Managers at distressed companies too often borrow a page from the playbook of “ The Office’s ” Michael Scott and are looking for distractions rather than facing reality, said experts who spoke Wednesday at the Daily Bankruptcy Review Restructuring and Turnaround Summit in New York. In the TV sitcom, Scott plays games with employees at fictional paper company Dunder Mifflin in the conference room rather than confronting bankruptcy rumors. Likewise, managers at real troubled companies are using employee morale and customer reaction to bankruptcy as excuses not to do the heavy lifting required in reorganizations.  “Everyone knows the bad news, and when it comes out, 90% of the employees are wondering what took so long,” said Mohsin Y. Meghji, principal and managing director at restructuring adviser Loughlin Meghji + Co. Meghi and others at the conference encouraged distressed companies to start addressing financial and operational problems early, rather than hoping for sales to pick up or for the economy to improve. Angus C. Littlejohn Jr., chairman and chief executive of private equity firm Littlejohn & Co., said the optimism and positive outlook executives typically rely on for their companies can “work against them.” “It’s easy to say that the customer will be back next month, but the reality is they don’t know when, or if, the customer will be back and often wait too long to develop alternative plans,” he said. Existing managers’ resistance to change is often why new executives are required to execute a turnaround. And managers need not be as bumbling as Michael Scott to lose their jobs. “The most senior executive who says they are not responsible, is responsible,” said Harvey L.  Tepner, principal at investment firm WL Ross & Co. “That person needs to be set aside.”

Originally posted here:
Experts: Sitcom Logic Won’t Work in Distressed Companies

Freedom Communications Inc. on Tuesday won confirmation of a Chapter 11 plan that gives the company to banks and offers hope to former newspaper carriers whose wage law violation settlement was in danger of being wiped out in bankruptcy court. Read the Daily Bankruptcy Review story here . According to The Wall Street Journal , key lawmakers in the Senate will charge the largest financial companies in the U.S. $50 billion to cover the costs for the collapse of financial firms. Metro-Goldwyn-Mayer Inc. is formulating a backup plan in case bids for the studio come in too low, WSJ reports . LyondellBasell Industries AF’s plan to exit bankruptcy is facing opposition from some lenders that are questioning whether the chemical giant is underestimating its value for the benefit of new investors and senior lenders. Read the DBR story here . According to the Phoenix Business Journal , former Phoenix Coyotes owner Jerry Moyes will likely countersue the National Hockey League, which sued him last week for breaching an agreement with the league. According to Fortune , Erin Callan, Lehman Brothers Holdings Inc.’s former chief financial officer, “simply vanished from the business world” after Lehman crashed into the biggest bankruptcy ever. Bank of America attorneys will reimburse attorneys of Cabi Downtown LLC after it was criticized by a bankruptcy judge for trying to “score a litigation point” in a foreclosure dispute, WSJ reports .

Read this article:
The Daily Docket: Freedom Wins OK on Chapter 11 Plan

Associated Press Former baseball star Lenny Dykstra, who filed for Chapter 11 protection last July, now wants a bankruptcy judge to dismiss his case, claiming he doesn’t belong in bankruptcy. “Bottom line, you don’t belong in bankruptcy when you have $100 million in assets,” Dykstra said Tuesday in a telephone interview. It’s unclear how the ex-ballplayer arrived at the $100 million figure. It also begs the question why he sought bankruptcy protection in the first place, since creditors have only filed about $27 million in claims against him. Dykstra referred further questions to his lawyer, who couldn’t be reached for comment. The onetime New York Mets playoff hero and Philadelphia Phillies all-star is asking a judge to dismiss his bankruptcy case so he “can once again claim his role as a productive member of society,” according a filing in his bankruptcy case. He says he’s lined up “interested parties” who would help him pay his debts if he wasn’t in bankruptcy. That’s quite an about-face from a year ago, when Dykstra told radio host Dan Patrick he filed for bankruptcy protection in order to stop creditors and other associates from “piling on.” “Chapter 11 is like putting a sniper on top of the roof to gun down all those people that are piling on,” he told Patrick. “It’s the last man standing that wins.” But that was before Dykstra lost control of his case, with a bankruptcy judge ruling he could no longer administer his own finances. Trustee Arturo M. Cisneros was appointed to steer the proceedings back on course and generate cash for creditors by selling off Dykstra’s personal belongings and real estate, including his California mansion, a palatial estate once owned by hockey legend Wayne Gretzky. To get out of bankruptcy, Dykstra, who’s representing himself in his case, must convince a bankruptcy judge that regaining control of his finances is in the best interests of his creditors. A hearing on his bid is scheduled for April 6.

