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Savient Pharmaceuticals Agreement Reached
Savient Pharmaceuticals announced that an agreement in principle has been reached by and among the Company, its official committee of unsecured creditors (UCC) and the unofficial committee of senior secured noteholders, whose members hold approximately 90% of Savient Pharmaceuticals' senior secured notes. As part of the agreement, it is anticipated that the UCC will withdraw its objection and consent to entry of a final order by the U.S. Bankruptcy Court authorizing the Company's continued use of cash collateral. These parties anticipate submitting a proposed final cash collateral order for consideration and approval by the Court on or before the hearing currently scheduled to take place on December 13, 2013 (subject to such notice procedures as may be agreed by the parties). If entered by the Court, the proposed final cash collateral order would, among other things, provide for the distribution of proceeds from the sale of all or substantially all of Savient Pharmaceuticals' assets and of additional amounts of cash collateral to the secured noteholders promptly after the sale closing. The agreement further contemplates that the UCC would waive its rights to challenge the secured noteholders' liens and claims subject to the implementation of a global settlement between Savient Pharmaceuticals, the UCC and the unofficial committee This proposed settlement, which remains subject to documentation and final agreement and is to be separately submitted for approval by the Court at a later date, is anticipated to include the following principal terms (but may be amended or modified): $1,775,000 in cash would be used to fund distributions to unsecured creditors under a confirmed plan of reorganization or liquidation and Court-approved fees and expenses of the UCC's professionals; $100,000 in additional cash would be used to pay the fees and expenses of the indenture trustee for the Company's convertible notes; 100% of any proceeds received by Savient Pharmaceuticals from a certain pending litigation with a major distribution customer would be used to fund distributions to unsecured creditors pursuant to a confirmed Plan; If the Company's process to sell all or substantially all of its assets results in a purchase price that exceeds $60 million, 3% of the first $10 million of any such overbid amounts and 4% of any additional overbid amounts would be used to fund distributions to unsecured creditors pursuant to a confirmed plan and subject to an aggregate cap of $750,000; following the cash sweep by the secured noteholders under the final cash collateral order, the amounts referred to in the first four bullets above would be placed in a segregated account and held in trust for the benefit of general unsecured creditors and the committee pursuant to the final cash collateral order; secured noteholders would receive no distribution on account of any unsecured deficiency claim; any accounts receivable that Savient Pharmaceuticals collects following the closing of the sale (except for any accounts receivable associated with the litigation) would be placed in a segregated account for the benefit of the secured noteholders; Savient Pharmaceuticals' cash collateral budget would include $25,000 per month for the UCC's counsel; the UCC or a Chapter 7 trustee would have the right to pursue disgorgement or lien avoidance actions against the secured noteholders under certain circumstances in the event that the proposed settlement were not implemented and the proposed settlement would include customary and appropriate release and exculpation provisions.
AMR Plan Effective, Equity Distribution Announced
AMR''s Fourth Amended Joint Chapter 11 Plan is now effective, and the Company has emerged from Chapter 11 protection and completed its merger agreement with US Airways Group to officially form American Airlines Group. The Court confirmed AMR's Plan on October 21, 2013. AMR and US Airways Group jointly announced that the new airline will employ more than 100,000 worldwide employees and operate nearly 6,700 daily flights to more than 330 destinations in more than 50 countries. "Our people, our customers and the communities we serve around the world have been anticipating the arrival of the new American," said Doug Parker, C.E.O. of American Airlines. "We are taking the best of both US Airways and American Airlines to create a formidable competitor, better positioned to deliver for all of our stakeholders. We look forward to integrating our companies quickly and efficiently so the significant benefits of the merger can be realized." The same release continues, "Employees of the new American will benefit from being part of a company with a more competitive and stronger financial foundation, which will create greater career opportunities over the long term. The completed merger also provides the path to improved compensation and benefits for employees." AMR and US Airways Group further assert that this transaction is expected to generate more than $1 billion in annual net synergies by 2015. The common and preferred stock of American Airlines Group will trade on the NASDAQ Global Select Market under the symbols "AAL" and "AALCP," respectively.
