A large group of creditors of MF Global Holdings Ltd.'s bankrupt brokerage unit will soon receive their first payout, as $518.7 million of checks start to be mailed out on Friday, the third anniversary of the company's chapter 11 filing, Reuters reported yesterday. James Giddens, the trustee liquidating the MF Global Inc. brokerage unit, said yesterday that the payout to unsecured general creditors will cover 39 percent of claims he has deemed valid. He said another $32.3 million will be distributed to some "priority" claimants, covering all of their valid claims. Giddens is keeping roughly $300 million in reserve for unresolved unsecured and priority claims, and said he expects another significant distribution by next June.
A pension fund said yesterday that GT Advanced Technologies Inc. shouldn’t be allowed to destroy papers filed under seal in its bankruptcy because shareholders may need the information in lawsuits, Bloomberg News reported yesterday. A sealed declaration by GT Advanced’s chief operating officer, Daniel Squiller, “details the reasons precipitating and necessitating” the bankruptcy, information litigants in at least nine federal securities lawsuits will need, the City of Pontiac General Employees’ Retirement System said in a filing yesterday in U.S. Bankruptcy Court in New Hampshire. GT Advanced filed for bankruptcy this month without specifying why. The Merrimack, N.H.-based company, which makes synthetic sapphire used to strengthen smartphone screens, later cited a burdensome supply agreement with Apple Inc. but continues to keep many of the details secret. The company has since reached a settlement with Apple that originally called for the destruction of Squiller’s declaration once the bankruptcy court approved the deal. Securities law requires all documents that may be relevant to a case be preserved, the retirement fund said in its filing.
Exide Technologies' unsecured creditors say they have lost confidence in the company's management to guide the battery maker safely through bankruptcy, Dow Jones Daily Bankruptcy Review reported today. The company’s unsecured creditors’ committee at a hearing yesterday asked a judge to help them get information about plans to sell the company, which has been struggling in chapter 11 since June 2013. The panel says that it suspects Exide is being steered into a sale that will put the company into the hands of senior lenders, leaving most creditors out in the cold.
Former billionaire Samuel Wyly, who filed for bankruptcy after losing a U.S. Securities and Exchange Commission fraud lawsuit, sold more than $320,000 worth of art in a Christie’s auction without a judge’s approval and with an asset freeze looming, Bloomberg News reported yesterday. The sale of three paintings on Oct. 27 — eight days after the bankruptcy filing — is evidence that Wyly is trying to liquidate assets as he awaits a final disgorgement order of at least $123.8 million, SEC lawyers said in a letter filed yesterday in federal court in Manhattan. “This evidence further underscores the need for an immediate asset freeze and the ability to serve such a freeze on third parties such as Christie’s, who are in possession of the defendant’s property,” the agency said. Wyly’s lawyer said the sale was inadvertent. A federal jury in Manhattan in May found Wyly and his late brother, Charles Wyly, traded stocks held in offshore accounts for more than 13 years, making at least $550 million in illegal profits. The trades involved companies they controlled and weren’t declared, in violation of U.S. law, jurors found. Charles Wyly was killed in an auto accident in 2011.
