Unsecured Creditors

Philadelphia Newspapers L.L.C. can use a private investigator to look into security breaches, including the leak of an internal planning document to the committee representing the firm's unsecured creditors, a federal bankruptcy judge ruled yesterday. Chief Bankruptcy Judge Stephen Raslavich agreed that the company could spend up to $25,000 to use SafirRosetti, a security firm, to investigate the leak and review the overall integrity of the company's protection of internal documents.

John Wanamaker's parent company can wait for Christmas sales results before filing a reorganization plan to get the department-store chain out of Chapter 11, a U.S. Bankruptcy Court judge ruled yesterday. Woodward & Lothrop Inc., which owns 15 Washington-area department stores and the 15-store John Wanamaker, voluntarily filed Chapter 11 on Jan. 17. Judge Stuart Bernstein yesterday gave Woodward & Lothrop until Jan. 9, 1995, to file its plan. He gave the chain until Feb. 8 to solicit acceptances of the plan.

Phoenix Steel Corp. announced yesterday that it had reached a new agreement with its unsecured creditors aimed at averting a second bankruptcy filing. Under the plan, Phoenix's 500 unsecured creditors agreed to forgo about half of the $15 million they are owed. In return, they will receive a share in net operating profits and net proceeds from the planned sale of the company. The plan, which was negotiated by Phoenix and a committee representing the unsecured creditors, must now be approved by at least 80 percent of the company's unsecured creditors.

Angry creditors yesterday asked a judge to appoint a trustee to run Eastern Airlines in place of managers from parent Texas Air Corp. The move could mean the end of Eastern's efforts to revive itself after a bankruptcy filing and a 13-month-old strike by the International Association of Machinists. For the first time since Eastern filed for protection from creditors March 9, 1989, Texas Air chairman Frank Lorenzo's control of the carrier seemed uncertain. Eastern's unsecured creditors, who until recently had supported the company, told U.S. Bankruptcy Judge Burton R. Lifland in New York that the carrier was guilty of "gross incompetence . . . gross mismanagement" or fraud in trying to reorganize.

Advanta Corp. creditors, stockholders, and others offered a list of objections last week to the bankrupt Montgomery County credit card firm's liquidation plan ahead of a hearing scheduled for Thursday in Wilmington. The committee representing Advanta's unsecured creditors said in a court filing that court approval of Advanta's proposed plan would be "futile and impose significant and unnecessary expense and delay" on the liquidation process because "it is highly likely that the vast majority of creditors" will vote against it. That would force a second round of voting, costing the bankruptcy estate money that could otherwise be used to pay off Advanta creditors.

If employees and other unsecured creditors go along with Plan A, they may get 58 cents on every dollar bankrupt St. Mary Hospital owes them. If they opt for Plan B, they may get only 33 cents on the dollar - and set the stage for a long legal battle. And, as in all bankruptcy cases, the unsecured creditors get a shot at what's left only after trustees, lawyers, accountants and so-called secured creditors - people with liens - get 100 percent of what they are owed. If estimates in court papers hold, the trustee, lawyers, accountants and others involved in the bankruptcy will get about $1.54 million.

David Feld, chairman and chief executive of the Today's Man menswear chain, has won court approval of his plan to pay off creditors and emerge from personal bankruptcy. Under the plan, Feld will retain his majority stake in Today's Man, in large part because of new backing he received from Philadelphia's Jefferson Bank. The company, which operates 25 retail stores in Philadelphia, New York and Washington, is still operating under Bankruptcy Court protection. Feld made all his payments to nine secured creditors who were owed more than $32 million, said his attorney, Jeffrey Kurtzman.

Prime Healthcare Services Inc., a California for-profit hospital operator, said it completed its purchase of Lower Bucks Hospital in Bristol - which had been running out of cash to operate - in a deal that calls for Prime to invest $10 million in Lower Bucks within five years, hire all 950 employees, and honor union contracts. Prime will assume the liabilities the 156-bed Lower Bucks had when it exited bankruptcy in January. Those debts include a $1.2 million note to unsecured creditors, a $2 million mortgage on a surgery center, and $500,000 owed on a $1 million note to Pension Benefit Guaranty Corp.

Phoenix Steel Corp. yesterday broke off negotiations with its 500 unsecured creditors and filed for protection under Chapter 11 of the Bankruptcy Act. It was the second such filing for the company within the last four years. Several of the creditors, with whom the company has been negotiating to avert a bankruptcy filing, said they were surprised by Phoenix's announcement because they believed an agreement was at hand. "We thought we were close to a deal," said I. Michael Coslov, president of Tube City Iron & Metal Co., one of Phoenix's largest creditors.

