All items from Bankruptcy Beat

Atlantic City’s Revel casino and hotel, the most recent addition to the city’s famed boardwalk, will head to the auction block Thursday as part of its second bankruptcy in as many years.
According to documents filed with the Camden, N.J., bankruptcy court, the auction was moved from Aug. 7 because lawyers “need additional time to fully analyze and evaluate the bids received and are not prepared to go forward with the scheduled auction.”
A hearing to approve the winning bid is scheduled for Aug. 18.
Revel received bankruptcy-court approval for its auction timeline last month. The rules permit lenders to credit bid—or forgive debt they’re owed instead of paying cash for the assets—for the property, a provision the drew resistance from unsecured creditors.
The property, a gleaming, 47-story tower, spans 6.2 million square feet and includes 2,300 slot machines and about 1,400 hotel rooms. Without a successful sale, Revel has said it will shut its doors and lay off all 2,000 employees on Sept. 1.
Monday, LightSquared will hold a status conference on an overhauled reorganization plan, which appears to spell the end of longtime backer Philip Falcone’s ownership of the wireless venture.
In the plan, filed Thursday with the Manhattan bankruptcy court, LightSquared didn’t make any references to a prior $3.05 billion restructuring proposal it had touted, which would have given 74% of the company to Cerberus Capital Management, Fortress Investment Group LLC  and J.P. Morgan Chase & Co. in exchange for new money.

Posted 5 weeks 5 days ago

Gordon Studer

Weil Gotshal & Manges LLP is bringing in a lawyer from one of its biggest rivals to help run its marquee bankruptcy business, as firms fight over a shrinking supply of big restructuring cases.
Ray Schrock, a partner at Kirkland & Ellis LLP, will join Weil as a partner with a leadership role and could be in line to take over as co-head of the restructuring group in the future, according to two people familiar with the hiring. Weil’s bankruptcy group is currently helmed by chair Marcia Goldstein and co-chair Gary Holtzer.
“We thank Ray for his service to the firm.  We wish him well,” a Kirkland spokeswoman said Thursday night. A Weil spokeswoman declined to comment, saying it has a policy not to comment on partners at other firms.
Weil has handled some of the most notable bankruptcies in recent corporate history, including Texaco Inc., Enron Corp., General Motors Corp. and Lehman Brothers Holdings Inc.

Posted 5 weeks 5 days ago

Wireless venture LightSquared on Thursday overhauled its reorganization plan, and the new proposal appears to spell the end of longtime backer Philip Falcone’s ownership of the wireless venture. 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.”)
Detroit is starting water shutoffs again after Aug. 25, WSJ reports.
Malaysia Airline System Bhd. is set for a $430 million buyout, WSJ reports.
The International Swaps & Derivatives Association ruled Banco Espírito Santo SA’s credit-default swaps are in a succession event, Bloomberg reports.

Posted 5 weeks 5 days ago

David Benick has joined consulting firm Gavin/Solmonese as a senior director and will work with the litigation consulting team. He has experience in bankruptcy valuation, dispute valuation and other types of valuations. Most recently, Mr. Benick worked with advisory firm Grant Thornton. He is a member of the American Bankruptcy Institute and the Turnaround Management Association.
Louis Curcio, Patrick Fitzmaurice, Jonathan Forstot and Hugh McDonald have joined law firm Troutman Sanders to help bolster the firm’s bankruptcy practice. The group joined from Dentons, where they’ve been practicing together for several years. They have represented lenders, buyers of distressed debt, trustees and financial institutions.

Posted 5 weeks 6 days ago

San Jose Repertory Theatre is auctioning off all of its possessions, including this vintage Coca-Cola machine.
West Auctions

It takes a whole lot of power tools to run a theater company. And now, thanks to a bankruptcy auction, those tools could be yours for the low, low price of $5 each.
San Jose Repertory Theatre, which shut its doors and put itself into Chapter 7 in June, is auctioning off all of its possessions to raise money to pay back its creditors in its bankruptcy liquidation.

