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Source Home Entertainment, which trucked magazines from warehouses to retailers for Time Inc. and other publishers, filed for chapter 11 protection after losing money for years, the New York Post reported today. While Time Inc., which publishes some of the best-read magazines in the country, like People, Sports Illustrated and InStyle, was the hardest hit by Source’s shuttering, the entire industry felt the blow, and some retailers could see a magazine shortage this summer as the industry looks for other companies to fill the void and get their titles to stores. Source is owned by Golden Tree Asset Management, a hedge fund, with an 82 percent stake; JPMorgan owns 9.3 percent and GE Capital has a 5.7 percent stake. In its filing, Source listed assets of $205 million and debts of $290 million, as of March 31. Source Home Entertainment, which filed for court protection for its operating unit, owes Time Warner Retail Sales $53,776,843, according to court papers. Time Inc., in a regulatory filing last month, said that it expected Source’s shutdown to cost it about $14 million in net profit in 2014.

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.

Brookstone Holdings Corp. won a judge's approval yesterday to sell itself to a consortium of Chinese investors that plans to continue operating the majority of the specialty retailer's 240 stores after the company exits bankruptcy, the Wall Street Journal reported today. The sale to Sailing Innovation US Inc. would form the centerpiece of a bankruptcy exit plan, approved yesterday by Bankruptcy Judge Brendan Shannon. The plan seeks to pay off Brookstone's approximately $51 million in bank loans with a loan provided by bondholders funding the restructuring. Sailing Innovation — a consortium made of investment firm Sailing Capital Overseas Investment Fund LP and conglomerate Sanpower Group — agreed to buy Brookstone at a June 2 auction with a bid of about $174 million.

Energy Future Holdings Corp., the subject of the largest leveraged-buyout ever, revised a $1.9 billion loan to help it emerge from bankruptcy after a group of creditors submitted a competing plan with NextEra Energy Inc., Bloomberg News reported yesterday. The original second-lien debtor-in-possession loan will convert into 60 percent of the equity in a newly reorganized company, down from 64 percent initially described in the restructuring proposal. The interest rate on the debt will be reduced to 6.25 percent from 8 percent. The former TXU Corp. filed for chapter 11 protection on April 29 in a bid to restructure its $49.7 billion of debt after falling natural gas prices undercut the electricity provider’s ability to remain profitable. KKR & Co., TPG Capital and the private-equity unit of Goldman Sachs Group Inc. took Dallas-based Energy Future private for $48 billion in 2007.

Brookstone Holdings Corp. will go before a bankruptcy judge this week to seek approval of its bankruptcy exit plan, the Wall Street Journal reported on Saturday. The centerpiece of the retailer’s plan is a $174 million bid to buy the company from Sailing Innovation US Inc. — a collaboration between Chinese investment firm Sailing Capital Overseas Investment Fund LP and Chinese conglomerate Sanpower Group, with a financing commitment from GE Capital. The consortium’s bid trumped a $146.3 million offer by an affiliate of Spencer Spirit Holdings Inc., the parent of the Spencer’s and Spirit Halloween retail chains, which had served as the lead bidder at a June 2 auction. Under the current plan, Brookstone’s unsecured creditors will receive at least $1.25 million, plus a chance to collect as much as $1.5 million more depending on how much money comes in from the sale. The plan also proposes to pay off the company’s approximately $51 million in bank loans with a loan provided by bondholders funding the restructuring.

Bankruptcy Judge Susan V. Kelley ruled on Friday that she does not have jurisdiction to approve the Archdiocese of Milwaukee's reorganization plan while key questions in a related lawsuit over $60 million it holds in trust for the maintenance of cemeteries are pending before the Seventh Circuit Court of Appeals, the Milwaukee Journal Sentinel reported today. The decision is a victory for the creditors committee, which had sought to block approval of the plan until the appellate judges rendered their decision — a process some have said could take a year. And it has forced the cancellation of the October confirmation hearings, at least for now — a setback for the archdiocese. At issue before the Seventh Circuit is whether forcing the archdiocese to put even $1 of the cemetery trust into the bankruptcy estate — and ultimately a settlement for clergy sex abuse survivors — would violate its free exercise of religion under the First Amendment and the 1993 Religious Freedom Restoration Act. Judge Kelley ruled earlier that it would not. She was overturned by U.S. District Judge Rudolph T. Randa, who found that cemeteries and their proper care play a central role in the Catholic belief in the resurrection of the body after death. The appellate court also is considering a request by the creditors committee that Randa be barred from hearing any issues related to the cemetery trust because of a conflict of interest.

Settlement talks may be in the works as the long-running trial over Nortel Networks Corp.'s billions winds to a close this week, Dow Jones Daily Bankruptcy Review reported today. Lawyers who have been battling for at least three years over how to divide $7.3 billion raised in the liquidation of the onetime telecommunications giant last week filed court papers that refer to discussions that could end the fighting. Nortel's various national factions have been caught up in a pitched battle over how to allocate the company's money among competing national units. Judges in Toronto and Wilmington are reviewing the bond interest briefs filed this week by Nortel Canada and Nortel U.S., an exchange sparked when it was suggested that getting a fast answer on the bond interest rate could advance the cash trial.

When women’s clothing retailer Coldwater Creek filed for chapter 11 protection in April, the company went out of its way to tell a bankruptcy judge that it planned to continue honoring gift cards and other customer service programs for the purpose of “preserving goodwill and maximizing revenue during the liquidation process,” the Wall Street Journal reported on Saturday. One customer promotion, however, didn’t make the cut — tens of thousands of Groupon deals offering Coldwater Creek shoppers $50 worth of merchandise for $25. In a court filing made on June 18, Groupon — the Chicago-based purveyor of deals on everything from restaurant meals to sky diving adventures — says that Coldwater Creek customers still held $2.8 million in unredeemed vouchers when the retailer went into bankruptcy. Unlike other promotions, the Groupon certificates were no longer accepted after the company’s bankruptcy filing, an attorney for Coldwater Creek confirmed Friday. Since the stores began rejecting the deals, Groupon has issued about $1.29 million in refunds to Coldwater Creek customers, according to its recent filing, and “that amount will continue to increase.”

Kid Brands Inc., which designs and makes infant bedding, furniture and toys sold under brands including Carters and Graco, filed for bankruptcy protection with a plan to sell its assets, Bloomberg News reported yesterday. The East Rutherford, N.J.-based company listed assets of $32.4 million and debt of $109.2 million in chapter 11 papers filed on Wednesday. The board’s decision to sell “is in the best interests of the company and its stakeholders” and followed a review of strategic and financing alternatives, Kid Brands said today in a statement. Kid Brands will seek approval of $49 million in debtor-in-possession financing from existing lenders Salus Capital Partners LLC and Sterling National Bank so it can continue to operate in bankruptcy, according to the statement. Units that sought court protection were Kids Line LLC, LaJobi Inc., Sassy Inc. and CoCaLo Inc. Affiliates I&J HoldCo Inc. and RB Trademark Holdco LLC also filed. The case is In re Kid Brands Inc., 14-bk-22582, U.S. Bankruptcy Court, District of New Jersey (Newark).

Vitamin and supplement seller Natrol Inc. yesterday asked a bankruptcy judge to allow it a shot at survival in spite of having veteran distressed lender Cerberus Business Finance LLC hot on Natrol's heels, demanding the ouster of the company's management, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Brendan Shannon indicated that he would grant Natrol spending authority to preserve the business while the battle with the lender plays out.