Archive forFiling For Bankruptcy

Battle for ‘Survivor’ Profits Ends up in Bankruptcy Court

A television executive who said he helped Emmy Award-winning producer Mark Burnett re-pitch the concept for Survivor after major networks snubbed it is fighting to collect millions of dollars of the reality show’s profits.

In court papers, Layne Leslie Britton says he is owed at least $14 million in TV show revenuean amount that was supposed to flow from entertainment consultant Conrad Riggs and his company, Cloudbreak Entertainment Inc.

Mr. Riggs, who was getting a cut of Mr. Burnett’s Survivor profits, broke his promise to share some of that money, Mr. Britton’s lawyers said.

The legal battle, waged in state court since 2012, is now in the hands of a bankruptcy judge after Mr. Riggs put Cloudbreak into chapter 11 protection on Dec. 1, just a few hours before a trial on the dispute was scheduled to start. Filing for bankruptcy puts a company’s lawsuits in timeout. (Cloudbreak’s bankruptcy lawyer did not return a request for comment.)

The dispute traces back to 1998, before Mr. Burnett launched hits like “The Apprentice”, “Shark Tank” and “The Voice”, back when he and Mr. Riggs looked for a network interested in a reality TV show based on Sweden’s Expedition Robinson.

Mr. Riggs and Mr. Burnett ended up in Mr. Britton’s office at the (now-defunct) UPN, where he was executive vice president of business operations.

By Mr. Britton’s account in court papers, ABC, NBC and FOX weren’t immediately hooked on the show. So he gave Mr. Riggs and Mr. Burnett novel advice: Pitch the show with a business model in which Mr. Burnett and a network share the responsibility of getting advertisers for the show, then split half of the profits.

CBS executives later agreed, and the show’s first episode ran on May 31, 2000.

Mr. Britton said he later advised “Survivors” creators at another crucial moment that occurred shortly before Survivor’s second episode. CBS executives were pressuring Mr. Burnett to lower his share of ad revenue to 25% from 50%, but Mr. Britton urged them to not to cave in, according to court papers. They didn’t.

“Holding firm to receiving the 50% share of advertising revenues set a hugely successful and important foundation for all of the deals that Burnett would do in the future, including the subsequent cycles of Survivor,” Mr. Britton said in court papers.

Several months after “Survivor’s” debut, Mr. Riggs hired Mr. Britton to provide more consulting advice. Under the deal, Mr. Britton would be paid 35% of the revenue that Mr. Riggs got for future seasons of Survivor, along with 40% of the revenue that Mr. Riggs received from other Burnett-related shows.

Mr. Riggs (via Cloudbreak) initially made payments of nearly $1.9 million to Mr. Britton from 2002 to 2006. But the money stopped when Mr. Riggs said he wasnt getting any more “Survivor” money because of a rocky relationship with Mr. Burnett.

Mr. Britton said he sued after finding out that Mr. Riggs (via Cloudbreak) had still been collecting “Survivor” money.

Throughout the lawsuit, Mr. Riggs has denied wrongdoing. His lawyers accused Mr. Britton of giving bad advice that cost him millions. And here is another reason why the payments stopped, according to a legal transcript from earlier this year:

Lawyer: “As of August of 2007, what reason were you entertaining as to not pay Layne?”

Mr. Riggs: “Because I felt like, looking at the situation, he had been paid enough for this work, and I hadn’t decided whether to continue paying him anymore or not.”

Court papers filed with Cloudbreak’s bankruptcy show that, aside from “Survivor”, the Santa Monica, Calif., company gets a cut from “The Apprentice”. The company could get future revenue from these other projects: “Bounty Hunter”, “Brides”, “Cinderella in America”, “Coming Out”, “Culver Academy”, “Divided Nation”, “House of Heather”, “Love at First Sight”, “The Jury Project” and “The Untitled Disaster Relief Project.”

Shortly after the bankruptcy, Mr. Britton asked US Bankruptcy Court Judge Neil W. Bason let the state-court trial continue anyway.

“Britton…has patiently waited for his day at trial,” his lawyers said in court papers.

Mr. Britton’s lawyers didn’t return a request for comment.

