All items from Bankruptcy Beat

New York shipping tycoon Peter Georgiopoulos’s Genco Shipping & Trading filed for Chapter 11 bankruptcy protection Monday, with a prepackaged restructuring plan that was hammered out with creditors and unveiled earlier this month. Read the Daily Bankruptcy Review article via The Wall Street Journal.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)
General Motors Co. wants a judge to reaffirm an order freeing the car company from most liabilities, Bloomberg reports.
The Supreme Court on Monday declined to hear a dispute from the AMR Corp. bankruptcy over whether the former American Airlines parent owes its bondholders a penalty fee in connection with the prepayment of more than $1.3 billion in debt. The DBR article is available via WSJ.

Posted 22 hours 19 min ago

Nortel Networks is preparing to spend more than $1 million on technology for an upcoming court fight over $7.3 billion raised in its global liquidation, a trial that will be broadcast live—but not to the public.
Only “authorized users” will be able to view the Webcast of the fight for the failed telecommunication company’s billions, according to an outline of the trial technology plan filed with the courts overseeing Nortel’s dissolution.
Nortel’s “authorized users” are the legal and professional firms that have tapped the bankrupt and defunct company’s coffers for more than $1 billion in fees, and who will be able to log in from the comfort of their homes and offices to view the courtroom action.  The point, says Nortel, is to “limit the need for all counsel to be in the courtroom at all times.”
Meanwhile, members of the public, including thousands of Nortel retirees and disabled workers who lost benefits and pay in the company’s collapse, will be barred from the webcast. If they want to know what’s going on, they must travel to Toronto or Wilmington, Del., at their own expense. Nortel’s planning for a courtroom packed with lawyers, not distressed retirees, according to the plan filed with the court. So any Nortel retirees or disabled who make the trek to Delaware or Toronto will likely be relegated to a “gallery” courtroom where they can gaze at the courtroom action on monitors.

Posted 23 hours 40 min ago

A bankruptcy judge ruled Thursday that former American Airlines parent AMR Corp. doesn’t have the unilateral right to terminate health and welfare benefits for nearly 47,000 union and nonunion retirees. Read the Daily Bankruptcy Review article via The Wall Street Journal.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)
WSJ looks at the rise and fall of bitcoin exchange Mt. Gox.
Creditors of 70% of Mt. Gox’s bitcoins said they’d support a buyout rather than have the company liquidate, WSJ reports.

Posted 1 day 22 hours ago

Party-goods supplier Event Rentals Inc. is kicking off the week in bankruptcy with a Monday auction of its assets.
A group of the company’s senior lenders, including Cerberus Capital Management, has been approved as the lead bidder with a $124 million credit bid. If it emerges as the winner, the lender group would forgive Event Rentals’ debt in exchange for the company’s assets.
Event Rentals filed for bankruptcy protection on Feb. 13 with roughly $148 million in assets and $246 million in liabilities. The company blamed its financial problems on an ill-timed growth spurt and the reluctance of corporations in recent years to throw lavish parties.
On Tuesday, plus-size women’s clothing retailer Ashley Stewart will seek a Trenton, N.J., bankruptcy court’s blessing of its proposed sale to Clearlake Capital Group for approximately $18 million.

Posted 4 days 19 hours ago

Downtown Detroit
Paul Sancya/Associated Press

Wayne State University is trying to pull college kids who are home in Michigan for the summer into the heart of Detroit with a new class about the city’s quest for financial redemption.
College officials are advertising the 13-week class, “Detroit: Metropolis in Transition,” both to their own students and to students at other universities who want to take a summer class. It’s a good opportunity, they said, for the school to pull outsider students into the heart of the 700,000-resident city, which filed the largest municipal bankruptcy in U.S. history in July.
Detroit officials have blamed the city’s financial problems on the loss of residents who fled in large numbers for safer suburbs and took their tax dollars with them. But the 28,000-student school is still rooted in downtown Detroit.
“It’s really booming,” said college spokesman Mike Brinich.

