%1

Nortel Networks Corp. tomorrow will ask a bankruptcy court to sign off on what it called a "milestone" in its long-running liquidation: a settlement with key creditors in a fight over billions of dollars, the Wall Street Journal reported on Saturday. In December, Nortel's U.S. unit reached a deal to resolve a bitter battle over how much it owes its European creditors and U.K. retirees. Nortel would pay $75 million under the settlement, which would also allow the company to shake nearly $2 billion of claims filed in its chapter 11 case for a fraction of the amount asserted by representatives of French creditors, British pensioners and other European creditors, court papers say.

Hybrid Tech Holdings LLC has bumped up its offer for Fisker Automotive Inc. in a bid to ward off competition for the hybrid-car company from a unit of China's Wanxiang Group, the Wall Street Journal reported on Friday. In advance of a courtroom showdown over Fisker, Hybrid Tech increased by $1 million the cash it is offering creditors to $26 million and proposed splitting with them the proceeds from the sale of a former General Motors plant in Delaware, a facility some estimates say could be worth as much as $50 million. Originally slated for Friday, the court session was pushed back to Jan. 10 in the wake of a rapid-fire series of developments that brought a new contender to the field, amid creditor questions about what went wrong at the maker of luxury hybrid vehicles.

Bankruptcy filings totaled 1,032,326 nationwide for calendar year 2013 (Jan. 1-Dec. 31), a 13 percent decrease from the 1,186,137 total filings in calendar year 2012, according to data provided by Epiq Systems, Inc. The 988,215 total noncommercial filings during calendar year 2013 represented a 12 percent drop from the noncommercial filing total of 1,128,173 during calendar year 2012. Total commercial filings during calendar year 2013 (Jan. 1-Dec. 31) were 44,111, a 24 percent drop from the 57,964 filings during the same period in 2012.

The 66,478 total bankruptcy filings for the month of December 2013 represented a 12 percent decrease from the 75,691 filings in December 2012. The 63,601 total noncommercial filings for December also represented a 12 percent drop from the December 2012 noncommercial filing total of 71,892. Total commercial filings for December 2013 were 2,877, a 24 percent decrease from the 3,799 filings recorded during the same period in 2012. Commercial chapter 11 filings dropped by 31 percent, as the number of chapter 11 filings in December 2012 (565) fell to 391 in December 2013. Average total filings per day in December 2013 were 2,145, a 12 percent decrease from the 2,442 total daily filings in December 2012.

Fisker Automotive, the bankrupt maker of a plug-in hybrid sports car, asked a federal judge to approve its proposed sale to a Hong Kong tycoon rather than a Chinese suitor that Fisker alleged was to blame for its failure, Reuters reported yesterday. A courtroom showdown is set for Jan. 10 that will determine the future of the defunct car maker, which was launched with a controversial U.S. government loan. Bankruptcy Judge Kevin Gross must decide if Fisker's business will be put to open auction or sold to an affiliate of Richard Li as the company has proposed. The hearing was originally scheduled for Friday, but was postponed one week as a major snowstorm threatened to disrupt travel throughout the eastern U.S.

Philip Falcone’s LightSquared Inc. should be the one to benefit from regulatory approval of the company’s wireless spectrum, the bankrupt company said as part of an objection to competing plans that would reorganize it by selling assets, Bloomberg News reported yesterday. “All [of] LightSquared entities should be permitted to reorganize and enjoy the significant value realized when the FCC grants LightSquared’s pending applications,” the company said in a court filing yesterday. During the company’s Dec. 30 court hearing, its lawyers discussed the latest talks with the Federal Communications Commission behind closed doors in U.S. Bankruptcy Judge Shelley Chapman’s chambers. LightSquared has a plan to reorganize as a standalone company, while an ad hoc group of its lenders seek to sell off its main wireless spectrum assets in an auction led by a $2.22 billion bid from an entity owned by Charlie Ergen, chairman of LightSquared’s rival Dish Network Corp.
http://www.bloomberg.com/news/print/2014-01-02/lightsquared-said-it-sho…

