Apex Silver Mines Ltd. Files First Day Pleadings

As reported earlier, Apex Silver Mines Limited filed for bankruptcy today (more details on the bankruptcy filing can be found here).  As is customary in large corporate bankruptcy filings, Apex also filed motions and applications for relief from certain bankruptcy code sections and rules in order to allow the companies to continue to operate their businesses.  Apex also sought authority to assume a Plan Support Agreement which sets forth the pre-negotiated terms of a proposed plan of reorganization for the company and to enter into an agreement with Sumitomo Corporation to sell certain assets in accordance with that Plan Support Agreement.

The following is a list of the companies’ first day pleadings filed thus far (follow the links to view the documents using netDockets):

• Voluntary Petition (Chapter 11)
• Motion for An Order Pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, Directing the Joint Administration of their Chapter 11 Cases
• Declaration of Robert P. Vogels in Support of First Day Motions and Applications and in Compliance with Local Rule 1007-2
• Application for an Order Authorizing the Employment and Retention of Cleary Gottlieb Steen & Hamilton LLP as Counsel for the Debtors and Debtors in Possession Nunc Pro Tunc
• Motion for Entry of an Order (i) Approving (a) Debtors’ Entry into the Purchase Agreement and Incurrence of Certain Obligations Thereunder, (b) ASML’s and ASMC’s Sale of Certain Assets, and (c) Break-Up Fee and Reimbursement Amount, (ii) Granting Administrative Expense Status to Break-Up Fee and Reimbursement Amount, and (iii) Scheduling Hearing on Approval of Break-Up Fee and Reimbursement Amount
• Motion for an Order Pursuant to Sections 345, 363(c)(1), 364(c)(1) and 503(b)(1): (A) Approving The Continued Use of the Cash Management System, Bank Accounts and Business Forms; (B) Granting Approval of Investment Guidelines; (C) Authorizing Banks to Honor Certain Transfers and Charge Certain Fees and Other Amounts; (D) Permitting Continued Intercompany Transactions and Granting Superpriority Status to Postpetition Intercompany Claims; and (E) Preserving and Permitting the Exercise of Intercompany Setoff Rights
• Motion for Entry of Interim and Final Orders (A) Authorizing Debtors to Obtain Postpetition Secured Financing; (B) Granting Liens and Superpriority Claims to Postpetition Lenders; and (C) Scheduling Final Hearing
• Motion for Order Authorizing the Debtors to Assume the Plan Support Agreement
• Motion for Entry of an Order (I) Scheduling a Hearing on the Adequacy of the Disclosure Statement (II) Scheduling a Hearing on the Confirmation of the Debtors Plan of Reorganization and (III) Approving the Form and Manner of Notice of the Disclosure Statement Hearing
• Motion For Entry Of An Order Authorizing, But Not Directing, Debtors To Pay Certain Prepetition (I) Wages, Salaries And Other Compensation, (II) Reimbursable Expenses, And (III) Medical, Retirement And Similar Benefits
• Application to Employ Epiq Bankruptcy Solutions as Claims and Noticing Agent
• Motion For Entry Of An Order Authorizing The Debtors To (A) Continue Insurance Coverage Entered Into Prepetition, And (B) Enter Into New Insurance Policies
• Motion Pursuant To Rule 1015(c) Of The Federal Rules Of Bankruptcy Procedure For An Administrative Order Establishing Case Management And Scheduling Procedures
• Motion For Order Pursuant To 11 U.S.C. 521(a)(1)(b) And (i)(3) And Fed. R. Bankr. P. 1007(a) And (c) And 9006(b) Granting Extension Of Time For Debtors To File Lists Of Creditors, Equity Security Holders, Schedules And Statements Of Financial Affairs
• Motion For An Order Authorizing The Retention And Compensation Of Certain Professionals Rendering Services In The Ordinary Course Of Business
• Motion For An Order Establishing Procedures For Interim Compensation And Reimbursement Of Expenses For Retained Bankruptcy Professionals
• Application For An Order Pursuant To 11 U.S.C. 327(e) And 328(a) Approving The Retention Of Davis Graham & Stubbs LLP As Special Counsel For The Debtors And Debtors In Possession Nunc Pro Tunc To The Petition Date
• Application For An Order Pursuant To 11 U.S.C. 327(e) And 328(a) Approving The Retention Of Walkers As Special Counsel For The Debtors And Debtors In Possession Nunc Pro Tunc To The Petition Date
• Motion Pursuant To Sections 105(a) And 366 Of The Bankruptcy Code An Order (I) Restraining Utility Companies From Discontinuing, Altering Or Refusing Service, (II) Deeming Utility Companies Adequately Assured Of Future Performance And (III) Establishing Procedures For Determining Requests For Additional Assurance
• Application For An Order Authorizing The Employment And Retention Of Jefferies & Co. As Financial Advisor For The Debtors And Debtors In Possession Nunc Pro Tunc To The Petition Date

If you don’t have a netDockets account, sign up now and get your first $100 of usage completely free.  Sign up here.