Original post:
Lenny Dykstra Wants Bankruptcy Case Dismissed

Associated Press Sholom Rubashkin The U.S. Department of Justice won’t answer several Orthodox rabbis’ call to intervene in Sholom Rubashkin’s case, saying there’s nothing more to do for the ex-Agriprocessors’ executive who’s been convicted of financial fraud and is waiting behind bars to find out his sentence. As Bankruptcy Beat previously reported , seven rabbis traveled to Washington, D.C., in January seeking remedy for what they said deemed overly harsh and unjust treatment of Rubashkin, whose kosher meatpacking plant was the site of a massive federal immigration raid and later filed for bankruptcy protection. The rabbis delivered a letter to U.S. Attorney General Eric Holder requesting his consideration of the case, including Rubashkin’s claim that his imprisonment prevented him from practicing his religion. According to the Jewish Telegraphic Agency , the rabbis received their answer last week. “Mr. Rubashkin has fully litigated the issue of whether detention pending sentencing is appropriate,” wrote H. Marshall Jarrett, a Justice Department official. “Both the district court and the Eighth Circuit Court of Appeals have determined that Mr. Rubashkin is a flight risk. We are sorry that we cannot be of further assistance in responding to your concerns.” Rubashkin’s received a string of bad news lately, with a federal judge’s recent rejection of his plea for acquittal and a new trial. That followed a U.S. appeals court’s announcement that it wouldn’t consider his request to be released on bail. Rubashkin is currently sitting in an Iowa jail cell as he awaits his sentence for the 86 counts of financial fraud a federal jury found him guilty of last fall. But the bad news doesn’t mean Rubashkin won’t stop fighting for a reprieve from his cell. “Sholom Rubashkin is a very religious man who has proposed that he be imprisoned pending his sentencing under 24-hour armed guard at his home, where he can engage fully in religious observances,” Rubashkin’s lawyer, Nathan Lewin, told the Jewish Telegraphic Agency. “There is no basis in law and no reason to keep him in a local jail until he is sentenced in April.”

Read more from the original source:
Justice Department Stays Out Of Rubashkin Case

General Growth Properties Inc. has lined up nearly $4 billion in commitments from creditors Fairholme Capital Management and Pershing Square Capital Management LP to help fund its exit from bankruptcy protection, The Wall Street Journal reports . Six Flags Inc. Monday launched its bid to exit bankruptcy as the property of private equity funds led by Avenue Capital Management, leaving bondholders owed $870 million with a fraction of the company. Read the Daily Bankruptcy Review story here . The U.S. Supreme Court on Monday restored a provision of the 2005 federal bankruptcy-reform law that bars attorneys from advising clients to take on more debt before they file for bankruptcy protection, WSJ reports . Carl Icahn and other investors took control of the Tropicana Casino & Resort in Atlantic City, N.J., as it emerged from bankruptcy protection, according to WSJ . Centaur LLC is putting its Colorado casino up for sale as it works to restructure its debt in bankruptcy, the Associated Press reports . The judge overseeing the liquidation of Bernard Madoff’s firm is allowing investors to appeal his order that lets the liquidator reject years’ worth of fake profit from the fraud when calculating victims’ repayment claims, according to Bloomberg . A bankruptcy judge in New Jersey on Monday approved a deal between top thoroughbred owner Ahmed Zayat and Fifth Third Bank that allows Zayat to continue operating through May 1, the day the Kentucky Derby will be run, the Lexington Herald-Leader reports . Smurfit-Stone Container Corp. is consolidating its two packaging-container plants in Virginia into a single facility, according to the Richmond Times-Dispatch . The National Hockey League has sued former Phoenix Coyotes owner Jerry Moyes, seeking to recover more than $61 million, Reuters reports .

See original here:
The Daily Docket: More Creditors Back General Growth Plan