Commercial Bankruptcies: Understanding Rule 4007(c) Regarding Dischargeability

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.

Understanding Rule 4007(c) Regarding Dischargeability

Rule 4007(c) of the U.S. Bankruptcy Code states that a complaint to determine the dischargeability of a debt under Section 523(c) should be filed no later than 60 days after the first date set for the meeting of creditors under Section 341(a). This applies to filings under Chapter 7, Chapter 11 and Chapter 13. Rule 4007(d) contains a special rule regarding filing a compliant that seeks to have a debt held nondischargeable on the basis that it was “willful or malicious injury” under Section 523(a)(6). This subsection states that on a debtor’s motion for a discharge under Section 1328(b), the court shall enter an order fixing the time to file a complaint to determine the dischargeability of any debt under 523(a)(6) and shall give no less than 30 days’ notice of the time fixed to all creditors in the manner provided in Rule 2002.

BANKRUPT COMPANIES

Chemtura Corp. received approval from a district judge to proceed to federal court with its case to try to avoid paying certain environmental claims to the U.S. government. Chemtura, which filed for protection from creditors nearly a year ago, hopes to emerge from bankruptcy proceedings this summer. For further information contact the U.S. Bankruptcy Court in Manhattan, N.Y. at 212-668-2780.

Cooper-Standard Holdings Inc., a bankrupt automotive supplier, received approval from the U.S. Bankruptcy Court in Delaware for an amended reorganization plan that will slash its debt by more than $650 million, which would leave it with $480 million in liabilities. For further information contact the court in Wilmington, De. at 302-252-2560.

Dynamic Builders Inc., Los Angeles, Ca., filed Chapter 11 in the U.S. Bankruptcy Court for the Central District of California. The firm listed assets and liabilities of between $100 million and $500 million each. The filing was under case number 10-14151. For more information contact the court at 866-522-6053.

East West Resort Development V LP has seen a 4/9 asset auction scheduled in its Chapter 11 bankruptcy and a sale hearing is set for 4/13. For further information contact the U.S. Bankruptcy Court in Wilmington, De. at 302-252-2560 and refer to case number 10-10452.

General Growth Properties Inc. won approval from the U.S. Bankruptcy Court to extend, until 2016, the due data of a $1.5 billion mortgage. Now having restructured $14 billion of its mortgages, the Chicago, Il. mall-property concern has only another $1 billion in mortgages left to deal with. General Growth is also filing a proposal by Brookfield Asset Management Inc. and two creditors to provide $6.5 billion to assist the company as it exits bankruptcy proceedings. Simon Property Group Inc., which plans on submitting its own sweetened buyout offer for General Growth, hopes to learn about some of the specifics of the Brookfield plan before making its revised bid.

Natural Products Group LLC has seen a 4/29 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 10-10239.

New York Off-Track Betting Corp., unable to reach a deal with New York State legislators, will shut down its operations within two weeks. The firm, which has filed Chapter 9 with liabilities of $95 million, will lay off 1,300 workers as it shuts down.

Washington Mutual filed its reorganization plan and disclosure statement with the U.S. Bankruptcy Court, calling for, among other things, more than $7 billion to be distributed through a trustee.