Apex Silver Mines Limited Files for Bankruptcy in New York

Apex Silver Mines Limited, headquartered in the Cayman Islands, filed a voluntary chapter 11 bankruptcy petition, along with several affiliates, in the United States Bankruptcy Court for the Southern District of New York on January 12, 2009.  Apex is a publicly-traded company engaged in the mining, exploration and development of silver and other mineral properties (including zinc and lead), primarily in Latin America.

An affiliate of Apex, Minera San Cristobal, S.A., is party to a $225 million senior secured project finance facility, which was secured by all of the assets of Minera San Cristobal, a guarantee of 65% of the obligations by Apex and certain other collateral.  The first principal payment on the facility, in the amount of $33 million, was due on December 15, 2008 but was not paid.  In its first day declaration, Apex blamed its bankruptcy filing on several factors.  First, Apex had also guaranteed hedge positions taken by another affiliate, Apex Finance.  Unanticipated increases in the prices of silver, lead and zinc caused Apex Finance to have to make large settlement payments on those hedge positions.  Apex Silver Mines Limited was responsible under its guarantees for 65% of the settlement payments and had to pay $210 million on account of those guarantees. Second, the company’s ramp up of its San Cristobal Mine was slower and more costly than the company had forecast.  Apex Silver Mines Ltd. was also responsible for 65% of the cost overruns, which were apparently substantial.

Apex and the holders of “a significant amount of [the company's] Subordinated Notes” have reached agreement on the principal terms of a plan of reorganization.  The parties have executed a Plan Support Agreement which Apex has filed with the court and sought authority to assume.  One key element of the proposed plan of reorganization is a purchase and sale agreement with Sumitomo Corporation whereby, subject to certain conditions including consummation of the plan, Sumitomo will purchase the equity interests in Minera San Cristobal, S.A. and Apex Metals Marketing GmbH for $27.5 million in cash plus certain other consideration.  As part of the transaction, Apex Silver Mines Corp. will also agree to manage the San Cristobal Mine in exchange for a $6 million annual management fee.

The company has also commenced a joint provisional liquidation in the Cayman Islands.

UPDATE: Apex has filed various “first day” motions and applications seeking relief from the bankruptcy court to allow the company to continue operating in the ordinary course.  Details of these motions and applications (and access to copies of the documents) can be found here.

Download a copy of every document filed in Apex’s bankruptcy cases using netDockets.  Sign up now for a free trial account and get your first $100 of research completely free with no further commitment.

Archway Cookies Bankruptcy Cases Converted to Chapter 7

The bankruptcy court has entered an order converting the bankruptcy cases of Archway Cookies, LLC and Mother’s Cake & Cookie Co. from cases under chapter 11 of the bankruptcy code to cases under chapter 7 of the bankruptcy code.  The court’s order comes in response to a motion made by the companies requesting the conversion, which was filed on December 16, 2008.  The motion was opposed by the Official Committee of Unsecured Creditors appointed in the cases, which argued that motion was filed in bad faith and was “a thinly veiled attempt by the Debtors’ board to circumvent the Committee’s investigation and prosecution of claims against” the companies’ shareholder, Catterton Partners (which the Committee asserts also controls the companies’ board of directors).  The Committee also included in its objection a cross-motion seeking the court to (1) compel discovery relating to the conversion motion, (2) authorize the Committee to prosecute claims on behalf of the estates, and (3) amend the debtor-in-possession financing order to expand the powers of any subsequently-appointed trustee.

The court’s order overrules the objections of the Committee and converts the bankruptcy cases to chapter 7 cases effective as of January 21, 2009 at 5:00 p.m.  The court also entered a separate order denying the relief sought in the Committee’s cross-motion.  The Committee does have, pursuant to the conversion order, the right to file a complaint alleging certain causes of action (as set forth in the debtor-in-possession financing order) on behalf of the debtors’ estates up until the effective date of conversion.

