Unsecured Creditors

Lawyers for a group of bondholders and other creditors of Adelphia Communications asked a bankruptcy court yesterday to restrict payments of several hundred million dollars promised to Adelphia's banks. In a filing late yesterday, lawyers for the unsecured creditors said the banks should not receive $300 million in interest payments promised in connection with a proposed $1.5 billion debtor-in-possession financing. Under debtor-in-possession financing, the lenders who provide the money for continuing operations are first in line among creditors with claims on the company's assets.

Unsecured creditors in the RG Steel bankruptcy case withdrew Friday their request to sue the company's billionaire founder. The Official Committee of Unsecured Creditors had in January asked the U.S. Bankruptcy Court in Wilmington for permission to go after Ira Rennert, alleging that his decisions in the months before RG Steel collapsed were aimed at worsening the company's finances to shore up his own. The committee said it might be able to recover...

NEW YORK - PSINet Inc., the former high-flying Internet service provider that filed for Chapter 11 protection last year after a string of acquisitions, will be liquidated now that it has obtained approval from a bankruptcy judge. U.S. Bankruptcy Judge Robert Gerber approved a liquidation that will return about 10 cents on the dollar to PSINet's bondholders and general unsecured creditors. Those creditors are owed more than $4 billion. "The plan is feasible," Gerber said in court papers filed yesterday.

Bankrupt RG Steel's unsecured creditors are seeking permission to sue Ira Rennert — the billionaire who created the company to buy Sparrows Point — for allegedly worsening the steel mill owner's financial situation in order to improve his own. The Official Committee of Unsecured Creditors told the U.S. Bankruptcy Court in Wilmington, Del., that it might be able to recover more than $238 million if allowed to pursue claims against Rennert for...

The speedy bankruptcy auction planned for the Sparrows Point steel mill and other assets held by its cash-strapped owner has come under fire from unsecured creditors, who say the timeline is so short that it reduces the possibility of a buyer paying fair value and restarting the facilities now standing idle. RG Steel LLC, which owns the Baltimore County mill, filed for bankruptcy protection at the end of May. It is in the midst of laying off nearly 2,000 employees at Sparrows Point — almost the entire workforce — as it shuts down division after division.

LAWRENCE, Mass. - Factory owner Aaron Feuerstein sought yesterday to delay a court deadline to buy back control of bankrupt Malden Mills Industries Inc. on favorable terms, though a representative for the company's unsecured creditors vowed to fight the proposal. The legal skirmish is the latest in the struggle for control over Malden Mills and its 1,200 jobs. The company is scheduled to emerge from bankruptcy Sept. 10, and under the terms of its reorganization plan Feuerstein needs to raise at least $92 million to buy back the majority of the company once owned by his family.

If Parks Sausage Co. is sold to Franco Harris, back property taxes and lawyers' fees will consume more than one-fourth of the $1.7 million purchase price, lawyers said yesterday at a meeting of creditors.That would leave a maximum of about $1.2 million to pay roughly 500 creditors whose $2.4 million in debt is not secured by collateral. Those unsecured creditors include Parks Chairman Raymond V. Haysbert Sr., who will try to get back part of a $200,000 loan he made to the company.Mark Friedman, a lawyer for the company, estimated that the unsecured creditors would receive between 25 cents and 50 cents on the dollar.

Bankrupt RG Steel's unsecured creditors are seeking permission to sue Ira Rennert — the billionaire who created the company to buy Sparrows Point — for allegedly worsening the steel mill owner's financial situation in order to improve his own. The Official Committee of Unsecured Creditors told the U.S. Bankruptcy Court in Wilmington, Del., that it might be able to recover more than $238 million if allowed to pursue claims against Rennert for...

CHICAGO - Two major investors in General Growth Properties are joining Brookfield Asset Management in offering to inject a combined $6.5 billion in fresh funds into the shopping mall operator to help it emerge from bankruptcy protection. General Growth said in a statement late Monday that its board is weighing an offer from Fairholme Capital Management, one of its largest unsecured creditors, and Pershing Square Capital Management, one of its largest shareholders, to invest $3.93 billion.

Unsecured creditors in the RG Steel bankruptcy case withdrew Friday their request to sue the company's billionaire founder. The Official Committee of Unsecured Creditors had in January asked the U.S. Bankruptcy Court in Wilmington for permission to go after Ira Rennert, alleging that his decisions in the months before RG Steel collapsed were aimed at worsening the company's finances to shore up his own. The committee said it might be able to recover...

