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Argentina lost a last-ditch bid to delay payments to Paul Singer’s NML Capital Ltd. and other holders of its defaulted bonds, adding to pressure on the South American country to negotiate a deal with the holdouts, Bloomberg News reported yesterday. U.S. District Judge Thomas Griesa had ordered Argentina to pay $1.5 billion to the holders of defaulted debt when it makes the next payment on its restructured debt, due June 30. Judge Griesa yesterday denied Argentina’s request for a stay, which it claims is necessary to allow it to negotiate a resolution with the bondholders. Argentina defaulted on $95 billion of debt in 2001. About 92 percent of creditors agreed to swap the defaulted debt for new bonds in 2005 and 2010, while the rest refused to accept losses of about 70 percent. Argentina has threatened a new default if it’s forced to obey Judge Griesa’s orders, saying that it can’t afford to pay holders of its defaulted and performing debt. Griesa’s decision leaves Argentina with the choice of defying his court orders, defaulting on the debt or striking a deal with the holdouts. If Argentina fails to make the $900 million payment due June 30 to holders of its restructured debt, it has an additional 30-day grace period.
http://www.bloomberg.com/news/print/2014-06-26/argentina-bond-fight-jud…

To learn more about the next steps for Argentina and sovereign debt restructuring, be sure to watch James Millstein’s June 20 presentation at ABI’s Cross-Border Symposium: http://news.abi.org/videos

A fee examiner tasked with keeping costs down in the American Airlines bankruptcy recommended this week that a court approve nearly $400 million in fees and expenses earned by professionals who he said engineered "perhaps the most efficient airline reorganization case on record,” the Wall Street Journal reported today. Robert Keach, an attorney from Maine, made the request in a series of filings on Tuesday in U.S. Bankruptcy Court in Manhattan. Keach recommended paying $371.7 million in fees and $16.3 million in expenses to 47 professional firms, including lawyers, accountants, aircraft consultants and other advisers. A handful of firms who submitted fees after a deadline will be included in separate requests, he said. The final fee and expense tallies cover work completed from the November 2011 inception of former American Airlines parent AMR Corp.'s chapter 11 case through the approval of its bankruptcy-exit plan 23 months later. American Airlines exited bankruptcy through a historic merger with US Airways Group Inc. — initially opposed and later cleared by the Justice Department — that created the world's largest airline. American also used its bankruptcy proceeding to negotiate deep concessions from its main labor unions, ultimately cutting about $1 billion in annual labor costs. Nancy Rapoport, a bankruptcy law professor at University of Nevada at Las Vegas who has served as a fee examiner in large chapter 11 cases, said the appointment of Keach at the beginning of the case was crucial to keeping costs down. "These fees would have been way higher" if Keach hadn't created ground rules governing what could and couldn't be charged, Rapoport said.

Five entities with a stake in land where the ambitious Las Vegas W hotel was supposed to be built filed for bankruptcy in Nevada on Wednesday, Dow Jones Daily Bankruptcy Review reported today. In filings with U.S. Bankruptcy Court in Las Vegas, the five businesses listed assets of between $100 million and $500 million and liabilities of between $500 million and $1 billion.

The U.S. Supreme Court curbed the president’s power to make temporary appointments without Senate approval, backing congressional Republicans and dealing a blow to President Barack Obama, Bloomberg News reported yesterday. The justices ruled unanimously that Obama exceeded his constitutional authority when he appointed three members of the National Labor Relations Board in January 2012. Four Republican-appointed justices would have gone even further in limiting the appointment power. The case was the court’s first look at a constitutional provision that lets the president make temporary appointments to high-level posts during Senate recesses. The decision means the Senate can all but nullify the recess-appointment power by holding brief “pro forma” sessions every few days.

Thirty men who were sexually abused decades ago as children at two Catholic schools in the Seattle area will split about $12.1 million from the Archdiocese of Seattle, which owned the schools, Dow Jones Daily Bankruptcy Review reported today. The deal between the victims and the Archdiocese of Seattle will end several lawsuits that had been filed in Washington state over incidents of abuse that took place at Bishop O'Dea High School and the now-closed Briscoe School, a boarding school, starting in the 1950s. The Archdiocese of Seattle will pay for the settlement using insurance money, according to Archbishop Sartain's statement.

