United States

The main unit of Mexicana on Tuesday warned it could face liquidation unless Mexico's largest airline was allowed to keep operating aircraft in the wake of its bankruptcy filing, Dow Jones reported. Compania Mexicana de Aviacion filed for bankruptcy protection in the U.S. and Mexico on Monday after failing to reach a new deal with its unions to cut costs after a period of rapid expansion. The airline continued to operate most flights Tuesday, but said in court filings that aircraft leasing companies and owners were taking steps to repossess planes.

Oaktree Capital Management LP is willing to give up its fight for control of Almatis BV, a bankrupt aluminum maker, for full payment of its loans and an end to threatened legal action, according to a "confidential" court filing on Monday, Reuters reported. In a letter dated July 27 to an Almatis lawyer, Oaktree's lawyer outlined six conditions for ending Oaktree's battle with Dubai International Capital LLC over the European aluminum company.

A U.K. Court of Appeal ruled in favor of hedge funds that maintained their client money, held in the main European arm of Lehman Brothers Holdings Inc., wasn't properly protected when the investment bank collapsed, The Wall Street Journal reported. The development is the latest aspect of the complex effort to return cash and other assets to Lehman's clients after the bank failed in September 2008. Lehman's bankruptcy, with more than $600 billion in total assets, ranks as the largest U.S. corporate failure.

A Kazakhstan bank's bid to use the U.S. bankruptcy court to halt an overseas legal proceeding could drag the court into disputes in which the U.S. itself has little at stake, Dow Jones Daily Bankruptcy Review reported. Kazakhstan's JSC BTA Bank says the U.S. bankruptcy court's decision to grant it Chapter 15 protection in the U.S. after it underwent restructuring in its home country last year extended a key benefit of U.S. bankruptcy law: the automatic stay that halts legal action against a debtor company.

Peru's Ministry for Mining and Energy said Tuesday it will begin the process of winding down Doe Run Peru's management of the country's only polymetallic smelter. Doe Run, a unit of U.S.-based Renco Group Inc., could also face insolvency and environmental proceedings against it by Peru's regulatory bodies, Osinergmin and OEFA, Dow Jones Daily Bankruptcy Review reported. Osinergmin supervises energy and mining investments, while OEFA is charged with the evaluation of environmental affairs.

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.

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.

Almatis Group said it has lined up $592 million to fund a potential restructuring plan that would see it exit bankruptcy under the ownership of Dubai International Capital, Dow Jones Daily Bankruptcy Review reported. In court papers filed Monday, the aluminum company said it expects to ask the bankruptcy court shortly for permission to strike a deal with various firms that are willing to back the Chapter 11 plan of reorganization that current Almatis owner Dubai International Capital wants to sponsor.

Online reservation company 1800Hotels has continued to make “numerous” holiday bookings even after seeking bankruptcy protection last Tuesday, a leading US travel company has claimed to a Florida court, The Irish Times reported. Mark Travel, which handles reservations for major tour operators, said the firm’s Dublin-based parent company was trying to compel it to take these bookings without showing any ability to pay. The bankruptcy laws were supposed to act “as a shield, not a sword.

The future of BP PLC has shifted in recent days from a death-watch discussion to a debate about how valuable the British oil giant will be after it finishes paying for the worst offshore oil spill in U.S. history, the Associated Press reported. BP gained temporary control of its broken well in the Gulf of Mexico on Thursday and is counting on shutting it off permanently within weeks. Its shares have regained more than a quarter of the value lost in the wake of the April 20 explosion on the Deepwater Horizon drilling rig.