Excel Maritime Carriers Extension Approved
The U.S. Bankruptcy Court approved Excel Maritime Carriers' motion to extend the exclusive period during which the Company can solicit acceptances for its plan through and including February 17, 2014. As previously reported, "The Debtors' chapter 11 cases involve hundreds of parties in interest and a complex capital structure consisting of approximately $771 million in senior secured debt, $150 million in unsecured convertible notes, and $4.3 million in unsecured interest rate swap liabilities. In addition to the sheer size of these chapter 11 cases, the Debtors' reorganization involves a number of complex issues, many of which will be addressed as part of the Debtors' amended chapter 11 plan. Although the Debtors have accomplished a great deal in a relatively short period of time, the Debtors require an extension of the Exclusive Period."
Orchard Supply Hardware Store Plan, Supplement Filed
Orchard Supply Hardware Stores filed with the U.S. Bankruptcy Court a Modified First Amended Chapter 11 Plan of Liquidation. A related Disclosure Statement was not filed as a result of the November 12, 2013 Court order approving the Disclosure Statement. According to the Plan, "On or before the Effective Date, the Debtors, on their own behalf and on behalf of the beneficiaries, shall execute the GUC Trust Agreement, in a form reasonably acceptable to the Creditors Committee, and all other necessary steps shall be taken to establish the GUC Trust....On the Effective Date, $500,000 will be paid from the Debtors' Estates to the GUC Trust for the benefit of holders of Allowed General Unsecured Claims whose prepetition debts were not assumed by the Purchaser under the Final APA. The GUC Trust shall handle reconciliation of Claims for General Unsecured Claims only, with the GUC Trustee selected by the Creditors Committee. In addition, the first $250,000 of any proceeds from the Designation Rights Sale shall be paid to the GUC Trust on the Effective Date (or such later time as they may be monetized). In the event that the holders of Senior Secured Term Loan Claims receive a total Cash Distribution providing a net recovery of 90% of the Senior Secured Term Loan Claims, the next $1,500,000 of proceeds available for distribution from the Debtors' estates shall be paid to the GUC Trust. The holders of Senior Secured Term Loan Claims shall receive all proceeds of the Sale in excess of the $1,500,000 described above, any proceeds of GOB Sales commenced prior to the closing of the sale to the Purchaser under the Final APA, and all proceeds of the Designation Rights Sale in excess of $250,000 until the holders of the Senior Secured Term Loan Claims receive a net recovery of 100%." The Company further filed a notice that states, "that pursuant to Article XI.A of the First Amended Plan, the Debtors have made certain modifications to the First Amended Plan that the Debtors believe do not materially or adversely affect the interests, rights or treatment of any Allowed Claims or Equity Interests (each as defined in the First Amended Plan) (collectively, the 'Non-Material Modifications')...the Non-Material Modifications include, among other things, a modification of Article IV.M of the First Amended Plan to provide for the tax treatment of the Liquidation Trust (as defined in the First Amended Plan)." The Debtor's also filed with the Court a Supplement with respect to the Modified First Amended Plan, which contains the following documents: Exhibit A: Schedule 7.1, Exhibit B: liquidating trust agreement and Exhibit C: GUC trust agreement.
Residential Capital Plan, Exhibits Filed
Residential Capital and its official committee of unsecured creditors filed with the U.S. Bankruptcy Court a Revised Second Amended Joint Chapter 11 Plan. A related Disclosure Statement was not filed as a result of the August 23, 2013 Court order approving the Disclosure Statement. The Revised Second Amended Plan includes amended Schedules 5, 6 and 7. According to the Plan, "Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, the Plan incorporates a compromise and settlement of numerous inter-Debtor, Debtor-Creditor and inter-Creditor issues designed to achieve an economic settlement of Claims against the Debtors and Ally and an efficient resolution of these Chapter 11 Cases. This Global Settlement constitutes a settlement of the potential litigation of issues including substantive consolidation, the validity and enforceability of Intercompany Balances, the allocation of the Available Assets, the amount and allocation of certain disputed Unsecured Claims, in addition to the resolution of extensive litigation, Claims, and potential Claims against Ally. The entry of the Confirmation Order shall constitute the Bankruptcy Court's approval of each of the following compromises or settlements and all other compromises and settlements provided for herein, and the Bankruptcy Court's findings shall constitute its determination that such compromises and settlements are in the best interests of the Debtors, their Estates, Creditors, the RMBS Trusts, Investors, and other parties-in-interest, and are fair, equitable, and within the range of reasonableness. Each provision of the Global Settlement shall be deemed non-severable from each other and from the remaining terms of the Plan." In addition, the Company also filed with the Court certain Plan Exhibits as amended, including the following: Exhibit 1: executory contracts, unexpired leases and certain post-petition contracts, which includes the name of the non-Debtor counterparty, the legal description of the executory contract or unexpired lease to be assumed and the proposed amount of an associated cure claim, if any, and Exhibit 13: liquidating trust causes of action and Exhibit 15: borrower-related causes of action.
