HealthSouth Corp., the Birmingham, Al. hospital operator, will sell its stake in Chesapeake Lithotripsy Associates LLP, a Maryland-based mobile provider of kidney-stone removal services, to United Medical Systems International AG of Germany for an undisclosed amount.  HealthSouth, which has been focusing on its inpatient care operations, has been selling off assets to whittle down its debt, which currently stands at about $4.8 billion. In the past several months, HealthSouth sold off its outpatient unit for $245 million, a diagnostics business for $47.5 million, its surgery unit for $945 million and its corporate campus for another $60 million.

Everglades-themed restaurant operator R.J. Gator’s and 10 companies it controls filed for Chapter 11 bankruptcy protection in West Palm Beach, Fla., on Tuesday, MSN.com reported yestereday. The Jupiter, Fla.-based chain of restaurants has $3 million in debt and assets of about the same amount. The company’s largest unsecured creditor is Sysco Corp., a Riviera Beach, Fla.-based food distributor, with $1.3 million in unpaid billings. R.J. Gator’s has 23 restaurants, but only eight are owned by the parent company and included in the chapter 11 filing. The company may close restaurants as it recapitalizes and gets rid of unprofitable sectors, but there are no immediate plans to lay off any of the company’s 410 employees.

See Also:  Bankruptcy Lawyers New York

A legal claim filed by the Newman Foundation of Oregon State University to prevent the Archdiocese of Portland from selling a valuable piece of property in Corvallis, Ore., was rejected this week by federal bankruptcy judge Elizabeth Perris, the Corvalis Gazette-Times reported today. The foundation wanted a hearing to explain why it had a legal interest in the site where the Newman Center Catholic student ministry is located. But less than 30 minutes after both sides’ lawyers and half a dozen Newman board members filed into a downtown Portland, Ore., courtroom, Perris rejected the foundation’s request. Perris was involved in the case because the foundation had filed its claim as part of the archdiocese’s bankruptcy proceedings. The 0.9-acre parcel of land, worth about $2.8 million, is slated to be sold within two years, according to the archdiocese’s reorganization plan approved two months ago by Perris.

Nissan CEO Carlos Ghosn told shareholders that the Japanese automaker’s board members will forego their bonus pay to take responsibility for poor performance, the Associated Press reported today. In the fiscal year ended March, Tokyo-based Nissan Motor Co. marked its first profit drop in seven years - the first time earnings have slid under the turnaround efforts led by Ghosn. Ghosn said that Nissan had no interest in buying the Jaguar and Land Rover luxury European brands that Ford Motor Co. has expressed interest in selling. Nissan had marked a dramatic turnaround from near bankruptcy under the Brazilian-born Ghosn, who was sent in 1999 by Renault, which owns 44 percent of Nissan. However, its sales have been sliding, and it has slipped into third place in Japan behind Toyota and Honda.
See Also:  Chapter 7 Bankruptcy

A company that provides controversial individual voluntary arrangements (IVAs) faces insolvency after its shares were suspended and it had to call in insolvency experts, the London Guardian reported today. Debt Advisor Group, which employs 150 people in Bury, Lancashire, had been in discussions about a possible takeover, which failed to come to fruition, but the group insisted it was still hopeful that a new suitor might be found. The group is a provider of IVAs, which help customers protect themselves from creditors. However, banks have accused providers of overzealous marketing and blamed providers for a rise in bad debts. In January a number of IVA providers were forced to issue profits warnings after banks made it more difficult for customers to take out such repayment protection.

The Enron Creditors Recovery Corporation, formerly known as the Enron Corporation, announced yesterday that the investment bank UBS had agreed to pay $115 million to settle litigation over the collapse of Enron, the Associated Press reported today. As part of the settlement, UBS will withdraw its claim for about $5 million against Enron. UBS had contended that as an investor in Enron, it had lost the money as a result of the company’s collapse. The settlement remains subject to the approval of the Bankruptcy Court for the Southern District of New York. UBS was one of several financial institutions accused of helping Enron create financial structures that hid the company’s true financial condition. Last week, Credit Suisse agreed to pay $61.5 million to settle litigation.

Tower Records on Monday disputed its unsecured creditors’ committee’s opposition to the bankrupt music distributor’s liquidation plan, saying that the opposition would lead to a “litigation free-for-all,” Bankruptcy Law360 reported yesterday. Tower, which has no intention of reorganizing, is currently in the last stages of liquidating its assets. However, it is still handling a number of critical issues, including a lawsuit recently filed by a vendor group. On May 22, the company offered a modified version of both its plan and its disclosure statement in an effort to quell protests by its various creditors over the original plan. However, the new plan was not enough to satisfy the unsecured creditors’ committee, who asked the court a day later to terminate Tower Records’ exclusivity period and allow the committee to file a competing plan.

Four former managers of Schieder Moebel Holding GmbH, Europe’s biggest furniture manufacturer which averted insolvency in April, were arrested yesterday on suspicion of manipulating the company’s balance sheets to obtain bank loans, Bloomberg News reported today. In April, Schieder avoided insolvency by agreeing with creditors on a bridge loan of 65 million euros ($87.8 million). The company has 11,000 employees in 40 European locations and sells furniture to retailers throughout Europe, including Ikea. The four people may have manipulated the balance sheet for the fiscal years 2005 and 2006 by 34 million euros, German prosecutors said. A “significant manipulation” of the balance sheet was detected after the company’s auditor PricewaterhouseCoopers investigated the books, Schieder said in an e-mailed statement dated yesterday.
See Also:  Chapter 7 Bankruptcy

Jessica Cutler, the former Senate aide whose online sex diary landed her a book deal and a spot in Playboy, has filed for chapter 7 protection, the Associated Press reported on Friday. Cutler, an aide to then-Sen. Mike DeWine (R-Ohio) created the “Washingtonienne” blog in 2004 and began posting racy details about her sex life with six men, including a Senate colleague and “a few generous older gentlemen” who she said paid many of her living expenses. Cutler has spent much of her time fending off a lawsuit by ex-boyfriend and fellow DeWine staffer Robert Steinbuch, who is seeking more than $20 million in damages. In court documents filed in the case Thursday, Cutler says that she can’t pay her American Express bill, legal fees and student loans. She submitted to the judge a copy of a Chapter 7 bankruptcy petition filed in New York dated Wednesday.

A state court’s use of its contempt power to enforce a pre-bankruptcy obligation may violate the automatic stay.  This is because of the general rule that enforcement or collection of a pre-bankruptcy debt is a violation of the stay.  Some courts have held that use of contempt power to enforce what would be a non-dischargeable support obligation is not violative of the stay; however, the bankruptcy courts would not uniformly follow that view.  As a result, the best course is to require one of the interested parties to file a motion with the bankruptcy court seeking appropriate relief in order to allow a contempt hearing, or enforcement, to continue.  The determination of whether a contempt action is a violation of the stay will, of course, depend on whether that action is criminal or civil contempt. 

See Also:  Chapter 7 Bankruptcy