Business Bankruptcy News Bulletin Summary for Week of June 21

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 Stocks and Bonds In a Chapter 11 Reorganization

During bankruptcy, bondholders will stop receiving interest and principal payments, and stockholders will stop receiving dividends. When the bankruptcy is concluded, if you are a bondholder, you may receive: new stock in exchange for your bonds, new bonds or a combination of stocks and bonds. If you are a stockholder, the trustee may ask you to send back your stock in exchange for shares in the reorganized company. The new shares may be fewer in number and be worth less. The reorganization plan will spell out your rights as an investor and what you can expect to receive, if anything, from the company.

BANKRUPT COMPANIES

Accentia Biopharmaceuticals filed its reorganization plan in the U.S. Bankruptcy Court in Florida, hoping that it can emerge from Chapter 11 this summer.

Colorado Sun Oil Processing LLC, Lamar, Co., has seen an involuntary Chapter 11 filed against it in the U.S. Bankruptcy Court for the District of Colorado. The filing was under case number 10-24424. For more information contact the court at 866-222-8029, then enter 22.

FairPoint Communications Inc.’s restructuring plan is under siege by affiliates of Verizon Communications Inc., the N.Y. telecom firm that sold landlines in New England to FairPoint two years ago for $2.3 billion. The affiliates, including Verizon Wireless, are worried that the plan will take away their protections against litigation. According to Verizon, FairPoint’s Chapter 11 reorganization plan would set up a trust to provide proceeds from litigation to FairPoint’s creditors.

I D Interactive LLC, Delray Beach, Fl., filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Florida. The firm listed assets and of between $1 million and $10 million and liabilities of between $10 million and $50 million. The filing was under case number 10-26493. Also filing were ID Interactive International LLC under case number 10-26545, ID Interactive Licensing Ltd. under case number 10-26540 and several other affiliates. For more information contact the court at 800-473-0226.

Newark Group Inc., a Cranford, N.J. paperboard recycler and vegetable-box manufacturer which recently filed Chapter 11, filed a prearranged plan with its lenders that would slash $200 million of its unsecured debt. Reportedly the company’s plan is supported by more than 80% of its noteholders. In its filing, Newark and two affiliates listed assets and liabilities of between $100 million and $500 million each. The filing was made in the U.S. Bankruptcy Court in New Jersey.

Station Casinos Inc. has seen a 6/30 deadline set for submitting bids for certain assets in its Chapter 11 bankruptcy case. For more information contact the U.S. Bankruptcy Court in Nevada at 800-314-3436.

Tribune Co., Chicago, Il., is under more pressure from lenders, who have joined with the bankruptcy trustee in questioning a $43 million bonus package the company is paying out to management. That would bring to $115 million the amount that the media firm has paid in bonuses to executives during its Chapter 11 restructuring. Among the lenders objecting to the bonuses is Wells Fargo Bank. 

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