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A judge yesterday approved a payout to MF Global's unsecured creditors, who have waited nearly three years as customers of the collapsed brokerage already had their money returned, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Martin Glenn said James W. Giddens, the trustee in charge of winding down the brokerage, could pay the unsecured creditors about $295 million. A lawyer for Giddens said that distributions to the unsecured creditors could begin as soon as the order is final, which typically takes two weeks. He also said settlements of unresolved claims could soon result in "very substantial" creditor distributions beyond the one approved yesterday.

An examiner will be appointed to conduct an investigation into the bankruptcies of two affiliates of troubled Indianapolis-based developer HDG Mansur, the Indianapolis Business Journal reported today. HDGM Advisory Services LLC and HDG Mansur Investment Services Inc., which manage Shariah-compliant investment funds, filed petitions for chapter 11 protection in Indianapolis on May 21 to fend off a $5.8 million judgment from a lawsuit filed in New York federal district court in January 2013 by funds previously managed by the bankrupt companies. At a Sept. 16 hearing, a bankruptcy judge in Indianapolis denied a request to appoint a chapter 11 trustee or convert the case to a liquidation in chapter 7, according to court records. The request was made by KFH Capital Investment Co. and Kuwait Finance House Real Estate Co. The judge granted the KFH entities’ request for an examiner. He also scheduled a Sept. 22 hearing to consider renewed requests by another creditor to appoint a trustee or convert the case to chapter 7 liquidation, according to court records.

Two affiliates of troubled Indianapolis-based developer HDG Mansur oppose requests to appoint a chapter 11 trustee or convert the case to a liquidation in chapter 7, saying that significant progress has been made toward a plan and global settlement of claims, the Indianapolis Business Journal reported today. HDGM Advisory Services LLC and HDG Mansur Investment Services Inc., which managed Shariah-compliant investment funds, filed court papers Sept. 11 opposing the requests. The requests were made by KFH Capital Investment Co. and Kuwait Finance House Real Estate Co., which sued Mansur Investment and owner Harold Garrison in the United Kingdom for breach of contract, fraud and negligent misrepresentation, according to court papers. The KFH entities aren’t eligible to seek such “drastic measures” because they’re not creditors of, nor do they have claims against, both debtors, according to the fund managers. They are motivated by “some other unstated purpose,” not their chapter 11 rights or distributions in the case, the fund managers said in the court filings.

Bankruptcy Judge Robert Drain ruled yesterday that senior bondholders of bankrupt Momentive Performance Materials cannot change their votes to accept the quartz and silicone maker's proposed restructuring, Reuters reported yesterday. Knocking down what he viewed as an effort to avoid a less desirable payout, Judge Drain denied the bondholders' request to switch their votes. Waterford, N.Y.-based Momentive, owned by Apollo Global Management, filed for protection under chapter 11 protection in April with a contentious proposal to cut $3 billion in debt and transfer control to a class of junior bondholders that also included Apollo. The offer by senior bondholders to change their votes met with resistance from Momentive, which viewed the shift as an effort to avoid repayment in the form of a long-term note, rather than cash.

Momentive Performance Materials Inc. amended its restructuring plan to comply with a bankruptcy judge's requirement that the silicone and quartz producer pay its top-ranking bondholders a slightly higher interest rate, Dow Jones Daily Bankruptcy Review reported today. With the updated plan, filed on Wednesday in bankruptcy court, Momentive took what is likely to be the final step in securing Judge Robert Drain’s signature on its proposal to slash more than $3 billion from its balance sheet. Under the revised plan, first-lien bondholders will receive an added 0.5 percentage points for a total interest rate of about 4.1 percent.

Some senior lenders to Apollo Global Management LLC’s Momentive Performance Materials Inc. said that they want to change their vote on the chemical company’s bankruptcy plan to “yes” so that they can collect a cash payment, Bloomberg reported yesterday. Momentive Performance had offered the senior lenders full repayment in cash, but no premium to compensate for early redemption of their notes if they voted in favor of the plan. If they voted against it, they were entitled to replacement liens, not cash. This week, some of those lenders said that they were willing to drop their opposition after Hon. Robert Drain criticized them for not taking the cash. The judge gave them a day to negotiate with the Waterford, N.Y.-based company, which makes silicone and quartz products. After they returned to court without a settlement, Judge Drain ruled that the lenders had no enforceable right to the premium and gave the reorganization plan his conditional approval, saying that Momentive Performance had to raise the rates on some of the debt being issued under the new plan. Momentive Performance has set Sept. 9 for the hearing on plan confirmation. The case is In re Momentive Performance Materials Inc., 14-bk-22503, U.S. Bankruptcy Court, Southern District of New York (White Plains).