A federal judge approved Wednesday a potentially multi-million-dollar bonus package for 10 RG Steel executives after the Baltimore County steelmaker modified the proposal in response to objections. The amount seems unchanged from the original proposal, which the U.S. Trustee Program calculated could be up to $20.3 million. But RG Steel altered the proposal to make some of the payments contingent on sales of its facilities to buyers who intend to operate them. Both creditors and the U.S. Trustee Program, which oversees bankruptcy cases, objected to the company's original plan.

The Sparrows Point steel mill will have more time to find buyers — two to four weeks extra — under an agreement hammered out Thursday in the bankruptcy case. Owner RG Steel's unsecured creditors had contended that the July 27 deadline to close a deal, just two months after the company filed for bankruptcy protection, was so tight that it would harm the chances of finding a buyer to pay fair value and restart the facilities being idled. The terms of the new deadline were outlined in court papers Thursday.

The speedy bankruptcy auction planned for the Sparrows Point steel mill and other assets held by its cash-strapped owner has come under fire from unsecured creditors, who say the timeline is so short that it reduces the possibility of a buyer paying fair value and restarting the facilities now standing idle. RG Steel LLC, which owns the Baltimore County mill, filed for bankruptcy protection at the end of May. It is in the midst of laying off nearly 2,000 employees at Sparrows Point — almost the entire workforce — as it shuts down division after division.

CHICAGO - Two major investors in General Growth Properties are joining Brookfield Asset Management in offering to inject a combined $6.5 billion in fresh funds into the shopping mall operator to help it emerge from bankruptcy protection. General Growth said in a statement late Monday that its board is weighing an offer from Fairholme Capital Management, one of its largest unsecured creditors, and Pershing Square Capital Management, one of its largest shareholders, to invest $3.93 billion.

Ritz Camera Centers Inc., the country's largest camera-store chain, filed for bankruptcy protection, blaming the deepening recession and the consumer transition to digital photography. The 91-year-old company, which had sales of almost $1 billion in 2008, has both assets and debt of less than $500 million, according to Chapter 11 reorganization papers filed Sunday in U.S. Bankruptcy Court in Wilmington, Del. Ritz sought court permission to tap a new $85 million loan from existing secured lenders to continue operating under the reorganization plan.

United Airlines efforts to emerge from bankruptcy may be delayed until next year, the airline said yesterday as it announced another delay in the filing of its long-awaited reorganization plan. The airline, which began setting and breaking dates nearly two years ago to emerge from bankruptcy protection, agreed to the delay requested by a committee of unsecured creditors so they could review the plan. The 13-member group, which represents the airline's hundreds of unsecured creditors, reportedly has been studying the proposed plan for about a month.

United Airlines efforts to emerge from bankruptcy may be delayed until next year, the airline said yesterday as it announced another delay in the filing of its long-awaited reorganization plan. The airline, which began setting and breaking dates nearly two years ago to emerge from bankruptcy protection, agreed to the delay requested by a committee of unsecured creditors so they could review the plan. The 13-member group, which represents the airline's hundreds of unsecured creditors, reportedly has been studying the proposed plan for about a month.

Unexpectedly keen competition to buy the airport gates and takeoff and landing slots of Eastern Airlines has led the bankruptcy judge handling Eastern's case to schedule an auction.As a result, some of the sale agreements already struck by the trustee who is running the carrier could be off, pending higher offers at the auction Monday.The auction is good news for the unsecured creditors of Eastern, which shut down Jan. 18 after trying for 22 months to reorganize under Chapter 11 of the Federal Bankruptcy Code.

Nearly two years after its financial collapse, Spiegel Inc. moved closer to emerging from bankruptcy yesterday, thanks to a settlement that the retailer is expected to reach with its controlling shareholder. Spiegel, a Chicago-born catalog company whose last remaining asset is the Eddie Bauer casual clothing chain, plans to file a plan of reorganization as early as today, said David LeMay, a Chadbourne & Parke lawyer representing the unsecured creditors' committee. The plan, a road map for where the company wants to go after bankruptcy, proposes to give ownership of the 140-year - old company to its creditors, which consist mostly of U.S. and German banks, LeMay said.

W.R. Grace & Co., a Columbia-based maker of specialty chemicals that is going through bankruptcy, said yesterday that it has revised its reorganization plan and won the support of two creditor committees. Two other committees, representing asbestos personal injury and property claimants, still object to the plan, which maintains a proposal to limit Grace's asbestos-related liabilities to $1.61 billion. In a filing yesterday with the Securities and Exchange Commission, Grace said the revised plan addresses "many of the objections raised by creditors and other interested parties to the plan," which originally was filed with U.S. Bankruptcy Court in Delaware in November.