Business Bankruptcy News Bulletin Summary for Week of September 20

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.

What to Expect in a Chapter 13 Filing

As in a Chapter 7 bankruptcy filing, in a Chapter 13 filing a trustee takes control in overseeing the case, but in Chapter 13, in contrast to a Chapter 7 case, the trustee doesn’t take possession of the bankrupt estate’s property. A 341 meeting of creditors takes place within forty days of the bankruptcy filing, when the debtor reports on the financial condition of the company. A reorganization plan must be filed quickly, within only about fifteen days of the bankruptcy petition, and the debtor must start making payments on claims within thirty days of the filing of the reorganization plan.

BANKRUPT COMPANIES

Circuit City Stores Inc., the bankrupt electronics retailer, won approval for its amended liquidation plan, which will be paying unsecured creditors 10% of their $1.8 billion to $2 billion in claims.

Claim Jumper Restaurants LLC, an Irvine, Ca. operator of forty-five eateries in eight states, filed Chapter 11, hoping to emerge in the next two or three months with a lightened debt and stronger balance sheet. As it filed for bankruptcy protection, the company announced that it will sell its operations to Private Capital Partners of Los Angeles, Ca. for an undisclosed amount. 

GC Holdings Inc., Fremont, Ca., filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of California. 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 10-70550. For more information contact the court at 888-457-0604.

Metro-Goldwyn Mayer Inc.’s creditors are being asked to approve a prepackaged bankruptcy restructuring plan within the next two weeks or so. As the plan stands, MGM would file Chapter 11 and hopefully emerge from bankruptcy protection by the end of the year. The Los Angeles, Ca. film company, sagging under some $3.7 billion in debt, would also be permitted to seek a credit line in order to fund ongoing operations.

Quigley Co., a unit of drug giant Pfizer Inc. which formerly manufactured asbestos, was turned down by the U.S. Bankruptcy Court in its request to exit bankruptcy proceedings. The court thinks that Pfizer manipulated the bankruptcy process for its own benefit and that the reorganization plan was filed in bad faith. According to the plan, Pfizer would have paid about $450 million into an asbestos trust, although according to some testimony in the bankruptcy proceedings Quigley faces claims of nearly $4.5 billion. For more information contact the court in Manhattan, N.Y. at 212-668-2780 and refer to case number 04-15739.

Westbury Owner LLC, Rockville, Md., filed Chapter 11 in the U.S. Bankruptcy Court for the District of Maryland. The firm listed assets and liabilities of between $10 million and $50 million each. The filing was under case number 10-30951. For more information contact the court at 866-222-8029, then enter 4.