Business Bankruptcy News Bulletin Summary for Week of October 4

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.

Filing Dischargeability Complaints & Time Limits In Bankruptcy Filings

In a Chapter 7 liquidation, a complaint that objects to the debtor’s discharge under 727(a) of the U.S. Bankruptcy Code should be filed within 60 days of the first date of the creditors’ 341 meeting. In a Chapter 11 filing, the complaint should be filed no later than the first date set for the confirmation hearing. Section 727, however, does not apply in Chapter 13 bankruptcy proceedings. The U.S. Supreme Court has held that a time limit in Rule 4004(a) is not jurisdictional but should rather be considered a procedural-complaint processing rule. Therefore, a debtor that didn’t raise the untimeliness of a creditor’s complaint until after the court granted summary judgment to the creditor was precluded from arguing that the court lacked jurisdiction to enter that judgment. In essence, the debtor in such a case forfeits the right to raise timeliness as an issue.

BANKRUPT COMPANIES

American Safety Razor Co., the Cedar Knolls, N.J. maker of razors that filed for bankruptcy protection in July, received a $301 million cash offer to be acquired by competitor Energizer Holdings Inc. of Town and Country, Mo.  The agreement must be approved by the U.S. Bankruptcy Court.

Blockbuster Inc.’s strategy under Chapter 11 proceedings calls for closing as many as 800 more of its remaining 3,300 outlets as the Dallas, Tx. video rental company thins out its bricks-and-mortar stores to focus more on mail-order and on-demand rental services. On the financial side, the company hopes to slash its $900 million debtload down to about $100 million through arrangements that call for handing over control of the company to creditors. When it emerges from bankruptcy proceedings, perhaps early next year, Blockbuster will find investor Carl Icahn controlling three of its seven seats on the board of directors. For more information contact the U.S. Bankruptcy Court in the Southern District of New York at 212-668-2780.

Formcraft Holdings Limited Partner Inc., Dayton, Oh., filed Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Virginia. The firm listed assets and liabilities of between $100 million and $500 million each. The filing was under case number 10-74630. Also filing was Formcraft Holdings General Partner Inc. under case number 10-74631. For more information contact the court at 800-326-5879.

Kentuckiana Medical Center LLC in Clarksville, In. believes it can reorganize under Chapter 11, saying that it ran into financial problems partly because of a drawn out certification process that delayed its billings. The company recently filed Chapter 11 in the wake of a dispute over an outstanding loan. Kentuckiana listed assets and liabilities of between $10 million and $50 million each. For more information contact the U.S. Bankruptcy Court for the Southern District of Indiana at 888-219-5534.

Nortel Networks Corp., the bankrupt Brampton, Ontario-based manufacturer of telecommunications equipment, is now ready to sell its Multi Service Switch operations to Sweden’s Ericsson in a $65 million transaction. Nortel has been selling off its assets under bankruptcy proceedings. Separately, the company said it’s laying off nearly three dozen workers at its facility in Davidson County, Tn.

WF Holdings Inc., Dayton, Oh., filed Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Virginia. The firm listed assets and liabilities of between $100 million and $500 million each. The filing was under case number 10-74620. Also filing were Workflow Solutions LLC under case number 10-74619, WF Capital Holdings Inc. under case number 10-74614 and several other affiliates. For more information contact the court at 800-326-5879.