Paul Allen May Lose Control of Charter in Banko and News on Other Challenged U.S. Companies

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 the Schedules Used in a Chapter 11 Filing as it Relates to Secured and Unsecured Claims

There are many schedules used in a bankruptcy case.  As an example, schedule D, in a Chapter 11 bankruptcy case, identifies the secured claims, even if they are only partially secured. In the case of partially secured claims, Schedule D must also identify the amount of the “deficiency” claim if it exists. Although the deficiency claim is a general unsecured claim, the debtor should not identify the deficiency claim on Schedule F too, which would be redundant. Often, a debtor has no basis to calculate the amount of the deficiency claim because the value of the underlying asset hasn’t been determined.  In such cases, the entry is marked “unliquidated” to reflect the uncertainty of the secured claim. Also, if the debtor is party to a secured financing arrangement but treated as a lease for reporting purposes under GAAP, the liability can be reflected on Schedule D and the related real property assets can be identified on Schedule A.

Regarding the value of collateral securing claims on Schedule D, before the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), debtors had to state the market value of the asset. Like Schedule A, the word “market” was deleted from the column that requires the debtor to state the value of the collateral to ensure that there are no inferences concerning the applicable valuation standard. 

Bankrupt Companies

ADS Logistics, a Chesterton, In. trucking and logistics operator, filed Chapter 11 in the U.S. Bankruptcy Court in Delaware listing assets of between $10 million and $50 million and liabilities of between $50 million and $100 million.  For more information call the court at 302-252-2560.

BNP Oil & Gas Properties Ltd., Corpus Christi, Tx., filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. The firm listed assets and liabilities of between $50 million and $100 million each. The filing was under case number 09-20612. For more information contact the court at 800-745-4459.

Charter Communications Inc. should receive a ruling on its reorganization plan from the U.S. Bankruptcy Court on 9/30. Billionaire Paul Allen had hoped to restructure the cable company’s debt so as to maintain control, but it’s now thought that Mr. Allen, the co-founder of Microsoft Corp., could end up losing control of Charter. The company earlier filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Manhattan, N.Y. hoping to slash its $22 billion debtload by $8 billion.

Crusader Energy Group Inc. has seen SandRidge Energy Inc., an Oklahoma City, Ok. oil and gas firm, agree to purchase Crusader for $230 million once it completes its reorganization plan. Crusader’s unsecured and secured creditors are allegedly supporting the purchase.  For more information contact Kevin White at 405-429-5515.

Fontainebleau Las Vegas, the bankrupt casino and resort development, is reportedly in talks to sell itself to Penn National Gaming Inc., a Wyomissing, Pa.-based operator of casinos and racetracks in the U.S. and Canada. The casino’s owners did say that they were in talks with an unidentified party but it has also been reported that Fontainebleau is negotiating with other suitors as well. It’s expected that even if a buyer assumed Fontainebleau’s $1.6 billion in debt it would also have to pump in another $1.5 billion to help complete the project.

Freedom Communications Inc. asked for permission from the U.S. Bankruptcy Court to hire a broker to look into a possible sale of its East Valley Tribune newspaper in Arizona and several other of its publications in the area. Freedom, Irvine, Ca., recently worked out a deal with creditors to restructure $770 million in debt. When it filed Chapter 11, Freedom, with more than 100 publications and eight television stations, said it has enough cash to fund day-to-day operations.

Mark IV Industries Inc., the privately-held Amherst, N.Y. manufacturer of engineered systems and components for vehicles, transportation infrastructure and equipment which employs more than 4,000 workers in sixteen countries, has seen the U.S. Bankruptcy Court for the Southern District of New York confirm its plan of reorganization. Under the plan, the company expects to reduce it debt to nearly $400 million from $1.2 billion.  Mark IV expects to emerge from bankruptcy before the end of October.

Progressive Baptist Church Inc., Temple Hills, Md., filed Chapter 11 in the U.S. Bankruptcy Court in Maryland. The firm listed assets and liabilities of between $1 million and $10 million each. The filing was under case number 09-27819. For more information contact the court at 800-829-0145.

Young Broadcasting Capital Corp., New York, N.Y., filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York. The firm listed assets of between $100 million and $500 million and liabilities of between $1 million and $100 million each. The filing was under case number 09-15606. For more information contact the court at 866-232-1268.