%1

Only a month after emerging from bankruptcy, American Airlines faces a claim from the city of Los Angeles for $21.5 million in fees charged to operate out of Los Angeles International Airport, the Los Angeles Times reported yesterday. The city asked a bankruptcy judge for permission to file a lawsuit to collect maintenance and operating fees from American, alleging that the airline has been underpaying LAX since Dec. 31, 2010. At the heart of the dispute is a method that LAX adopted in 2006 for calculating maintenance and operating fees charged to airlines that operate out of LAX. The new method raised the cost of operating out of LAX by adding charges for security and maintenance of private roads around the airport. Nearly every airline at the airport challenged the 2006 fee structure, including American, according to airport officials.

Dish Network Corp.’s motion to drop its $2.2 billion offer for airwaves owned by LightSquared Inc. became the focus of a trial over how Dish Chairman Charles Ergen bought debt in Philip Falcone’s bankrupt wireless broadband company, Bloomberg News reported yesterday. Dish sent a termination letter just before a trial began yesterday bankruptcy court, where the satellite-television company and Ergen are accused of improperly acquiring the LightSquared debt. Lawyers for LightSquared told Bankruptcy Judge Shelley Chapman that Dish’s latest move may be a gambit to drive down the price of the assets. The lawyers said Ergen began stockpiling the debt in 2011, the year before LightSquared’s bankruptcy, and spent $800 million of his personal wealth, including money in his daughter’s trust fund.

Philip Falcone’s LightSquared Inc. is set to open a trial accusing Charlie Ergen of improperly snapped up debt in the company to hijack its reorganization and get airwaves worth billions of dollars for Dish Network Corp., even as Dish has said it may withdraw its bid, Bloomberg News reported today. LightSquared, the satellite-based wireless provider controlled by Falcone’s Harbinger Capital Partners, is scheduled to go to trial against Ergen today before Bankruptcy Judge Shelley Chapman. The Reston, Va.-based company filed for bankruptcy in 2012 after failing to win regulatory approval to use the airwaves.

Banks are lined up to provide up to $1.55 billion worth of loans to W.R. Grace & Co. when the specialty chemical company ends a dozen-year stay in bankruptcy at the end of this month, Dow Jones Newswires reported yesterday. The financing, which carries some $21.25 million worth of fees, is being coordinated globally by affiliates of Goldman Sachs Group Inc. and Deutsche Bank AG. It involves affiliates or units of Bank of America Corp., Citigroup Inc., HSBC Holdings PLC, Commerzbank AG, KeyBanc Capital Markets Inc., PNC Financial Services Group Inc. and Sumitomo Mitsui Banking Corp. At a Jan. 29 bankruptcy court hearing, Grace will seek court authority to enter into the loan commitments along with other final touches on a chapter 11 restructuring that will remove from the Maryland company the threat of billions of dollars worth of liabilities for injuries linked to asbestos, a toxic material used decades ago. Bankruptcy exit financing is "likely to include" a $700 million senior secured term loan, a $200 million euro equivalent senior secured term loan, a $250 million senior secured delayed draw term loan, a senior secured revolving loan of up to $250 million and a multicurrency senior secured revolving loan of up to $150 million, according to papers filed on Tuesday.

A bankruptcy judge yesterday approved a settlement that allows Peregrine Financial Group to avoid dueling legal claims over its collapse and ensures that any litigation proceeds wind up in the hands of the brokerage's customers and creditors, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Carol A. Doyle signed off on the deal struck last month between the official overseeing Peregrine's liquidation, trustee Ira Bodenstein, and Peregrine's customers. Under the settlement, Bodenstein will stand down in a battle over litigation and will allow Peregrine's customers and creditors to take the lead in pursuing any legal claims Peregrine may have against Peregrine's former president, Russell Wasendorf Jr., related to his father's "misappropriation of customer funds" from Peregrine.

Cengage Learning Inc.'s efforts to line up $2 billion in bankruptcy-exit financing are facing headwinds from the committee representing its unsecured creditors, which says the financing is "premature and unnecessary," the Wall Street Journal reported today. In court documents filed on Monday, the unsecured creditors' committee in the textbook publisher’s chapter 11 case said that it doesn’t support the payment of loan fees in connection with a bankruptcy-exit plan it believes “cannot be confirmed, or at best, has a real risk of not being confirmed.” The committee has argued that it doesn’t believe Cengage’s current plan for exiting chapter 11 protection can be approved by the court. The company and its creditors have been in mediation, with the goal of resolving disagreements prior to Feb. 24, when Judge Elizabeth Stong is slated to consider confirmation of the plan, putting the company on track to emerge from bankruptcy in March.

A federal bankruptcy judge granted the Rockets permission yesterday to continue negotiating on behalf of Comcast SportsNet Houston and set Feb. 4 to hear arguments on the Houston Astros’ motion to dismiss an involuntary chapter 11 bankruptcy petition filed against the network last September, the Houston Chronicle reported yesterday. Bankruptcy Judge Marvin Isgur also provided a clearly worded signal indicating that if the Astros-Rockets-Comcast partnership enters bankruptcy, he favors eliminating a controversial clause that requires all three partners to agree on significant decisions. Judge Isgur agreed to extend until next month the Rockets’ power to seek new business for CSNH but also lifted a stay on two undecided motions in the case, the more significant of which is the Astros’ motion to dismiss the involuntary bankruptcy proceeding.

Months after its spinoff from Hertz Global Holdings Inc., Advantage Rent a Car is asking federal regulators to approve its sale to a new owner, the Wall Street Journal reported today. The Federal Trade Commission yesterday began seeking public comment on Catalyst Capital Group Inc.’s bid to acquire Advantage, the fourth-largest independent U.S. car-rental chain, out of chapter 11. A bankruptcy judge approved the deal last week, although a rival bidder is appealing, and the FTC must still give its blessing.

Going-out-of-business sales could begin as early as Thursday at Loehmann's Holdings Inc.'s 39 designer discount retailers after the bankruptcy court's approval yesterday of a sale worth $16.4 million, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Martin Glenn yesterday approved the sale of two groups of assets and scheduled for Friday a hearing on a third sale worth an additional $7.5 million. Loehmann's auction, held on Friday, overall garnered $23.9 million for the company's assets.

A section of LightSquared Inc. lenders are opposing the company's decision to seek a new financing arrangement as part of its plan to exit bankruptcy, Reuters reported today. LightSquared in December proposed a new bankruptcy exit plan with financing from Fortress Investment Group and other backers, as the U.S. wireless communications company seeks to avoid a sale to highest bidder Dish Network Corp. The new plan replaced one based on an auction of the company's assets. LightSquared scrapped that sale after Dish emerged as the only qualified bidder, with a $2.2 billion offer and terms that LightSquared found unappealing. LightSquared had asked to be allowed to implement the new plan without going back to creditors to get their approval, saying that the latest deal increases the recovery for creditors. However, lenders including US Bank and MAST Capital Management said yesterday that the new arrangement violates an earlier deal, which prohibited LightSquared from seeking alternative financing unless the creditors were first paid in full.