All items from Bankruptcy Beat

The Pittsburgh Riverhounds soccer team has a plan to get out of bankruptcy with a new owner: a local businessman who has already extended several million dollars to keep the team kicking.
In court papers, officials asked a judge to approve two bankruptcy-exit plans—one for the team and one for its 3,500-seat stadium on Pittsburgh’s South Side—that would allow Terrance “Tuffy” Shallenberger Jr. to become their sole owner. Right now, Mr. Shallenberger owns a 51% stake in the two partnerships that own the team and the stadium.
The partnerships filed for Chapter 11 bankruptcy on March 26 (several days before the team’s season opener) blaming the larger-than-expected construction costs of Highmark Stadium. Before the stadium opened last year, the team played at local high schools.

Posted 9 hours 6 min ago

Capmark Financial Group reached a settlement with its former head honcho over the nearly $17 million he received when he left the commercial real estate lender the year before its bankruptcy, but one key detail is under wraps—how much the individual will pay.
The proposed settlement would end Capmark’s effort to claw back the $16.7 million paid to former Chief Executive William F. Aldinger III and a family trust on his way out the door. Mr. Aldinger, who is also a former chairman and chief executive officer of HSBC Finance Corp., left Capmark in December 2008. The company filed for bankruptcy protection in October 2009, joining a long list of real-estate lenders toppled by the global financial crisis.
However, the deal aims to keep secret the amount of money Mr. Aldinger will return to Capmark to settle the litigation. To explain why it’s necessary to hide the amount, Capmark noted that Mr. Aldinger is retired and doesn’t need the publicity that will certainly attend the news of the settlement.

Posted 11 hours 58 min ago

Lehman Brothers Holdings Inc.’s brokerage is asking a U.S. court to reconsider its ruling affirming Barclays PLC’s right to billions of dollars in disputed assets, saying the decision throws into question the integrity of bankruptcy sales. Read the Daily Bankruptcy Review story in 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.”)
The team winding down Lehman Brothers’ U.K. business will pay more than $300 million to the unit’s pensioners, the biggest win ever for the U.K.’s pension authorities. Read the DBR story in The Journal.
A years-long attempt by the estate of deceased Playboy model Anna Nicole Smith to collect millions of dollars from her late husband’s family came to a close this week, at least in federal court. Read the DBR story on WSJ’s Law Blog.

Posted 16 hours 38 min ago

With the closure of Bryman College and sister school BioHealth College, programs to protect its more than 300 students sprang into action, helping them obtain tuition refunds and loan forgiveness.
But for the colleges’ 85 employees—who were laid off without payment of wages they were owed or severance—there’s no safety net.
Former employees of the California campuses have told Bankruptcy Beat that no one received paychecks on Aug. 1, the payday following the July 25 shutdown, and that many July 16 paychecks bounced. Left jobless and frustrated, the employees are navigating the bankruptcy system to recover their wages and are finding their odds of payment to be grim.
A lawyer representing Bryman and BioHealth in their bankruptcy case declined to comment on the employees’ situation Tuesday.
The schools’ parent company, which filed for Chapter 11 bankruptcy in July and shut down days later, lists the employees as unsecured priority creditors (a group in bankruptcy cases that often receives only partial payment) owed $96,597.30, according to recently filed court documents. This doesn’t include the $121,590 Chief Executive Sam Shirazi says he’s owed.

Posted 1 day 10 hours ago

The Revel Casino Hotel in Atlantic City, N.J., in Feb. 14, 2013.
Associated Press

The Ravel Hotel sits directly across the East River from Manhattan, crowned by a rooftop bar and restaurant with views of the Midtown skyline and the Queensboro bridge.
On its website, the Long Island City, N.Y., hotel says it welcomes “the discerning traveler who appreciates sophistication, style, and value.”
But just how discerning Ravel’s patrons are is the subject of a recent trademark lawsuit that it brought against the Revel Casino Hotel, located 100 miles away in Atlantic City, N.J.
This week, a bankruptcy judge refused to lift an injunction that would have allowed Ravel to proceed with the litigation, which claims Revel’s name is too close for comfort.
Though Revel’s bankruptcy shields it from litigation, Ravel wanted to move forward so that a federal court could put a price on alleged damages Ravel says it has suffered due to confusion between the two names.

