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Harrisburg, Tropicana Las Vegas, Shubh, Schutt, Riviera Marine: Bankruptcy
Pennsylvania Governor Ed Rendell said he opposes a bankruptcy filing by the state’s capital city, Harrisburg.
The city has told bondholders it cannot make $3.3 million in general-obligation bond payments due Sept. 15. Rendell said his administration is working with the city to pay for a financial adviser. The city has no authority to make the debt- service payment, which is scheduled to be covered by its insurer, Ambac Financial Group, on Harrisburg’s behalf.
The city also has skipped $8 million in payments it guaranteed this year on bonds issued by the Harrisburg Authority for a trash-to-energy incinerator built in the 1960s. Rendell said the debt the city faces from that project makes Harrisburg’s situation “an aberration.”
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Tropicana Las Vegas Seeks Dismissal of Icahn Suit
The operator of the Tropicana Las Vegas hotel and casino asked a bankruptcy court to dismiss a trademark lawsuit filed by companies controlled by financier Carl Icahn to win rights to the hotel’s name.
Tropicana Las Vegas Inc. said a court in Nevada has already ruled that it owns the rights to the name, according to a Sept. 8 filing in U.S. Bankruptcy Court in Wilmington, Delaware. Icahn’s companies sued last month in Delaware bankruptcy court seeking ownership of the Tropicana trademark.
The Tropicana Entertainment LLC bankruptcy resulted in two reorganization plans, one by the operator of the Nevada casino and the other by its primary lender. Tropicana Las Vegas left Chapter 11 last year. Icahn’s Tropicana Entertainment Inc., which provided the $150 million in financing to exit Chapter 11, emerged in March. Icahn’s companies control the Tropicana Casino & Resort in Atlantic City, New Jersey.
The adversary trademark case is Icahn Agency Services LLC v. Tropicana Las Vegas Inc., 10-52489, U.S. Bankruptcy Court, District of Delaware (Wilmington). The main bankruptcy case is In re Tropicana Entertainment LLC, 08-10856, U.S. Bankruptcy Court, District of Delaware (Wilmington).
New Filings
Hilton Hotels Pittsburgh Owner Files for Bankruptcy
Shubh Hotels Pittsburgh LLC, the owner of Pittsburgh’s largest hotel, filed for bankruptcy protection days after Hilton Hotels Corp. terminated its franchise license agreement.
The Boca Raton, Florida-based company listed assets of as much as $50 million and debt of as much as $100 million in Chapter 11 documents filed Sept. 7 in U.S. Bankruptcy Court in Pittsburgh.
Hilton Hotels terminated a 20-year franchise agreement and pulled its name from the hotel last week, according to the Pittsburgh Tribune-Review. Shubh bought the 713-room hotel in downtown Pittsburgh in 2006 for $28 million.
The 20 largest creditors without collateral backing their claims are owed a total of $27.4 million, according to court papers. BlackRock Financial Management Inc. is listed as the largest unsecured creditor, owed $20 million. Hilton Hotels, owned by New York-based Blackstone Group LP, is owed $4.2 million, court papers show.
The case is In re Shubh Hotels Pittsburgh LLC, 10-26337, U.S. Bankruptcy Court, Western District of Pennsylvania (Pittsburgh).
Schutt Sports Files Bankruptcy, Seeks Shield From Verdict
Schutt Sports Inc., the Illinois football-helmet maker, filed for bankruptcy and sued competitor Riddell Inc. seeking an order to block collection of a $29 million patent lawsuit verdict.
Schutt and affiliates filed Chapter 11 bankruptcy papers Sept. 6 in Wilmington, Delaware. They listed both assets and debt of $50 million to $100 million. Schutt also sued Riddell, asking the bankruptcy court to bar collection of the damages in the patent suit, and to block the trial court’s order not to sell helmets involved in the case.
A federal court jury in Madison, Wisconsin, found last month that Schutt’s DNA and ION football helmets infringed Riddell inventions and awarded Riddell the damages, Riddell said in a statement at the time.
The bankruptcy case is In re Schutt Sports Inc., 1:10-bk- 12795, and the Riddell suit is Schutt Sports Inc. v. Riddell Inc., 1:10-ap-52995, U.S. Bankruptcy Court, District of Delaware (Wilmington). The patent case is Riddell Inc. v. Schutt Sports Inc., 3:08-cv-00711, U.S. District Court, Western District of Wisconsin (Madison)
Riviera Marine Files for Bankruptcy Protection in U.S.
Riviera Marine (Int.) Pty Ltd., part of a group of Australian companies that manufacture and sell luxury boats, sought bankruptcy protection in the U.S. citing a drop in demand starting in January 2008.
The Queensland-based company listed assets and debt of as much as $50 million each in Chapter 15 documents filed Sept. 8 in U.S. Bankruptcy Court in Tampa, Florida. Four affiliates also sought protection. Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while a company reorganizes abroad.
Riviera Marine said it sold 52 boats with sales totaling $54 million for fiscal year ending June 30, down from 139 boats with sales totaling $131 million in 2009 and 327 boats with sales totaling $265 million in 2008.
The U.S. filing followed a voluntary administration in Australia.
The case is In re Riviera Marine (Int.) Pty Ltd, 10-21722, U.S. Bankruptcy Court, Middle District of Florida (Tampa).
Queens Plaza Development LLC Files for Bankruptcy Protection
Queens Plaza Development LLC, the owner of property in Garden City, New York, sought bankruptcy protection from creditors.
The company listed assets and debt of as much as $50 million each in Chapter 11 documents filed Sept. 8 in U.S. Bankruptcy Court in Central Islip, New York.
The case is In re Queens Plaza Development LLC, 10-77035, U.S. Bankruptcy Court, Eastern District of New York (Central Islip).
Briefly Noted
Vitro Says It May Have Majority Support for Debt Plan
Vitro SAB, the Mexican glassmaker that defaulted last year on more than $1.2 billion of bonds, said it may have majority support among bondholders for a debt restructuring.
Vitro will file a plan under Mexico’s bankruptcy law, known as concurso mercantil, after obtaining a majority of backers under a consent solicitation being sought this month, according to a letter to the U.S. Securities and Exchange Commission.
The Monterrey, Mexico-based company said last month it was negotiating with a new set of creditors after a third restructuring proposal was rejected by the group that had led discussions since the February 2009 default. Vitro on Sept. 8 reached an agreement to recognize $240.3 million owed to derivative holders in exchange for dropping a lawsuit against the company.
Defaults
Credit-Default Swaps Index Falls as Jobless Claims Decline
A gauge of corporate credit risk in the U.S. fell a second day after a government report showed applications for jobless benefits declined more than forecast last week.
The Markit CDX North America Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses on corporate debt or to speculate on creditworthiness, declined 1 basis point to a mid-price of 104.5 basis points as of 1:29 p.m. yesterday in New York, according to Markit Group Ltd.
Credit swaps typically fall as investor confidence improves and rise as it deteriorates. They pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. To read additional details, click here.
To contact the reporter on this story: Dawn McCarty in Wilmington, Delaware, at dmccarty@bloomberg.net.
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