OCZ Technology Group Inc. won court approval yesterday to sell its assets to Toshiba Corp. in a $35 million deal that preserves jobs but that likely means a slim recovery for creditors, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Peter Walsh signed off on the sale of the solid-state drive technology company, which arrived in bankruptcy late last year without the money to cover payroll.
W.R. Grace & Co. cut the rate it is paying on a $900 million loan to support its emergence from bankruptcy, according to a person with knowledge of the transaction, Bloomberg News reported yesterday. The company will pay interest at 2.25 percentage points more than the London interbank offered rate on the debt that includes a $200 million portion denominated in euros, compared with 2.5 percentage points more than the lending benchmark initially proposed. The loans will have a 0.75 percent minimum on Libor. Grace, which filed for chapter 11 protection in 2001 to deal with 100,000 asbestos-related injury claims, has said it anticipates emerging from bankruptcy on Jan. 31. Last month, the Columbia, Md.-based company said that it would pay lenders $129 million, plus interest from Dec. 31, in addition to distributions under its reorganization plan, according to a regulatory filing.
Phil Falcone, the billionaire investor whose Harbinger Capital Partners owns wireless satellite company LightSquared, said yesterday that he expended considerable energy in 2012 and 2013 trying to work out who was buying up LightSquared's debt, Reuters reported yesterday. The purchases, which later turned out to have been made by Dish Network Corp. Chairman Charles Ergen, are at the center of a trial in the U.S. bankruptcy court in New York this week. LightSquared and Falcone accuse Ergen of hiding his identity as the purchaser to overcome restrictions on competitors such as Dish from buying LightSquared debt. Ergen, who testified in the trial earlier this week, said that he bought the debt on his own behalf and not for Dish.
Some Eastman Kodak Co. shareholders who want compensation for losing their stock are heading to federal bankruptcy court this week, fighting a company objection to their claims, the Rochester Democrat & Chronicle reported today. Bankruptcy Judge Allan Gropper is scheduled to hear arguments today from various shareholders who have filed a claim against Kodak and now are objecting to the company's efforts to get those claims declared null and void. Throughout its bankruptcy and since exiting chapter 11 in September, Kodak has regularly filed objections in U.S. Bankruptcy Court, essentially saying that it doesn't owe anything to a particular party seeking money. The deadline for the last of those claims was Oct. 18. In November and December, Kodak filed a series of objections to claims with lists of hundreds of former shareholders who had filed claims asking to be compensated for their lost stock. Some of those shareholders are objecting to Kodak's objections.
Edgenet Inc. filed for chapter 11 protection on Tuesday in an effort to safeguard the planned sale of the company during a fight among creditors, who are battling over how to split up the proceeds, Dow Jones Daily Bankruptcy Review reported today. Citing "the real likelihood that the sale process will be stymied due to the dispute" between secured creditors owed a combined $103 million, the Atlanta company sought bankruptcy protection to ease the sale of its business. Edgenet provides technology that supports the sale of goods and services across mobile devices, on the web and in stores. No committed buyer has been signed up yet, but Edgenet Chief Financial Officer Juliet Reising said in court papers that the company is in "serious discussions with possible purchasers" and "strongly" believes a purchaser will be identified soon to lead a bankruptcy auction.
Cashing in on leveraged buyouts got a little riskier this week when a bankruptcy judge weighed in on the side of the former Lyondell Chemical Co.'s creditors in a lawsuit against former shareholders, Dow Jones Daily Bankruptcy Review reported today. Judge Robert Gerber said shareholders of the company, which tanked under the weight of debt piled on in a 2007 leveraged buyout, can't take refuge in a Bankruptcy Code safe-harbor provision to escape a state-law fraud lawsuit brought on behalf of creditors left unpaid in Lyondell's chapter 11 bankruptcy.
A hedge fund manager who handled debt purchases at the center of a trial over the bankruptcy of LightSquared said yesterday he did not recall whether Dish Network Corp Chairman Charles Ergen was buying the debt to influence the bankruptcy, Reuters reported yesterday. Stephen Ketchum, the head of Sound Point Capital, also testified that he could not recall how badly Ergen wanted the debt of the wireless communications company, apparently contradicting an earlier deposition and drawing a reminder from the judge that he was under oath. Ergen's motivation for buying LightSquared's debt is central to the trial, which is taking place in the U.S. bankruptcy court in Manhattan. LightSquared and its owner, Harbinger Capital Partners, accuse Ergen of improperly buying the debt as a way for Dish to take control of LightSquared's wireless broadband rights. Ergen has said he was buying the debt for his own purposes.
Three years after it declared bankruptcy as a way to deal with its mounting sex abuse claims, the Archdiocese of Milwaukee is poised to file the reorganization plan that will detail how it compensates abuse victims and operates as an institution into the future, the Milwaukee (Wis.) Journal Sentinel reported today. The archdiocese is preparing that plan, but it has offered few hints about its content or when it might be filed in bankruptcy court. The Milwaukee bankruptcy, filed by Archbishop Jerome Listecki in January 2011, came after the archdiocese had been largely successful in fighting lawsuits dating back at least to the 1950s. With 575 sex abuse claims and legal fees topping $11 million, it is one of the largest and most contentious bankruptcies filed by Catholic dioceses around the country, say observers and lawyers who've worked on those cases.
Bankruptcy Judge George Hodges accepted the $125 million figure proposed by Garlock Sealing Technologies, cutting more than $1 billion from what the company owes to current and future victims, the Charlotte Observer reported yesterday. The amount covers claims for mesothelioma, a rare and deadly cancer of the lining of the lungs and one of a host of diseases linked to asbestos. Attorneys representing current and future mesothelioma victims had asked the court to set liability at $1.3 billion. But in his 65-page order on Friday, Judge Hodges said that the attorneys’ dollar figure did not fairly reflect Garlock’s liability. According to the U.S. Chamber Institute for Legal Reform, an industry advocacy group, Hodges’ ruling marked the first time in more than 80 asbestos bankruptcies stretching back for more than 30 years that a judge refused to accept the plaintiffs’ estimate for future claims.
Anadarko Petroleum Corp. said that it should pay as little as $850 million in damages over the 2005 spinoff of paint materials company Tronox Inc., 94 percent below the maximum amount a federal bankruptcy judge said it might owe, Reuters reported yesterday. The estimate was provided on Monday, one month after Bankruptcy Judge Allan Gropper said that a higher payout of $14.17 billion might be in order because Anadarko's Kerr-McGee Corp unit intended to harm Tronox creditors by saddling the spinoff with unsustainable environmental liabilities. Tronox filed for chapter 11 protection in 2009 and also sued Anadarko and Kerr-McGee, which Anadarko had bought three years earlier, claiming the spinoff was fraudulent because of the environmental liabilities.