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A federal judge has agreed to slow the chapter 11 case of Genco Shipping & Trading Ltd., scheduling a four-day trial in the middle of next month, as the parties gear up for a battle over how much the dry bulk shipper is worth, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Sean Lane scheduled the first day of the trial for June 12, with the likely conclusion on June 24 and a week-long recess in between. The hearing had initially been slated for June 3. (Subscription required.)
http://bankruptcynews.dowjones.com/Article?an=DJFDBR0020140523ea5nloch6…

Valuation is often a key component in chapter 11 cases. To learn more, purchase ABI’s A Practical Guide to Bankruptcy Valuation from the ABI Bookstore.
http://bookstore.abi.org/practical-guide-bankruptcy-valuation

The Oreck family is rallying to take back their namesake vacuum-cleaner company from private equity owners in a deal valued at $22 million — a price that founder David Oreck hints is cheaper than what he sold the business for a decade ago, the Wall Street Journal reported on Friday. Oreck has never stately publicly how much he profited from the 2003 sale of his company. But while his three sons lead the charge to buy the company’s 96 retail stores and 250-worker manufacturing plant in Tennessee out of bankruptcy, Oreck pointed out that the value of the business has certainly fallen in recent years. Oreck Corp. filed for chapter 11 protection on May 6, saying that the business has struggled against competitors and that sales have declined since 2010. The company has changed hands since the Oreck family sold it in 2003, and it’s now controlled by Black Diamond Commercial Finance LLC.

Fiat SpA and a United Auto Workers trust each appeared to score points with a Delaware judge yesterday during a hearing that could help determine what the Italian company has to pay to acquire the rest of car maker Chrysler Group LLC, Reuters reported yesterday. Fiat Chief Executive Sergio Marchionne wants to buy a minority stake in Chrysler that is held by the trust to create the world's seventh-largest automaker and give Fiat the added cash flow and scale to ride out Europe's economic slump. The two sides differ sharply on the value of Chrysler's equity, which the union trust has estimated at $11.493 billion and Fiat says is worth $4.68 billion, according to court papers. The dispute stems from Fiat's call option to buy from the trust a 3.3 percent stake in Chrysler and has offered to pay $139.7 million. The UAW trust has said in papers filed with Delaware's Court of Chancery that the stake is worth at least $342 million.

A Fitch Ratings analysis of corporate bankruptcies released yesterday found that fundamental estimates of reorganization enterprise value or negotiated settlement values used in bankruptcy reorganization plans are critical to the success of an issuer's reorganization process, Reuters reported yesterday. On average, the 75 defaulted issuers in Fitch's sample eliminated 68 percent of pre-petition debt through their bankruptcy processes, with debt reduction in 73 of 75 cases. Fifteen companies emerged with no debt outstanding due to being completely liquidated or emerging as going concerns with no debt. Relative position in the capital structure was also a key determinant of recovery. First-lien creditors fared much better than junior creditors in terms of ultimate recoveries: 54 percent of the 99 secured claims (all priorities) received plan distributions that resulted in recoveries of at least 91 percent of the claim amounts. Creditor recoveries on unsecured debt were more widely distributed: 43 percent of the 71 unsecured issues received distributions of 10 percent or less of their claim amount and 16 percent recovered at least 91 percent. Read more: http://www.reuters.com/article/2013/02/14/idUSWNB0035C20130214

Looking for further information and current analysis on the latest valuation topics? Don’t miss VALCON 2013 next week in Las Vegas. Not able to attend the conference? Be sure to pick up a copy of ABI’s latest title, A Practical Guide to Bankruptcy Valuation, from the ABI Bookstore.

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-…

The primary industry group for the corporate loan market warned that any attempt to limit the rights of secured creditors in the event of a bankruptcy could have a broader impact on companies' access to and cost of capital, the Wall Street Journal's CFO Journal reported today. The comments by the Loan Syndications and Trading Association (LSTA) were aimed at the American Bankruptcy Institute's Chapter 11 Commission, which is currently studying the 1978 bankruptcy code for areas in need of updating. The LSTA's general counsel Elliot Ganz announced the formation of a working group on the ABI's review that any attempt to limit secured creditors' rights could limit companies' access to capital both before and after bankruptcy, because lenders will feel less protected. Robert Keach, co-chair of the ABI Chapter 11 Commission, said that the Commission has so far only identified the role of secured debt in bankruptcies as an area of study and hasn’t taken any position on the issue. "The ABI commission is certainly not looking at the prevalence of secured debt that’s occurred over the last 30 years as a problem to be solved," he said. "We mentioned it in the mission statement because there have been changes that have occurred over time that have made the current Code somewhat obsolete."

The next hearing of ABI's Chapter 11 Commission will be on Thursday, Nov. 15, at the CFA Annual Convention in Phoenix. For more information on the public hearing schedule and the work of the Commission, please click here: http://commission.abi.org/

Overseas Shipholding Group Inc.'s warning that it may file for bankruptcy protection has companies that lease ships to the world's No. 2 tanker operator scrambling to find alternative customers and writing down the value of their OSG contracts, Reuters reported yesterday. Nearly 35 percent of OSG's 112-vessel fleet is leased, with contracts ending between 2013 and 2018. OSG, which has a stock market value of about $36 million, said last week that it was evaluating options including filing for bankruptcy protection as a result of a tax issue that could force it to restate results for at least the last three years. OSG's main credit line, a $1.5 billion fully drawn facility, is set to expire in February, leaving it with few options other than to restructure, shipping and restructuring experts said.

Nova Financial Holdings Inc. filed for bankruptcy after its banking unit was closed by regulators, making it the 47th bank to fail in the U.S. this year, Bloomberg news reported today. The chapter 7 petition for the bank holding company listed assets of as much as $100,000 and debt of as much as $50 million. Nova Bank had about $483 million in assets and $432 million in deposits as of June 30, according to a Federal Deposit Insurance Corp. statement. The Pennsylvania Department of Banking closed Nova Bank on Oct. 26, according to the FDIC, which became the receiver. The FDIC was unable to find another financial institution to take over the banking operations. Nova Bank’s failure will cost the Deposit Insurance Fund about $91.2 million, the FDIC estimated.

A123 Systems Inc., the electric-car battery maker that recently filed for bankruptcy, is seeking emergency approval to tap a $50 million loan provided by a Chinese auto parts maker to fund its chapter 11 case pending an auction of the clean energy firm, the Wall Street Journal reported yesterday. Lawyers for A123 Systems said on Sunday in a bankruptcy court filing that Chinese auto parts maker Wanxiang Group Corp. will provide the debtor-in-possession financing, replacing initial lender Johnson Controls Inc. Wanxiang's bankruptcy loan, which cuts the interest rate to 12 percent from 15 percent from Johnson Controls' initial offer, comes as a bidding war heats up between the two companies vying for the Massachusetts-based battery maker's assets.

Bankruptcy Judge Christopher Sontchi told Japanese chipmaker Elpida Memory Inc. that he was "troubled" by the firm's inadequate efforts to keep creditors informed about its bankruptcy process, and warned he may upend its proposed sale to U.S. rival Micron Technology Inc., Reuters reported yesterday Elpida's main bankruptcy proceeding is being handled by a district court in Tokyo, but Judge Sontchi said that the company was taking a risk by not keeping creditors better informed. Judge Sontchi will eventually have to approve the transfer of U.S. assets after a sale is cleared by the Japanese court.