%1

The New Hampshire company that fell into bankruptcy following a failed deal with Apple Inc. is asking to pay millions in bonuses to its senior executives, the Wall Street Journal reported today. GT Advanced Technologies Inc. says it needs to keep the identities of those in line for bonuses secret to keep its business from being damaged. Less than a year after announcing it would transform itself from a solar-power and sapphire-producing-equipment maker to a maker of smartphone screen material for Apple, GT filed for chapter 11 protection, blaming Apple. Apple has denied it was responsible for GT’s collapse. Pay enhancement is necessary to motivate “the key drivers” in GT’s bid to restore its business in bankruptcy, lawyers said. Court filings outlining the bonus proposal say that GT’s stock, once a major component of executive compensation, is no longer good for motivating performance by company leaders.

Bankrupt cancer vaccine maker Dendreon Corp. will move ahead with a court-supervised auction of the company without a stalking-horse bidder, Reuters reported yesterday. Dendreon filed for chapter 11 protection in November after its vaccine fell short of expectations, leaving the company unable to service debt taken on to ramp up manufacturing of its key drug, Provenge. The company had said that it planned to identify a stalking-horse bidder by yesterday and hold an auction on Feb. 3 for bidders who qualify by the end of January. Multiple potential bidders were interested in Dendreon, but the company's advisers decided they did not want to tie up millions of dollars in a break-up fee, said Ken Ziman, an attorney for Skadden, Arps, Slate, Meagher & Flom who represents Dendreon.

The closed Revel Casino Hotel in Atlantic City, N.J., wants to tap millions of dollars of new bankruptcy financing in order to pay a $26 million settlement with the city over its 2014 property taxes, Dow Jones Daily Bankruptcy Review reported today. The casino is asking a bankruptcy judge to approve a new $21 million increase in availability, which includes $19 million in new financing provided by Wells Fargo NA. The financing will be combined with $7 million in cash on hand to fund a $26 million settlement with Atlantic City and provide enough cash to operate until Jan. 8.

Energy Future Holdings Corp. expected to be well on its way out of bankruptcy by now when it filed for chapter 11 protection in April hoping to implement a restructuring deal struck with some of its leading creditors, the Wall Street Journal reported today. Instead of preparing for a first quarter 2015 emergence from chapter 11, however, the Texas electricity seller is still hiring professionals for a bankruptcy proceeding in which the fate of $42 billion in debt is up in the air and the chapter 11 exit sign is barely in view. Energy Future scrapped its pre-packaged restructuring pact in favor of a strategy pinned to a sale of some assets, but the sale rules are being renegotiated after a judge faulted the corporate governance process behind it. Energy Future is back at the bargaining table, or in litigation, with creditors. A fee committee set up to review the bills from court-supervised professionals counts 30 legal and financial advisory firms hired, or in the process of being hired, to work for Energy Future or its affiliates or other official bodies in chapter 11. For the first four months of the case, from April 29 through the end of August, 14 Energy Future firms ran up a combined $66 million in bills, the fee committee reported in a filing Sunday. Some were approved Monday; the rest await review.

Caesars Entertainment Corp. said yesterday that more than 39 percent of senior bondholders backed a restructuring plan, bringing it closer to a key level of creditor support, and it released details of how the reorganized casino company will operate, Reuters reported yesterday. Caesars detailed lease agreements for Caesars Palace Las Vegas and other properties and new debt issuance for its operating unit, which it plans to put into bankruptcy next month and then split into a casino operator and property company. Caesars has said that filing for bankruptcy will reduce its debt to $8.6 billion from $18.4 billion for its operating unit, which runs 44 casinos in 13 states. Caesars said in a securities filing yesterday that the restructuring will include two separate leases: one for Caesars Palace Las Vegas and a separate lease for certain other Caesars properties. The Caesars Palace Las Vegas lease includes a base rent of $160 million for the first five years, while the base rent for the other properties will be $475 million for the first three years.

