British retailer Tesco PLC's U.S. grocery chain, Fresh & Easy Neighborhood Market, is pushing for a sale by Thanksgiving, probably to Yucaipa Cos., the investing company that helped fund Great Atlantic & Pacific Tea Co.'s exit from bankruptcy, Dow Jones Daily Bankruptcy Review reported today. Yucaipa was chosen to lead the bidding on the grocery chain after a nine-month marketing process in advance of Monday's bankruptcy filing.
The U.S. Department of Justice, fighting a proposed merger of US Airways Group Inc. and American Airlines parent AMR Corp., lost a bid to delay the case yesterday, Reuters reported yesterday. The Justice Department requested a delay after many of its attorneys and support staff were placed on furlough. Judge Colleen Kollar-Kotelly, however, turned down the request in an order issued on Tuesday. Texas Attorney General Greg Abbott also announced that his state was dropping out of a U.S. Justice Department lawsuit seeking to block the merger, Reuters reported yesterday. Texas was one of several states that joined the Justice Department lawsuit, filed in August, that has sought to stop a deal it said would lead to higher airfares and less competition. The other states are Arizona, Florida, Michigan, Pennsylvania, Tennessee, Virginia. The District of Columbia also opposes the deal.
General Motors Co. has agreed to pay $50 million to end long-running litigation over a secretive deal that was struck on the eve of the automaker's 2009 bankruptcy that critics said favored hedge funds, Reuters reported yesterday. The agreement ends complex litigation in which hedge funds affiliated with John Paulson and Paul Singer's Elliott Management agreed to reduce the amount they said they were owed in the bankruptcy of "Old GM." The agreement was reached on Friday. GM had warned the litigation could put it on the hook for $918 million. That threat was removed by the settlement, which still needs to be approved by a bankruptcy court at a hearing scheduled for Oct. 21.
Comcast Corp. is prepared to bid if it can force a sale of the financially troubled, regional-sports network that carries the games of the Houston Astros baseball team and the Houston Rockets, the city's basketball team, court papers show, Reuters reported yesterday. Affiliates of Comcast, which owns NBCUniversal, on Friday filed for involuntary bankruptcy against Houston Regional Sports Network LP, and said in court papers that the network should be put up for sale for the benefit of creditors. Comcast "believes the network's assets have meaningful value, and would be prepared to make a bid to acquire either the network (under a plan of reorganization) or substantially all of its assets," the media conglomerate said in court documents. The network's three-member board consists of representatives of Comcast, the Houston Rockets of the National Basketball Association and the Houston Astros of Major League Baseball, according to documents filed by a Comcast affiliate. The network has been locked in a dispute with cable and satellite television providers over how much it should receive per subscriber, which has limited the network's reach.
Tesco Plc’s Fresh & Easy Neighborhood Market Inc. filed for bankruptcy so it can sell itself at auction with an affiliate of billionaire Ron Burkle’s Yucaipa Cos. as the lead bidder, Bloomberg News reported yesterday. Fresh & Easy yesterday listed debt of as much as $1 billion and assets of as much as $500 million in a court filing. Under the proposed deal, a Tesco affiliate would loan the Yucaipa affiliate $120 million to help fund the takeover. Tesco would get warrants to buy as much as 10 percent of the equity in the reorganized supermarket chain. Should Yucaipa win a proposed court-sanctioned auction, a Tesco unit would retain 22.5 percent of the equity in the reorganized chain.
Community news conglomerate GateHouse Media Inc. yesterday sketched out its plan to shake up its nearly $1.2 billion debt load in preparation for the launch of a new local media company combining GateHouse's hundreds of publications with the Dow Jones Local Media Group string of small newspapers, Dow Jones Daily Bankruptcy Review reported today. Led by Newcastle Investment Corp., all 80 of GateHouse's secured lenders voted in support of a chapter 11 plan that will allow them to cash out their debt at 40 cents on the dollar or pick up a stake in the new company.
LightSquared Inc., Philip Falcone’s bankrupt wireless spectrum company, resolved a dispute with lenders on bidding procedures that the company had said could have foiled a $2 billion offer for its assets, Bloomberg News reported yesterday. The auction procedures will be submitted for formal court approval, Matthew S. Barr, an attorney for LightSquared, told Bankruptcy Judge Shelley Chapman yesterday. Under the agreement, an independent committee will oversee the auction. The lenders, who hold $1.4 billion of $1.7 billion in debt of LightSquared’s LP unit, had objected to a plan that it said would have given Falcone’s investment company, Harbinger Capital Partners LLC, too much power to choose the winning bid. The group said Harbinger opposed any sale of LightSquared assets.
Bahrain-based Arcapita is aiming to build a new asset management firm with a debut local deal in the logistics, education or health care sector as the company recovers from the first chapter 11 bankruptcy process undertaken by a Gulf Arab entity, Reuters reported on Friday. The Islamic investment firm emerged from chapter 11 on Sept. 17 after seeking court protection in March 2012 under hedge fund pressure ahead of the repayment of a $1.1 billion Islamic loan. Under the court-approved restructuring plan, Arcapita is to be split into two entities: one will hold the existing company assets as they are sold down to pay creditors, while a second will be in charge of the process's management. The latter entity hopes to rebuild itself going forward, said Atif Abdulmalik, chief executive of Arcapita, aiming to raise $100 million of new equity from original Arcapita investors by January to help fund dealmaking.
Motors Liquidation Co., a trust for creditors of General Motors Co.’s old assets, cut $2.67 billion in claims to $1.55 billion in an out-of-court agreement, Bloomberg News reported on friday. Terms of the settlement reached on Thursday include the reduction of a $1.61 billion claim from Green Hunt Wedlake Inc. to $477 million, as well as a distribution of some General Motors stock to holders of debt issued by a Canadian unit in 2003, according to a filing with the U.S. Securities and Exchange Commission. The noteholders will be allowed a $1.07 billion unsecured claim. Motors Liquidation creditors began court-ordered mediation in June with hedge funds that held the notes issued by General Motors Nova Scotia Finance Co. A trust sued the funds on behalf of creditors in March 2012, questioning their right to the $2.67 billion in claims.
GateHouse Media Inc., the community newspaper publisher overseen by the co-chairman of Fortress Investment Group LLC, filed for bankruptcy after creditors approved a plan to combine its assets with those recently purchased by Newcastle Investment Corp., Bloomberg News reported on Friday. GateHouse, based in Fairport, N.Y., listed assets of $433.7 million and debt of $1.3 billion in a chapter 11 petition filed on Friday. The prepackaged restructuring plan hinges on the combination of GateHouse with assets of Dow Jones Local Media Group, which Newcastle bought from News Corp. this month for $87 million.