Eastman Kodak Co. is seeking to extend the exclusive control it has over its bankruptcy case for a few more months, citing significant progress towards the targeted mid-2013 exit date, Dow Jones Newswires reported yesterday. The bankrupt photography company is asking the court to give it until May 31 to file a bankruptcy-exit proposal without threat from competing plans and until July 31 to seek support for the plan.
A committee of bondholders who have gone unpaid by Ampal American Israel Corp. received the power to lead collection efforts on a $20 million loan the company made to an affiliate to construct a sugarcane ethanol-producing plant in Colombia, Dow Jones DBR Small Cap reported today. The struggling plant failed to repay the loan by a Dec. 31 deadline, leading the bondholder committee to pressure the Ampal American leaders to begin collection efforts that could recover money for Ampal American, a holding company for energy investments and real estate holdings throughout the Middle East.
Bankruptcy Judge Martin Glenn yesterday approved a settlement under which many former MF Global customers would get back 93 percent of the value of their accounts, a major step in the wind-down of former New Jersey Governor Jon Corzine's collapsed brokerage, Bloomberg News reported yesterday. The approval comes nearly six weeks after trustees for MF's UK and U.S. broker-dealers, as well as its parent, announced the deal to resolve billions of dollars in intercompany claims. The agreement avoids litigation in the UK that could have dragged out MF Global's liquidation for years. It will allow James Giddens, the trustee for MF's U.S. trader customers, to return another $500 million to $600 million to those customers. That would increase total payouts to about 93 percent of the value of their accounts, from the 80 percent or so most have recovered so far.
Otelco Inc. plans to seek support for a pre-packaged chapter 11 filing from its senior subordinated notes holders in an effort to reduce its overall debt by roughly $135 million, MarketWatch.com reported today. The wireline telecommunication services provider said that it currently has more than $32 million in cash and sufficient liquidity to consummate the transaction. Otelco ended the third quarter with total liabilities of roughly $330.1 million. The company said that its senior lenders have agreed to amend and extend the company's current senior financing through April 2016.
Hotel media provider LodgeNet Interactive Corp. received bankruptcy court approval to access $5 million of its bankruptcy financing, Dow Jones Newswires reported yesterday. A final hearing to provide LodgeNet full access to its bankruptcy financing, which includes $15 million in new loans and a $15 million refinancing of prepetition debt, is set for Feb. 27. LodgeNet, which provides DirecTV, HBO, pay-per-view movies and other services in hotel rooms throughout the U.S., filed for chapter 11 bankruptcy on Jan. 27 with a plan to hand over the company to private-equity firm Colony Capital LLC in exchange for a $60 million infusion of new capital. The plan allows it to pay unsecured creditors in full and provide a substantial recovery to secured creditors in the case.
Hostess Brands Inc., the bankrupt maker of Wonder Bread and Twinkies, picked the team of Apollo Global Management LLC and C. Dean Metropoulos & Co. as the lead bidder for its cake brands, Bloomberg News reported yesterday. The offer becomes the stalking-horse bid for an auction of the cakes business that includes CupCakes, Ding Dongs and Ho Hos. Flowers Foods Inc., the Thomasville, Ga.-based owner of brands that include Nature’s Own and Tastykake, was earlier selected as the stalking-horse bidder for most of Hostess’s bread brands with a $360 million offer. Flowers is also the stalking-horse bidder for Hostess’s Beefsteak bread brand with a $30 million bid. That auction is scheduled for Feb. 28.
Law firm Kaye Scholer and financial adviser Capstone admitted on Monday to making "mistakes" during the bankruptcy of investment management firm GSC Group Inc., but said that they should not have to forfeit more than $10 million in fees earned from their work, Reuters reported yesterday. The U.S. Trustee Program is seeking to void the firms' fees because of their mischaracterization of Robert Manzo, a Capstone contractor who was presented to the bankruptcy court as a direct employee. Kaye Scholer served as legal counsel to GSC in bankruptcy, while Capstone was the company's financial adviser. In court papers filed earlier this month, the U.S. Trustee said that the firms covered up Manzo's contractor status and fee-sharing arrangement with Capstone, which may have served to inflate their fees.
Preparing for a possible legal fight over the Sacramento Kings, the bankruptcy trustee who controls 7 percent of the team plans to bring in "special litigation counsel" to pursue claims that minority owners are being denied the right to match the purchase offer from Seattle, the Sacramento Bee reported today. Trustee David Flemmer is preparing to auction the 7 percent share held by bankrupt developer Bob Cook in order to pay creditors' claims. The current majority stakeholder in the Kings, the Maloof family, agreed to sell its 65 percent controlling interest to a Seattle group led by hedge fund manager Chris Hansen. Preserving the legal right to match Hansen's offer would make the 7 percent share considerably more valuable, Flemmer said. A bankruptcy court hearing on the matter is scheduled for Thursday.
Hostess Brands Inc. said yesterday that it has selected stalking-horse bidders for its Drake's cake business and additional bread brands that will net the bankrupt bakery company more than $56 million, Reuters reported yesterday. McKee Foods, maker of Little Debbie snack cakes, is offering roughly $27 million for Drake's, which makes Devil Dogs, Ring Dings and Yodels. United States Bakery Inc., also known as Franz Family Bakery, is expected to bid about the same amount for Hostess bread brands including Sweetheart, Eddy's, Standish Farms and Grandma Emilie's.
The Archdiocese of Milwaukee said in court documents that it is hemorrhaging money on legal and professional fees as a result of its bankruptcy and will be unable to pay its monthly operating expenses beginning in April unless the judge suspends those payments, the Milwaukee Journal Sentinel reported on Friday. The archdiocese filed a motion asking Bankruptcy Judge Susan V. Kelley to allow it to suspend all payments to attorneys and consultants, except $125,000 for work on its plan of reorganization. And it would continue to pay its own attorneys to challenge sex-abuse claims with proceeds from its insurance carriers. James Stang, lead attorney for the bankruptcy creditors committee, said that he had not had a chance to discuss the motion with his colleagues, but he blamed the cost of the bankruptcy - nearly $9 million in fees paid to date - on the archdiocese's aggressive efforts to throw out hundreds of sex abuse claims.