Caesars Entertainment Corp. today unveiled details of its planned restructuring after agreeing earlier this month to acquire affiliate Caesars Acquisition Co. in a stock-for-stock merger that will better position the $18.4 billion debt load of its largest unit, the Wall Street Journal reported today. Caesars Entertainment Operating Co., which owns, operates or manages 44 casinos, will be restructured as an operating company and a property company, which would be owned and controlled by a real-estate investment trust. The Wall Street Journal reported earlier this month that the operating company and its creditors had been in talks on a deal to put the unit in chapter 11 protection by mid-January and reorganize the company as a real-estate investment trust. The restructuring will also include two leases: one $160-million-a-year lease for the Caesars Palace Las Vegas facility, and one for certain other properties.

A bankruptcy court has allowed defunct video streaming company Aereo Inc. to auction its TV streaming technology assets, Reuters reported on Friday. The U.S. Bankruptcy Court in Manhattan ruled on Wednesday that Aereo could sell its assets, after the company reached an agreement with broadcasters over the sale process. These broadcasters include CBS Corp., Comcast Corp.'s NBC, Walt Disney Co.'s ABC and Twenty-First Century Fox Inc.'s Fox. Under the agreement, Aereo will allow the broadcasters to attend the auction of the assets and provide them a weekly update on the status of the sale process. Aereo filed for bankruptcy in November, five months after the U.S. Supreme Court said that it violated broadcasters' copyrights by capturing live and recorded programs on miniature antennas and transmitting them to subscribers for $8-$12 a month.

America's bankruptcy system has been one of the U.S. economy's competitive strengths: A failing business should get a shot at a fresh start. Too often, however, bankrupt companies get trapped in court for years, paying a fortune in fees while competitors flourish at their expense, according to an editorial in yesterday’s Chicago Tribune. In a report unveiled this month, the American Bankruptcy Institute's Commission to Study the Reform of Chapter 11 recommends an overhaul of the law. Among some of the commission’s suggestions are improving bankruptcy for small businesses by eliminating the automatic appointment of unsecured creditors committees. These committees use a bankrupt company's money to hire lawyers and advisers who supposedly ensure that the interests of all creditors get taken into account. But the majority of companies filing for chapter 11 have less than $1 million in annual revenues and can ill-afford the administrative burden. Doing away with the committees in at least some cases sounds to the Tribune like a smart idea. The report also says that attorneys for cash-strapped companies should forgo hourly billing rates and instead work for fixed fees or contingent fees — giving lawyers an incentive to wrap up cases.
http://www.chicagotribune.com/news/opinion/editorials/ct-edit-bankruptc…

To read the full report of ABI’s Chapter 11 Reform Commission, please click here: http://commission.abi.org

Years of contamination at a Southern California lead-acid battery-recycling plant caused severe health problems for local residents, including cancer and kidney failure, according to a new lawsuit, Dow Jones Daily Bankruptcy Review reported today. The suit, brought against directors and officers of Exide Technologies, was filed on Monday in Los Angeles Superior Court. Plaintiffs attorney Robert Mandell said yesterday that the suit is one of five that he and three other lawyers plan to bring related to the alleged effect of an Exide plant in Vernon, Calif. The group's 475 clients include children and adults who say they became ill from exposure to lead and arsenic used at the plant, as well as the families of roughly a dozen people who have died from apparent exposure.

GT Advanced Technologies Inc. said that it is pursuing the sale of its sapphire furnaces and will pay former partner, Apple Inc., a portion of the cash it gets from the sale, Reuters reported yesterday. The furnaces were installed to make sapphire glass for Apple, which loaned GT Advanced $439 million for the project. GT Advanced, which invested heavily into increasing production of sapphire materials for Apple, blamed the supply agreement for forcing it into bankruptcy in October, a move that shocked investors and sent its stock plummeting more than 90 percent to under $1 before Nasdaq suspended the shares.