Posted 4 days 20 hours ago

In this Tuesday, April 15, photo, Homeland Security Investigators raid telecommunications and marketing firm TelexFree in Marlborough, Mass.
Alan Jung/Associated Press

The Securities and Exchange Commission has filed charges against a Massachusetts telephone marketing company for allegedly running a pyramid scheme that targeted primarily Dominican and Brazilian immigrants. Read the DBR article here.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)
Mt. Gox suitors are launching a last-ditch effort to revive the bitcoin exchange after it said it would move to liquidate, WSJ reports.

Posted 4 days 22 hours ago

Leonard M. Rosen, a founder of New York law firm Wachtell, Lipton, Rosen & Katz.

Leonard M. Rosen, a founding partner of elite New York law firm Wachtell, Lipton, Rosen & Katz, has died.
The influential bankruptcy lawyer passed away on Wednesday, April 16, at the age of 83 years, according to the firm. A consensus-builder, he helped pull New York City back from the brink of fiscal collapse in the 1970s and, during the 1980s government bailout of Chrysler Corp., forged an agreement between the company and its creditors that allowed the cash-strapped automaker to survive.
“When it was over, the financial institutions gave him a memento with a glass block and a gold sword—Excalibur,” Harvey Miller, a bankruptcy partner at Weil, Gotshal & Manges LLP and longtime friend of Mr. Rosen’s, told Law Blog. “He was the only one who could pull that sword out.”

Posted 5 days 15 hours ago

Mikel R. Bistrow and Christopher Celentino have joined law firm Ballard Spahr LLP as partners in the San Diego office. Ms. Bistrow and Mr. Celentino have experience in insolvency and have worked on bankruptcy filings and wind-downs. Mr. Celentino focuses on creditor rights, business reorganizations and workouts, while Ms. Bistrow specializes in commercial finance and lending. They both joined Ballard Spahr from Foley & Lardner LLP.
Werner Meier has joined King & Spalding as a partner in the Frankfurt, Germany, office, where he’ll help launch the law firm’s European restructuring practice. He focuses on international restructuring, German restructurings and high-yield transactions. Most recently, he was a finance and restructuring partner with Cleary Gottlieb Steen & Hamilton LLP.

Posted 5 days 19 hours ago

Mark Karpeles attends a news conference at the Tokyo District Court in Tokyo on Feb. 28.

Mt. Gox Chief Executive Mark Karpelès said he would not come to the U.S. later this week to answer questions about the Japanese bitcoin exchange’s U.S. bankruptcy case, Mt. Gox lawyers told a federal judge on Monday. Read the Daily Bankruptcy Review article via The Wall Street Journal.
A federal judge Wednesday said a lawsuit filed by a former MF Global Holdings Ltd. futures customer against former Chief Executive Jon S. Corzine and other top officials could move forward but dismissed all claims against the failed brokerage’s independent directors and investment firm J.C. Flowers & Co. Read the DBR article in WSJ.

Posted 5 days 21 hours ago

The company behind the chemical spill that tainted the water supply of 300,000 people in West Virginia spent $1.9 million on attorneys and advisers in the first months of its bankruptcy case.

Freedom Industries Inc.’s lead bankruptcy law firm, McGuireWoods LLP, billed top dollar, according to court papers filed Tuesday. The law firm charged nearly $746,000 in fees and expenses for work performed between Jan. 17, when Freedom filed for bankruptcy, and the end of March.
Two specialist law firms, one for environmental matters and one for litigation, billed a combined $535,000 in fees and expenses for work during the same timeframe.
Less than 5% of the bills from bankruptcy professionals come from lawyers representing Freedom’s committee of unsecured creditors, whose members include people claiming injury or other damages from the disastrous Jan. 9 chemical spill from a Freedom-owned tank farm.

Posted 6 days 18 hours ago