American Realty Trust wants more time behind the shield of bankruptcy to figure out how to pay off a judgment from a failed apartment building sale, Dow Jones DBR Small Cap reported today. Lawyers for American Realty are seeking a six-month extension of its exclusive right to file a chapter 11 plan explaining how it intends to pay off creditors, including a disputed $73 million judgment to a Michigan real estate developer.
The New York State regulator for MBIA Inc.'s insurance unit criticized the company for paying executives $11.4 million to stay on board for three more years, Bloomberg News reported yesterday. MBIA said on Wednesday that it is paying the cash bonuses to keep four executives with the company through December 2015. Its board approved compensation for Chief Financial Officer Chuck Chaplin, Chief Operating Officer William Fallon, Chief Legal Officer Ram Wertheim and Chief Portfolio Officer Anthony McKiernan that include the retention awards and 2 million shares of stock.
Beartooth Electric Cooperative can continue its legal fight to cut ties with its bankrupt wholesale supplier, Bankruptcy Judge Ralph Kirscher ruled on Dec. 20, the Billings (Mont.) Gazette reported on Tuesday. Judge Kirscher's ruling allows Beartooth to pursue its claim that its contract with Southern is invalid because the Wyoming Public Service Commission did not approve it as required and because Southern failed to get a valuation of Beartooth’s contract before pledging it as security. Beartooth is seeking to end its 2008 amended contract with Southern because of the risk to the co-op’s financial security, say its board members. The contract runs until 2048.
Hawker Beechcraft Inc., which plans to exit bankruptcy protection under the control of a group of hedge funds that includes Bain Capital's Sankaty Advisors, is jettisoning two underfunded pension plans covering thousands of nonunion workers and retirees, the Wall Street Journal reported today. The Kansas-based aircraft manufacturer, which hopes to exit bankruptcy protection in the first quarter of next year, also said that it struck a deal with the Pension Benefit Guaranty Corp. (PBGC) to retain a third "hourly" plan covering more than 8,200 current and former union workers. In court papers filed on Feb. 21, Hawker said that it was terminating its so-called salaried and base pension plans covering nearly 9,500 employees and retirees as part of a comprehensive deal with the PBGC and the International Association of Machinist and Aerospace Workers, the union representing its hourly workers.
Embattled money-management firm Aletheia Research and Management Inc. has reached a deal with its unsecured creditors that would see an independent trustee appointed to manage the company while it attempts to restructure in chapter 11, Dow Jones DBR Small Cap reported today. In court papers filed on Thursday, Aletheia and its unsecured creditors' committee agreed to the appointment of a chapter 11 trustee to "avoid the uncertainty and costs arising from litigation."
A U.S. bankruptcy judge ruled against an attempt by the California Public Employees Retirement System to bypass the bankruptcy court and collect overdue pension payments from the bankrupt city of San Bernardino, Reuters reported on Friday. The decision, while only one step in a highly complex legal proceeding, was a blow to Calpers' argument that pension payments and California law should take precedence in a bankruptcy. Calpers, the largest U.S. pension fund with $241 billion in assets, had been seeking to lift the automatic bar on payment collections that comes with a bankruptcy filing.
To learn more about issues in chapter 9, be sure to pick up the latest ABI publication, Municipalities in Peril: The ABI Guide to Chapter 9, Second Edition, now up for pre-order in ABI's Bookstore.
James Giddens, the trustee for the failed MF Global Inc., announced two key agreements that are expected to accelerate cash payouts to clients and creditors of the failed futures brokerage, Reuters reported on Saturday. Giddens said that he has negotiated deals to resolve disputes with the company's former British affiliate and the parent company, MF Global Holdings Ltd. As a result of the UK agreement, Giddens estimated between $500 million and $600 million could be returned to the MF Global estate if the deal is finalized.
Residential Capital LLC won court approval of a mediator for talks with creditors opposing the bankrupt mortgage company's $750 million settlement with parent Ally Financial Inc., Bloomberg News reported yesterday. Bankruptcy Judge Martin Glenn agreed to appoint fellow judge James Peck to try to resolve a fight over how much Ally should be forced to pay to avoid a lawsuit over what the company did before it put ResCap into bankruptcy and other issues. Unsecured noteholders represented by Wilmington Trust NA say that Ally is offering too little to resolve claims that it stripped ResCap of valuable assets. A bankruptcy examiner is investigating the settlement offer and plans to deliver a report in April.
The sale of men's suit maker HMX Group for $70.1 million to Authentic Brands Group , which is owned by private equity firm Leonard Green & Partners LP , received bankruptcy court approval on Wednesday, Dow Jones DBR Small Cap reported today. The deal is expected to close Friday, according to Leonard, Street and Deinard's Robert Kugler, who represents the committee of unsecured creditors in the case.
Bankruptcy Judge Mary Walrath on Monday said that LSP Energy can take $13.25 million off of the nearly $300 million purchase price for its Mississippi power plant as the sale is held up by an outage that began in September, Dow Jones DBR Small Cap reported today. LSP last month sought permission to cut the price South Mississippi Electric Power Association will pay for the 837-megawatt gas-fired plant to $272.6 million from $285.9 million to compensate the company for the "risk associated with taking ownership of the Facility when all repairs may not have been completed."