%1

Since filing for bankruptcy nearly five years ago, the Lehman estate has paid more than $2 billion in fees and expenses to professionals, dwarfing the previous record of $757 million in Enron Corp.’s bankruptcy, Bloomberg News reported today. In exchange for that pay, approved by the bankruptcy court, Lehman creditors are poised to get 18 cents on the dollar by 2016 from an estate valued at $65 billion, according to a liquidation plan approved in December 2011. Harvey Miller, Lehman's lead attorney, estimated that the recovery may rise to as much as 22 cents on the dollar as the value of Lehman’s assets increases over the next three years to about $80 billion. Lehman, which listed $613 billion in debt when it filed, is scheduled to pay out $14 billion to creditors on Oct. 3, bringing total distributions to $43 billion since its chapter 11 plan was approved, according to court records.
http://www.bloomberg.com/news/print/2013-09-11/lehman-recovery-seen-as-…

ABI will be holding a media teleconference at 2 p.m. ET tomorrow with primary figures involved in the Lehman chapter 11 filing to examine the Lehman case and the lessons learned from it, so that large financial institutions can be better equipped to emerge from financial distress in the future. Experts on the teleconference include Bankruptcy Judge James Peck, Harvey Miller of Weil, Gotshal & Manges LLP (New York), Dennis Dunne of Milbank, Tweed, Hadley & McCloy (New York), Bryan Marsal of Alvarez and Marsal (New York) and Chris Kiplock of Hughes Hubbard & Reed LLP (New York). There is limited space available for ABI members that would like to join the teleconference. To join, please contact ABI Public Affairs Manager John Hartgen at jhartgen@abiworld.org.

Furniture Brands International Inc. filed for chapter 11 protection yesterday and said that it plans to sell most of its business, which includes names such as Thomasville, Drexel Heritage and La Barge, Reuters reported yesterday. The St. Louis-based company said that it agreed to sell all of its brands except Lane Furniture to Oaktree Capital Management, an investment firm that specializes in buying assets from bankrupt companies. The sale agreement will be subject to higher bids and a court-supervised auction. The money from the auction will be used to repay Furniture Brands creditors. Oaktree also committed to providing a $140 million debtor-in-possession or DIP loan to finance the bankruptcy case.

The government's bankruptcy watchdog is objecting to a California developer's plan to bring a long-stalled Hawaii development project known as Hokuli'a out of bankruptcy under the control of an investment group that includes the chairman of retailer Wal-Mart Stores Inc., Dow Jones Newswires reported yesterday. Acting U.S. Trustee Tiffany L. Carroll is objecting to the disclosure document of developer 1250 Oceanside plan to exit bankruptcy under the control of SunChase Holdings, a California real-estate investment firm. Carroll said in a court filing on Friday that the developer's disclosure statement failed to explain how the plan's backers intend to pay the project's unsecured creditors.

The unsecured creditors' committee of Personal Communications Devices LLC is asking a bankruptcy judge to toss the $105.3 million offer set to lead bidding at an auction for the wireless device supplier's assets, Dow Jones Daily Bankruptcy Review reported today. The offer's high value is "pure fiction," the committee said in court documents filed Friday, because only a small portion of it is cash, just enough to repay Personal Communications' $46 million bankruptcy loan and some transaction expenses. The rest of the value comes from assuming and refinancing two second-lien notes worth $25 million and $36.3 million respectively, the committee said.

Longview Power LLC filed for chapter 11 protection along with certain of its affiliates, a court filing showed, as the U.S. power plant operator aims to restructure its debts to gain financial and operational flexibility, Reuters reported today. Longview Power, majority-owned by First Reserve Corp., a private investment firm, listed liabilities and assets of more than $1 billion, a court filing showed. Longview said that there will be no interruption to its business and employees will not be affected by the chapter 11 filing.

A U.S. Trustee yesterday asked a judge to convert a troubled South Dakota beef processing plant's bankruptcy to a chapter 7 liquidation, the Associated Press reported yesterday. Assistant U.S. trustee James Snyder said in a petition that he believes that Northern Beef Packers, which filed for chapter 11 bankruptcy protection last month, is "administratively insolvent" based on company reports and statements. "Based on currently available information, it appears the plant represents the only asset by which Debtor may generate funds to pay creditors," Snyder wrote. Northern Beef, based in Aberdeen, S.D., had been trying to obtain post-petition financing so it could proceed with hiring an investment banking firm to pursue a sale of the plant.

Residential Capital LLC’s disclosure statement for its reorganization was opposed by the U.S. Trustee, Bloomberg News reported yesterday. The U.S. Trustee said in a court filing yesterday that the statement doesn’t adequately describe the plan. Also, provisions of the plan contained in the disclosure statement include impermissible payments for the reimbursement of legal expenses of certain creditors, the trustee said. Unless the provisions at issue are removed, the plan “is not confirmable and neither the plan nor the disclosure statement may be approved,” the filing said. Last month, the bankrupt mortgage company filed a reorganization plan estimating unsecured creditors will recover about 36 percent of what they are owed, while debts backed by collateral will be paid in full.

Creditors of Excel Maritime Carriers Ltd. say that bondholders are preparing a rival turnaround plan for the shipping company, which has pledged itself to a bank-backed chapter 11 plan, Dow Jones Daily Bankruptcy Review reported today. Excel’s proposed plan is designed to preserve the control of owner Gabriel Panayotides while leaving convertible bondholders who are owed $100 million and unsecured creditors with a slim and chancy recovery. Members of Excel’s unsecured creditors’ committee have protested Excel’s bid to lock in senior lender control by way of bankruptcy financing and said in court filings that they would prefer to wait to see what the bondholders propose to do for them.

MF Global Inc.’s trustee said that former customers should get “significantly” increased distributions in coming months, and the goal is still 100 percent recoveries, Bloomberg News reported yesterday. Customers who traded on U.S. exchanges may get distributions starting in early September that would bring their percentage recoveries into “the high nineties” while customers who traded on foreign exchanges may get “in the sixties,” trustee James Giddens said yesterday. His projections assume that agreements with MF Global’s U.K. unit and JPMorgan Chase & Co. take effect in mid-August. A prior projection in June estimated customers would get 94 cents on their dollar. Giddens said at the time that disputes including a lawsuit against directors and officers delayed the potential for full recovery.

Hog producer AgFeed Industries Inc. filed for chapter 11 protection yesterday after agreeing to wind down its supply contract with its main U.S. customer, Hormel Foods Corp., which purchases weanling pigs and hogs from the company, the Wall Street Journal reported today. AgFeed plans to sell its U.S. operations while under chapter 11 protection, and it is also looking for a buyer for its Chinese units, which aren't included in the U.S. bankruptcy case. The Hendersonville, Tenn.-based company has lined up a $79 million leading bid for most of its U.S. assets from Maschhoffs LLC, a Carlyle, Ill., hog production network, according to court papers. The company has been involved in a dispute with Hormel that led to an arbitration award of $7.9 million against AgFeed earlier this year. This decision spurred an event of default under the company's $68.5 million credit facility, which matured in February and hasn't yet been repaid.