Business Bankruptcy News Bulletin Summary for Week of October 18

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 and an examination of business bankruptcy matters. Please visit the insideARM bookstore for information on subscribing to the Bulletin.

A Brief Look at a Chapter 11 Unsecured Creditors’ Committee

An unsecured creditors’ committee is an essential part of a Chapter 11 reorganization in acting as a watchdog for the creditors that it represents. The committee to represent unsecured claims should be set up as soon as possible after the filing of the case.  According to the U.S. Bankruptcy Code, the committee should represent the various interests of unsecured creditors. Following the bankruptcy filing, the U.S. Trustee may schedule a meeting of creditors to provide the Trustee with information about the case and to identify creditors willing to serve on the committee. Any creditor interested in serving on the committee should submit a request to that effect with the Trustee, and once the committee is formed the Trustee should announce the constitution of the committee and file details of the committee with the U.S. Bankruptcy Court overseeing the case.

BANKRUPT COMPANIES

American Safety Razor’s winning bidder is Energizer Holdings Inc. of Town & Country, Mo., which agreed to acquire the Cedar Knolls, N.J. maker of private-label razors out of bankruptcy protection. Energizer, which agreed to pay $301 million and assume certain debt, must still win approval for the deal from antitrust regulators. American Safety Razor filed Chapter 11 over the summer sagging under $500 million in obligations.

Crownbrook Debco LLC, Nazareth, Pa., filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York. The firm listed assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. The filing was under case number 10-15345. For more information contact the court at 866-232-1268.

Extended Stay Inc. has now emerged from Chapter 11 after being acquired by a group including Centerbridge Partners LP, Paulson & Co. Inc. and Blackstone Real Estate Partners VI LP for about $3.9 billion. The company listed $7.6 billion in debt when it filed for bankruptcy protection last year but was able to pare that amount by nearly $5 billion during reorganization.

General Growth Properties Inc., the bankrupt Chicago, Il. mall owner, received approval from the U.S. Bankruptcy Court to go ahead with a $2 billion share offering once it emerges from Chapter 11. The court also gave its okay to a     $1.8 billion commitment for debt financing. For further information contact the court in Manhattan, N.Y. at 212-668-2780 and refer to case number 09-11977.

Lehman Brothers Holdings Inc. has apparently reached a deal that calls for Ambac Assurance Corp. to drop $6.1 billion in claims against Lehman’s bankruptcy estate.

Pacific Coast Medical Supply Inc., Astoria, Or., filed Chapter 11 in the U.S. Bankruptcy Court for the District of Oregon. The firm listed assets of between $100,000 and $1 million and liabilities of between $1 million and $10 million. The filing was under case number 10-39598. For more information contact the court at 800-726-2227.

Sorrento Mesa Hand Car Wash & Spa, San Diego, Ca., filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of California. The firm listed assets and liabilities of between $1 million and $10 million each. The filing was under case number 10-18144. For more information contact the court at 619-557-6521.

Washington Mutual Inc. filed its amended reorganization plan and disclosure statement regarding the distribution of $7 billion that it expects to gain through its Chapter 11 proceedings. For further information contact the U.S. Bankruptcy Court in Wilmington, De. at 302-252-2560.