WaMu, Park Lafayette, Point Blank, Schutt: Bankruptcy

Washington Mutual Inc. told the bankruptcy judge in a court filing yesterday that the parties to the global settlement agreed to an extension of the confirmation deadline until Jan. 31.

U.S. Bankruptcy Judge Mary F. Walrath told the parties on Dec. 20 that she would be unable to decide by the original Dec. 31 deadline whether she will or won’t approve the global settlement and confirm the Chapter 11 plan.

The judge held a four-day confirmation trial that ended Dec. 7. The global settlement, the foundation for the Chapter 11 plan, had a Dec. 31 deadline for approval by Walrath.

If approved, the plan and the settlement together call for distributing more than $7 billion to creditors. For a summary of changes WaMu made to its plan in October, click here for the Oct. 7 Bloomberg bankruptcy report. To read about the settlement before it was modified, click here for the May 24 Bloomberg bankruptcy report. Click here to read the May 18 Bloomberg bankruptcy report for a summary of WaMu’s plan.

The WaMu holding company filed under Chapter 11 in September 2008, one day after the bank subsidiary was taken over. The bank, once the sixth-largest depository and credit- card issuer in the U.S., was the largest bank failure in the country’s history. The holding company filed formal lists of assets and debt showing property with a total value of $4.49 billion against liabilities of $7.83 billion.

The holding company Chapter 11 case is In re Washington Mutual Inc., 08-12229, U.S. Bankruptcy Court, District of Delaware (Wilmington).

Updates

Secured Lender Buying Park Lafayette in Milwaukee

Amalgamated Bank, as agent for the lender to the 280-unit Park Lafayette condominium in Milwaukee, was given authority at a hearing last week to buy the project in return for $55 million of the secured debt.

Owed $120 million, the lender, Longview Ultra Construction Loan Investment Fund, won the auction. The next best offer was $48 million, according to minutes of last week’s hearing.

The lender agreed to carve out $600,000, including $250,000 for professional fees and $70,000 to make a 10 percent distribution to unsecured creditors. Mechanics’ lien holders whose security interests are subordinate to the lender’s will be paid 10 percent on claims estimated to be almost $2 million.

The creditors’ committee unsuccessfully opposed the sale.

The property is at the intersection of North Prospect Avenue and Lafayette Place in Milwaukee. At the time of bankruptcy, 39 units had been sold.

The project’s owner filed under Chapter 11 in December 2009.

The case is In re Renaissant Lafayette LLC, 09-38166, U.S. Bankruptcy Court, Eastern District of Wisconsin (Milwaukee).

Point Blank Has Final $25 Million Financing Approval

Point Blank Solutions Inc., a manufacturer of soft body armor, was given final approval on Dec. 28 for $25 million in replacement financing for the Chapter 11 case. The financing, which pays off an existing $20 million credit, is provided by Lonestar Partners LP, Privet Fund Management LLC, and Prescott Group Capital Management.

The order approving financing also sanctioned a so-called plan-support agreement where the three lenders will backstop a $15 million to $25 million equity offering to help finance a Chapter 11 plan. The offering would be open to unsecured creditors and stockholders. For details on the plan, click here for the Dec. 14 Bloomberg bankruptcy report.

The prior financing required selling the business this month. Creditors arranged the new financing in favor of a plan they believed more beneficial than a quick sale.

Based in Pompano Beach, Florida, Point Blank has two plants. Revenue in 2009 exceeded $153 million. The former chief executive and chief operating officer were convicted in September of orchestrating a $185 million fraud.

The Chapter 11 petition in April listed assets of $64 million against debt totaling $68.5 million. Debt included a $10.5 million secured loan paid off by financing for the Chapter 11 case. Point Blank said it also owes $28.2 million to trade suppliers.

The case is In re Point Blank Solutions Inc., 10-11255, U.S. Bankruptcy Court, District of Delaware (Wilmington).

Schutt Files First Exclusivity Extension Motion

Schutt Sports Inc., a football-helmet manufacturer, sold the business this month and filed a motion this week for a three-month extension of the exclusive right to file a Chapter 11 plan. If granted by the bankruptcy judge at a Jan. 10 hearing, the new deadline would be April 4.

Kranos Intermediate Holding Corp., an affiliate of Platinum Equity LLC, bought the business for a price that should net Schutt about $31.1 million, the company said. The price rose $8 million at auction. Rawlings Sporting Goods Co. Inc. bid at the auction and argued unsuccessfully to the judge that its offer was better.

Schutt estimated that secured debt at the time of sale would be some $19.8 million, with administrative expenses totaling $3.5 million more.

