Notices Filed Regarding Clearwater Natural Resources Creditors’ Committees

On January 13, 2009, the United States Trustee filed three notices regarding the appointment of Official Committees of Unsecured Creditors in the bankruptcy cases of Clearwater Natural Resources, LP and its affiliates.  The Trustee filed notices that Creditors’ Committees were not being appointed in the bankruptcy cases of Clearwater Natural Resources, LP and Clearwater Natural Resources, LLC at present, without prejudice to the Trustee’s ability to appoint Committees at a later date.

The Trustee, however, did appoint a Creditors’ Committee in the bankruptcy case of Miller Bros. Coal, LLC.  The members of the Creditors’ Committee in that case are as follows:

• Nelson Brothers, LLC (Interim Chair)
• Dyno Nobel Inc.
• Cook Tire Inc.

More information regarding Clearwater’s bankruptcy filing can be found here.  Copies of every document filed in Clearwater’s bankruptcy case can be accessed using netDockets.  Sign up now for a free trial account.

Merisant Worldwide First Day Orders Entered

Yesterday, the bankruptcy court entered a number of orders approving the relief sought by Merisant Worldwide, Inc. in its first day motions and applications (for details of Merisant’s first day pleadings, please see an earlier post available here).  Merisant, which is headquartered in Chicago, is a leading manufacturer of low-calorie tabletop sweetners, including the Equal and Canderel brands.

The following is a list of the first day orders entered by the bankruptcy court yesterday (click on the titles to view the orders):

• Order (I) Approving Cash Management System, (II) Authorizing Use of Prepetition Bank Accounts and Business Forms, (III) Waiving Requirements of 11 U.S.C. Section 345(b) on an Interim Basis, and (IV) Granting Administrative Expense Status to Intercompany Claims
• Order (I) Authorizing: (A) Payment of Prepetition Employee Wages, Salaries, Production Bonuses, and Other Compensation; (B) Payment of Prepetition Compensation Owed to Independent Contractors and Temporary Workers; (C) Reimbursement of Prepetition Employee Business Expenses; (D) Payments for Which Prepetition Payroll and Tax Deductions Were Made; (E) Contributions to Prepetition Employee Benefit Programs and Continuation of Such Programs in the Ordinary Course; (F) Payment of Workers Compensation Obligations; and (G) Payment to Third Parties of All Costs and Expenses Incident to the Foregoing Payments and Contributions; and (II) Authorizing and Directing Applicable Banks and Other Financial Institutions to Honor and Pay All Checks and Transfers Drawn on the Debtors Payroll Accounts to Make the Foregoing Payments
• Order (INTERIM) (I) Authorizing Debtors to Obtain Postpetition Secured Financing; (II) Authorizing Debtors to Use Cash Collateral; (III) Granting Adequate Protection to Prepetition Lenders; (IV) Modifying the Automatic Stay; and (V) Scheduling a Final Hearing.
• Order Directing Joint Administration of Related Chapter 11 Cases: 09-10059 through 09-10064
• Order Authorizing, But Not Requiring, the Debtors to Honor Certain Prepetition Obligations to Customers and to Otherwise Continue Prepetition Customer Programs and Practices in the Ordinary Course of Business
• Order Authorizing the Debtors and Debtors-in-Possession to Retain and Employ Epiq Bankruptcy Solutions, LLC as Claims and Noticing Agent Nunc Pro Tunc to the Petition Date
• Order Authorizing, But Not Directing, the Payment of Certain Prepetition Sales, Use, Property and Franchise Taxes
• Order (BRIDGE) (I) Prohibiting Utility Providers from Altering, Refusing, or Discontinuing Utility Services, (II) Deeming Utility Providers Adequately Assured of Future Performance, and (III) Establishing Procedures for Determining Adequate Assurance of Payment
• Order (I) Authorizing, on an Emergency Basis, Payment of Certain Prepetition Claims of Critical Vendors and (II) Scheduling a Hearing to Consider the Allowance of Administrative Expense Status for Certain Obligation Arising in Connection With Non-Critical Goods Received by the Debtors Within the Twenty Day Period Before the Petition Date and to Consider Authorization, But Not Direction, to Pay Such Obligations
• Order Granting the Debtors’ Motion Authorizing, But Not Requiring, the Debtors to Continue to Operate in the Ordinary Course, Including Payment of Pre-Petition Date Claims With Respect to Non-Debtor Brokers
• Order Authorizing, But Not Directing, the Debtors to Pay Prepetition Claims of Shippers, Shipping Coordinators and Warehousemen