Download a copy of the motion, objection, and orders using netDockets.  Sign up now for a free trial account.

PPI Holdings Seek Approval of Asset Sale Procedures

PPI Holdings, Inc. has filed a motion seeking approval of procedures for the sale of substantially all of the assets of it and its subsidiaries, either in one transaction or in a combination of transactions.  PPI Holdings, primarily a manufacturer of automotive parts, filed for chapter 11 protection on December 12, 2008 and has continued to operate since that time.  However, the company’s debtor-in-possession (DIP) financing facility matures on March 2, 2009 and the order approving the DIP financing provides for the liquidation of the company’s assets, which the company is seeking to accomplish on a going-concern basis pursuant to the procedures set forth in the motion.

Since the chapter 11 filing, the company has been assisted by Rothschild Inc. in marketing its assets for sale.  The company reports in the motion that it contacted 52 potential purchasers, entered into confidentiality agreements with 13 of those parties, and continues to negoitate with three parties.  Nevertheless, no party had agreed to be a stalking horse bidder as of the filing of the motion.  Briefly, the proposed bidding and auction procedures provide for the following timeline (please see the motion, a copy of which can be viewed here, for the complete proposed procedures):

• Bid Deadline: February 6, 2009 at 4:00 p.m. (Eastern)
• Bid Deposit: Cash equal to 10% of the bid amount
• Auction: February 10, 2009 at 10:00 a.m. (Eastern)
• Minimum Overbid: $100,000
• Sale Hearing: February 11, 2009

The motion also contemplates that PPI Holdings may reach agreement with a party to act as a stalking horse on or before January 30, 2009 and seeks approval of an expense reimbursement fee of up to $100,000 to be provided to such a stalking horse bidder as a bid protection.

Download a copy of the motion, the proposed bidding procedures, and every other pleading filed in PPI’s bankruptcy cases using netDockets.  Sign up now for a free trial account.

Tropicana Entertainment Disclosure Statements Filed

On Sunday, Tropicana Entertainment, LLC filed proposed disclosure statements for each of the two proposed plans of reorganization for the companies referenced as the OpCo Debtors and the LandCo Debtors (for details regarding the proposed plans of reorganization and a discussion of which companies fall in each category of debtors, please see an earlier entry available here).

The OpCo Debtor Disclosure Statement (a copy available here)

Of particular interest, the OpCo Debtor Disclosure Statement provides expected claim amounts and recovery percentages (i.e., the percentage of the claim amount that is likely to be recovered by the creditor under the proposed plan).  The claim categories are as follows:

• Other Priority Claims
  • Expected Claim Amount: $225,000-$1.3 million
  • Expected Recovery: 100%
• Other Secured Claims
  • Expected Claim Amount: $1.1-$16.9 million
  • Expected Recovery: 100%
• OpCo Credit Facility Claims
  • Expected Claim Amount: $1.31 billion
  • Expected Recovery: 58.1%-72.7%
• OpCo General Unsecured Claims
  • Expected Claim Amount: $29.6-$124.4 million
  • Expected Recovery: 1.0-2.0%
• OpCo Noteholder Unsecured Claims
  • Expected Claim Amount: $998.5 million
  • Expected Recovery: 1.0-2.0%
• OpCo Credit Facility Deficiency Claims
  • Expected Claim Amount: $355-$548 million
  • Expected Recovery: 0%
• Insider Claims
  • Expected Claim Amount: $23.8 million
  • Expected Recovery: 1.0-2.0%
• Unsecured Convenience Class Claims
  • Expected Claim Amount: $8.1-$8.6 million
  • Expected Recovery: 3.0%
• LandCo Stock Pledge Claims, Intercompany Claims, Yung Interests, JMBS Interests, and Intercompany Interests
  • Expected Claim Amount: n/a
  • Expected Recovery: 0%

For the treatment of the claims in each category (i.e., the form of consideration to be received by holders of allowed claims), please see the earlier posting summarizing the terms of the plan of reorganization (available here).