When Schutt filed under Chapter 11 in September, $34.8 million was owed to the secured lender Bank of America NA. Another $17.5 million was owing on a subordinated note held by Windjammer Mezzanine & Equity Fund II LP. The pre-bankruptcy secured debt was replaced with a $34 million credit to finance the Chapter 11 case. Schutt was forced into Chapter 11 by a $29 million patent-infringement judgment in favor of competitor Riddell Inc.

Based in Litchfield, Illinois, Schutt said assets and debt both exceed $50 million.

The case is In re Schutt Sports Inc., 10-12795, U.S. Bankruptcy Court, District of Delaware (Wilmington).

Bear Island Paper Has Exclusivity Until April 2011

Bear Island Paper Co. LLC, a subsidiary of Canada’s White Birch Paper Co., was granted its request and for a third time received an extension of the exclusive right to propose a Chapter 11 plan. The new deadline is April 1.

The creditors’ committee was authorized last week to file a lawsuit in bankruptcy court against Brant Industries Inc., a company controlled by Peter Brant who is also the ultimate owner of Bear Island and White Birch.

Brant Industries had an agreement to provide Bear Island with management services. The committee contends that $8.4 million in payments within two years of bankruptcy were fraudulent transfers based on the argument that Bear Island was not expressly obligated.

The committee will also sue Brant Industries for $3.8 million in so-called preferences received within one year of bankruptcy.

Bear Island was authorized to sell the business to a group consisting of Black Diamond Capital Management LLC, Credit Suisse Group AG, and Caspian Capital Advisors LLC. They offered $172.5 million, comprised of $94.5 million cash and $78 million as a credit against secured debt. The Black Diamond group estimated that their offer would generate between $90 million and $94.5 million cash for assets not representing their collateral. The group holds 65 percent of the $438 million in first-lien debt.

Based in Nova Scotia, White Birch and U.S. subsidiaries filed for reorganization simultaneously in the U.S. and Canada in February. White Birch is the second-largest newsprint maker in North America.

When the Chapter 11 case began, secured liabilities included $438 million on a first-lien term loan, $104 million on a second-lien term loan, $50 million on an asset-backed revolving credit, and $51.5 million on swap agreements. Trade suppliers were owed $9.5 million. The companies had $667 million in sales during 2009, with $125 million attributable to Bear Island. White Birch had three pulp and paper mills in the province of Quebec. The Bear Island plant was in Ashland, Virginia. White Birch is controlled by Brant-Allen Industries, according to Bloomberg Data.

The case is In re Bear Island Paper Co. LLC, 10-31202, U.S. Bankruptcy Court, Eastern District of Virginia (Richmond).

Judicial Vacancy

Mitchell Retiring from Alexandria, Virginia Bench

U.S. Bankruptcy Judge Stephen S. Mitchell is retiring from the bankruptcy bench in Alexandria, Virginia, in August, according to the Virginia Lawyers Weekly.

Mitchell, 65, has been a bankruptcy judge since 1994. He is a graduate of the Yale Law School.

Mitchell’s successor will be named by the 4th U.S. Circuit Court of Appeals in Richmond. The notice of vacancy says that the Court of Appeals is an “equal opportunity employer.”

Year-End Statistics

Old Chrysler Is Largest Plan Confirmation in 2010

Chapter 11 plans were confirmed by 41 publicly held companies in 2010, according to New Generation Research Inc., the publisher of BankruptcyData.com.

Ranked by assets, the four largest companies to confirm plans this year were old Chrysler, now formally named Old Carco LLC, shopping mall owner General Growth Properties Inc., chemical producer Lyondell Chemical Co., and bank holding company Fremont General Corp.

Lehman Again Most Frequently Read Docket on Bloomberg

Three bankruptcy cases were among the ten most widely read court dockets on the Bloomberg system during 2010, Bloomberg Law announced yesterday.

The bankruptcy court docket for Lehman Brothers Holdings Inc. was the most frequently read docket on the Bloomberg system, for the second year in a row.

The dockets for the reorganizations of shopping center owner General Growth Properties Inc. and bank holding company Washington Mutual Inc. were the sixth and ninth most-frequently consulted.

Citadel Broadcasting Corp., a Las Vegas-based owner of 224 radio stations, beat all the bankruptcy cases other than Lehman. Coming in fourth place, Citadel’s docket attracted more readers than General Growth and Washington Mutual.

If you don’t know how to use the Bloomberg terminal or Bloomberglaw.com to read court dockets and underlying court papers, call Bloomberg customer service for a tutorial. A Pacer ID isn’t required to read court papers on the Bloomberg system.

To contact the reporter on this story: Bill Rochelle in New York at wrochelle@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.