United States

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.

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.

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.

The chief executive of General Motors Co.'s Adam Opel GmbH division, Nick Reilly, said he wants to complete almost all of the planned restructuring measures by the end of this year in a bid to turn around the business as soon as possible, Dow Jones reported. Thanks to the revamped Meriva and Astra models, Opel's market share in the second half of the year is expected to rise to slightly more than 9% from currently just under 9%, Reilly said.

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.

Barclays Plc's President Robert Diamond said on Monday that the British bank's comments to the media about its deal to acquire parts of Lehman Brothers may not have been official disclosure to the U.S. bankruptcy court, which approved the takeover, Reuters reported. At issue is whether the British bank received an unfair $11 billion windfall when it acquired parts of Lehman Brothers after the investment bank's collapse in Sept., 2008. Diamond said that Barclays had tried to craft a deal to take over Lehman's core U.S. brokerage business in a way that Barclays would see a gain.