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Goody’s Files First Day Pleadings

As reported earlier, Goody’s LLC and affiliates filed for bankruptcy yesterday (more details on the bankruptcy filing can be found here).  As is customary in large corporate bankruptcy filings, Goody’s 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
• Motion for Joint Administration of Cases
• Application to Appoint Claims/Noticing Agent – Logan & Company, Inc.
• Motion to Maintain Bank Accounts – Continued Maintenance of Existing Accounts, Continued Use of Existing Business Forms, Continued Use of Existing Cash Management System, Authorizing Intercompany Transactions and Granting Admininstrative Expense Priority to Intercompany Claims
• Motion Waiving Investment/Deposit Requirements
• Motion to Pay Employee Wages – Prepetition Wages, Compensation, And Employee Benefits
• Motion to Pay Sales and Use Taxes
• Motion for Continuation of Utility Service and Approval of Adequate Assurance of Payment to Utility Company Under Section 366(b)
• Motion to Authorize – Maintain Existing Insurance Policies and Continue Insurance Premium Financing Obligations
  
• Motion to Continue Customer Programs
• Emergency Motion to Use Cash Collateral and Grant of Adequate Protection
• Emergency Motion Of The Debtors For Entry Of An Order (I)Approving Assumption Of Agency Agreement Pursuant To Sections 105, 363 And 365 Of The Bankruptcy Code, (II) Granting Interim Authorization For The Debtors To Incur Post-Petition Secured Indebtedness In Relation Thereto, (III) Granting Interim Approval Of Security Interests And Superpriority Claims Pursuant To Sections 105(a), 361, 364(c), 364(c) And 364(e) Of The Bankruptcy Code And Bankruptcy Rules 2002, 4001 And 9014, (IV)Approving Store Closing Sales Free And Clear Of Liens, Claims And Encumbrances Pursuant To Sections 105(a) And 363 Of The Bankruptcy Code And Bankruptcy Rules 6004 And 9014 And (V)Granting Related Relief
• Affidavit in Support of Petitions and First Day Pleadings by David G. Peek
• Notice of Hearing to Consider First Day Motions and Applications
• Notice of Agenda of Matters Scheduled for Hearing to Consider First Day Motions and Applications

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UPDATE: An ad hoc group of Goody’s unsecured creditors has asked the bankruptcy court to dismiss these bankruptcy cases.  Details of the ad hoc committee’s motion and position can be found here.

Gottschalks Inc. Files First Day Pleadings

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

• Chapter 11 Voluntary Petition
• Emergency Motion of Debtor and Debtor in Possession for Order Authorizing and Directing the Debtor’s Banks to Honor Prepetition Checks for Payment of Prepetition Payroll Obligations Pending First Day Hearing and Prohibiting Banks from Placing Holds on or Attempting to Reverse Transfers to Employee Accounts on Account of Payroll Amounts
• Motion of the Debtor and Debtor in Possession for Entry of an Order Appointing Kurtzman Carson Consultants LLC as Claims, Noticing and Balloting Agent
• Motion of the Debtor and the Debtor in Possession for an Order (A) Authorizing the Continued Use of the Debtor’s Cash Management System, (B) Authorizing Maintenance of the Debtor’s Existing Bank Accounts and Busines Forms, and (C) Extending the Debtor’s Time to Comply with Section 345 of the Bankruptcy Code
• Motion of the Debtor and Debtor in Possession for an Order Authorizing the Debtor to Pay Prepetition Wages, Compensation and Employee Benefits Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code
  
• Motion of the Debtor and Debtor in Possession for Interim and Final Orders Under Section 366 of the Bankruptcy Code (A) Prohibiting Utility Providers from Altering, Refusing or Discontinuing Service, (B) Deeming Utilities Adequately Assured of Future Performance, and (C) Establishing Procedures for Determining Adequate Assurance of Payment
  
