Commercial Bankruptcy:Bankruptcy Dismissals, Failure to Provide Timely Payment Advice

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.

Where previously bankrupt firms were filing payment advices and judges were not as concerned that the advices were filed within the necessary time period, increasingly, the U.S. Bankruptcy Courts are forcing debtors, and their attorneys, to adhere to section 521(I)(2) of the U.S. Bankruptcy Code as it relates to the timely filing of these payment advices. In one case, a debtor’s attorney, claiming he had delivered payment advices late to the U.S. trustee as well as a Chapter 7 trustee because he was experiencing computer problems, nevertheless, saw the court hold that the statute was clear and would not allow the late filing.

ABH LLC 1 filed Chapter 11 in the U.S. Bankruptcy Court in Delaware. The firm listed assets of less than $100,000 and liabilities of more than $1 billion. The filing was under case number 09-14485. Also filing were ABH LLC 2 under case number 09-14486 and ABH Holding Company LLC under case number 09-14887.  For more information contact the court at 302-252-2560.

Black Gaming LLC, the Mesquite, Nv. firm which operates such casinos and resorts as the Casablanca Hotel & Casino, the Oasis Hotel & Casino and the Virginia River Hotel & Casino and which filed Chapter 11 last week, was in default on $206 million in debt.  Under a prepackaged bankruptcy plan, an investment group would take control of the company while general unsecured creditors would be paid in cash. Wells Fargo’s nearly $15 million in debt would also be paid-in full.  The company filed bankruptcy after entering into a “lockup agreement” with holders of nearly 70% of the company’s $125 million in senior notes.

ION Media Networks, the Florida firm fka as Paxson Communications which had suffered a setback when a federal court stayed a U.S. Bankruptcy Court ruling that had approved ION’s reorganization plan, has seen that stay vacated. As a result, the company, which erased $2.7 billion in debt, can emerge from Chapter 11 protection debt free and with $150 million in growth funding.  Under the plan of reorganization, secured creditors would receive 62% in new stock in exchange for the $150 million.  For more information contact the court at 866-232-1268.

NM Texas Inc. filed Chapter 11 in the U.S. Bankruptcy Court in Delaware. The firm listed assets of less than $100,000 and liabilities of between $100 million and $500 million. The filing was under case number 09-14470. For more information contact the court at 302-252-2560.