All items from WSJ.com: Bankruptcy Beat

Energy Future Holdings Corp. creditors have taken issue with the company’s proposal to auction its stake in Oncor, with some demanding greater access to the process and others questioning whether the sale is necessary at all. Read the Daily Bankruptcy Review 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.”)
The Catholic Church in Minnesota and a lawyer for victims of sexual abuse on Monday announced the settlement in the first-of-its-kind lawsuit claiming that clergy abuse and subsequent inaction by church leadership constituted a “public nuisance.” Read the DBR article in The Wall Street Journal.
Bloomberg reports that Trump Entertainment Resorts Inc. is set to ask a bankruptcy judge Tuesday to let it terminate a union contract.



Posted 5 days 19 hours ago

Endeavour International Corp., a Houston-based oil and gas company, filed for bankruptcy protection late Friday night as part of a debt-for-equity swap with bondholders that will slash about $568 million in debt off the company’s books, Daily Bankruptcy Review reports 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.”)
Alco Stores Inc . filed for Chapter 11 bankruptcy Sunday with plans to liquidate or sell the 113-year-old retail operation. WSJ has the DBR article here.
Apple Inc. supplier GT Advanced Technologies Inc. said closing its Arizona and Massachusetts factories to make artificial sapphire would cost 890 people their jobs, DBR reports via WSJ.



Posted 6 days 19 hours ago

Federal Reserve Bank of Richmond President Jeffrey Lacker said Friday financial firms’ so-called “living wills” should do a lot to strengthen the financial system, if banks and regulators respect these plans.
The living wills in question are plans by financial companies detailing how they expect to be wound down in the event of running into trouble. Mr. Lacker, speaking in Chicago, said these plans are vital to ending the perception that many firms are considered to be too-big-to-fail and will be bailed out by the government in the event of trouble.
“Living wills offer us the only realistic path” to ending the ongoing belief that very large firms will get government bailouts, Mr. Lacker said in the text of his speech. While living wills “have not received as much attention as other regulatory and legislative responses to the crisis, they may be the most critical, and I applaud the hard work that is being done to make them credible.”
Mr. Lacker long has argued that the too-big-to-fail problem that played such a large role in the financial crisis was in part the fault of regulators and political authorities who couldn’t resist saving failing financial firms. He has pressed for strengthening the mechanisms available to help wind down a failing firm, and he believes that reducing the prospects of a government bailout reduces the odds a firm will make overly risky decisions that can result in failure.
Mr. Lacker also said in his speech the existing bankruptcy law could be effective in dealing with a failed financial firm.



Posted 1 week 2 days ago

Energy Future Holdings Corp. will continue making its case next Wednesday in Wilmington, Del., to pay as much as $18 million in bonuses to upper management. A hearing on the matter began on Oct. 8 and spilled into Oct. 9, as the company faces a fight from U.S. Trustee Roberta A. DeAngelis.
Among Ms. DeAngelis’s problems with the package is a pre-existing bonus arrangement that could nearly double the amount Energy Future is seeking.
Energy Future’s lawyers say the existing bonus package, $18 million worth of letters of credit backing payments to five top executives, has been disclosed in the company’s regulatory filings. The company has been putting on witnesses trying to prove the incentives tied to the bonuses are tied to difficult-enough milestones. Executives and other top employees aren’t allowed to be paid retention bonuses in bankruptcy cases, but incentive bonuses are acceptable. Ms. DeAngelis has argued the milestones tied to bonuses are too easy. The dust-up over bonuses comes as the company prepares to auction one of its most valuable assets, an 80% stake in the transmission business Oncor. Energy Future sought Chapter 11 bankruptcy protection in April, with $42 billion in debt on its balance sheet.
LightSquared
LightSquared is scheduled to update a judge on its restructuring on Wednesday in Manhattan.
Last week, Judge Shelley C. Chapman told the wireless venture’s lawyers that she is considering converting the case to a Chapter 7 liquidation if parties can’t come together on a restructuring.



Posted 1 week 2 days ago

Apple Inc . supplier GT Advanced Technologies Inc. plans to exit the business of manufacturing sapphire after a failed effort to produce material for Apple’s smartphone screens. 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.”)
Trump Taj Mahal executives are accusing union leaders of “harassing” their customers who have upcoming conventions and other big events, telling them they should rebook their parties with the beleaguered casino’s Atlantic City rivals, reports DBR via The Journal.



Posted 1 week 2 days ago

The paper mill in Millinocket, Maine, which closed in 2008.
Associated Press

The closure of Great Northern Paper Co.’s paper mill in Maine and subsequent bankruptcy of the company has become a campaign issue in the state’s race for governor, with a lagging gubernatorial hopeful trying to bring into the race the state money provided to the paper producer’s owner Cate Street Capital.
“Before the state of Maine goes the way of the Great Northern Paper Company, we need new management,” independent candidate Eliot Cutler said at a news conference last week.
The original Great Northern Paper Co., once a giant of New England’s pulp and paper industry, traces its roots to the beginning of the 20th century, when it began manufacturing newsprint. The company boomed in the mid-1900s but has changed hands several times recently, landing Cate Street Capital as its owner in 2011.
Cate Street purchased mills in Millinocket and East Millinocket, both shuttered at the time, for $1 and reopened the East Millinocket mill. Earlier this year, that mill was also closed and the company was placed in Chapter 7 bankruptcy last month.



Posted 1 week 3 days ago

Puerto Rico’s Prepa utility has until mid-December to come up with a new business plan and early March to propose a debt-restructuring plan. What should these plans consider?
The successful restructuring of the Puerto Rico Electric Power Authority will be critical to the island’s overall economic recovery. Prepa’s mountainous $9 billion debt represents 12% of Puerto Rico’s overall debt load. The recent appointment of a chief restructuring officer, fellow Examiner Lisa Donahue of AlixPartners, is an important first step for the utility, which has been plagued by years of mismanagement and waste. The implementation of Prepa’s restructuring plan will be challenging, and success depends on gaining the approval of Gov. Alejandro García Padilla’s embattled administration, nervous bondholders and UTIER, Prepa’s main labor union.



Posted 1 week 3 days ago

Puerto Rico’s Prepa utility has until mid-December to come up with a new business plan and early March to propose a debt-restructuring plan. What should these plans consider?
The turnaround plan for Puerto Rico Electric Power Authority, or Prepa, will have to address many unique circumstances not present in more traditional aspects of a turnaround or restructuring, as well as those which are more universal.
Prepa’s unique circumstances include:



Posted 1 week 3 days ago

Associated Press

The union for some 1,140 workers at Atlantic City, N.J.’s Trump Taj Mahal casino who are rallying to save their health-care and pension benefits are now fighting in two places: in the courtroom and on the streets. The Wall Street Journal has the Daily Bankruptcy Review 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.”)
The abrupt bankruptcy filing by GT Advanced Technologies Inc. earlier this week stunned investors, creditors and partners including Apple Inc., which backed the materials maker for its massive bet on sapphire screen technology, DBR reports via WSJ.



Posted 1 week 3 days ago

GT Advanced Technologies , the sapphire supplier that filed for bankruptcy protection Monday, wants to keep what went wrong between it and Apple Inc. behind closed doors.
Why?
According to GT, there’s a risk it will have to pay $50 million damages “under certain confidentiality agreements involving a third party, which agreements themselves are required to be kept confidential.”
Read the motion here.
It was filed in the early morning hours Thursday, as GT Advanced prepares for its first appearance before a judge in U.S. Bankruptcy Court in New Hampshire.



Posted 1 week 3 days ago