%1

Hibu Inc., the publisher of “Yellowbook” phone directories in the U.S., filed for bankruptcy court protection to aid the U.K. restructuring that began this month, Bloomberg News reported yesterday. The company, based in Reading, England, owes creditors more than $1 billion, according to a chapter 15 filing that seeks to block lawsuits and organize creditors in the U.S. Hibu, which also prints yellow pages in the U.K. and Spain, began reorganizing in U.K. courts on Jan. 17 after earnings fell on competition from the Internet. Before court proceedings began, Hibu negotiated a restructuring in July that would reduce its debt by 800 million pounds ($1.3 billion) while giving lenders control of the company, formerly known as Yell. The case is In re Hibu Inc., 14-bk-70323, U.S. Bankruptcy Court, Eastern District of New York (Central Islip).

The Roman Catholic Diocese of Stockton, Calif., which is the 10th Catholic diocese in the U.S. to enter chapter 11 protection as a result of increasing sexual-abuse claims, has received a judge's approval of its initial bankruptcy requests, the Wall Street Journal reported today. The ruling by Bankruptcy Judge Christopher M. Klein on Friday will allow the diocese to continue to pay its 37 salaried employees and seven hourly employees, according to court papers. Bishop Stephen E. Blaire said that the diocese, which filed for bankruptcy Jan. 15, has spent $14 million in legal settlements and judgments over the past 20 years as it dealt with abuse allegations, and doesn't have funds available to settle pending lawsuits or address allegations in the future. In all, the diocese estimated its total liabilities at between $10 million and $50 million, according to its bankruptcy petition.

Hybrid Tech Holdings LLC is seeking to appeal a bankruptcy judge's ruling that capped its right to credit bid for the failed luxury hybrid automaker Fisker Automotive Inc. at $25 million, Bloomberg News reported today. The case should go directly to the U.S. Court of Appeals in Philadelphia, bypassing the U.S. District Court, to let Fisker's auction proceed efficiently next month and to ensure the appeal isn't mooted by a sale, Hybrid said in court papers filed on Monday. Bankruptcy Judge Kevin Gross ruled on Jan. 17 that Hybrid's ability to use debt forgiveness to bid for the Anaheim, Calif., automaker's assets was properly limited at $25 million rather than the $75 million Hybrid proposed. The judge said a limit would promote competitive bidding that wouldn't otherwise occur if Hybrid was permitted to use the full amount of its claim. Judge Gross also cited questions over whether Hybrid's claim is fully secured.

Bankruptcy Judge Allan Gropper on Friday ruled against a variety of former Eastman Kodak Co. shareholders hoping the company would compensate them for stock that is now worthless, the Rochester (N.Y.) Democrat and Chronicle reported today. Judge Gropper filed a series of rulings agreeing with Kodak objections to claims filed by the shareholders. The claims were filed in recent months by Kodak shareholders who saw their stock get canceled in September when the company emerged from its 20-month chapter 11 bankruptcy. The claims ranged from hundreds of dollars to more than $100,000.

Global Aviation Holdings Inc. won bankruptcy-court approval to sell itself to its lender, a unit of Cerberus Capital Management, subject to higher bids at a March auction, the Wall Street Journal reported today. Bankruptcy Judge Mary F. Walrath on Friday authorized Global Aviation to hold a March 19 auction, where the Cerberus unit will lead off the bidding. The Cerberus unit, Cerberus Business Finance LLC, is offering to sponsor Global Aviation's restructuring plan. If it wins the bidding, it will forgive at least some of the debt it holds in exchange for all of the new equity in the restructured charter airline operator. Court papers show would-be buyers' bids, due March 14, have to include at least $35 million in cash earmarked to repay Cerberus. The buyout firm is owed $39 million in pre-bankruptcy loan debt and also provided more than $50 million in bankruptcy financing to cover the costs of Global's chapter 11 case, its second in as many years. Judge Walrath will consider approving the winning bid at a March 25 sale hearing, according to court papers.

A takeover vehicle associated with Hong Kong billionaire Richard Li yesterday mounted an emergency appeal attacking a bankruptcy-court decision that put Fisker Automotive Inc. on the auction block, Dow Jones Daily Bankruptcy Review reported today. Li's acquisition vehicle, Hybrid Tech Holdings LLC, is due to face off Feb. 12 against an affiliate of China's Wanxiang Group in a chapter 11 auction duel for the assets of Fisker, a failed luxury hybrid car maker.

Dish Network Corp. Chairman Charlie Ergen is again fighting with a group of hedge funds that hold LightSquared's bank debt, this time over which side should be providing a short-term bankruptcy loan to keep LightSquared afloat, the Wall Street Journal reported on Saturday. In a court filing on Thursday, lawyers for Ergen's SPSO Special Opportunities investment vehicle said the $33 million loan offer from the hedge funds to keep LightSquared afloat through April 15 is "inferior" to theirs. Ergen's loan, his lawyers said, "is not a coercive financing designed to benefit select parties in interest rather than the estate as a whole." After months of being on the same side in LightSquared's bankruptcy case, Ergen and the ad hoc group of hedge funds have been adversaries since Dish withdrew its $2.2 billion bid for LightSquared's spectrum assets earlier this month. The hedge funds, which like Ergen own LightSquared's bank debt, had filed a restructuring proposal for LightSquared based on the bid trying to force Dish into making the deal. However, a judge turned them down earlier last week, saying Dish properly abandoned its offer.

KKR & Co's Marc Lipschultz has resigned from the board of directors of Energy Future Holdings (EFH), the embattled power giant taken private by KKR and others in a massive 2007 leveraged buyout, Reuters reported on Friday. In a U.S. Securities & Exchange Commission filing on Friday, EFH said Lipschultz notified the board on Jan. 17 of his resignation "effective immediately." Two other KKR representatives, Jonathan Smidt and Brandon Freiman, remain as members of EFH's 13-member board. EFH for months has been trying to restructure about $40 billion in debt with various classes of creditors. The company may face bankruptcy, though it is in the midst of negotiations with creditors on a consensual restructuring.

The 129-year-old publisher of Fredericksburg, Va.’s Free Lance-Star newspaper filed for bankruptcy, saying that creditor Sandton Capital Partners LP pressed the company to enter court protection to sell its assets, Bloomberg News reported yesterday. Free Lance-Star Publishing Co., which also owns radio stations and websites, listed assets and debt of more than $50 million each in chapter 11 documents filed yesterday. Free Lance-Star, owned by the Rowe family, was undone by a loan it took out from BB&T Corp. to build a printing plant in 2007. Sandton, a New York-based investment firm, bought the loan in June after Free Lance-Star violated covenants, then urged the publisher to file in chapter 11 and sell its assets, according to a court filing.

Irish developer Garrett Kelleher, the man behind the now-bankrupt Chicago Spire project, is seeking to use the automatic stay provision of the Bankruptcy Code that would buy him enough time to reorganize and aid in the construction of the 2,000-foot tall skyscraper, Dow Jones Daily Bankruptcy Review reported today. Kelleher is being sued by the creditors who initially forced his company, Shelbourne North Water Street LP, into chapter 11 protection, according to court papers. Kelleher contends that the lawsuits are an "unnecessary distraction" while he negotiates with potential partners to find a plan that would pay his creditors and restart construction on the tower, according to court papers filed Tuesday.