North America

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.

Retailer Comercial Mexicana said Wednesday that it has submitted its prepackaged $1.54 billion debt-restructuring agreement to a Mexican court with 98% of its creditors on board, Dow Jones reported. Comercial Mexicana said in a press release that the restructuring agreement, which was announced in late May, has the support of all of its derivatives counterparties and bank creditors, and 88% of its bond creditors. The restructuring already has been approved by the company's shareholders. Under the agreement, the company will issue new debt in pesos and U.S.

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.

Chemtura Corp. has struck a deal to sell its stake in a Dutch joint venture that will pay the chemical company $5 million and allow it to unload $14.25 million in environmental and pension liabilities, Dow Jones Daily Bankruptcy Review reported. In papers filed Wednesday with the U.S. Bankruptcy Court in Wilmington, Del., Chemtura said the deal will allow it divest a petroleum-additive business that contributes little to its bottom line but exposes it to potentially expensive obligations. The sale to Sonneborn B.V.

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.

The Financial Stability Board on Sunday urged leaders of the world's 20 largest developed and emerging nations to support the introduction of stricter capital rules to help banks withstand possible future crises, Dow Jones reported. The statement, made in a letter to the Group of 20, comes amid a tussle involving governments, banks and regulators on the scope of the new rules and the timing of their implementation.

No company has the ability to pay unlimited claims, even one that earned $16.6 billion last year and more than $20 billion annually in the prior four years. At the same time, no one has any idea how big BP’s damages will be, Bloomberg reported in a commentary. That hasn’t stopped Wall Street analysts from churning out estimates that move up in lockstep with the number of barrels thought to be leaking from the collapsed well each day. How many companies are willing to face unlimited civil claims, the prospect of criminal prosecution and daily excoriation by the U.S.