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The U.S. Trustee’s office urged a group of Energy Future Holdings Corp.’s creditors to wait at least 30 days before asking a judge to approve a second committee to represent debt holders in the company’s $49.7 billion bankruptcy case, said the U.S. Trustee, Bloomberg News reported on Friday. “The appointment of a second creditors’ committee at this time is premature,” Richard L. Schepacarter, an attorney with the Office of the U.S. Trustee said in a court filing on Thursday. Last month, American Stock Transfer & Trust Company LLC asked the U.S. Trustee to appoint a second panel to represent lower ranking creditors of Energy Future. American Stock is the indenture trustee for investors holding the company’s so-called legacy notes and some debt related to the company’s 2007 leveraged buyout. Energy Future filed bankruptcy in April, listing $49.7 billion of debt. A plan negotiated with senior lenders to split the company in two and give each piece to a different group of creditors was abandoned last month in the face of opposition by lower-ranking debt holders.

A judge yesterday said that the trustee unwinding Lehman Brothers Inc. could create a $3 billion-plus fund to pay back unsecured creditors of the brokerage, Dow Jones Daily Bankruptcy Review reported today. A spokesman for James W. Giddens, the trustee in charge of the brokerage, said Bankruptcy Judge Shelley C. Chapman approved the creation of the fund at a hearing yesterday. Giddens said that he expects the distribution to begin in September, marking the first time he has put a timetable on it.

A bankruptcy judge on Friday pushed back a decision on a proposal to auction Atlantic City-based Revel Casino Hotel, which last month filed for chapter 11 protection while it searches for a buyer, Dow Jones Daily Bankruptcy Review reported today. During a bankruptcy court hearing, Revel and its unsecured creditors were unable to come to terms over disputes involving the right of Revel's lender to credit bid as well as the timeline for submitting bids.

The debtors in the Garlock Sealing Technologies bankruptcy proceeding have filed a heavily redacted opposition to reopening the sealed record of 2013’s estimation hearing that led to only $125 million being placed in a trust for asbestos claimants, the Washington Examiner reported today. The company’s asbestos personal injury claimants’ committee has asked a bankruptcy judge to reopen the record, claiming the debtors misled and committed a fraud upon the court. The debtors claim that the arguments presented by the committee in its motion provide no sound reason for reopening the estimation record as most arguments have already been rejected by the court. The debtors — which include Garlock, Garrison Litigation Management Group and The Anchor Packing Company — filed their opposition on July 3 in the U.S. Bankruptcy Court for the Western District of North Carolina. The action arises out of Judge George Hodges’ Jan. 10 bankruptcy ruling in favor of Garlock, ordering the gasket manufacturer to put $125 million in an asbestos trust — roughly $1 billion less than what plaintiffs’ representatives felt was proper. In his decision, Hodges noted how attorneys had been withholding evidence while pursuing claims against Garlock.

The trustee in charge of Jeffrey Soffer's failed Fontainebleau Las Vegas casino project has struck a settlement that would put more than $83 million of directors and officers insurance money into creditors' pockets, Dow Jones Daily Bankruptcy Review reported today. In a filing with U.S. Bankruptcy Court in Miami, lawyers for chapter 7 trustee Soneet R. Kapila said that the settlement also removes $675 million in claims against the Fontainebleau estate.

LightSquared Inc., Philip Falcone’s wireless broadband company, agreed on tentative terms of a reorganization plan that would give majority ownership to JPMorgan Chase & Co. (JPM), Fortress Investment Group LLC and Cerberus Capital Management LP, Bloomberg News reported yesterday. Falcone’s Harbinger Capital Partners LLC would retain a small stake under the plan, which will work only if LightSquared exits bankruptcy by Sept. 30, Joshua Sussberg, a lawyer for a special LightSquared committee, told Bankruptcy Judge Shelley Chapman yesterday. The agreement was reached in mediation following a dispute with creditor Charles Ergen over how his $1 billion in debt would be treated. The plan would be financed with a $1.3 billion first-lien credit facility and the investment of $1.75 billion in new money, Sussberg told Chapman. Cerberus, Fortress and JPMorgan would end up with 74 percent of LightSquared’s new common equity and Harbinger would have 12.5 percent, Sussberg said.

Bankrupt Energy Future Holdings' novel plan to sell itself through a loan provision has Texas's largest power company in hot water with creditors, who accuse it of trying to skirt a public sale process and hiding its true value, Reuters reported yesterday. The company and its creditors are heading for a courtroom showdown on Monday when Energy Future will seek a judge's approval to take on a $2 billion loan that would give a group of hedge fund lenders 60 percent of the company when it emerges from its $48 billion bankruptcy. Other creditors have cried foul, saying that Energy Future hasn't considered competing offers and is selling itself without a traditional court-supervised bankruptcy auction. Creditors have estimated Energy Future has a total enterprise value, which includes debt, of $21 billion thanks to its EFIH unit, which owns Texas's biggest power lines operator, Oncor.The fight centers on EFIH's plan for a debtor-in-possession loan that would refinance high-yielding notes. Energy Future can consider alternate transactions, but creditors said once the loan is approved restrictive provisions will deter any potential bidders. John Penn, a bankruptcy attorney at Perkins Coie in Dallas, who is not involved in the case, said the judge has flexibility to decide what to with the assets if he rejects the company proposal on Monday. "Sometimes it becomes a formalized process with bid procedures and other times you just have the competing parties show up in court with their offers and each makes their pitch," said Penn.

Energy Future Holdings rejected an unsolicited $2.3 billion restructuring plan by NextEra Energy Inc. that would have given the alternative energy group a large stake in Energy Future's power lines unit, according to court filings, Reuters reported yesterday. The proposal, which was revealed in court filings on Monday, was developed by NextEra and a group of investors that hold second-lien notes issued by Energy Future's EFIH unit, which in turn controls the Oncor power distribution business. Energy Future Intermediate Holding (EFIH) rejected the proposal in favor of a plan already advanced by a group of investors who hold the unit's unsecured bonds, according to court filings. Both proposals take the form of a loan to refinance EFIH's high-yielding second-lien notes, which would cut interest costs. Rather than repay the loan, when EFIH emerges from bankruptcy the financing would convert into an equity stake of a little more than 60 percent of the company.

Creditors of Energy Future Holdings Corp., the bankrupt Texas power provider, agreed to drop objections to $4.5 billion in loans needed to keep its main operating unit running while under court protection, Bloomberg News reported yesterday. Bankruptcy Judge Christopher Sontchi said yesterday that he will approve the loans once he sees the final wording of the terms. The company may still face opposition to a separate proposed package of $5.4 billion in loans that would be used to pay off bondholders of the company’s regulated unit. The judge said he will consider approving those loans at a hearing today.

The former Fisker Automotive Inc. appears headed for a peaceful end to its bankruptcy, having reached an accord with the official committee of unsecured creditors over terms of a cash-sharing plan, the Wall Street Journal reported today. Announced in a court filing yesterday, the agreement heads off the threat of a major clash next week, when the bankruptcy case of the former hybrid auto maker enters its final stages. China's Wanxiang Group bought the car-making operation at a bankruptcy auction, leaving $149.2 million worth of cash and stock for Fisker creditors. Fisker's creditor’s committee forced the auction after a fight with the company, which advocated a private deal with a company affiliated with Hong Kong billionaire Richard Li, an early Fisker backer.