GT Advanced Technology Inc., which struck an agreement with erstwhile partner Apple Inc. last week that allowed it to proceed with its bankruptcy, said that the iPhone maker had threatened to seek damages of more than $1 billion against the company. Former stock market darling GT Advanced, once set to become the main supplier of scratch-resistant sapphire to Apple, surprised markets when it filed for chapter 11 earlier this month. It failed to meet performance targets set out in its supply agreement with Apple, setting the stage for its failure, according to court filings. GT Advanced said in a court filing late on Monday that it needed to settle with the iPhone maker to avert a costly legal battle it might not win. "The alternative to the settlement agreement would be months, if not years, of costly, time-consuming, and distracting litigation with Apple over a wide range of contested issues, the success of which GTAT could not guarantee," the company said in a court filing late on Monday. http://www.reuters.com/article/2014/10/28/gt-advanced-tech-bankruptcy-a…
In related news, Dow Jones & Co. Inc., publisher of the Wall Street Journal, has asked a court to deny a request by Apple Inc. and GT Advanced Technology Inc. to keep under seal some documents relating to GT Advanced's bankruptcy. Dow Jones, owned by News Corp., said that keeping the documents under seal is an offense to constitutional principles of public access, according to the publisher's court filing yesterday. GT Advanced, which supplied sapphire material to Apple to make smartphone screens, filed for chapter 11 protection earlier this month under mysterious circumstances. GT refused to explain why it had imploded, citing confidentiality clauses in its Apple contracts. http://www.reuters.com/article/2014/10/29/gt-advanced-tech-bankruptcy-d…
Clark Appliance, a high-end home appliance retailer in business for more than 100 years, filed an emergency voluntary petition for chapter 11 relief on Friday, the Indianapolis Star reported yesterday. In a letter to customers, owner Bob Clark said that the move was motivated by a number of financial problems that have plagued the company since 2008. Court documents state that Clark Appliance owes about $2.2 million to its largest single creditor, General Electric. First Business Capital Corp., an asset-based lender in Madison, Wis., is owed about $2 million.
Hollywood’s Todd-Soundelux LLC, which until its shutdown provided postproduction sound effects for movies and television shows, is selling a collection of sound effects to the highest bidder at a Nov. 13 auction, the Wall Street Journal reported today. Bids are due Nov. 5 for the company’s Hollywood Edge sound effects library and website. Users pay a licensing fee to download sound effects appropriate for everything from a light rainstorm to an alien invasion. The Haunted House collection features such sounds as “spooky blood-curdling screams,” “graveyard” and a “haunted monster cave.” Todd-Soundelux will ask a Los Angeles bankruptcy judge to approve the winning bid at a hearing to follow next month’s auction.
The U.S. and Securities Exchange Commission on Tuesday added more than a dozen relatives of Texas businessmen Sam and Charles Wyly to a long-running securities fraud lawsuit against the brothers to bolster its efforts to collect some $300 million, Reuters reported yesterday. The amended complaint filed in New York federal court included the relatives as "relief defendants," which means they are not accused of wrongdoing but can be subject to civil claims. The filing was expected, as the SEC and the relatives continue to dispute whether hundreds of millions of dollars held in offshore trusts should be subject to collection. U.S. District Judge Shira Scheindlin has said she will order the Wyly brothers' assets frozen at the SEC's request, including money previously transferred from the trusts to various relatives, despite objections from the family members.
A Delaware bankruptcy judge has scheduled a confirmation hearing in the Bondex International bankruptcy settlement agreement, LegalNewsline.com reported yesterday. Bankruptcy Judge Peter J. Walsh filed an Oct. 20 order scheduling a hearing on confirmation of the proposed joint plan and approved related notice procedures for Dec. 10 in the U.S. District Court for the District of Delaware. In his order, Walsh approved the debtors’ disclosure statement, the solicitation and tabulation procedures, the certified plan solicitation directive and the ballots. On July 28, RPM International Inc. announced its agreement with the bankruptcy representatives of current and future claimants in order to resolve Bondex-related asbestos liability. According to the agreement, RPM would pay $797.5 million over four years and resolve all present and future asbestos personal injury claims related to its subsidiary Bondex.
Fertilizer company Mississippi Phosphates Corp. filed for chapter 11 protection on Monday with plans to remain open but eventually sell its assets, Dow Jones Daily Bankruptcy Review reported today. Mississippi Phosphates said in its court filing that it has between $100 million and $500 million in both assets and liabilities. The company said in a separate filing that it plans to file motions establishing a "formal sales process" within a week. Mississippi Phosphates blamed its bankruptcy filing on several things, including natural disasters, unplanned shutdown of its production plants and "unsuccessful planned turnarounds."
