All items from WSJ.com: Bankruptcy Beat

This week, the Examiners will take on a not-infrequent occurrence in the restructuring world: the filing of so-called Chapter 22s, or companies that seek Chapter 11 protection a second time.
Chapter 11 gives companies the breathing room and the tools to make such survival-strengthening changes as reducing their debts, getting out of unwieldy contracts or finding a buyer to take over operations. To exit Chapter 11, a bankruptcy judge must find that the restructuring plan a company negotiated with its creditors is, among other things, feasible and in creditors’ best interests.



Posted 3 weeks 8 hours ago

John Spinello sits in front of merchandise from the game “Operation” at his Bloomingdale, Ill. home on Friday.
Carrie Antlfinger/Associated Press

The U.S. unit of Australia’s Marion Energy Ltd., which explores for natural gas in Utah, filed for Chapter 11 bankruptcy protection on Friday. 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.”)



Posted 3 weeks 9 hours ago

This week on The Broke and the Beautiful, 38 Studios’ bankruptcy trustee reached an important settlement, and Girls Gone Wild’s Hottest Girl in America 2010 is getting an overdue payment. Also, a Formula One racing team filed for bankruptcy.



Posted 3 weeks 3 days ago

Detroit could get a ticket to get out of bankruptcy next Friday.
U.S. Bankruptcy Judge Steven Rhodes will reveal his decision on whether the city’s bankruptcy-exit plan, which cuts $7 billion in debt, is fair.
City leaders and creditors picked through the details of the plan during a trial that lasted several weeks. The plan calls for $275 million in new borrowing and a $1.7 billion reinvestment in removing blighted buildings and boosting police and fire services in the city.
With Judge Rhodes’s approval, city leaders say Detroit could be out of bankruptcy court as soon as Thanksgiving, bringing to close the largest municipal bankruptcy in U.S. history. The 680,000-resident city filed for bankruptcy on July 18, 2013, to try to negotiate cuts to $18 billion in debt, blaming tax revenue that fell after the real-estate crash and the city’s population decline.
Throughout the case, Detroit leaders fought pressure from some Wall Street creditors and others to sell the city’s valuable art collection to repay a greater portion of the city’s debt. Federal mediators helped negotiate a deal to use more than $800 million from private foundations and the state of Michigan to avoid that sale and make the cuts to city’s worker pensions less severe.
Some individual objectors are still challenging the reorganization plan, arguing in part that the city’s emergency manager acted improperly in cutting any benefits to pensioners.



Posted 3 weeks 3 days ago

Approximately 100 shoppers lined up outside the Borders store in Brea, Calif., to take advantage of going out of business sale prices on July 24, 2011.
Associated Press

It’s been three years since the last Borders store closed its doors, but that hasn’t stopped a group of jilted gift-card holders from continuing to fight for their unredeemed vouchers to be turned into cash.
Wednesday, the group faced its latest setback when the Second U.S. Circuit Court of Appeals sided with two lower courts and ruled that the former customers waited too long to raise their claims for the unused gift cards.



Posted 3 weeks 3 days ago

Gosia Wozniacka

The federal judge overseeing the two-year-long bankruptcy of Stockton, Calif., ruled Thursday that the distressed city can exit court protection without deeper cuts to its pension obligations. 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.”)
A bankruptcy judge in New Hampshire on Thursday ordered the unsealing of papers spelling out, in detail, the reasons jilted Apple Inc. supplier GT Advanced Technologies Inc. filed for Chapter 11 bankruptcy protection, DBR reports in WSJ.



Posted 3 weeks 3 days ago

Joost Geginat has joined AlixPartners as a managing director and will help build the consulting firm’s turnaround and restructuring presence in Switzerland. Mr. Geginat, who will be based in Zurich, most recently worked as a managing partner of the Southeast Asia office of Roland Berger Strategy Consultants. He focuses on reorganizations, portfolio optimizations and corporate strategies.
Michael S. Haynes has rejoined Gardere Wynne Sewell as a partner in the law firm’s bankruptcy and business reorganization practice. Mr. Haynes, who left Gardere for Akin Gump Strauss Hauer & Feld in 2011, focuses on oil and gas matters in financial workouts and restructuring. He has represented bankruptcy trustees, debtors, creditors and other parties in bankruptcy cases.



Posted 3 weeks 4 days ago

In this May 6 file photo, Texas entrepreneur Sam Wyly arrives to U.S. District Court in New York.
Associated Press

Unaware that ex-billionaire Samuel Wyly had filed for bankruptcy, auctioneers at Christie’s Inc. sold three paintings he owned earlier this week without first getting permission from his bankruptcy judge, 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.”)



Posted 3 weeks 4 days ago

Chelsea Heath, Girls Gone Wild’s 2010 Hottest Girl in America.
Chris Lambeth

The woman crowned Girls Gone Wild’s Hottest Girl in America in 2010 is finally going to get paid for winning the contest.
Earlier this week, a California bankruptcy judge approved a settlement between Chelsea Heath, 25, and lawyers who are settling old legal disputes involving Girls Gone Wild. Under the deal, Ms. Heath is expected to get at least $12,500 for the prize money she never got, according to court papers.
Ms. Heath, a Louisiana native, was picked from thousands of contestants with help from voting fans. She was put on the cover of Girls Gone Wild’s magazine, collected $5,000 and was supposed to get $1,000 for the next 12 months. But after the company made several payments, Girls Gone Wild founder Joe Francis fired her, her lawyers said in a copy of a complaint that was filed to the U.S. Bankruptcy Court in Los Angeles.



Posted 3 weeks 4 days ago

The U.S. Bankruptcy Code isn’t just for companies in the U.S.
A new report from scholars Oscar Couwenberg of University of Groningen Faculty of Law in the Netherlands and Stephen J. Lubben of Seton Hall University School of Law in New Jersey identified 49 corporate bankruptcy filings between 2005 and 2012 that included foreign debtors. Of those, 15 had no U.S. parent company.
The U.S. Bankruptcy Code has been interpreted to qualify companies with as little as a U.S. bank account and will reorganize assets anywhere in the world. So with the explosion of high-yield debt in Europe, European companies burdened with bond debt are expected to come to the U.S. to reorganize with increasing frequency, according to the report.
The only European country with a bankruptcy law to rival the U.S.—the United Kingdom with its “scheme of arrangement”—isn’t good at dealing with bond debt, Mr. Lubben told Bankruptcy Beat Wednesday. Plus, the U.K. is trying to discourage forum shopping to its country, which will almost certainly send distressed European companies to U.S. courts, Mr. Lubben added.
Read the full report here.



Posted 3 weeks 5 days ago