Write to Katy Stech at Follow her on Twitter at @KatyStech

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David O. Russell Fails to Deliver Joy

Weve seen Cooper and Lawrence strike sparks off each other before in a David O. Russell jointSilver Linings Playbook, where they played a pair of mentally unstable but curiously meant-for-each-other lovers. Here, their characters connection is professional rather than romantic, but the energy that flows between them is just as crackling. With the appearance of Cooper about two-thirds of the way in, Joy becomes yet a third kind of movieneither a screwball family comedy nor a portrait of the artist as monomaniacal entrepreneur, but the story of a business partnership made in heaven. After her first attempt to peddle her invention on the shopping channel ends in disaster, Joy, on the brink of filing for bankruptcy, decides to strong-arm the practical-minded Neil into giving her one more shot. In a scene thats one of the films highlights, Joy overcomes her terror of appearing on live TV and, addressing the audience as the regular-gal homemaker she is, proudly demonstrates the various convenient features of her humble invention. The connection is made, the QVC phones start ringing, and a housewares empire is bornbut not until after more plot complications involving patent fraud, dishonest parts manufacturers, and passive-aggressive attempts at sabotage by members of Joys family.

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Tinian Dynasty owner files for Chapter 11

The owner of Tinian Dynasty Hotel amp; Casino has filed for bankruptcy not to go out of business, but to continue doing business.

Hong Kong Entertainment Investments Ltd. (HKE), which owns the Tinian Dynasty casino on the Commonwealth of the Northern Mariana Islands, filed a Chapter 11 petition in the US District Court on Friday, citing insufficient assets to meet its liabilities.

Based on the petition, HKE’s total assets amounted to $55.2m, comprising more than $51.3m from real property and $3.9m from personal property. However, the company’s summary of liabilities amounted to $285.5m–$175.8 million is owed to creditors who have claims secured by property; $76.7m for priority unsecured claims; and $6.4m unsecured claims.

HKE legal counsel Timothy Bellas said that the purpose of Chapter 11 is not to go out of business but to continue doing business. One of HKEs priorities would be to ask the court to pay the unpaid salaries of Tinian Dynasty employees as well as federal and local taxes.

There are over 200 creditors listed in the 49-page document, including TV stations and local newspapers for advertising, airline flights for tour companies, and obligations to government agencies and private businesses. Among the creditors are the US Department of the Treasury’s Financial Crimes of Enforcement Network, Internal Revenue Service, and the CNMI Treasury.

The filing came a day after HKE was given a go signal by the Tinian Casino Gaming and Control Commission to reopen the resort casino on Tuesday. The casino was shut down in September by its previous owner due to lack of guests following typhoon Soudelor.

The bankruptcy came as no surprise as according to HKE, its board held a special meeting in November to discuss the corporation’s financial condition. The board was advised that filing of Chapter 11 is necessary for the company “to avoid the possibility that the assets of the corporation will be insufficient to meet the obligations based on litigation expenses and possible liabilities, which may result from unliquidated but disputed claims.”

The meeting concluded with an agreement that filing for bankruptcy would be in the best interest of the corporation. Chairman and president of the board of directors Chun Wai Chan was authorized on behalf of the corporation to prepare any documents necessary for the filing.

Bellas also stated that the filing is not yet complete and the company will provide updated pleadings in the coming weeks.

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Next Week in Bankruptcy

A federal judge will hear protests on Wednesday from bondholders who say the city of San Bernardino, Calif., shouldn’t leave bankruptcy protection without making a higher repayment offer on roughly $51 million worth of bonds.

The 213,000-resident city, which has been in bankruptcy for more than three years, needs approval from Judge Meredith Jury to put its reorganization plan into action. The plan would cut health-care benefits for thousands of retired city workers, freeing up money to fix roads, prepare city hall for earthquakes with $20 million in improvements and buy $33 million worth of new police vehicles, according to documents filed in US Bankruptcy Court in Riverside, Calif.

The plan also calls for the city to save money by contracting out services currently provided by city workers to other agencies or private entities.

But under the same plan, a Luxembourg bank that extended bonds worth about $51 millionErste Europaische Pfandbrief-und Kommunalkreditbank AGwould be paid about 1% of that debt. The bank purchased the San Bernardino bonds in 2005 to pay pensions.

The city stopped repaying the bonds once it filed for bankruptcy on Aug. 1, 2012, projecting to run out of money in less than two months. San Bernardino, which is located about 60 miles east of Los Angeles, has suffered from double-digit unemployment and lower tax revenue from fallen property values.

Bondholders have objected to the city’s spending and to the repayment plan, arguing the city should raise taxes instead. They have also criticized San Bernardino officials’ decision to continue making full payments into the pension fund run by California Public Employees Retirement System , also known as Calpers, which distributes that money to thousands of retired city workers.

Pension benefits of current retirees or the active workforce enjoy strong protections by states, but filing for bankruptcy protection gives a city or county the power to cut contracts.

On Monday, a bankruptcy judge in California could clear Internet music giant Pandora Media Inc. to take over struggling competitor Rdio Inc. with its purchase offer of $75 million in cash.

