Business Bankruptcy News Bulletin Summary for Week of July 19

The items below are excerpted from the Business Bankruptcy News Bulletin. A full issue contains information on dozens of troubled companies, as well as informational and analysis highlights and an examination of business bankruptcy matters. Please visit the insideARM bookstore for information on subscribing to the Bulletin.

A Brief Look at the Unsecured Creditors’ Committees in a Chapter 11

A creditors’ committee can play a major role in Chapter 11 bankruptcy reorganizations. The committee, appointed by the U.S. Trustee, usually consists of unsecured creditors who hold the seven largest unsecured claims against the debtor. Among other things, the committee consults with the debtor in possession on administration of the case, investigates the debtor’s conduct and operation of the business and participates in formulating a reorganization plan. A creditors’ committee may, with the approval of the U.S. Bankruptcy Court, hire an attorney or other professionals to assist in the performance of the committee’s duties. A creditors’ committee can be an important safeguard to the proper management of the firm.

BANKRUPT COMPANIES

Builders Financial Corp., Chicago, Il., filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Illinois. The firm listed assets of between $1 million and $10 million and liabilities of between $10 million and $50 million. The filing was under case number 10-31180. For more information contact the court at 866-222-8029, then enter 15.

Centurion Properties III LLC, Kennewick, Wa., filed Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Washington. The firm listed assets and liabilities of between $50 million and $100 million each. The filing was under case number 10-04024. For more information contact the court at 509-458-2441.

Ernest Communities LLC, Richmond Hill, Ga., filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Georgia. The firm listed assets and liabilities of between $10 million and $50 million each. The filing was under case number 10-41437. For more information contact the court at 912-280-1376.

Flying J’s Chapter 11 reorganization plan received approval from the U.S. Bankruptcy Court. The plan calls for the truck-stop operator’s travel plazas to be purchased by Pilot Travel Centers LLC for $1.6 billion in cash and stock, and Flying J says it will repay its creditors in full from money garnered through $2 billion in asset sales.

King of Diamonds Gentleman’s Club, Inner Grove Heights, Mn., filed Chapter 11, listing liabilities of at least $4.6 million, including $1 million in back taxes. The company claims it has strong cash flow and that it intends to continue operating.

Point Blank Solutions Inc., which filed Chapter 11 in April along with affiliates, is now looking at strategic alternatives, including the possibility of putting itself up for sale. As a result, the firm will look for ways to enhance its finances to gain the highest value for all concerned. The Florida-based producer of advanced body-armor systems for the military and law enforcement, earlier arranged for a $20 million in debtor-in-possession financing to help fund continued operations as it restructures.

Wright Group Inc., Valparaiso, In., filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Indiana. The firm listed assets of less than $100,000 and liabilities of between $1 million and $10 million. The filing was under case number 10-30577. For more information contact the court at 304-347-5680.