• Motion of the Debtor and Debtor in Possession for an Order Authorizing (I) Continuation of All Insurance Policies and Agreements Relating Thereto and (II) the Debtor to Honor Certain Obligations in Respect Thereof Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code
• Motion of the Debtor and Debtor in Possession for an Order Authorizing the Debtor to Satisfy Prepetition Claims of Certain Common Carriers and Sales and Shipping Processors Pursuant to Section 105(a) of the Bankruptcy Code
  
• Motion of the Debtor and Debtor in Possession for an Order Pursuant to Section 105(a) of the Bankruptcy Code Authorizing the Debtor (A) to Honor Certain Prepetition Obligations to Customers and to Continue Customer Programs and (B) to Honor Certain Other Prepetition Obligations Necessary to Maintain the Existence of Customer Programs
• Motion of the Debtor and the Debtor in Possession for an Order Authorizing the Debtor to Pay Prepetition Sales, Use and Franchise Taxes Pursuant to Section 105(a) of the Bankruptcy Code
• Declaration of J. Gregory Ambro in Support of Chapter 11 Petition and Request for First Day Relief
• Debtor’s Motion for Interim and Final Orders (A) Authorizing Debtor (A) to Obtain Senior Secured Superpriority Postpetition Financing and (B) to Utilize Cash Collateral; (II) Granting Liens and Providing Superpriority Administrative Expense Status; (III) Granting Adequate Protection to Prepetition Secured Parties; (IV) Modifying Automatic Stay and (V) Scheduling Interim and Final Hearings
• Notice of Agenda of Matters Scheduled for Hearing

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Nortel Networks Files First Day Pleadings

As reported earlier, Nortel Networks Inc. and affiliates filed for bankruptcy today (more details on the bankruptcy filing can be found here).  As is customary in large corporate bankruptcy filings, Nortel 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
• Motion For Entry Of An Order Pursuant To 11 U.S.C. Section 105, Bankruptcy Rule 1015, And Local Rule 1015-1 (i) Directing Joint Administration Of The Debtors’ Related Chapter 11 Cases And (ii) Granting Related Relief
• Affidavit in Support Declaration Of John Doolittle, Vice President of Nortel Networks Inc. In Support of Chapter 11 Petitions And First Day Motions
• Motion to Authorize Nortel to (i) File (A) Consolidated List of Creditors and (B) Consolidated List of Debtors’ Top Forty Creditors and (ii) Provide Notices, Including Notice of Commencement of Cases and Section 341 Meeting
• Motion to Extend Deadline to File Schedules or Provide Required Information and Statements of Financial Affairs
• Application to Appoint Claims/Noticing Agent Epiq Bankruptcy Solutions, LLC
• Motion For Interim and Final Orders (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
• Motion for Order (A) Approving the Continued Use of the Cash Management System, Bank Accounts and Business Forms; (B) Permitting Continued Intercompany Transactions, Granting Administrative Priority Status to Postpetition Intercompany Claims and Preserving and Permitting the Exercise of Intercompany Setoff Rights; (C) Authorizing Banks to Honor Certain Transfer and Charge Certain Fees and Other Amounts; and (D) Waiving the Requirements of 11 U.S.C. Section 345(b) on an Interim Basis
• 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
• Motion Pursuant to Sections 105(a), 363(b), 507(a)(8), and 541 of The Bankruptcy Code for an Order Authorizing the Debtors to Remit and Pay Certain Taxes and Fees
• Motion for Entry of an Order Authorizing, But Not Directing, Debtors To (i) Honor Prepetition Obligations To Their Customers and (ii) Continue Customer Programs
• Motion For an Order Authorizing the Debtors to Pay Prepetition Common Carrier Charges and Warehouse Fees
• Motion to Authorize Nortel to (i) Continue Insurance Coverage Entered Into Prepetition, and (ii) Enter Into New Insurance Policies
• Motion to Enforce the Automatic Stay
• Motion for Entry of an Administrative Order Establishing Procedures for Interim Compensation of Fees and Reimbursement of Expenses of Professionals and Official Committee Members
• Motion to Approve Entry of an Order Pursuant to 11 U.S.C. Section 105(a) Approving Cross-Border Court-to-Court Protocol
• Motion to Approve Under 11 U.S.C. Sections 105, 362 and 541 For An Interim Order Establishing Notification Procedures and Approving Restrictions on Certain Transfers of the Debtors’ Parents’ Equity Securities