In related news, LightSquared said that it wants to extend the incentive bonus package for its top executives as the company eyes an end to its chapter 11 case, Dow Jones Newswires reported yesterday. LightSquared said in a court filing on Tuesday that it wants to alter the parts of the bonuses tied to when the company emerges from bankruptcy and receives regulatory approvals for its networks. The original $6 million proposal was approved in October 2012, but the parts of the bonuses tied to those events expired on Dec. 31. LightSquared wants to modify the plan so its top four executives get cash bonuses of 75 percent of their salary if Judge Shelley C. Chapman confirms a restructuring or approves a sale of the company by Feb. 15. After that, those executives — Chief Executive Doug Smith, Chief Financial Officer Marc Montagner, General Counsel Curtis Lu and regulatory executive Jeffrey Carlisle — would not receive anything.
http://www.nasdaq.com/article/lightsquared-seeks-to-extend-management-b…

U.S. Trustee Roberta A. DeAngelis is objecting to Green Field Energy Services Inc.'s proposed employee bonuses, advising the court to intervene, Dow Jones Newswires reported yesterday. DeAngelis said in a court filing yesterday that the bonus plan — notable details of which, including the amount, have been redacted — was structured to entice employees to remain with the company through its bankruptcy instead of rewarding them for performance. "Despite the label of the bonus plan, the bonus plan is structured to entice the debtors' insiders to stay with the companies and do their jobs through the conclusion of the restructuring process, rather than entice the insiders to perform at a high level to achieve significant benchmarks," she said.

Capitol Bancorp Ltd. has reached a settlement with unsecured creditors that will allow the bank holding company to close on its sale to Wilbur Ross's Talmer Bancorp Inc. after months of fighting, Dow Jones Daily Bankruptcy Review reported today. With this deal, creditors have agreed to support Capitol's bankruptcy-exit plan after 99 percent of general unsecured debt and 61 percent of trust-preferred securities debt voted in mid-December to reject it. These groups are owed $20.8 million and $2.35 million, respectively.

Cengage Learning Inc. is requesting bankruptcy court permission to pay fees that are associated with lining up as much as $2 billion in loans that will finance the company's operations after it exits chapter 11, Dow Jones Newswires reported on Tuesday. The textbook publisher said in court documents that were filed on Dec. 27 that it must have the financing — a $250 million revolving facility and a term loan of between $1.5 billion and $1.75 billion — lined up by Jan. 15 so that it can exit bankruptcy in March. Cengage's reorganization plan, which is slated for a confirmation hearing on Feb. 24, is contingent on it lining up this financing.

Fiat SpA said that it would obtain full control of Chrysler Group LLC in a $4.35 billion deal, ending a standoff that had clouded the future of both companies, the Wall Street Journal reported today. The deal, which helps clear the way for the consolidation of both automakers, assumes a value for Chrysler at just over $10 billion, within the $9 billion to $12 billion valuation that banks underwriting a proposed initial public offering had been considering, but some insiders said that the IPO will now be called off. The total price being paid for the 41.5 percent in Chrysler that Fiat didn't already own is lower than some analysts had predicted. In merging the two companies, Sergio Marchionne, the chief executive of both companies, hopes to create a single, global automaker with combined sales of six million vehicles, ranking as the world's seventh largest. Fiat and Chrysler reported combined revenue of €84 billion in 2012.

A New Jersey-based aluminum company has filed for chapter 11 protection, which has led to it removing an asbestos lawsuit filed against it in Kanawha County (W.Va.) Circuit Court to federal court, the West Virginia Record reported today. Consolidated Aluminum Corp., which ceased operations in 1994, declared bankruptcy on Dec. 15. The company still exists to manage litigation against it. According to its bankruptcy petition, the company has between 100-199 creditors but only between $500,001 and $1 million in assets. Its largest creditor is Lonza America, to which it owes more than $72 million for an intercompany loan.