Circuit City Stores Files Chapter 11 Cases in Virginia

 

Earlier today, Circuit City Stores, Inc. filed chapter 11 cases in the United States Bankruptcy Court for the Eastern District of Virginia.  A Canadian subsidiary also filed a bankruptcy case in Canada today.  Some key details regarding the Virginia filings:

• Assets: $3.4 billion
• Employees: 39,600
• Annual Revenue: $1.17 billion
• Counsel: Skadden, Arps, Slate, Meagher & Flom LLP and McGuireWoods LLP

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Sturgis Iron and Metal Files Second Amended Plan of Liquidation

Sturgis Iron and Metal Co., Inc. filed its Second Amended Plan of Liquidation and accompanying Disclosure Statement on Friday with the United States Bankruptcy Court for the Western District of Michigan.  The privately-held company operated nine scrap metal recycling facilities located in three states.  The company filed for bankruptcy on April 4, 2008.

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Delphi Corporation Seeks Approval for New Financing Agreements and New Agreements with General Motors

Delphi Corporation filed two significant motions in its chatper 11 cases on Friday.  First, Delphi filed its “Accommodation Motion” wherein the debtor seeks authority to supplement its January 2008 DIP facility refinancing order and enter into and implement an accommodation agreement with the DIP agent and the participating lenders.  According to the motion, Delphi’s financing facility matures on December 31, 2008 and the company does not believe that it will be able to receive the requisite consents to extend that maturity date.  However, the company states that it has reached agreement on the Accommodation Agreement which will provide it continuing access to funds lent under the DIP facility through June 30, 2009 (subject to earlier termination under certain conditions).  In exchange, Delphi has agreed to increased interest rates, to pledge additional collateral, and to pay certain additional fees.

The second motion Delphi filed seeks authority to enter into a second amendment to an agreement reached with General Motors Corporation which was approved pursuant to the second DIP facility extension order and to enter into a partial temporary accelerated payment agreement with GM.  With respect to the first agreement, Delphi seeks to extend a current agreement with General Motors whereby GM earlier agreed to provide $300 million in liquidity enhancements to Delphi.  The extension would run through June 30, 2009.  With respect to the second agreement, Delphi seeks authority to enter into a new agreement with GM whereby GM would provide an additional $300 million of liquidity during the second quarter of 2009 through a temporary acceleration of accounts payable to Delphi.

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Empire Land Creditors’ Committee Asks Court to Convert Cases

The Official Committee of Unsecured Creditors for Empire Land, LLC filed a motion on Friday with the United States Bankruptcy Court for the Central District of California asking that the company’s chapter 11 cases be converted to cases under chapter 7.  In the motion, the Committee asserts that the debtors will certainly have to liquidate and that the best course of action would be for the cases to be converted so as to reduce the administrative expenses that the estates will have to bear.  The Committee further alleges a failure by the debtors to respond to information and other discovery requests and questionable expenditures by insiders and management of the debtors.

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