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Energy Future Holdings rejected an unsolicited $2.3 billion restructuring plan by NextEra Energy Inc. that would have given the alternative energy group a large stake in Energy Future's power lines unit, according to court filings, Reuters reported yesterday. The proposal, which was revealed in court filings on Monday, was developed by NextEra and a group of investors that hold second-lien notes issued by Energy Future's EFIH unit, which in turn controls the Oncor power distribution business. Energy Future Intermediate Holding (EFIH) rejected the proposal in favor of a plan already advanced by a group of investors who hold the unit's unsecured bonds, according to court filings. Both proposals take the form of a loan to refinance EFIH's high-yielding second-lien notes, which would cut interest costs. Rather than repay the loan, when EFIH emerges from bankruptcy the financing would convert into an equity stake of a little more than 60 percent of the company.

A federal judge will allow a California-based investment firm to purchase West Virginia's Fairmont General Hospital out of bankruptcy for $15 million, Dow Jones Daily Bankruptcy Review reported today. According to court records, Judge Patrick M. Flatley plans to approve the offer for the 207-bed hospital from Alecto Healthcare Services LLC, which is expected to continue operating the facility located about 90 miles south of Pittsburgh. The Long Beach, Calif.-based Alecto promised to pay another $300,000 one year after the deal closes and spend at least $5 million on hospital improvements during the next two years, according to earlier court documents.

Lawyers for bankrupt Genco Shipping & Trading Ltd. yesterday insisted the dry bulk shipper is not being undervalued during the closing of a trial pitting the company against angry shareholders who wanted better treatment in the restructuring, Reuters reported yesterday. The four-day trial bankruptcy posed the question of how to value a shipping company. The answer will determine what is left for Genco shareholders after its lenders and other creditors are repaid. Financial advisers at Blackstone, which was retained by Genco to value the company, argued the shipper was worth between $1.36 billion and $1.44 billion based on the market value of its ships and other assets. Shareholders put the value at $1.91 billion based on financial performance and other factors. Since Genco's Chapter 11 filing in April, shareholders have found themselves at odds with the company and just about all its creditors. They are the only opponents to a restructuring that would reduce debt by $1.2 billion, split most of the company's equity among more senior creditors and give existing shareholders $30 million in warrants. Judge Sean Lane gave no indication how he may rule, but said he would issue a decision by July 2.
http://www.reuters.com/article/2014/06/24/genco-ship-trade-bankruptcy-t…

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Nautilus Holdings Ltd., a Bermuda-chartered company that leases container ships, has filed for chapter 11 protection, becoming the latest victim of a depressed shipping industry, Reuters reported yesterday. The company has about $770 million in debt, according to papers filed on Monday with the U.S. Bankruptcy Court in Manhattan. International shipping rates have fallen in recent years as large new vessels entered service at the same time that a sluggish global economy was curbing trade. Nautilus said that it had some profitable charter contracts and believed it was well-positioned to restructure its obligations, but it filed for bankruptcy protection to bring creditors into a single forum for negotiations.

Energy Future Holdings Corp., the subject of the largest leveraged-buyout ever, revised a $1.9 billion loan to help it emerge from bankruptcy after a group of creditors submitted a competing plan with NextEra Energy Inc., Bloomberg News reported yesterday. The original second-lien debtor-in-possession loan will convert into 60 percent of the equity in a newly reorganized company, down from 64 percent initially described in the restructuring proposal. The interest rate on the debt will be reduced to 6.25 percent from 8 percent. The former TXU Corp. filed for chapter 11 protection on April 29 in a bid to restructure its $49.7 billion of debt after falling natural gas prices undercut the electricity provider’s ability to remain profitable. KKR & Co., TPG Capital and the private-equity unit of Goldman Sachs Group Inc. took Dallas-based Energy Future private for $48 billion in 2007.

