Exide Technologies, the 125-year-old battery maker, won initial court approval to borrow as much as $500 million to replace older loans and stay in business while it reorganizes in bankruptcy, Bloomberg News reported yesterday. About $225 million of the new debt will go to pay off and replace a $160 million revolving credit line, with any money left over used for operations, according to court papers. The other $275 million will be partly supplied by a group of noteholders that holds 45 percent of the company’s bonds that mature in 2018.
Bahrain investment firm Arcapita Bank received approval from a U.S. bankruptcy court yesterday for its plan to repay creditors, thought to be the first that is compliant with sharia, Islamic law, Reuters reported yesterday. Under the plan of reorganization, Arcapita will repay its only secured creditor, Standard Chartered Plc, in full. Arcapita will transfer its assets to a new holding company which will dispose of its investments over time, in an attempt to avoid a firesale liquidation. The company's unsecured creditors will receive the equity in the new holding company as well as their pro rata share in a sharia-compliant loan. General unsecured creditors are expected to receive around 7.7 percent of the $1.9 billion they are owed, according to court documents.
Dutch sports car maker Spyker NV's $3 billion lawsuit accusing General Motors Co. of trying to bankrupt Swedish automaker Saab was dismissed by a U.S. federal judge yesterday who said the U.S. automaker had the right to block the sale of a company using its technology, Reuters reported yesterday. Spyker sued GM in August 2012, seeking damages and accusing the U.S. automaker of trying to stop a deal with Zhejiang Youngman Lotus Automobile Co. and eliminate a potential rival in the growing Chinese market. "General Motors had a contractual right to approve or disapprove the proposed transaction," U.S. District Court Judge Gershwin Drain said. "The court is going to grant the motion to dismiss the matter."
Bankruptcy Judge Allan L. Gropper on Friday approved an investor group's $275 million bid to sponsor a plan to bring the newly resurgent K-V Pharmaceutical Co. out of bankruptcy after "peace broke out" between two warring factions of bidders, Dow Jones Daily Bankruptcy Review reported today. The settlement, announced in court Friday afternoon, brings to an end months of legal sparring between the investor group—Greywolf Capital, Susquehanna International Group, Deutsche Bank Securities Inc. and Kingdon Associates—and a separate group of lenders led by Silver Point Capital. The investor group has agreed to backstop a $238 million rights offering that will form the backbone of K-V Pharmaceutical's chapter 11 plan.
U.S. battery maker Exide Technologies filed for chapter 11 protection today with the aim of cutting debt and implementing a restructuring plan to better compete in the market, Reuters reported today. Exide, which makes lead-acid batteries, said in the court filing that a combination of rising production costs, intense competition and the economic downturn in Europe had led to liquidity constraints. Exide estimated its liabilities at $1.14 billion and assets at more than $1.89 billion, according to the court filing. The case is Exide Technologies, Case No. 13-11482, U.S. Bankruptcy Court, District of Delaware.
LightSquared Inc., the wireless broadband company said to have received an offer from Dish Network Corp. Chairman Charlie Ergen, won permission to hire Jefferies Group LLC to line up financing to exit bankruptcy, Bloomberg News reported yesterday. Bankruptcy Judge Shelley Chapman approved Jefferies’s hiring yesterday, also raising questions about the identities of LightSquared’s debt owners after lawyers expressed concerns that a committee of lenders may no longer be the company’s largest debt holder. Lawyers told her that as far as they know, documents giving details about the owners of the company’s debt were still accurate.
The U.S. Trustee Program (USTP) announced today that the independent auditor appointed under a nationwide settlement between the USTP and Capital One Bank N.A. has filed her final report, bringing the settlement to a successful conclusion, according to a USTP release yesterday. The auditor reported that Capital One refunded approximately $2.35 million it received after filing erroneous claims in bankruptcy cases for debts previously discharged in bankruptcy, as well as approximately $30,000 in fees and expenses incurred by consumers and bankruptcy trustees who objected to erroneous claims. The report also confirmed that Capital One corrected the flawed process that led to the filing of the erroneous claims. As part of the settlement filed in 2008 in the U.S. Bankruptcy Court for the District of Massachusetts, Capital One had agreed to an audit overseen by an independent auditor. Former Bankruptcy Judge Melanie Cyganowski, who was selected as the auditor, filed her final report after examining more than 850,000 claims filed by Capital One in bankruptcy cases nationwide. Under the settlement, Capital One paid the auditor’s fees and costs of conducting the audit.
Ahern Rentals Inc. won bankruptcy court approval to exit chapter 11 protection under a plan that keeps the construction equipment rental company in the hands of the family that founded it 60 years ago, Dow Jones Daily Bankruptcy Review reported today. Ahern will use $745 million in recently secured bankruptcy-exit financing to fund its plan, which proposes to pay such creditors as bank lenders and unsecured creditors in full.
A lawsuit over $3 billion in claims in the bankruptcy of General Motors Co.'s old assets needs court-ordered mediation, funds owned by Paulson & Co. said on Friday, Bloomberg Briefs reported yesterday. Holders of notes in a Nova Scotia unit of the automaker, including Paulson funds, previously tried to settle a dispute over the claims and failed. Paulson asked Bankruptcy Judge Robert Gerber to reinstate settlement talks, overseen by another bankruptcy judge, according to court papers filed on Friday. Elliott International LP and a unit of Fortress Investment Group LLC are among hedge funds that failed to reach an agreement with the trust liquidating General Motors’ old assets over a $367 million consent fee and a claim of $2.67 billion related to the automaker’s 2009 bankruptcy filing, according to court papers.
Sound Shore Medical Center of Westchester, an affiliate of New York College of Medicine serving patients in the New Rochelle area, filed for bankruptcy protection, planning a sale to Montefiore Health System, Bloomberg News reported yesterday. The company, with about 2,000 employees, listed assets of $159.6 million and debts of $200 million in papers filed in Bankruptcy Court on Wednesday. Sound Shore said that it will continue business as usual pending the sale to Bronx, N.Y.-based Montefiore by the end of the year, subject to court approval. The center was formed in 1997, when Mount Vernon Hospital, Sound Shore Medical Center, Dorothea Hopfer School of Nursing and Schaffer Extended Care Center affiliated to create one of the largest private healthcare systems between New York City and Albany.