Capitol Bancorp Objections Filed
Multiple parties - including Capitol Bancorp's official committee of unsecured creditors, Manufacturers and Traders Trust, Wilmington Trust and Bank of New York Mellon Trust - filed with the U.S. Bankruptcy Court separate objections to confirmation of Capitol Bancorp's Amended Joint Liquidating Plan. The official committee states, "The Plan suffers from two major - and fatal - flaws. First, the Debtors have proposed that this Court release the Debtors' insiders, including their officers and directors, from any liability for any claims arising on or before the Effective Date of the Plan. What is more, the Debtors have proposed these non-consensual, third-party releases in the context of a Chapter 11 plan of liquidation. Such releases are prohibited in this (and other) circuits and their presence in the Plan compels entry of an order denying confirmation of the Plan. Second, the Debtors have turned the chapter 11 process on its head. In a normal case, a chapter 11 debtor would decide whether it intends to liquidate or reorganize and then file a plan that accomplished either a liquidation or reorganization. Not these Debtors. Eager to secure the third party releases discussed above, and for current management to maintain control of the Debtors with little creditor oversight, the Debtors have filed a chapter 11 plan that punts the decision to liquidate or reorganize."
W.R. Grace Status Updates Anticipated
W.R. Grace & Co. announced that the Company will host a conference call and webcast on December 12, 2013 to review the Company's recent UNIPOL acquisition and the status of its timeline for Chapter 11 emergence. The announcement explains that none of the four parties with asbestos-related appeals to W.R. Grace's Plan of Reorganization filed further appeals with the U.S. Supreme Court before the applicable deadline. One appeal, relating to the appropriate amount of interest payable on the Company's pre-petition bank debt, remains pending before the Third Circuit Court of Appeals. W.R. Grace states that it does not expect to emerge from Chapter 11 protection until the Third Circuit has ruled on this appeal. The Company will further discuss its fourth quarter 2013 adoption of mark-to-market pension accounting on the December 12, 2013 call.
City of Detroit Certification Sought
The City of Detroit's Police and Fire Retirement System and the General Retirement System (together, the Retirement Systems) filed with the U.S. Bankruptcy Court a motion for entry of an order certifying their appeal of the Court's previous order determining that the City of Detroit is eligible to be a Debtor under Chapter 9 directly to the U.S. Court of Appeals for the Sixth Circuit, pursuant to 28 U.S.C. Section 158(d)(2)(B)(i) and Rule 8001(f)(3) of the Federal Rules of Bankruptcy Procedure. The motion explains, "This case is the largest municipal bankruptcy in American history. By its own account, the City has approximately $18 billion in debt and more than 100,000 creditors that include over 32,000 active and retired City employees who participate in the Retirement Systems. Swift resolution of whether the City may proceed in Chapter 9 bankruptcy is of paramount importance to the City, the State, the public, and those municipal employees and retirees whose livelihoods depend on the accrued pension benefits that they earned and that the City seeks to discharge in bankruptcy. The Retirement Systems thus seek to certify this Court's eligibility ruling for a direct appeal to the Sixth Circuit under 28 U.S.C. Section 158(d)(2)....This Court's eligibility ruling is a paradigmatic case for immediate appeal to the Sixth Circuit. The City's eligibility to file for Chapter 9 bankruptcy is undeniably of great 'public importance.' 28 U.S.C. Section 158(d)(2). An immediate appeal of the City's eligibility would 'materially advance' the progress of this case....The Sixth Circuit eventually will decide whether the City is eligible to be a Chapter 9 debtor. The only question is timing. Because time is manifestly of the essence, this Court should certify its eligibility ruling for an immediate appeal to the Sixth Circuit." The Retirement Systems filed a separate motion requesting that the Court expedite its consideration of the certification motion and schedule a related December 6, 2013 hearing.
