Business Bankruptcy News Bulletin Summary for Week of June 7

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.

A Brief Look at Some of Your Rights in a Bankruptcy Case

As a credit/finance executive, you may first learn about a business bankruptcy in the news.  If you hold stocks or bonds in your own name, you should receive information about the filing directly from the company.  If you hold stocks or bonds in street name with a broker, your broker should forward information from the company to you.  You may be asked to vote on the reorganization plan, although you may not get the full value back on your investment.  In fact, sometimes stockholders don’t get to vote on the reorganization plan and don’t get anything back.

If you are entitled to vote on the plan, you should receive from the debtor: a copy of the reorganization plan or summary; a court-approved disclosure statement that includes information to help you make an informed judgement regarding the plan; a ballot to vote on the plan; and a notice of the date of a confirmation hearing.

Even if you’re not entitled to vote, you should still get a summary of the disclosure statement and a notice about how to file objections and other information.

BANKRUPT COMPANIES

Armored Money Services LLC, Mount Vernon, N.Y., filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York. The firm listed assets and liabilities of between $10 million and $50 million each. The filing was under case number 10-23060. For more information contact the court at 866-232-1268.

Community Bancorp, Las Vegas, Nv., filed Chapter 7 and will liquidate. The company, which made its filing in the U.S. Bankruptcy Court in Las Vegas, listed liabilities of more than $880 million, including about $805 million being claimed by the federal government.

Extended Stay Inc. has seen a group, led by investor Centerbridge Partners LP, emerge as the winner in a bankruptcy auction to take control of the hotel company. The group, which also includes Blackstone Group and Paulson & Co. and other backers, offered more than $3.9 billion in cash for Extended Stay, which itself estimated its valued at about $3.3 billion when it filed Chapter 11. The deal to sell out to the Centerbridge group must still be approved by the court.

Nortel Networks Inc., the bankrupt manufacturer of telecom gear, sold its Internet-calling technology to Genband, Plano, Tx., for $282 million.

Simple Solar Systems LLC, a Boulder, Co. seller and installer of photovoltaic systems, filed Chapter 11 in an attempt to reorganize its debt and to focus on its core operations. The filing, in the U.S. Bankruptcy Court for the District of Colorado, listed assets of between $500,000 and $1 million and liabilities of between $1 million and $100 million. For more information call the court at 720-904-7419.

Tribune Co., Chicago, Il., reported net income of $26.9 million in April on revenue of $232 million. The results included reorganization costs of $7.9 million and operating income of $25.6 million.

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