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Pizza chain Sbarro Inc. is one step closer to emerging from bankruptcy under the control of its first-lien lenders, the Wall Street Journal reported today. Bankruptcy Judge Shelley C. Chapman on Tuesday said that she would clear the company to distribute its reorganization plan to creditors for a vote. Judge Chapman's approval comes just a few days after Sbarro rolled out a few revisions to its plan, most notably $35 million in fresh capital lenders are now committing to funnel into the revamped company. Under the proposal Sbarro wants to use to guide its exit from chapter 11, the reorganized chain would have $110 million in new debt: $35 million in bankruptcy loans and $75 million in existing first-lien debt converted into a new term-loan facility.

Big M Inc., the owner of women’s-clothing chains Annie sez and Mandee, filed for chapter 11 protection, saying that it owes creditors as much as $100 million, Bloomberg News reported yesterday. Big M, which last year had about 150 U.S. stores, listed assets of more than $50 million in its chapter 11 filing. The company, based in Totowa, N.J., said that it is negotiating final details of a $10 million credit line with Salus Capital Partners LLC. The case is In re Big M Inc. 13-10233, U.S. Bankruptcy Court, District of New Jersey (Newark).

A month after debuting a plan to reorganize around its remaining locations, Bakers Footwear Group Inc. is reversing course and plotting the full liquidation of its chain of shoe stores, Dow Jones DBR Small Cap reported today. The St. Louis-based retailer on Jan. 2 said that it has failed to come up with a restructuring that passes muster with its secured lender or other constituents in its bankruptcy case.

Actor Patrick Dempsey promised to rescue Seattle's Tully's coffee chain with a $9.15 million bid to buy it out of bankruptcy, Reuters reported on Friday. The "Grey's Anatomy" star who plays Dr. Derek Shepherd, a surgeon at fictional Seattle Grace Hospital, said that his offer bested those from six rival bidders - including global coffee giant Starbucks Corp. Tully's owner TC Global Inc filed for chapter 11 protection to reorganize in October. Bidders said that a bankruptcy court hearing on the sale is set for Jan. 11 in Seattle.

East Coast longshoremen are threatening a strike beginning on Sunday that would shut seaports from Massachusetts to Texas, the New York Times reported today. It would be the first such coastwide strike since a two-month walkout in 1977 paralyzed the flow of tens of billions of dollars of imports — and the nation's retailers and other businesses fear a painful replay if the 14,500 dockworkers make good on their threats. The strike threat has so alarmed corporate America that more than 100 business groups wrote to President Obama last week to urge him to intervene to push the two sides to settle — and, if need be, to invoke his emergency powers under the 1947 Taft-Hartley Act to bar a strike. President George W. Bush invoked the act in 2002 to end a lockout at ports on the West Coast, where a different union represents dockworkers.

The sale of men's suit maker HMX Group for $70.1 million to Authentic Brands Group , which is owned by private equity firm Leonard Green & Partners LP , received bankruptcy court approval on Wednesday, Dow Jones DBR Small Cap reported today. The deal is expected to close Friday, according to Leonard, Street and Deinard's Robert Kugler, who represents the committee of unsecured creditors in the case.

Liquidating discount retailer Daffy's Inc. says it needs to immediately tap a fresh $12 million loan in order to complete the sale of its real estate assets and repay its creditors, Dow Jones Daily Bankruptcy Review Small Cap reported yesterday. The company, which once operated 19 stores in New York, New Jersey and Pennsylvania, says it is running out of money to pay its expenses and stay in line with its existing loans. Lacking "sufficient liquid funds," it is seeking court permission to access a new bankruptcy loan from Jericho Acquisitions I LLC, an affiliate of Manhattan-based developer JEMB Realty Corp. and the purchaser of Daffy's real estate assets under a deal negotiated before its August bankruptcy filing. A judge previously cleared Daffy's to tap a $10 million bankruptcy loan from Wells Fargo; that loan and others from the bank are set to mature Dec. 24. The deal with Jericho includes a cash payment of up to $46 million for Daffy's in exchange for certain of its store leases and intellectual property, according to court papers. A judge is set to consider Daffy's financing request at a hearing Dec. 17. Daffy's sought chapter 11 protection on Aug. 1.

Members of ABI's Chapter 11 Reform Commission said yesterday pointed to labor and benefits being key issues likely to surface during a host of public hearings beginning early next year, Reuters reported. "We'll be hearing from both labor and management about the way the bankruptcy code treats collective bargaining agreements, pension issues and the like," said Commission Co-Chair Robert Keach Bernstein Shur Sawyer & Nelson on an ABI media teleconference. In the handful of hearings so far, the commission has heard largely from lenders, many of whom have expressed concern that the commission would look to limit the use of secured credit. Commission members have said they are not looking to curb the use of secured credit so much as improve its transparency. The commission will also consider changes to rules that exempt derivatives contracts from certain bankruptcy rules and the effects on bankrupt retailers of a 2005 law that changed rules on treatment of leases in bankruptcy. About six or seven hearings will be held throughout the country next year. Read more: http://www.reuters.com/article/2012/12/03/bankruptcy-commission-idUSL1E…

To listen to the ABI media teleconference, please click here:
http://news.abi.org/educatonal-brief/teleconference-to-look-at-chapter-…

General Motors Co., saddled with large stocks of unsold cars and trucks, is taking steps to cut excess production and signaled there may be more to come, the Wall Street Journal reported today. Workers at its Lordstown, Ohio, assembly plant soon will be off the job for three weeks instead of a planned two-week Christmas shutdown as the Detroit auto maker curtails Chevrolet Cruze output. The company also said yesterday that year-end inventories of Silverado and Sierra pickups may exceed 220,000 vehicles in part due to a decision to hold the line on discounts. The higher-than-expected supply will likely push GM's overall car and truck inventory beyond a year-end target of 670,000 vehicles.

Sen. Richard Blumenthal (D-Conn.) wants to require companies in bankruptcy to honor outstanding gift cards, something they are not legally compelled to do, the Wall Street Journal reported today. Blumenthal introduced the Gift Card Protection Act, which would also bar companies in bankruptcy from continuing to sell gift cards and ban such cards from carrying expiration dates. Gift-card protections have been a pet issue for Blumenthal, who was elected to the Senate two years ago after serving 20 years as Connecticut’s attorney general. During his time as the state’s top lawyer, state laws banning gift card expiration dates and fees were restored. He also urged a bankruptcy judge to require local retailer Ski Market to honor about $200,000 gift cards after it told customers that the bankruptcy process did not allow it to do so.