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Goody’s Files for Bankruptcy – Second Time in 7 Months

Goody’s LLC, a retailer that operated 282 specialty stores in 20 states that sold clothes, shoes, accessories and gift items, filed for bankrupty protection yesterday in the United States Bankruptcy Court for the District of Delaware.  The filing represents the second bankruptcy filing by Goody’s in approximately seven months. The company previously filed for bankruptcy on June 9, 2008.  A plan of reorganization was confirmed in that case on October 7, 2008 and its effective date was October 20, 2008.  Pursuant to that plan, Prentice Capital Management, PGDYS, LLC, and PGDYS Lending, LLC received the membership interests in the parent company, Goody’s Parent LLC.

The company reported that it has suffered from unexpectedly poor sales since emerging from the earlier bankruptcy.  October 2008 same store sales decreased by 19.2%.  By comparison, the plan of reorganization was based upon a 2.9% decline.  November 2008 same store sales decreased 18.4% (the plan assumed a 4.4% decline) and December 2008 same store sales decreased 13.6% (versus plan of 2.7% decline).

Prior to this second bankruptcy filing, Goody’s sought to locate a buyer for its assets but did not generate significant interest.  It also sought, working with counsel to the Creditors’ Committee in the first bankruptcy, to receive support for a composition plan and concessions from its vendors to maintain Goody’s as a going concern.  The company determined by December 29, 2008 that there was insufficent vendor support for the composition plan.

Therefore, Goody’s has determined to go forward with a liquidation of its assets.  Following a competitive process, the company has selected a joint venture comprised of Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC as liquidators.  The company is seeking approval to begin running a “going out of business” sale beginning January 15th.

As of the petition date, Goody’s reported consolidated assets of $206 million, consolidated liabilities of $202 million, and 8,200 employees.  For the eleven months ended January 3, 2009, Goody’s reported net operating losses, including restructuring costs, of $91 million on revenues of $786 million.

UPDATE: Goody’s 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.

UPDATE 2: An ad hoc group of Goody’s unsecured creditors has asked the bankruptcy court to dismiss these bankruptcy cases.  Details of the ad hoc committee’s motion and position can be found here.

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Gottschalks Inc., Retailer, Files for Bankruptcy in Delaware

Gottschalks Inc., which operates 59 department stores and three specialty stores in California, Oregon, Washington, Alaska, Nevada and Idaho, filed for bankruptcy protection today in the United States Bankruptcy Court for the District of Delaware.  Gottschalks’ stores offer “better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise” in mid-sized markets, according to the company’s most recent annual report.

The company intends to continue operating its stores in the ordinary course while it pursues “one or more options to create value for stakeholders,” including a sale of its businesses under section 363 of the Bankruptcy Code.  The company also reported today that it has negotiated $125 million in debtor-in-possession financing from a group of lenders led by GE Capital.

Gottschalks lost $12.4 million on sales of $629 million in 2007.  Same store sales at stores open more than a year have fallen in 15 of the last 16 months and fell 2.1% in July 2008, the company reported yesterday.  The July sales decrease was the smallest monthly decrease in eight months.

Gottschalks is represented by O’Melveny & Myers LLP and Richards, Layton & Finger as restructuring counsel, FTI Consulting as financial advisor, Financo as investment bank, and Kurtzman Carson Consultants as claims and noticing agent.

UPDATE: Gottschalks 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.

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Nortel Networks Files for Bankruptcy in Delaware

Nortel Networks Inc. and certain U.S. affiliates filed voluntary chapter 11 petitions today in the United States Bankruptcy Court for the District of Delaware.  In addition, certain Canadian affiliates, including the ultimate parent company Nortel Networks Corporation, filed for insolvency protection under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List).  Certain European Nortel affiliates are also expected to make filings for creditor protection in Europe.