Posted 1 day 14 hours ago

India’s Sesa Sterlite Ltd. has lost a bid to block a bankruptcy-court order requiring it to pay an $82.75 million judgment stemming from its failed attempt to acquire Asarco LLC, a U.S.-based copper miner. Read Peg Brickley’s story in the Daily Bankruptcy Review.
(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.”)
Freedom Industries Inc., the company behind a chemical spill that contaminated a significant swath of West Virginia’s water supply, filed a creditor-payment plan that aims to start resolving the claims brought by those affected by the spill. Read DBR’s Joe Checkler in The Wall Street Journal.
Three weeks after defaulting on its debt, Argentina moved to circumvent a U.S. court order by offering a bond swap that would let it pay bondholders in Argentina instead of in the U.S., WSJ reports.

Posted 1 day 16 hours ago

Energy Future Holdings Corp. Tuesday successfully fended off questions from creditors anxious to probe the financial health of a company division that is the target of deal talks.
The questions arose in a brewing court fight over whether Energy Future owes of millions of dollars of premiums on $4 billion worth of debt attached to the division, which owns an 80% stake in the Texas transmission business, Oncor.  At some point, that fight may turn on the question of whether the division is solvent. The answer to that question is in the works, as Energy Future engages in talks aimed at selling the Oncor stake, probably by way of a complex transaction worked into a Chapter 11 restructuring plan.
“The case is dynamic,” commented Judge Christopher Sontchi, at a court session where he said investors pressing the premium litigation could ask questions later about the solvency of the Energy Future division, Energy Future Intermediate Holding. By the time those questions are asked, the judge said, the “extraordinary” course of the Texas power company’s bankruptcy case may have made the answers obvious.
When Energy Future filed for Chapter 11 protection in April,  it had a predetermined pathway out of bankruptcy. Some leading creditors had agreed to split the company in two, with one division to be spun out, and the other, Energy Future Intermediate, reorganized.

Posted 2 days 11 hours ago

The Chicago Bears are up against a tough foe, but not on the gridiron. Try bankruptcy court.
Edison Mission Energy, which emerged from Chapter 11 protection this spring, is challenging the $114,240 unsecured claim that da Bears filed against the company last year. The claim is tied to the annual license fee the NFL football team charges for use of an executive suite at Soldier Field, a license that an Edison Mission affiliate terminated during the bankruptcy case.
In an objection filed Monday, Edison Mission’s administrators say the company doesn’t owe the Bears a penny. They also pointed out that the Bears could have asked to tap the $14,300 security deposit that the Edison Mission affiliate put down in 2004 in order to first license the suite—money that Edison Mission says the team hasn’t returned.

Posted 2 days 13 hours ago

Daehan Shipbuilding Co. Ltd. filed for Chapter 15 bankruptcy protection Monday in New York, seeking to shield its U.S. assets from efforts to collect a $54.5 million judgment. Read the story in the Daily Bankruptcy Review. 
(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.”)
The shutdown of Crumbs Bake Shop has left vendors further down the supply chain, like a family-run bakery in the Bronx, picking up the pieces. Read DBR reporter Sara Randazzo’s piece in The Wall Street Journal.

Posted 2 days 16 hours ago

Latin American Nextel wireless provider NII Holdings Inc. won’t make a $118.8 million interest payment to bondholders, the company announced Friday, days after it warned it would likely have to file for Chapter 11 bankruptcy protection. Read the Daily Bankruptcy Review story 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.”)
Exide Technologies has been hit with a grand jury subpoena in connection with a criminal investigation involving its Vernon, Calif., lead-recycling plant. Read the Daily Bankruptcy Review story in The Wall Street Journal.
Credit Suisse Group AG helped sell billions of dollars of securities that ultimately played a role in toppling Portugal’s second-largest bank, The Wall Street Journal reports.

Posted 3 days 16 hours ago