%1

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.

Three former Dewey & LeBoeuf executives are asking a federal judge in Iowa to reconsider their request to put a civil suit by Aviva Life and Annuity Company on hold until a criminal case pending against them in New York is resolved, American Lawyer reported today. In its suit filed in 2012, Aviva claims that it lost 45 percent of its $35 million investment in the now-defunct firm's 2010 bond offering "as a result of false and misleading statements" by former Dewey chairman Steven Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders. All three men are currently facing criminal charges in their roles leading up to Dewey’s bankruptcy in May 2012. They are accused of lying to auditors, investors, creditors and colleagues for four years about the financial condition of the firm.
The defendants originally filed a motion to dismiss Aviva’s suit in 2013, arguing that the insurer had no standing in the case because it sold off its securities to Sea Port Group Securities for $19.2 million in the same month that Dewey went under. U.S. District Court Judge James Gritzer denied their motion in May.

Bankruptcy Judge Martin Glenn largely approved the final fee requests for the professionals working on Residential Capital LLC 's bankruptcy case, which totaled nearly $400 million, Dow Jones Daily Bankruptcy Review reported today. Judge Glenn made some small subtractions from the fee requests and said that he would rule later on the application of Morrison Cohen LLP, the law firm representing ResCap's independent directors. ResCap's liquidating trust had objected to nearly $1 million of Morrison Cohen's request for $4.3 million in fees and expenses, saying that among other things that the firm held too many unnecessary meetings.

Philip Falcone resigned from the board of LightSquared Inc., the bankrupt wireless-spectrum owner he has tried to build into a rival to U.S. mobile providers, amid negotiations with creditors to reorganize the company, Bloomberg News reported yesterday. Falcone and four other people appointed to the board by his Harbinger Capital Partners voluntarily resigned on June 12, according to a letter filed with the Federal Communications Commission and posted on the agency’s website. Falcone had been fighting to keep control of the company throughout its two years in bankruptcy. At one point, Dish Network Corp. Chairman Charles Ergen made a $2.22 billion offer for its assets, only to withdraw the bid at the last minute. Falcone accused Ergen of acquiring LightSquared debt improperly to game the bankruptcy process. Bankruptcy Judge Shelley Chapman rejected a Falcone-backed reorganization plan in May, saying that it was largely unfair to Ergen, while she also faulted Ergen’s behavior during the case. Since then, LightSquared and its creditors have entered court-supervised mediation to work out a new plan.

Argentina will seek to move its overseas bonds into local jurisdiction to skirt a U.S. court ruling forcing it to pay holders of defaulted debt in full, Bloomberg News reported yesterday. The swap will ensure holders of restructured bonds keep getting paid while allowing Argentina to avoid complying with the U.S. ruling, Economy Minister Axel Kicillof said yesterday. Cabinet officials will meet with lawmakers today to discuss how to shift investors into local-law bonds, he said. Officials overseeing South America’s second-largest economy say that the nation doesn’t have sufficient reserves to pay what they estimate could be $15 billion of claims from holders of defaulted bonds that didn’t participate in two debt exchanges following the country’s 2001 default. After the U.S. Supreme Court said on June 16 that it wouldn’t consider the case, Argentina is bound by a U.S. District Court ruling that it can’t make interest payments to holders of restructured international bonds without paying the defaulted notes as well.

For more on the Argentinian debt crisis, the Supreme Court's ruling and what happens next, make sure to attend Friday's Cross-Border Symposium on Friday in New York. The program will feature a keynote by James Millstein, who will discuss Argentina's debt situation. Millstein, chairman and CEO of Millstein & Co., represented the Republic of Argentina in connection with the exchange offer for its international bond indebtedness.
http://www.abiworld.org/CB14/

Southborough, Mass.-based data center services provider GlassHouse Technologies, poised to go public just a few years ago, has filed for chapter 7 bankruptcy, the Boston Globe reported today. The filing comes two months after GlassHouse sold its consulting division to Phoenix-based Signature Technology Group. In court documents, the company listed debts between $50 million and $100 million, owed to nearly 100 parties, and assets of less than $1 million. In the United Kingdom, a GlassHouse subsidiary owes money to that country’s customs and tax agency, according to British news reports.

A Brooklyn prep school filed for chapter 11 bankruptcy on Monday, facing declining enrollment that it says stems from negative publicity about a 2008 foreclosure action, the Wall Street Journal reported today. Adelphi Academy of Brooklyn said that it filed for bankruptcy because it’s been unable to operate profitably after enrollment dropped following 2008 news reports of a foreclosure by its lender, Metropolitan National Bank, which holds a $6.2 million note, according to court documents. The school said that while it disputes the “technical default” that caused Metropolitan to take action against it, “the resulting negative publicity significantly impacted the debtor’s reputation and resources and despite continued efforts, its student enrollment declined.” Current enrollment is at 100 students, according to court documents.

The trust in charge of overseeing Residential Capital LLC 's liquidation is trying to make the former mortgage servicer's expensive bankruptcy case a little cheaper, Dow Jones Daily Bankruptcy Review reported today. The liquidating trust, managed by Quest Turnaround Advisors LLC, is taking aim at some of the fees charged by the professionals working for the court-appointed independent examiner, including $2.5 million related to typesetting the report when, the trust says, Microsoft Word could've done the trick. The trust has no objections to the $568,612.50 charged by the examiner himself, former bankruptcy judge Arthur J. Gonzalez. The court-ordered examination, which helped get ResCap out of bankruptcy, ended up costing the estate about $90 million, more than 20 percent of the total $400 million in professional fees that ResCap's lawyers, advisers and others charged in the case.

The U.S. Supreme Court handed Argentina a major setback in its long-running battle with a small group of determined creditors, heightening the risk the country will default for the second time in 13 years, the Wall Street Journal reported today. The justices yesterday rejected Argentina's appeal of a lower-court ruling that said that the country can't make bond payments until it compensates hedge funds that refused to accept restructured debt in the years following Argentina's 2001 default. Because of that earlier ruling, Argentina must decide by the end of the month whether to reach a deal with the holdouts or default on its next debt payment. Argentina's President Cristina Kirchner has refused to negotiate with the holdouts, calling them "vultures." But in an address Monday night, she said that Argentina wouldn't default on its restructured debt and would make its interest payment at the end of June. (Subscription required.)
http://online.wsj.com/articles/u-s-supreme-court-rejects-argentina-appe…

Click here to read the Supreme Court’s ruling: http://www.supremecourt.gov/opinions/13pdf/12-842_g3bi.pdf

For more on the Argentinian debt crisis, the Supreme Court’s ruling and what happens next, make sure to attend ABI’s Cross-Border Symposium on Friday in New York. The program will feature a keynote by James Millstein addressing the topic of Argentina’s debt situation. Millstein is the chairman and CEO of Millstein & Co. During his time as a managing director and the global co-head of corporate restructuring at Lazard, Millstein represented the Republic of Argentina in connection with the exchange offer for its international bond indebtedness. Register here: http://www.abiworld.org/CB14