All items from WSJ.com: Bankruptcy Beat

Next week in bankruptcy, two companies—Ashley Stewart and Quantum Foods—on Thursday will each place their assets on the auction block.
Retailer Ashley Stewart Holdings Inc.’s auction will be led by private equity firm Clearlake Capital Group, which is offering $18 million in cash, subject to an inventory adjustment.
The quick sale timeline is important, the company said, to assure others that Ashley Stewart isn’t going down the same path as other retailers that have liquidated recently.
Separately Thursday, Quantum Foods LLC is going to auction with an offer from Oaktree Capital. Oaktree’s bid consists of $54 million in cash and $30.3 million in assumed liabilities.
The company, with top-ranking debt of about $50 million, entered Chapter 11 with a $51 million offer from CTI, a so-called custom culinary company that supplies meat products, soups and side dishes. CTI, owned by Thomas H. Lee Partners and the private equity arm of Goldman Sachs Group Inc., could still bid.



Posted 1 week 4 days ago

The apparent suicide of a Federal Bureau of Investigation agent testifying in the criminal trial of the president of a failed Idaho real-estate firm has created a difficult situation for the judge overseeing the case.
Following the death of FBI Special Agent Rebekah Morse, U.S. District Court Judge B. Lynn Winmill had to figure out how to instruct the jury that’s now deliberating whether to convict Douglas Swenson and others of fraud and conspiracy charges related to the now-bankrupt DBSI Inc.
Ms. Morse, the lead FBI investigator in the case, testified for the prosecution on March 18 and 19, court papers show. The second day, a juror told the court that while the judge was conferring with attorneys in the case, the juror had spotted Ms. Morse texting on the witness stand.
Judge Winmill said the juror’s comment couldn’t be ignored because it raised a “troubling possibility”—that jurors who had seen Ms. Morse texting on the stand might believe she was being coached during her testimony.



Posted 1 week 4 days ago

Associated Press/Elaine Thompson

Coldwater Creek Inc. filed for Chapter 11 protection and will liquidate, The Wall Street Journal reports.
Glacial Energy Holdings Inc., an electric company that operates in more than 20 states, filed for bankruptcy protection Thursday with a plan to sell its business to Vantage Commodities Financial Services LLC, subject to higher bids at auction. Read the Daily Bankruptcy Review article via WSJ.
(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.”)



Posted 1 week 5 days ago

Patrick T. Fallon/Bloomberg News

Shutterfly and Kodak are walking away from a legal battle that erupted after Shutterfly purchased Kodak’s online photo service.
During Kodak’s bankruptcy, Shutterfly scooped up Kodak Gallery in a $23.8 million deal. Shutterfly later sued Kodak, claiming that the company’s new My Kodak Moments social-networking application violated the deal’s no-compete clause.



Posted 1 week 5 days ago

Wayne Parry/Associated Press

Fear of another bankruptcy for Atlantic City, N.J.’s Revel casino prompted a local casino workers’ union to do its own calculation of what a prospective buyer should be expected to pay for the glitzy tower.
The estimated price tag Unite Here’s Ben Begleiter came up with, from $25 million to $73 million, is a fraction of the $383 million he estimates Revel owes after its debt load was chopped down in a pass through Chapter 11 that ended in May 2013.
“Bankruptcy is designed to deal with the problem of having too much debt. What it doesn’t do is solve the problem of too little revenue,” Mr. Begleiter said Thursday.
A lack of high rollers has been the problem for Revel and other Atlantic City casinos, which have seen their business drained away by competition in neighboring states.



Posted 1 week 5 days ago

Puerto Rico hired restructuring advisers to work on utility and highway operations, The Wall Street Journal reports.
Quiznos is pushing off until May a key court hearing on its bankruptcy exit plan after unsecured creditors asked for more time to probe its restructuring strategy. Read the Daily Bankruptcy Review article via WSJ.
(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 bankruptcy city of Detroit reached a settlement with some bondholders to give them almost three-fourths of what’s owed to them, WSJ reports.
Also according to WSJ, one of Detroit’s creditors is trying to sell the city’s art collection, and investors are willing to finance up to $2 billion for part of it.



Posted 1 week 6 days ago

Transparency and bankruptcy go hand in hand, but the bankruptcy judge overseeing a closely watched asbestos case has taken an unusual step to keep certain details shielded from public view.
Last month, unredacted transcripts from confidential court proceedings in the bankruptcy case of Garlock Sealing Technologies LLC were inadvertently made available to the public online. Once staff of the U.S. Bankruptcy Court in Charlotte, N.C., realized this, the transcripts were yanked from the court docket and replaced with their redacted versions.
But that’s not all. This week, U.S. Bankruptcy Judge George R. Hodges issued an order directing those who downloaded the unredacted transcripts to not only destroy the documents, including all hard and electronic copies, but to also provide the court with written certification that they’ve done so.
Gregg Leslie, the legal defense director for the Reporters Committee for Freedom of the Press, said he’s aware of prior court cases where confidential information has accidentally been made public but has never seen a court demand that any members of the public destroy information that they lawfully obtained from the court.
“You certainly understand why courts want to correct an error… but they can’t tell people to unlearn something that they’ve learned form a court record,” Mr. Leslie said told Bankruptcy Beat Wednesday.



Posted 1 week 6 days ago

The bankrupt city of Detroit is in advanced talks with some bond insurers to strike a deal as early as Wednesday in efforts to build more momentum for its plan of reorganization, the Wall Street Journal reports.
American Airlines Group Inc. distributed the last big chunk of its payout to its bankrupt predecessor’s shareholders, delivering them a windfall that was even more enormous than previously expected, via WSJ.
James River Coal is considering selling its assets during its Chapter 11 restructuring. Read Daily Bankruptcy Review’s 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.”)



Posted 2 weeks 35 min ago

Calumet Photographic Inc., the photography retail chain whose abrupt shuttering and bankruptcy filing surprised customers, has found a buyer for some of its assets.
According to court papers filed Monday in Calumet’s bankruptcy case, CalPhotoUS LLC—a new company formed by Calumet’s former principals—is offering $2.825 million to acquire inventory, store leases and other assets.
The inventory and leases are for former Calumet stores in such cities as Chicago, San Francisco and Washington, D.C. CalPhoto would also take responsibility for any liabilities related to the leases as well as the stores’ former employees and customers.
Calumet, which sold high-end photography and video equipment, filed for Chapter 7 bankruptcy liquidation on March 12 with plans to close all of its 14 U.S. stores. Its European stores will remain open.
Chapter 7 trustee Catherine Steege, an attorney with Jenner & Block, urged the Chicago bankruptcy court to approve the sale at an April 29 hearing.
Calumet is due in bankruptcy court Wednesday for a hearing on such proposals as its request to hire a consultant to help it find buyers for its remaining store leases and other assets.
Write to Jacqueline Palank at jacqueline.palank@wsj.com. Follow her on Twitter at @PalankJ.
 



Posted 2 weeks 23 hours ago

Puerto Rico’s finance arm hired restructuring lawyers at Cleary Gottlieb Steen & Hamilton LLP, as the troubled island battles a weak economy and perpetual budget deficits, the Wall Street Journal reports.
Appalachian coal miner James River Coal Co. filed for Chapter 11 bankruptcy protection Monday as it continues its search for a buyer or investor. Read the Daily Bankruptcy Review story via WSJ.
(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.”)
Coldwater Creek Inc. is planning to liquidate its assets after a bankruptcy filing that may come as soon as today, Bloomberg reports.



Posted 2 weeks 1 day ago