Business Bankruptcy News Bulletin Summary for Week of May 10

The items below are excerpted from the Business Bankruptcy News Bulletin. A full issue contains information on dozens of troubled companies, as well as informational and analysis highlights. Please visit the insideARM bookstore for information on subscribing to the Bulletin.

Postconfirmation Administration

Notwithstanding the entry of an order confirming the debtor’s reorganization plan, the U.S. Bankruptcy Court has the authority to issue any other order necessary to administer the estate. The court’s authority includes the postconfirmation determination of objections to claims or adversary proceedings, which must be resolved before a plan can be fully consummated. Also, Sections 1106(a)(7) and 1107(a) of the Bankruptcy Code require a debtor in possession or a trustee to report on the progress made in implementing a plan after confirmation. A Chapter 11 trustee or debtor in possession has a number of responsibilities to perform after confirmation, including consummating the plan, reporting on the status of consummation, and applying for a final decree.

BANKRUPT COMPANIES

Alliance Haulers Inc., Houston, Tx., filed Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. The firm listed assets and liabilities of between $100 million and $500 million each. The filing was under case number 10-11409. For more information contact the court at 302-252-2560.

American Mortgage Acceptance Co., a real-estate investment trust, filed its reorganization plan and disclosure statement with the U.S. Bankruptcy Court. According to the Chapter 11 plan, the company will transfer some of its assets to Teberna Preferred Funding I Ltd. in exchange for Teberna’s claim and it will later issue new preferred shares to raise money for operations. At the same time, American Mortgage is warning that the only alternative to its plan is a Chapter 7 liquidation. For more information contact the court in Manhattan, N.Y. at 212-668-2780.

Bi-Lo, the supermarket operator, received approval from the U.S. Bankruptcy Court for its reorganization plan, which will preserve about 207 stores out of the 214 that it entered bankruptcy proceedings with. The plan also calls for $150 million in new equity, a $200 million term loan and a $150 million asset-based loan, among other financing.

Magna Entertainment Corp. was hoping to wrap up its Chapter 11 reorganization by the end of April, after wining support for its reorganization plan from the U.S. Bankruptcy Court. The court agreed to Magna’s plan to transfer its Golden Gates Fields unit and other racetracks to MI Developments Inc. and Magna will pay out $90.5 million to unsecured creditors.

Movie Gallery Inc. will shutter its remaining stores in the U.S. over the next few months. The video-rental firm, which filed Chapter 11 over the winter, had earlier said it would close about half of its 2,400 locations in the U.S., but the fate of its more than 180 locations in Canada is not clear, as those locations are not part of Movie Gallery’s bankruptcy case.

Schwing America Inc., a bankrupt White Bear Township, Mn. manufacturer of concrete pumps, filed a reorganization plan that would have Schwing paying $27 million that it owes to Wells Fargo & Co.  Most of that payment would be funded by its German parent company, Schwing GmbH, as Schwing America attempts to avoid having its Chapter 11 converted to a liquidation under Chapter 7. The firm now has approval from the U.S. Bankruptcy Court to continue using cash collateral for spending.