Momentive Performance Materials Inc. is set to face court rulings on its bankruptcy plan, including on a proposal to withhold some payments for unpaid interest that has senior lenders at odds with lower-ranked creditors, Bloomberg reported today. U.S. Bankruptcy Judge Robert D. Drain said that he would render his decision on whether to confirm the plan and on related lawsuits today. The Waterford, N.Y.-based maker of silicone and quartz products filed for bankruptcy protection in April after struggling to meet payments on debt dating to its $3.8 billion buyout by Leon Black’s Apollo Global Management LLC in 2006. One dispute involves special premium payments to first-lien lenders based on unpaid interest. Under the proposed plan, the lenders will be repaid in full, but without the interest. Momentive said that the premium is not earned if the debt comes due on account of the bankruptcy. A decision to award the so-called make-whole premiums to the creditors would reduce the payments available to lower-ranked creditors. The judge must also decide whether unsecured noteholders are subordinated by contract to second-lien noteholders. The case is In re Momentive Performance Materials Inc., 14-bk-22503, U.S. Bankruptcy Court, Southern District of New York (White Plains).

Freedom Industries Inc., the company behind a chemical spill that contaminated a significant swath of West Virginia's water supply, filed a creditor-payment plan that aims to start resolving the claims brought by those affected by the spill, the Wall Street Journal reported today. Freedom Industries in a Monday court filing provided an outline of its plan, on which creditors must eventually vote. That includes general unsecured creditors, who would receive nearly a dime for every dollar of the approximately $8.5 million they are owed. The proposal is buoyed by two recent settlements. The first is a $2.9 million compromise with attorneys representing local residents and businesses, with the money earmarked for health studies, water testing or other projects to benefit individuals as well as the businesses that were forced to close in the wake of the spill. The settlement would end about two dozen lawsuits filed against Freedom Industries. The other deal is one Freedom Industries struck in June with AIG Specialty Insurance Co., which provided insurance coverage to Freedom Industries before the Jan. 9 spill. The agreement calls for AIG to pay nearly $3 million to Freedom Industries, which has faced a number of claims in connection with the spill, from civil lawsuits to cleanup costs.

Momentive Performance Materials, the quartz and silicone maker owned by Apollo Global Management, will embark Monday on a week of hotly contested hearings seeking court approval of a plan to cut $3 billion in debt and exit bankruptcy, Reuters reported today. The Waterford, N.Y.-based company filed for chapter 11 protection in April with an agreement to transfer control to a class of bondholders, but most other creditors have vigorously opposed the plan. Bankruptcy Judge Robert Drain has set aside four days this week — Monday, Tuesday, Thursday and Friday — to hash out the disputes in his courtroom and decide whether to approve the plan. The deal is premised on a $1.3 billion loan from JPMorgan Chase & Co. and a $600 million rights offering available to holders of second-lien bonds, who would walk away with Momentive's equity.

Junior creditors of Energy Future Holdings can review company financial records, a judge ruled yesterday, as the bankrupt Texas utility trudges through an increasingly complicated bankruptcy, Reuters reported yesterday. Granting a request from second-lien bondholders of Energy Future's TCEH power generation unit, bankruptcy Judge Christopher Sontchi endorsed broad discovery procedures at a hearing in his Delaware courtroom, mostly centered on transactions that occurred before Energy Future's chapter 11 filing in April. The move could herald future litigation in what is already a tangled case. Wilmington Savings Fund Society, the trustee for the second-lien group, wants to study Energy Future's collapse with an eye toward determining if certain transactions can be unwound due to fraud or other improprieties. Energy Future, the former TXU Corp, is the product of a record-breaking $45 billion buyout in 2007 by KKR & Co., TPG Capital Management and the private equity arm of Goldman Sachs. It filed for chapter 11 after years of lower-than-forecast power prices to restructure more than $40 billion in debt.