Canada

Canada's BCE Inc. has agreed to pay $40 million cash and drop $500 million worth of claims to settle litigation over the collapse of Teleglobe Communications Corp., a failed subsidiary, Dow Jones Daily Bankruptcy Review reported. Documents filed with the U.S. Bankruptcy Court in Wilmington, Del., set out terms of the pact, which caps five years of litigation in courts in the U.S. and Canada. The deal means cash for bondholders of Teleglobe and a smaller pile of debt in the bankruptcy case, a product of the telecommunications industry meltdown of 2000 and 2001.

Bankrupt Canadian newsprint producer AbitibiBowater Inc said it repaid $166 million of its debtor-in-possession loan following an improvement in market conditions and operational performance, Reuters reported. In regulatory filings with the U.S. Securities and Exchange Commission, the company said it now had $40 million outstanding under the loan. AbitibiBowater also extended the DIP loan to Dec. 31, 2010, and modified certain covenants. It now has the ability to retain the proceeds from asset sales without triggering a mandatory prepayment. The amendment fee amounted to about $1 million.

AbitibiBowater Inc. is seeking to keep control of its restructuring for an extra three months so it can stay on track to emerge from bankruptcy early this fall, Dow Jones Daily Bankruptcy Review reported. The giant pulp-and-paper manufacturer is urging the U.S. Bankruptcy Court in Wilmington, Del., to extend the time in which it alone has the right to file a Chapter 11 plan of reorganization, which AbitibiBowater has already filed but is continuing to negotiate the terms of with its creditors. If the court doesn't agree to extend its exclusive plan-filing rights through Oct.

AbitibiBowater Inc. on Thursday pushed off until July 30 a preliminary hearing on its Chapter 11 exit plan, as talks continue with investors clamoring for a piece of the paper-maker's $500 million debt-rights offering, Dow Jones Daily Bankruptcy Review reported. Aurelius Capital Management LP and Contrarian Capital Management LLC say their $620 million claim entitles them to participate in the deal, part of AbitibiBowater's bankruptcy emergence financing.

Nortel Networks Inc., once part of North America’s biggest maker of telecommunications equipment, filed its plan to repay creditors without disclosing how much they will get, Bloomberg Businessweek reported. The plan, filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware, doesn’t provide details about how the company will divide the proceeds from selling its assets. Nortel, based in Toronto, filed for bankruptcy last year along with its parent, Nortel Networks Corp. The company has since raised about $2.8 billion from selling assets.

Two AbitibiBowater Inc. bondholders are asking that their disputed $620.1 million claim be temporarily reclassified in the company's Chapter 11 case so that they can participate in the paper maker's debt-rights offering, Dow Jones Daily Bankruptcy Review reported. Aurelius Capital Management LP and Contrarian Capital Management LLC said in papers filed Wednesday with the U.S. Bankruptcy Court in Wilmington, Del., that AbitibiBowater's proposed Chapter 11 plan is designed to block them from buying debt in the reorganized company that is convertible to stock at a discounted price.

Insolvent modular home manufacturer Winalta Inc. has been given a court extension to come up with a restructuring plan, The Edmonton Journal reported. Edmonton Court of Queen’s Bench Friday agreed to extend the deadline to Aug. 6 while the Acheson company continues to dispose of assets. The company was granted court protection from creditors April 26 when it could not meet its debt obligations. The court has approved the sale of 29 homes and lots and three vacant lots at Sylvan Lake for $3.8 million, as well as 118 acres of residential property in Estevan, Sask. for $1.6 million.

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.