The LandCo Disclosure Statement (a copy available here)

Similarly, the LandCo Debtor Disclosure Statement provides expected claim amounts and recovery percentages (i.e., the percentage of the claim amount that is likely to be recovered by the creditor under the proposed plan).  The claim categories are as follows:

• Other Priority Claims
  • Expected Claim Amount: $69,000-$211,000
  • Expected Recovery: 100%
• Other Secured Claims
  • Expected Claim Amount: $36,000
  • Expected Recovery: 100%
• LandCo Credit Facility Claims
  • Expected Claim Amount: $442.7 million
  • Expected Recovery: 81.0%-85.6%
• LandCo General Unsecured Claims
  • Expected Claim Amount: $1.5-$7.5 million
  • Expected Recovery: 0.0%
• LandCo Credit Facility Deficiency Claims
  • Expected Claim Amount: $64-$84 million
  • Expected Recovery: 0.0%
• Insider Claims
  • Expected Claim Amount: $28.2 million
  • Expected Recovery: 0.0%
• Unsecured Convenience Class Claims
  • Expected Claim Amount: $1.8-$2.1 million
  • Expected Recovery: 3.0%
• Intercompany Claims, Yung Interests, and Intercompany Interests
  • Expected Claim Amount: n/a
  • Expected Recovery: 0%

For the treatment of the claims in each category (i.e., the form of consideration to be received by holders of allowed claims), please see the earlier posting summarizing the terms of the plan of reorganization (available here).

Shane Co. Files First Day Pleadings

As reported earlier, Shane Co. filed for bankruptcy today (more details on the bankruptcy filing can be found here).  As is customary in large corporate bankruptcy filings, Shane Co. also filed motions and applications for relief from certain bankruptcy code sections and rules in order to allow the companies to continue to operate their businesses.  The following is a list of the companies’ first day pleadings filed thus far (follow the links to view the documents using netDockets):

• Chapter 11 Voluntary Petition
• List of Creditors Holding 20 Largest Unsecured Claims
• Corporate Resolution
• Motion To Pursuant to 11 U.S.C. 105(a), 342(a) and 521 Fed.R.Bankr.P. 1007 and Local Rule 1007-1 for Authority to Prepare List of Creditors in Lieu of Submitting Formatted Mailing Matrix
• Motion To for Order Pursuant to 11 USC 105(a) and 364 and Fed.R.Bankr.P. 6003 (I) Authorizing Maintenance of Existing Bank Accounts and (II) Authorizing Use of Existing Cash Management System
• Motion To for Order Pursuant to Bankruptcy Code Sections 105(a), 363, 507(a), 541, 1107(a), and 1108 and Bankruptcy Rule 6003 Authorizing Debtor to Pay Prepetition Wages, Compensation, and Employee Benefits
• Motion To for Entry of an Order Authorizing the Debtor to Pay Prepetition Sales, Use, Trust Fund, and Other Taxes and Related Obligations
• Motion To Limit Notice
• Motion To for Order Under Bankruptcy Code Sections 105(a), 363, and 366, and Bankruptcy Rule 6003 Approving Debtor’s Adequate Assurance of Payment of Utilities
• Motion To for Order Pursuant to Bankruptcy Code Sections 105(a), 363, 506, 507(a), 553, 1107(a), 1108 and 1129(b) and Bankruptcy Rule 6003 Authorizing Continuation of Certain Customer Practices
• Motion To for Order Pursuant to Bankruptcy Code Sections 105, 363, 364, 1107 and 1108 and Bankruptcy Rule 6003 Authorizing Debtor to Maintain Insurance Policies, Pay Insurance Obligations and Renew Insurance Policies
• Motion to Reject Lease
• Motion For Order Under Bankruptcy Code Sections 105(a) and 331 Establishing Interim Compensation Procedures
• Motion to Approve Agreement With Kurtzman Carson Consultants LLC and Appointing It As Claims, Noticing, and Balloting Agent
• Application to Employ Fairfield and Woods, P.C. as Counsel and Approve Retainer in the Amount of $ 299,200.82
• Motion To Entry of Interim Order (i) Authorizing Debtor’s Consensual Use of Cash Collateral, (ii) Granting Adequate Protection, (iii) Modifying the Automatic Stay, and (iv) Scheduling a Final Hearing
• Affidavit in Support of First Day Motions
• Motion To Pursuant to 11 USC Sections 105, 363 and 364 and Federal Rules of Bankruptcy Procedure 2002 and 4001 for Interim and Final Orders Authorizing Debtor to Obtain Postpetition Financing
• Motion to Expedite Hearing

If you don’t have a netDockets account, sign up now and get your first $100 of usage completely free.  Sign up here.