Lawyers for bankrupt Genco Shipping & Trading Ltd. yesterday insisted the dry bulk shipper is not being undervalued during the closing of a trial pitting the company against angry shareholders who wanted better treatment in the restructuring, Reuters reported yesterday. The four-day trial bankruptcy posed the question of how to value a shipping company. The answer will determine what is left for Genco shareholders after its lenders and other creditors are repaid. Financial advisers at Blackstone, which was retained by Genco to value the company, argued the shipper was worth between $1.36 billion and $1.44 billion based on the market value of its ships and other assets. Shareholders put the value at $1.91 billion based on financial performance and other factors. Since Genco's Chapter 11 filing in April, shareholders have found themselves at odds with the company and just about all its creditors. They are the only opponents to a restructuring that would reduce debt by $1.2 billion, split most of the company's equity among more senior creditors and give existing shareholders $30 million in warrants. Judge Sean Lane gave no indication how he may rule, but said he would issue a decision by July 2.
http://www.reuters.com/article/2014/06/24/genco-ship-trade-bankruptcy-t…

For more on the valuation of distressed companies, be sure to pick up a copy of A Practical Guide to Bankruptcy Valuation in the ABI Bookstore. To order, please click here: http://bookstore.abi.org/practical-guide-bankruptcy-valuation

A federal judge will allow a California-based investment firm to purchase West Virginia's Fairmont General Hospital out of bankruptcy for $15 million, Dow Jones Daily Bankruptcy Review reported today. According to court records, Judge Patrick M. Flatley plans to approve the offer for the 207-bed hospital from Alecto Healthcare Services LLC, which is expected to continue operating the facility located about 90 miles south of Pittsburgh. The Long Beach, Calif.-based Alecto promised to pay another $300,000 one year after the deal closes and spend at least $5 million on hospital improvements during the next two years, according to earlier court documents.

Nautilus Holdings Ltd., a Bermuda-chartered company that leases container ships, has filed for chapter 11 protection, becoming the latest victim of a depressed shipping industry, Reuters reported yesterday. The company has about $770 million in debt, according to papers filed on Monday with the U.S. Bankruptcy Court in Manhattan. International shipping rates have fallen in recent years as large new vessels entered service at the same time that a sluggish global economy was curbing trade. Nautilus said that it had some profitable charter contracts and believed it was well-positioned to restructure its obligations, but it filed for bankruptcy protection to bring creditors into a single forum for negotiations.

Energy Future Holdings rejected an unsolicited $2.3 billion restructuring plan by NextEra Energy Inc. that would have given the alternative energy group a large stake in Energy Future's power lines unit, according to court filings, Reuters reported yesterday. The proposal, which was revealed in court filings on Monday, was developed by NextEra and a group of investors that hold second-lien notes issued by Energy Future's EFIH unit, which in turn controls the Oncor power distribution business. Energy Future Intermediate Holding (EFIH) rejected the proposal in favor of a plan already advanced by a group of investors who hold the unit's unsecured bonds, according to court filings. Both proposals take the form of a loan to refinance EFIH's high-yielding second-lien notes, which would cut interest costs. Rather than repay the loan, when EFIH emerges from bankruptcy the financing would convert into an equity stake of a little more than 60 percent of the company.

The U.S. Supreme Court tightened the limits on class-action lawsuits by shareholders, giving a partial victory to Halliburton Co. while stopping short of abolishing those suits altogether, Bloomberg News reported yesterday. Halliburton and business groups had sought to overturn a 1988 precedent and effectively end class-action fraud suits over securities bought on public exchanges. A divided court today refused, with Chief Justice John Roberts saying Halliburton hadn’t shown “the kind of fundamental shift in economic theory” that would warrant overruling the precedent. The court instead made it easier for defendants to prevent approval of a class action, a certification that can ratchet up the pressure on a company to settle. Roberts said that a defendant can block a class action by showing that an alleged misstatement didn’t affect a company’s stock price.