BANKRUPTCY UPDATES

• Taking Your Credit Score from Bankrupt to Perfect 10 (May 21, 2012)
• Music Storage Website MP3Tunes.com Seeks Bankruptcy Protection (May 22, 2012)
• Book Publisher Houghton Mifflin Harcourt Files for Bankruptcy (May 17, 2012)
• Las Vegas Tycoon Lists $500 Million in Debts in Bankruptcy Filing (May 15, 2012)
• Nassau Broadcasting Sells its Assets in Bankruptcy Court (May 22, 2012)

Washington Entrepreneur Filing Bankruptcy

Darren Berg is a Seattle, Washington, area entrepreneur with real estate mortgage fund holdings, as well as a high end charter bus company.

Those diverse holdings are now being reorganized as Berg decided to file for Chapter 11 bankruptcy recently, beginning a process that lawyers say will be a complicated task as they figure out which of the more than 500 investors will get what.

According to the article from the Seattle Times, some say that Berg has raised more than $200 million for his funds via nine different mortgage and real estate investing outfits.

Berg listed $13.4 million in assets in the filing with bankruptcy court against $8.8 million in debts. Berg did not, according to sources, include information about what his luxury charter bus company is worth. Some believe that the bus company is his most valuable asset.

Michael Gearin, who is an attorney for the court-appointed bankruptcy trustee, was not surprised by the lack of detail about the bus company so early in the bankruptcy proceeding.

According to Gearin, investors in the funds will likely have to file claims further along in the process in order to recover assets from Berg’s personal holdings, which include the bus company. The lawyer went on to say that Berg did stipulate that his personal assets would be available to fund creditors.

While he didn’t comment on the latest development in his bankruptcy filing, Berg has stated that he is totally committed to “maximizing recovery for his investors,” according to the Seattle Times.

The court ordered the investment funds into chapter bankruptcy protection after investors reported that they didn’t receive interest payments they had been promised for June.

Berg filed for Chapter 11 bankruptcy protection a month or so ago, after a group of investors filed another lawsuit, and acquired a court order that allowed them to begin seizing Berg’s car, his furniture and other personal belongings.

Court Approves Bankruptcy Exit Plan for Newsprint Maker AbitibiBowater

A world leader in the manufacture of newsprint, AbitibiBowater Inc. has received approval from the courts to borrow upwards of $1.35 billion in funds to help it emerge from bankruptcy.

The company got the go ahead after there were no objections to the proposals that were put forth, according to Bloomberg. JPMorgan Chase, Barclays and Citigroup Inc. will provide the loans, one of which will be a $600 million loan. Each bank will contribute $100 million, and AbitibiBowater will try to raise another $750 million through notes offered in capital markets.

AbitibiBowater’s restructuring plan will enable unsecured creditors to share the company’s stock after it is reorganized. They will also have the chance to join in on the notes offering. The notes can be converted into equity in the reorganized company, as well.

Secured creditors will be paid in full, in cash, unless other terms are agreed upon. Current shareholders in the company would be wiped out.

AbitibiBowater operates 22 pulp and paper mills and 26 wood-produce plants in Canada, the U.S., South Korea and the U.K. The company in its latest state came about when two companies, Abitibi-Consolidated and Bowater, merged in 2007 in a $4.8 billion stock transaction.