%1

Vegetable canner Allens Inc. is preparing to hold a Jan. 21 auction for buyers that want to challenge a competitor's $148 million purchase offer for the Arkansas business, which lost too much money on its failed expansion into frozen foods, Dow Jones Daily Bankruptcy Review reported today. In court papers, Allens’ executives said that they have reached out to more than 175 potential buyers that might want to purchase the Siloam Springs, Ark., company, which employs roughly 1,175 people and called itself one of the largest private canning companies in the world.

KidsPeace Corp., the operator of a psychiatric hospital and residential treatment centers for children, filed a reorganization plan that includes a settlement of $100 million in potential liability that is owed to the Pension Benefit Guarantee Corp. (PBGC), the Wall Street Journal reported today. According to the proposed reorganization plan filed in bankruptcy court last week, KidsPeace would pay PBGC $13.5 million to settle what the federal agency claims is a $100 million shortfall in its terminated pension plan. KidsPeace won a "distress termination" agreement from PBGC, which will move the duty to pay retirees off its balance sheet. The settlement pays $450,000 in cash up front to PBGC and the remaining $13.05 million will be paid with an interest-free note, under which KidsPeace will make $225,000 payments quarterly.

LightSquared is proposing a new bankruptcy exit plan with financing from Fortress Investment Group and other backers, as the U.S. wireless communications company seeks to avoid a sale to highest bidder Dish Network Corp., Reuters reported yesterday. LightSquared would receive $2.75 billion in fresh loans and at least $1.25 billion in equity investment from private-equity firms Fortress and Melody Capital Advisors LLC, as well as JPMorgan Chase & Co and Harbinger Capital Partners, court documents filed on Tuesday show. The plan replaces one based on an auction of the company's assets earlier this year. LightSquared scrapped that sale after Dish emerged as the only qualified bidder, with a $2.2 billion offer and terms that LightSquared found unappealing.

Lone Pine Resources Inc. is requesting bankruptcy court approval of its reorganization plan, contingent with its also receiving the Canadian bankruptcy court’s blessing early next year, the Wall Street Journal reported today. The company is scheduled to ask the Canadian court to approve its plan during a sanction hearing on Jan. 9. The approval will implement the plan in Canada, but it would still require U.S. court confirmation. Lone Pine is requesting that on Jan. 14, the U.S. Bankruptcy Court in Wilmington, Del., approve the sanction order from Canada, making the plan binding in the U.S. Lone Pine’s reorganization plan is a debt-for-equity swap that would allow it to shed $195 million in bond debt. The plan would hand equity in the reorganized company to bondholders and raise $100 million in new cash through a private rights offering. Current equityholders are being wiped out.

Ambulance operator Rural/Metro Corp., which is poised to emerge from chapter 11 protection in the coming weeks, has agreed to pay $2.8 million to the federal government to settle civil allegations of Medicare fraud, Dow Jones Daily Bankruptcy Review reported today. John S. Leonardo, the U.S. Attorney for Arizona, said yesterday that his office has agreed to a deal with Rural/Metro to settle allegations that the company violated the federal False Claims Act by submitting false bills to Medicare between 2007 and 2011. The settlement resolves allegations that various ambulance companies owned by Rural/Metro billed Medicare for transporting patients from one hospital to another on an emergency basis when, in fact, the calls were not emergencies.

W.R. Grace & Co said that it has settled the only remaining appeal for its chapter 11 plan with a group of bank lenders, paving the way for the U.S. chemicals maker to emerge out of bankruptcy protection after 12 years, Reuters reported today. The company reached a settlement with holders of its pre-petition bank debt, who have been demanding a higher interest rate on their loans, according to a court filing yesterday. Grace will pay the lender group $1.1 billion, comprising $971 million of principal and undisputed interest through Dec. 31, and $129 million in settlements, removing the last remaining obstacle to its emergence out of bankruptcy protection. Grace filed for chapter 11 protection in 2001, making it one of the longest bankruptcies in U.S. history, after an asbestos leak at one of its mines led to a slew of lawsuits.

Advantage Rent a Car won bankruptcy court approval to settle a battle with former owner Hertz Global Holdings Inc. over leased vehicles and is now seeking to borrow more than $100 million to help build its own fleet of rental cars, the Wall Street Journal reported today. Bankruptcy Judge Edward Ellington on Thursday signed off on the settlement with Hertz, which removes a significant obstacle to Advantage's future operations and will help pave the way for its proposed sale to a Canadian private-equity firm. Federal regulators ordered Hertz to spin off Advantage in connection with its $2.3 billion acquisition of Dollar Thrifty Automotive Group Inc. Under the spinoff, Hertz agreed to lease 24,000 vehicles to Advantage but disputes arose over the agreement, prompting Advantage to seek chapter 11 protection in November, shortly after the divestiture was finalized.

China's Suntech Power Holdings Co. and a group of bondholders will have to wait a little longer before a court showdown over an involuntary bankruptcy petition filed in U.S. federal court against the solar panel maker, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Stewart M. Bernstein said that he would push back a hearing to consider Suntech's bid to dismiss the involuntary bankruptcy petition to Jan. 23 from Jan. 7.

Philip Falcone’s LightSquared Inc. may get more than $2 billion in financing sponsored by Fortress Investment Group LLC that would allow him to avoid a sale to Charlie Ergen, Bloomberg News reported on Friday. Falcone has been fighting to keep control of LightSquared’s wireless spectrum assets, facing dwindling cash in bankruptcy and a $2.22 billion offer from an entity owned by Ergen, the chairman of Dish Network Corp. Yesterday, a group of lenders that includes an Ergen-owned fund said all other offers to pay for a reorganization had “vaporized.” JPMorgan Chase & Co. is in talks with lenders to lead $2 billion to $2.5 billion in financing sponsored by Fortress. Lenders would need to commit by Jan. 8, and a condition for closing is regulatory approval to use some of the company’s wireless spectrum.

A bankruptcy judge approved Michigan honey supplier Groeb Farms Inc.’s restructuring plan, paving the way for the company to emerge from chapter 11 protection under the ownership of a private equity firm, the Wall Street Journal reported on Saturday. Bankruptcy Judge Walter Shapero signed off on the plan on Thursday following a confirmation hearing. Texas investment firm Peak Rock Capital will take control of Groeb Farms after extending a $30 million bankruptcy loan to the 76-worker company, which filed for bankruptcy protection after regulators caught it illegally buying Chinese honey through other countries to avoid antidumping tariffs.