%1

Optim Energy LLC, a Texas electric company owned by a Bill Gates investment fund, filed for chapter 11 protection yesterday after piling up losses in a depressed power market, Reuters reported yesterday. The company, which owns three power plants in eastern Texas, said in court documents that it has been unable to reduce costs far enough to stem financial losses. Optim said that it had $713 million outstanding under a credit agreement with Wells Fargo. It estimated its assets were worth less than $500 million.

LightSquared hopes to submit a consensual restructuring plan by Friday, although the judge overseeing the wireless venture's bankruptcy isn't convinced that will happen, Reuters reported yesterday. A lawyer for the company said in a court hearing yesterday that it aims to file a reorganization plan that has the support of its creditors by Friday, putting the company, owned by Phil Falcone's Harbinger Capital Partners, on track to exit bankruptcy around the end of March. But Bankruptcy Judge Shelley Chapman voiced skepticism that parties in the fractious case could reach a deal by then. Three competing restructuring proposals are on the table — one backed by Harbinger and two others from creditor groups — but the company has said it plans to engage creditors and work toward a consensual deal. The key question is whether any restructuring plan would have the support of an investment vehicle run by Dish Network Corp Chairman Charles Ergen. The Ergen entity holds enough LightSquared debt to give him sufficient voting clout to block any restructuring plan that he opposes.

Patriot Coal Corp., which emerged from bankruptcy in December, spilled waste into a creek feeding West Virginia’s Kanawha River, a month after Freedom Industries Inc. contaminated Charleston’s water with a coal chemical, Bloomberg News reported yesterday. About 108,000 gallons of slurry waste from washing coal spilled into Fields Creek from the Kanawha Eagle Prep Plant near Winifrede, West Virginia’s Department of Environmental Protection said on Monday. A slurry-line seal failed sometime after 2:30 a.m. and the company shut the pump at about 5:30 a.m., the department said. The plant, located about 16 miles south of Charleston, is 95 miles from the nearest surface water intake and so the leak isn’t expected to affect public water systems, the state said. A coal cleaning chemical spilled from a Freedom Industries storage tank last month, polluting water used by about 300,000 residents in and around Charleston.

Energy Future Holdings Corp. is meeting with lenders in New York this week to discuss loans that would fund it through bankruptcy as the latest chapter of the power generator’s restructuring begins to unfold, Bloomberg News reported yesterday. Banks began presenting proposals to the former TXU Corp. yesterday to provide debtor-in-possession financing. Energy Future, purchased in the largest leveraged buyout in history six years ago, is resuming efforts to line up the funding less than two months before auditors may raise doubts about its ability to remain a going concern. The Dallas-based company is seeking to restructure $45.6 billion of debt after a plunge in natural gas prices, which set the price of electricity in the state, triggered 10 straight quarterly losses. Attempts to agree on a reorganization plan with creditors in October failed.

A Hong Kong bidder for Fisker Automotive has hired former Ford Motor Co. executive Martin Leach in anticipation of possibly winning Wednesday's bankruptcy auction for the assets of the defunct maker of a plug-in hybrid sports car, Reuters reported yesterday. Leach, the former president of Ford's European business, will give added heft to the management of Hybrid Tech Holding LLC, which will square off against a Chinese auto parts company in this week's auction. California-based Fisker filed for bankruptcy protection in November. It has not produced its signature Karma sports car since 2012 due to a series of technical glitches and a cash shortage. Hybrid, an affiliate of Hong Kong businessman Richard Li, has offered $55 million for Fisker, while a unit of Wanxiang Group has made an initial bid worth around $35 million.

A unit of Cerberus Capital Management is poised to acquire the operator of the Fox & Hound and Champps restaurant and sports bar chains out of bankruptcy protection in a deal valued at more than $120 million, Dow Jones Daily Bankruptcy Review reported today. Cerberus Business Finance, a unit of the New York private equity firm, would pay $14.5 million in cash, forgive $19 million of the debt it is owed as the company's lender and take responsibility for another $86 million of the company's debt in exchange for most of the company's assets, according to court papers filed Friday.

First Mariner Bancorp, the holding company for Maryland community bank 1st Mariner, plans to file for chapter 11 protection in order to sell the bank, the Wall Street Journal reported today. The company has an offer that would provide $100 million of new capital from a group of private-equity investors — Priam Capital, Patriot Financial Partners, GCP Capital Partners and TFO Financial Institutions Restructuring Fund LLC — and investors from the Baltimore business community. The offer will be tested at auction. First Mariner said that it would ask the bankruptcy court to approve the auction rules quickly but didn’t say exactly when it plans to file for bankruptcy. First Mariner had become undercapitalized, it said in recent financial disclosures, and wasn’t in compliance with Federal Deposit Insurance Corp. and Federal Reserve Board of Richmond capital requirements.

Two retailers in Southern California have reached a $55 million deal to buy Phoenix-based Pro's Ranch Markets, which filed for Chapter 11 bankruptcy protection last May, the Associated Press reported yesterday. The family-owned chain of grocery stores popular with Latino customers was founded 31 years ago and has seven stores in Arizona and two each in New Mexico and Texas. Cardenas Northgate Group Ranch announced yesterday that as part of the deal, it will also get Pro's Ranch Markets' corporate office and a 151,000-square-foot warehouse in Phoenix. CNG Ranch officials say all 11 Pro's Ranch Market stores will remain open for the foreseeable future. Cardenas Markets currently owns 26 stores in California and three in Nevada while Northgate Gonzalez Markets operates 38 California locations.

Constar International Holdings LLC, a maker of plastic soda bottles, won bankruptcy court approval of three asset sales totaling about $113.6 million, including a sale of the majority of its assets to Plastipak Packaging Inc. for about $102.5 million, Bloomberg News reported yesterday. Bankruptcy Judge Christopher Sontchi yesterday granted the company permission to sell its U.S. and U.K. assets including real estate in Havre De Grace, Md., to the winners of a bankruptcy auction held last week. In 29 rounds of bidding, the sale price for the U.S. assets rose about $34 million, or almost 50 percent, from Amcor Rigid Plastics USA Inc.’s initial bid of $68.5 million.

Assistant U.S. Trustee Debra A. Wertman wants to investigate the ties between Freedom Industries Inc.'s bankruptcy lawyers and key parties in its chapter 11 case, including the company that acquired Freedom shortly before the chemical spill that tainted the water supply of a large swath of West Virginia, Dow Jones Daily Bankruptcy Review reported on Friday. Wertman is asking the bankruptcy court to give her and Freedom's creditors time to conduct a "full review" of disclosures of past client relationships by Freedom's bankruptcy lawyers at McGuireWoods LLP to ensure the firm doesn't have any conflicts of interest. "A preliminary review of McGuireWoods's disclosures, however, revealed several connections between McGuireWoods and key parties in this case that require further investigation," Wertman said in court papers filed on Wednesday.