In the Region   ICG profit down; shares rise   ICG Group Inc. , a Radnor firm that buys and builds Internet software companies, said earnings for the quarter ended Dec. 31 declined to $14.7 million, or 40 cents a share, from $17.9 million, or 49 cents a share, a year earlier. Revenue was $43.6 million, compared with $34.4 million in the year-ago period. The company said full-year revenue exceeded guidance, rising 24.8 percent, compared to 2011, to $166.6 million.

A merger between US Airways Group Inc. and bankrupt American Airlines could be announced this week, creating the world's largest airline by passenger traffic. American parent AMR Corp.'s unsecured creditors planned to meet Monday, and the boards of AMR and US Airways - already the dominant airline in Philadelphia - could also vote on merger terms by midweek, according to reports by Reuters, the Wall Street Journal, and other media outlets, citing unnamed sources. US Airways chief executive officer Doug Parker is expected to head the new company, and American's CEO, Tom Horton, would become nonexecutive board chairman, at least for a time.

Prime Healthcare Services Inc., a California for-profit hospital operator, said it completed its purchase of Lower Bucks Hospital in Bristol - which had been running out of cash to operate - in a deal that calls for Prime to invest $10 million in Lower Bucks within five years, hire all 950 employees, and honor union contracts. Prime will assume the liabilities the 156-bed Lower Bucks had when it exited bankruptcy in January. Those debts include a $1.2 million note to unsecured creditors, a $2 million mortgage on a surgery center, and $500,000 owed on a $1 million note to Pension Benefit Guaranty Corp.

A Bucks County judge Wednesday approved Prime Healthcare Services Inc.'s purchase of the cash-starved Lower Bucks Hospital. If the sale of the Bristol nonprofit to Prime or some other entity were rejected, "we would be forced to close it immediately," hospital chief executive Albert Mezzaroba testified at an Orphans' Court hearing in Doylestown. Mezzaroba said the hospital had only $2 million cash in the bank, including $1.5 million from a $3 million line of credit provided last month by Prime, a California for-profit that bought Roxborough Memorial Hospital in Philadelphia in February.

Two family-owned nurseries that have been around for generations in the Philadelphia suburbs are wishing the summer hadn't brought unexpected financial heat in the form of the Waterloo Gardens bankruptcy. Both are entangled in the Chapter 11 case filed June 26 by the debt-soaked gardening center that closed its renowned Devon store. Both landed on an unenviable list: creditors holding the 20 largest unsecured claims. And both longtime suppliers of poinsettias, annuals, and other earthly wares to the region's onetime preeminent gardening center are coming to understand the exquisite frustration of being a little guy in a big, old bankruptcy case.

Advanta Corp. creditors, stockholders, and others offered a list of objections last week to the bankrupt Montgomery County credit card firm's liquidation plan ahead of a hearing scheduled for Thursday in Wilmington. The committee representing Advanta's unsecured creditors said in a court filing that court approval of Advanta's proposed plan would be "futile and impose significant and unnecessary expense and delay" on the liquidation process because "it is highly likely that the vast majority of creditors" will vote against it. That would force a second round of voting, costing the bankruptcy estate money that could otherwise be used to pay off Advanta creditors.

Advanta Corp.'s bankruptcy has hit some choppy waters that could delay payments to retail investors owed $140.6 million by the defunct Montgomery County credit card company. At a hearing Wednesday in Wilmington, the committee representing Advanta's unsecured creditors said it was not supporting the company's liquidation plan. The plan was filed Nov. 2 and said retail noteholders - the largest block of unsecured creditors - could expect to recover 64.4 percent to 100 percent of their investments.

  Angels look like they're slipping off saddle again Back when they were still owned by Gene Autry, the California Angels (as they were then known, but that's another story) were a snakebitten team. No matter what they did, or how much money the singing cowboy spent, the Halos always fell short of winning the World Series. All that was wiped away in 2002, when the Angels beat the Giants in seven. But now, at the start of a new decade, it appears that what's old is new again.

Philadelphia Newspapers L.L.C. can use a private investigator to look into security breaches, including the leak of an internal planning document to the committee representing the firm's unsecured creditors, a federal bankruptcy judge ruled yesterday. Chief Bankruptcy Judge Stephen Raslavich agreed that the company could spend up to $25,000 to use SafirRosetti, a security firm, to investigate the leak and review the overall integrity of the company's protection of internal documents.