Business Bankruptcy News Bulletin Summary for Week of April 26

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.

Cash Collateral in a Chapter 11 Bankruptcy Filing

Debtors that file for Chapter 11 protection often face the immediate task of accessing financing to continue operating, and in fact the ability to continue as a business depends much on whether the debtor can access the cash collateral. A debtor-in-possession typically gets quick approval for fairly free use of the cash collateral to conduct operations but some provisions on using it are rather strict. For example, the debtor-in-possession can’t use, sell or lease cash collateral without the agreement of potentially affected creditors or without authority of the U.S. Bankruptcy Court to do so. Often a debtor must first get an agreement from its secured creditors before seeking permission from the court to use the cash collateral. One matter to be considered by the court is whether secured creditors’ interest in the debtor’s property will be specially protected. The court may then place certain restrictions on the debtor’s use of the cash collateral.

BANKRUPT COMPANIES

Advanta Corp. has seen a 5/14 deadline set for filing proof of claims in its Chapter 11 bankruptcy. For further information contact the U.S. Bankruptcy Court in Wilmington, De. at 302-252-2560 and refer to case number 09-13931.

Cooper-Standard Holdings Inc. has seen a 5/12 hearing scheduled to consider the reorganization plan in its Chapter 11 bankruptcy. Objections to the plan should be filed by 5/5. For further information contact the U.S. Bankruptcy Court in Wilmington, De. at 302-252-2560 and refer to case number 09-12452.

Fuddruckers Inc., Austin, Tx., filed Chapter 11 in the U.S. Bankruptcy Court in Delaware. The firm listed assets and liabilities of between $50 million and $100 million each. The filing was under case number 10-11314. For more information contact the court at 302-252-2560.

FX Luxury Las Vegas I LLC, New York, N.Y., filed Chapter 11 in the U.S. Bankruptcy Court in Nevada. The firm listed assets and liabilities of between $100 million and $500 million each. The filing was under case number 10-17015. For more information contact the court at 800-314-3436.

Pacific Ethanol Inc., Sacramento, Ca., filed an amended joint reorganization plan, along with four of its ethanol-manufacturing facilities. The plan, filed with the U.S. Bankruptcy Court in Delaware, will cut the firm’s debt through a swap of $290 million in secured debt for equity and $115 million in secured and subordinated debt. The company hopes that upon emergence from Chapter 11 it will continue owning as well as operating the production facilities. For further information on Pacific Ethanol contact the court at 302-252-2560.

Visteon Corp., the bankrupt Van Buren Township, Mi. automotive supplier, is facing new claims from the Pension Protection Fund in the U.K., which is seeking $555 million for underfunded pensions. The claims, which could delay the firm’s plans for exiting Chapter 11 bankruptcy, will be discussed in court on 4/30. Visteon says that its Visteon UK unit currently has no funding requirements, according to British law.