Overseas Shipholding Group Inc. exited chapter 11 protection yesterday, less than two years after filing for bankruptcy to restructure its finances under the weight of a large tax liability, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Peter Walsh cleared the way for Overseas Shipholding's bankruptcy exit at a July 18 hearing, and a deadline to appeal Judge Walsh's decision passed Aug. 1. The company's bankruptcy plan repays in full senior lenders owed $1.5 billion and gives bondholders cash, new debt or reinstated loans.