Nortel is North America’s largest manufacturer of telephone equipment.  The companies trace their history to 1895 when the Bell Telephone Company of Canada founded the Northern Electric and Manufacturing Company Limited, which was an equipment provider for Canada’s telephone system.  At their peak (in 2000), the Nortel companies generated $30 billion in annual revenue, employed 93,000 employees and had a market capitalization of over $250 billion.  The companies have undergone significant restructuring and contraction since that point and generated approximately $11 billion in revenue in 2007.  However, the companies have generated significant losses, with approximately $7 billion in losses since 2005.

In his first day declaration, John Doolittle (V.P. of Nortel Networks, Inc.) blamed the companies’ losses and negative cash flow on, among other factors, “competitive pressures, an inability to reduce operating expenses fast enough, the incurrence of costs related to restructuring efforts, significant competitor and customer consolidation, customers cutting back on capital expenditures and deferring new investments and the poor state of the global economy.”  The companies have over $4 billion in public debt and a regularly-scheduled interest payment on that public debt was due January 15, 2009.  That interest payment will not be made as a result of the bankruptcy filings.

The companies are represented in the United States bankruptcy cases by Cleary Gottlieb Steen & Hamilton, LLP.  In the Canadian insolvency proceedings, they are seeking the appointment of Ernst & Young Inc. as monitor.

UPDATE: Nortel 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.

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VeraSun Seeks Approval of Financing for 7 US BioEnergy Facilities

Yesterday, VeraSun Energy Corp. filed a motion seeking approval of a debtor-in-possession (or DIP) financing facility to fund operations at seven ethanol production facilities operated by a sub-set of the jointly-administered debtors (referred to in the motion as the “US BioEnergy Debtors”).  The motion notes that the debtors have been working to secure separate DIP financing for individual groups of debtors as a result of the highly-fragmented pre-bankruptcy capital structure of the debtors.

To date, the bankruptcy court has approved multiple DIP facilities on either an interim or final basis, some of which cover six of the seven US BioEnergy facilities that are the subject of the present motion (the exception being an ethanol production facility in Janesville, Minnesota).  However, the relevant existing DIP facilities expire on January 15, 2009 and the debtors therefore require replacement DIP facilities, which are intended (per the motion) to preserve the going concern value of these seven facilities while VeraSun pursues a sale of the facilities.  The financing is specifically tied to the sale of the facilities and the governing agreements contain covenants and events of default which relate to certain sale process milestones (these loan provisions are discussed in greater detail in the motion and agreements attached thereto).

The seven separate new DIP facilities would provide financing of up to $81.7 million on an interim basis and $110.6 million on a final basis (however, only $30.3 million of that final amount represents incremental new borrowings).  The lender under the new facilities is AgStar Financial Services, PCA.  The facilities are guaranteed by U.S. BioEnergy Corporation (the borrower under each facility is the US BioEnergy Debtor which operates the ethanol production facility covered by the DIP financing).

UPDATE: The Official Committee of Unsecured Creditors appointed in the VeraSun bankruptcy cases has filed a formal objection to approval of the DIP financing.  Details on the Committee’s bases for its objection can be found here.

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Integra Hospital Plano Again Seeks to Sell All Assets

Integra Hospital Plano, L.L.C. yesterday filed a new motion seeking approval of a sale of substantially all of its assets.  The company had previously filed an asset sale motion on December 1, 2008, but withdrew that motion without prejudice on December 10, 2008.  The bankruptcy court then entered an order on December 19, 2008 approving revised bidding procedures for substantially all of the company’s assets and approving bid protections for Rockwall Rehab Hospitals, Ltd. as a stalking horse bidder.

The company did not receive any qualified bids other than the bid from Rockwall.  Therefore, the company now seeks approval of a sale to Rockwall.  The company argues that exigent circumstances exist for approving the sale, as its debtor-in-possession financing matures on February 5, 2009.  The company seeks to sell its Baton Rouge and Plano hospitals on one of two alternate sets of terms.  If the court approves a sale free and clear of liens and claims (which is currently objected to by one of Integra’s secured creditors – Contemporary Health Capital), Rockwall will purchase the assets for $6,555,000, out of which Integra will pay cure costs of approximately $200,000.  If, however, the court does not permit the sale free and clear of liens and claims, the company proposes that the Bank of Texas will foreclose on the assets on which the bank has a first priority lien and sell the same at a foreclosure sale.

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