Canadian foamer Domfoam International Inc. has filed for bankruptcy protection in the US after flagging sales and a million-dollar fine over price-fixing led the company into insolvency, PlasticsNews.com reported. Domfoam filed for Chapter 15 protection in the U.S. Bankruptcy Court in Toledo, where it faced more than a dozen lawsuits over the inflated prices it charged for its foam that goes into carpet underlay, furniture and bedding, according to a report from Dow Jones. Judge Mary Ann Whipple granted the company’s request to put lawsuits against the company and its affiliates – Valle Foam and A-Z Sponge Foam Products – on hold while she decides if Domfoam is entitled to full protection in US court system, Dow Jones reported. The protection is aimed at providing stability to allow the company to sell off its businesses and pay its debts. Earlier in January, Domfoam pled guilty to fixing foam prices with a group of other manufacturers. The conspiracy is said to have started in January 1999 and ran for over a decade. Read more.
Struggling Catalyst Paper Corp. has received the go-ahead from a court in British Columbia to begin a planned restructuring, while at the same time filing for protection from creditors in the United States, The Globe and Mail reported. The Richmond, B.C.,-based company said Wednesday a B.C. court had issued an initial order under the Canada Business Corporations Act to begin the restructuring process. The plan would see bondholders take control of the firm. It would also reduce its overall debt by $315.4-million and cut annual cash interest payments by $25.5-million. The filing Wednesday in a Delaware court was made under provisions of Chapter 15, a form of filing that foreign companies operating in the U.S. employ when seeking protection from creditors. But Catalyst emphasized that the Canadian court order is not a bankruptcy proceeding. “While this whole process of restructuring continues we will be running the business as usual and satisfying all of our obligations to our suppliers, customers, employees and retirees just as we ordinarily would,” said Catalyst spokeswoman Lyn Brown. Shares in Catalyst fell from 2 cents each to a penny Wednesday on the Toronto Stock Exchange. The B.C.-based producer of specialty papers, newsprint and pulp operates four mills in British Columbia and Arizona. Catalyst said the debt restructuring will give the company more financial flexibility to deal with a slumping pulp, paper and newsprint market. Read more.
Two Congressmen from opposite sides of the aisle are calling on the Mexican government to take action in Vitro S.A.B.'s restructuring, which they say could set a "dangerous precedent" that will hurt investors in the Mexican glass company and future cross-border investment, Dow Jones Daily Bankruptcy Review reported. Rep. Jared Polis (D., Colo.) and Rep. Patrick Meehan (R., Pa.) sent a letter last week to the Mexican Embassy in Washington, D.C., warning about the danger of allowing Vitro's pending restructuring to proceed. Read more. (Subscription required.)
Vitro S.A.B.'s bondholders are pushing to move forward with a legal battle that could cost $1.35 billion or more, calling the Mexican glassmaker's bid to stop them a meritless "act of pure gamesmanship," Dow Jones Daily Bankruptcy Review reported. An informal group of bondholders and bond trustee Wilmington Trust separately asked the U.S. Bankruptcy Court in Dallas Thursday to deny Vitro's request to enforce the shield of bankruptcy currently protecting the company from litigation, according to court papers. Read more. (Subscription required.)
India mining giant Ashapura Minechem Ltd. filed for Chapter 15 bankruptcy protection Tuesday in U.S. Bankruptcy Court in Manhattan in a move to block foreign shipping companies that won a $125 million legal judgment against it from raiding the company's U.S. bank accounts, Dow Jones Daily Bankruptcy Review reported. The Mumbai-based company, a mineral miner and processor with debts topping $223.4 million, argued that the seizure of its U.S.-based assets would jeopardize the financial overhaul underway in its home country. Read more. (Subscription required.)
Vitro SAB won U.S. recognition of its ongoing Mexican restructuring proceeding, a decision that shields U.S. assets from debt collection attempts by angry creditors, Dow Jones Daily Bankruptcy Review reported. Judge Harlin D. Hale of the U.S. Bankruptcy Court in Dallas signed off on the Mexican glass maker's Chapter 15 petition Thursday. Read more. (Subscription required.)
Tokio Marine Europe Insurance Ltd, a part of the Tokio Marine Group, said it filed a petition for protection from creditors under Chapter 15 in U.S. bankruptcy court in Manhattan, London South East reported on a Reuters story. The company, which underwrites commercial property, casualty and marine insurance, in a court filing on Monday listed assets of more than $100 million and liabilities of more than $100 million. The company, which was formerly known as The Tokio Marine & Fire Insurance Co (U.K.) Ltd, said its debts were primarily business debts and listed 1,000 to 5,000 estimated creditors. The firm was established as the controlling company for the European operations for Tokio Marine & Nichido Fire Insurance Co, Ltd, which is a member company of the Tokio Marine Group. Read more.