Brookstone Holdings Corp. won a judge's approval yesterday to sell itself to a consortium of Chinese investors that plans to continue operating the majority of the specialty retailer's 240 stores after the company exits bankruptcy, the Wall Street Journal reported today. The sale to Sailing Innovation US Inc. would form the centerpiece of a bankruptcy exit plan, approved yesterday by Bankruptcy Judge Brendan Shannon. The plan seeks to pay off Brookstone's approximately $51 million in bank loans with a loan provided by bondholders funding the restructuring. Sailing Innovation — a consortium made of investment firm Sailing Capital Overseas Investment Fund LP and conglomerate Sanpower Group — agreed to buy Brookstone at a June 2 auction with a bid of about $174 million.

Source Home Entertainment, which trucked magazines from warehouses to retailers for Time Inc. and other publishers, filed for chapter 11 protection after losing money for years, the New York Post reported today. While Time Inc., which publishes some of the best-read magazines in the country, like People, Sports Illustrated and InStyle, was the hardest hit by Source’s shuttering, the entire industry felt the blow, and some retailers could see a magazine shortage this summer as the industry looks for other companies to fill the void and get their titles to stores. Source is owned by Golden Tree Asset Management, a hedge fund, with an 82 percent stake; JPMorgan owns 9.3 percent and GE Capital has a 5.7 percent stake. In its filing, Source listed assets of $205 million and debts of $290 million, as of March 31. Source Home Entertainment, which filed for court protection for its operating unit, owes Time Warner Retail Sales $53,776,843, according to court papers. Time Inc., in a regulatory filing last month, said that it expected Source’s shutdown to cost it about $14 million in net profit in 2014.

Defense attorneys for two ex-leaders of Dewey & LeBoeuf said in court papers filed on Friday that unless a trustee’s lawsuit against them is halted in bankruptcy court, they will be forced to depose prosecution witnesses from the criminal case against them, Law.com reported yesterday. Alan Jacobs, the liquidating trustee overseeing the defunct law firm Dewey & LeBoeuf, is seeking to recover more than $21.8 million from former CFO Joel Sanders and former executive director Stephen DiCarmine in a clawback lawsuit in Southern District Bankruptcy Court, Jacobs v. DiCarmine, 13-01765. Earlier this month, Jacobs amended his complaint to add new claims for “actual intent” fraudulent transfers, incorporating details from the criminal indictment and the SEC complaint against former firm leaders, as well as the guilty pleas of seven former Dewey accounting employees. Jacobs said that the circumstances surrounding the firm’s payments to Sanders and DiCarmine reveal “several badges of fraud” and their employment contracts awarded them “exorbitant compensation and required, literally, nothing in return.” Now Sanders and DiCarmine are asking for a stay of the entire clawback suit until the criminal case in Manhattan Supreme Court is resolved.

Houston Astros owner Jim Crane has sued Comcast Corp. accusing the cable company of fraud in selling him a stake in the "overpriced and broken" regional broadcast venture, Comcast SportsNet Houston, Dow Jones Daily Bankruptcy Review reported today. Comcast, which owns part of the regional sports venture, pushed it into bankruptcy in September, blocking a drive by Crane to force co-owner Comcast out of its spot as broadcaster. Comcast denied the charges of fraud in the lawsuit and said it would defend against allegations that the November 2011 sale of the Astros baseball team and more than 40 percent of the network to Crane was founded in "knowing misrepresentations" about the network's financial prospects.

Atlantic City's bankrupt Revel Casino Hotel has received court approval to borrow $23.9 million that it said would keep the 1,400-room resort operating for the coming month as it scrambles to find a buyer, Reuters reported on Friday. Revel filed for chapter 11 protection on Thursday afternoon and rushed to court early on Friday for a slew of court orders that it said were vital to pay its 3,140 employees, soothe nervous vendors and honor programs that provide gamblers with key perks. "The reality of the Revel situation today is that Revel has lost this year alone $75 million," John Cunningham, a White & Case attorney who represents the casino, told Judge Gloria Burns. "Even in peak summer season, Revel loses $2 million a week and relies on borrowed funds." The loan is being provided by a unit of Wells Fargo, a creditor of the hotel, and Revel will return to court on July 11 and could seek to increase the amount it borrows to $41.9 million.