GMX Resources Plan Filed
GMX Resources filed with the U.S. Bankruptcy Court a First Amended Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "The primary purpose of the Plan is to effectuate the restructuring of the Debtors' capital structure (the 'Restructuring') by, among other things, reducing their overall indebtedness and improving free cash flow. Presently, the Debtors have a substantial amount of indebtedness outstanding under the Senior Secured Notes, Second-Priority Notes, Convertible Notes, Old Senior Notes, and other obligations to various third parties. If the Debtors are not able to consummate the Restructuring, the Debtors will likely have to formulate an alternative plan, and the Debtors' financial condition will likely be further materially adversely affected. The Restructuring will reduce the amount of the Debtors' outstanding indebtedness by approximately $505,000,000 under their various indentures as follows: (i) satisfaction of $336,276,571.00 of the Senior Secured Notes through conversion of the Senior Secured Noteholders Secured Claim into all of the issued and outstanding shares of Reorganized GMXR Common Stock and 61.3856% of the New GMXR Interests; provided, that such Holders of Senior Secured Noteholder Secured Claims may hold a lower percentage of the New GMXR Interests to the extent that Holders of Allowed Senior Secured Noteholder Secured Claims demonstrate that such claims are Old and Cold Senior Secured Notes Claims; (ii) waiver of a $66,086,738.00 deficiency claim by the Holders of Senior Secured Notes if Class 4 votes to accept the Plan, or discharge of such deficiency claim with such claim being treated as a General Unsecured Claim if Class 4 votes to reject the Plan; (iii) discharge of the Second-Priority Notes in the approximate amount of $51,500,000, with such claims being treated as General Unsecured Claims under Class 4; (iv) discharge of the Convertible Notes in the approximate amount of $48,296,000, with such claims being treated as General Unsecured Claims under Class 4; and (v) discharge of the Old Senior Notes in the approximate amount of $1,970,000, with such claims being treated as General Unsecured Claims under Class 4."
Global Aviation Holdings Procedures Approval Sought
Global Aviation Holdings filed with the U.S. Bankruptcy Court a motion for an order (a) approving sale procedures in connection with the sale of (i) the Debtors business or (ii) the acquired assets; (b) scheduling an auction, prevailing bidder hearing and manner of notice thereof and (c) establishing procedures relating to the cure amount for the assumption and/or assumption and assignment of executory contracts and unexpired leases. The Debtors have selected secured lender Cerberus Business Finance as stalking horse bidder. The motion explains, "The Secured Lender has proposed to sponsor a Plan of Reorganization (the 'Plan') as a Stalking Horse Bidder (the 'Stalking Horse Bidder') to acquire the Business through the purchase of the new equity of the reorganized Debtors pursuant to the Plan. The terms of the Secured Lender's bid (the 'Stalking Horse Bid') will be set forth in the Plan Term Sheet (the 'Plan Term Sheet') which will be filed with the Court prior to the hearing on the Motion and distributed to all known potential bidders. In an alternative to the Plan Term Sheet, the Sale Procedures also contemplate the sale of the Acquired Assets through the Asset Sale. The Debtors will file the form of an asset purchase agreement (the 'Asset Purchase Agreement') prior to the hearing on the Motion and will distribute it to all known potential bidders." The procedures further provide for provides for the cash repayment of not less than $35 million of the Company's indebtedness to the secured lender upon consummation of the asset sale or plan. The Court scheduled a December 20, 2013 hearing to consider the motion, with objections due by December 13, 2013. In the event that the Company timely receives two or more qualifying bids, a February 21, 2014 auction will take place.