Canada

Secured lenders owed $357 million and an assortment of creditors say AbitibiBowater Inc. owes them a better explanation of its bankruptcy-exit proposal, Dow Jones Daily Bankruptcy Review reported. Term lenders said the newsprint producer is unfairly capping what they can recover, while depriving them of the right to vote on its Chapter 11 plan. The plan promises payment in full to secured lenders, including the term lenders, and lists them as "unimpaired," meaning AbitibiBowater doesn't need to poll them.

Nortel Networks Corp. has complained to a U.S. bankruptcy court that Avaya Inc. is balking at handing over $22 million of the agreed $900 million purchase price for Nortel's enterprise business, Dow Jones Daily Bankruptcy Review reported. As it musters cash to pay creditors, Nortel says, it needs a court order to force Avaya to turn over the money, which it says is being withheld in violation of the sale agreement.

AbitibiBowater Inc. is seeking to pay fees to banks that will assist it in lining up more than $2.3 billion in capital that the newsprint maker says is necessary for it to emerge from Chapter 11 protection, Dow Jones Daily Bankruptcy Review reported. In papers filed Wednesday with the U.S. Bankruptcy Court in Wilmington, Del., AbitibiBowater said lining up the necessary financing is "critical" as it prepares to seek permission to send its bankruptcy-exit plan to creditors on July 7 and emerge from Chapter 11 this fall.

Shaw Communications Inc on Wednesday won court approval for its C$2 billion purchase of Canwest Global's broadcast arm after it agreed to provide C$11 million to shareholders who had complained of being shut out of the deal, Reuters reported. The amended agreement, approved by Ontario Superior Court Judge Sarah Peppal, followed last-ditch negotiations that began early Tuesday and ran late into the night before resuming on Wednesday.

A legal dispute over Shaw Communications Inc's takeover of Canwest Global Communications' broadcast assets that shareholders say leaves them empty-handed continued into the evening on Tuesday, Reuters reported. The two sides hope to hammer out a deal that can be finalized in a hearing on Wednesday, David Byers, a lawyer for the court-appointed monitor for the CanWest bankruptcy and sale, told Toronto Superior Court on Tuesday. Shaw was in court to get approval for its purchase of Canwest's bankrupt TV assets.

Nortel Networks Corp. has moved to shut off health care to retirees and payments to disabled employees in the U.S. as it prepares to distribute $2.8 billion in cash and deal with patents that could be worth another $1 billion, Dow Jones Daily Bankruptcy Review reported. Papers filed recently in a U.S. Bankruptcy Court say the former telecommunications equipment giant wants to end health care and life insurance benefits on Aug. 31 for more than 4,000 retired people or their dependents, and cut off long-term disability payments to another 280 people.

Fairfax Financial Holdings Ltd., a key contributor to AbitibiBowater Inc.'s proposed $500 million bankruptcy-exit financing package, refused to move forward with the deal after a bankruptcy judge said the company couldn't grant the investor immunity from a possible legal challenge, Dow Jones Daily Bankruptcy Review reported. Fairfax and two other AbitibiBowater bondholders that were to backstop a debt offering walked away from the deal this weekend, causing the newsprint maker to scramble for other options, said company attorney Kelley A.

A bankruptcy judge on Friday refused to approve a $500 million financing deal for AbitibiBowater Inc. as long as that deal grants key investor Fairfax Financial Holdings Ltd. immunity from a possible legal challenge, Dow Jones Daily Bankruptcy Review reported. Judge Kevin J. Carey of the U.S. Bankruptcy Court in Wilmington, Del., said he would approve the financing deal, which AbitibiBowater claims is essential to its effort to raise more than $1 billion to fund it emergence from Chapter 11, if the company dropped the Fairfax release.

Movie Gallery Inc. said Wednesday that its Canadian subsidiary has begun liquidating all 181 of its video rental stores, including 50 stores that were potentially up for sale but no longer are, Bloomberg BusinessWeek reported on an Associated Press story. Net proceeds from the sale of inventory worth an estimated 48 million Canadian dollars ($47 million) will be used to fund a proposal by the company to pay its Canadian creditors, including landlords and employees, Movie Gallery said. The Canadian unit, Movie Gallery Canada Inc., is not in bankruptcy proceedings.

An attempt by an ad hoc group of disgruntled shareholders to derail the takeover of Canwest Global Communications Inc. is “misguided” and their petition for a re-auction of the broadcaster’s assets “must be rejected,” declared the Winnipeg-based company in a court filing, the National Post reported.