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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

Mattress Source, an independent chain of more than a dozen stores in the Midwest, has filed for bankruptcy and will shutter some unprofitable locations, the St. Louis Post-Dispatch reported today. St. Louis-based Jamat LLC, which does business as the Mattress Source, filed for chapter 11 protection on Friday. It has 13 local stores in Missouri and Illinois. In its filing, the chain said that both its assets and estimated liabilities range between $1 million and $10 million.

Glacial Energy Holdings Inc., a privately held electric company that operates in more than 20 states, received a judge's approval Monday to move forward with a sale and settlement meant to ensure its chapter 11 case will proceed without delays or additional litigation, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Christopher Sontchi overruled an objection from a Justice Department representative and signed off on a key settlement between Glacial Energy, its unsecured creditors and its senior lender. Judge Sontchi also authorized the sale of Glacial's assets to Platinum Partners Value Arbitrage Fund LP for $32.8 million plus assumed liabilities and some adjustments.

Momentive Performance Materials Inc. will likely revise its restructuring plan outline after a federal bankruptcy watchdog called it "woefully inadequate,” Dow Jones Daily Bankruptcy Review reported today. According to court papers filed by the watchdog, U.S. Trustee William K. Harrington, Momentive's current disclosure statement omits crucial information that creditors need to cast informed votes on the company's restructuring plan. Harrington said that the company's bankruptcy lawyers have told him they'll file a revised disclosure statement that addresses his concerns, but he still took the defensive step of filing an objection Thursday should those revisions not be sufficient.

When General Motors Co. entered bankruptcy court five years ago, it used the laws to slash labor costs, shed factories and rid itself of billions of dollars in debt, the Wall Street Journal reported today. Now the automaker is turning to chapter 11 to try to solve a new problem: potential liability stemming from the ignition-switch problems that emerged publicly in February. In recent weeks, the company's lawyers have argued that the 2009 bankruptcy filing, in which the debt-laden "Old GM" sold its best assets to a new, government-backed company and left the rest behind, shields it from certain liabilities stemming from its ignition-switch problems. Whether GM gets stuck with a tab for those liabilities, which could run into the billions of dollars, is now largely in the hands of Bankruptcy Judge Robert Gerber. GM's argument — that it is unfair to make the company pay for liabilities it expressly gave up five years ago — holds appeal, said David Skeel, a bankruptcy expert and law professor at the University of Pennsylvania. "The point of corporate bankruptcy is to bring all the stakeholders into one place, resolve the problems and start over," he said. "When you allow multiple bites at the apple," he added, the bankruptcy process "falls apart." Skeel and others say that, in rare situations, it makes sense to allow creditors to "re-open" a bankruptcy reorganization to press old claims. A company, for instance, shouldn't be allowed to hide possible liabilities, then claim they are wiped away with its bankruptcy filing in the rear-view mirror. "The plaintiffs here have a sympathetic argument — that you can't just cut off a creditor's rights without first giving them notice" that those rights exist, said Stephen Selbst, a bankruptcy lawyer in New York not involved in the GM case.

A bankruptcy judge today could clear Platinum Partners Value Arbitrage Fund LP to take over struggling Glacial Energy Holdings Inc. after winning a bankruptcy auction earlier this month, the Wall Street Journal reported on Saturday. The value of Platinum Partners’ winning offer hasn’t been disclosed in documents filed to the U.S. Bankruptcy Court in Wilmington, Del. Throughout the case, Glacial Energy was able to spend a $122 million bankruptcy loan from a senior lender, which had also offered to purchase Glacial Energy out of bankruptcy but lost at auction. Bankruptcy Judge Christopher Sontchi needs to approve the Platinum Partners deal before it can close.

A bankruptcy judge yesterday refused to sign off on chapter 11 plan voting materials for Coldwater Creek Inc. and urged the liquidating retailer and its creditors to work out their differences over the payout scheme, the Wall Street Journal reported today. Bankruptcy Judge Brendan Shannon cited concerns that litigation over the money raised in the liquidation of the women’s clothing seller will erode the value gathered in Coldwater Creek’s bankruptcy and cost creditors more than they will gain. Coldwater Creek is no longer operating its stores but liquidators continue to run going-out-of-business sales, and a private equity firm that bought the brand has said it will revive the clothing line.

Natrol Inc. filed for bankruptcy yesterday, a day after a U.S. judicial panel consolidated several class actions accusing the health supplement maker of false marketing of its joint relief products, Reuters reported yesterday. Natrol, a unit of Plethico Pharmaceuticals Ltd. of India, also owns the Laci Le Beau dieter's teas, NuHair and Shen Min hair loss treatments and MRI and Prolab strength supplements. Natrol has been the target in the past year of at least three lawsuits seeking class action status filed in California, Illinois and New York federal courts. The lawsuits say that Natrol's glucosamine-related supplements cannot provide the advertised benefits of regenerating cartilage, lubricating joints and providing comfort, according to court documents.

A Long Island olive importer is asking a bankruptcy judge to decide how much it owes customers for allegedly selling processed olive oil as pure, the Wall Street Journal reported today. Kangadis Food Inc., which is fighting claims that it improperly marketed a chemically treated olive byproduct as “100 percent pure olive oil,” recently sought bankruptcy protection in an attempt to put the brakes on a class-action suit over the alleged mislabeling. The family-owned company filed for chapter 11 Friday in U.S. Bankruptcy Court in Central Islip, New York, saying that the approximately $1.4 million in legal fees it has racked up over the past year and a half have hurt what is otherwise a profitable business. The goal of the filing, according to Kangadis Food’s bankruptcy lawyer, is to avoid paying an estimated $750,000 to $1 million more to defend itself in a class-action suit scheduled to go to trial in September.

A judge said that James River Coal Co. can pay up to $2.7 million in bonuses to its top executives, rejecting a challenge to the payments by the federal government’s bankruptcy watchdog, the Wall Street Journal reported today. Bankruptcy Judge Kevin R. Huennekens said yesterday that James River could pay the bonuses to nine top executives and approved a separate set of bonuses for 39 non-executives, with that pool totaling up to $1.4 million. U.S. Trustee Judy A. Robbins objected to the executive bonus plan because Judge Huennekens said that details of the bonuses could be filed confidentially with the court for competitive reasons. Robert B. Van Arsdale, an assistant to Robbins, argued that without publicly disclosing the terms of the packages, it’s impossible to know if they comply with the Bankruptcy Code.