Posted 5 weeks 6 days ago

In this Sept. 7, 2012, file photo, Joe Francis attends the House of Hype Music Awards at the Beverly Hills Hotel in Beverly Hills, Calif.
Arnold Turner/Associated Press

A Los Angeles bankruptcy judge is calling for the arrest of Girls Gone Wild founder Joe Francis.
In court papers, U.S. Bankruptcy Court Judge Sandra Klein recommended jail time for Mr. Francis after he failed to turn over luxury cars owned by Girls Gone Wild to the lawyers who are handling the bankruptcy of the porn business. The Girls Gone Wild brand, whose low-budget, late night commercials advertised topless coeds on spring break, was sold to new owners earlier this year.

Posted 5 weeks 6 days ago

Satellite TV provider DirecTV and telecom giant AT&T Inc. are would take over Houston’s struggling professional sports channel under a proposal filed late Wednesday in bankruptcy court. 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 city of Detroit is going to offer $2.7 billion in water debt refinancing, The Wall Street Journal reports.
Atlantic City, N.J.’s Revel casino postponed its auction by a week so it can analyze purchase offers, according to Bloomberg.
The relationship between regulators and big U.S. banks is likely to get tenser amid the banks’ failure on “living wills,” WSJ reports.

Posted 5 weeks 6 days ago

Private equity firm Blackstone Group LP won an auction for a Texas power plant earlier this week with $126 million offer—and then tried to take it back.
According to a transcript of Monday’s auction, Blackstone was challenging Boston-based energy investor ArcLight Capital Partners for a coal-fired power plant that Optim Energy LLC put up for sale after filing for bankruptcy. Bids stood at $121.5 million when Blackstone’s lawyer put in a $126 million offer.

Scott Eells/Bloomberg

“ArcLight would like to congratulate you on buying a power plant,” ArcLight’s lawyer responded, according to the transcript, filed Wednesday in bankruptcy court. “We’re out.”
But a few moments later:
Blackstone lawyer: “Did I say 126?”
Auction leader: “You did.”

Posted 6 weeks 10 hours ago

The Bill & Melinda Gates Foundation has a simple question for education technology company ConnectEDU, which sought bankruptcy protection in April: Where’s our money?
In July 2013, the well-known foundation awarded a nearly $500,000 grant to ConnectEDU to develop an interactive program to help students master literacy under the Common Core standards that many states use to guide how public school students are caught.
The money came with some conditions, including a promise to only use the funds for the development of the new technology as well as a timeline requiring benchmarks to be met along the way. The grant, paid out in two installments, was set to expire this December. (Read ConnectEDU’s grant pitch here.)
The project, however, got derailed earlier this year when ConnectEDU filed for Chapter 11 protection, citing an estimated $33.7 million in liabilities and $17.7 million in assets.
Since then, the Gates Foundation has tried to ensure that its grant money is kept in a separate account and that any unused portion will be returned to the organization, according to a filing made this week in the U.S. Bankruptcy Court in New York. Requests for information from ConnectEDU’s counsel at Lowenstein Sandler, however, have gone unanswered, the foundation says.

Posted 6 weeks 15 hours ago

Eagle Bulk Shipping Inc.’s fleet of dry-bulk shipping vessels share a common theme: avian adoration.
The New York-based company, which filed for Chapter 11 protection Wednesday after striking a restructuring deal with its lenders, isn’t only named for one bird of prey but has also named its fleet of 45 vessels for a variety of winged creatures.
There’s the Canary, Crane, Hawk, Owl, Peregrine and Wren. There are variations on the eagle theme: Crested Eagle, Crowned Eagle and Imperial Eagle. There are some unusual names that you’d likely be hard pressed to spot at your backyard bird feeder but might find by the water: Avocet, Bittern and Skua. And there are names that you’ll see emblazoned on college campuses and pro sports stadiums: Cardinal, Falcon, Golden Eagle and Redwing.
(You can find the full list of Eagle Bulk’s vessels, and more details about its Chapter 11 filing, here.)

Posted 6 weeks 16 hours ago