No better offers came in for the 140-worker company, which was founded in 2010, but the transaction still needs approval from Judge Dennis Montali.

The San Francisco company filed for bankruptcy protection on Nov. 16, saying its debts top $200 million. It had been racking up losses of around $2 million per month, thanks largely to the high costs of retaining high caliber Silicon Valley engineering talent,” according to documents filed in the US Bankruptcy Court in San Francisco.

Like Spotify and several other competitors, Rdio charges users $10 a month for unlimited access to tens of millions of songs. While many music companies believe that approach is key to their future, consumers have been slow to embrace it and some artists have complained that it doesnt generate sufficient royalties. On top of that, deep-pocketed competitors including Apple Inc. and Alphabet Inc. have recently entered the market, challenging smaller outfits such as Rdio.

On Tuesday, a bankruptcy judge in Alabama could approve a deal between coal-miner Walter Energy Inc. and unsecured creditors while the company looks for buyers for some of its mining operations.

At a court hearing, Judge Tamara Mitchell is expected to go over the deal’s fine print, which would give unsecured creditors a 1% ownership stake in the company if its core mining operations are bought by lenders who’ve already made a purchase offer. Under that purchase offer, the lenders would forgive about $1.25 billion in debt.

Walter Energy filed for bankruptcy on July 15, roiled by energy markets that were thrown by an oversupply of natural gas unlocked by a new drilling technique called fracking. Oil prices fell below $40 a barrel earlier this month.

Walter Energy officials are looking for buyers to bid on some of the company’s mining operations at a Jan. 5 auction. The sale doesn’t include some mines in West Virginia.

-Peg Brickley, Hannah Karp and Jacqueline Palank contributed to this article.

Write to Katy Stech at Follow her on Twitter at @KatyStech

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Former Relativity CRO: Ryan Kavanaugh Obstructed Bankruptcy Efforts

Kushner says in a court filing that his company, FTI Consulting, has not beenpaid the $4.58 million in fees and $251,504 in expensesRelativity owes for the work beginning this summer to steerthe entertainment company through the bankruptcy process. It filed for Chapter 11 protection on July 31.

It is no secret that Mr. Kavanaugh did not want to hire an outside firm to manage its affairs, Kushner said. Mr.Kavanaugh stated to me on several occasions during the pre-petition period of Summer 2015 thathe did not want nor would he even consider the Debtors filing for bankruptcy and/or selling its assets. Rather, Mr. Kavanaugh worked, unsuccessfully, to raise sufficient financing mainlythrough equity investments while the liquidity position of the Debtors deteriorated.

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Attorney General Schneiderman says Radio Shack gift card holders can file …

Attorney General Eric T. Schneiderman says that holders of gift cards purchased from the former retailer Radio Shack, which had several stores in St. Lawrence County, can now file claims seeking to recover the unused balance on their cards.

Radio Shack stores in Potsdam and Massena were part of more than 1,000 stores said to be closing earlier this year after the company announced it was filing for bankruptcy.

The stores in St. Lawrence County closed in February. A franchise “store within the store” in Rex Hardware, in Canton’s University Plaza, was not affected.

“Individuals who have unused balances on Radio Shack gift cards may now apply to get their money back,” said Schneiderman. “When a company goes bankrupt, it is important that consumers are protected and this claims process will ensure just that.”

Consumers who have unused Radio Shack gift cards with a balance can go to the website to obtain a claim form which they can submit electronically or by mail.

The claims process is part of a settlement agreement previously approved in the US Bankruptcy court in Wilmington, Delaware and supported by Attorney General Eric Schneiderman, 23 other states, and the District of Columbia.

All claims will be reviewed according to the court-approved plan and settlement that established the RSH Liquidating Trust to review and approve claims in accordance with the court’s orders.

Under the court’s order, the trust will treat as a priority claim and pay one hundred percent of the balance on the cards to consumers holding gift cards that were purchased (by either the holder of the card or by the person who gave the card as a gift) from Radio Shack, the Radio Shack website or any of its authorized sellers. Per the court order, gift cards acquired in other way will not have priority and will be treated as a general unsecured creditor.

The deadline for filing claims is Dec. 2, 2016 and consumers in New York as well all fifty states are eligible to file proofs of claim.

Schneiderman cautions consumers that no one associated with this settlement will contact them to ask for personal or financial information or to request any payment. Consumers asked for such information or payment should say no to those requests.

For more information call Attorney General Eric Schneiderman’s Internet Bureau at 212-416-8433 or visit

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The muni trades that pushed Pimco to the top in year of distress

Those were our big credit decisions, said David Hammer, who co-manages the $583 million fund with Joe Deane in New York.

The fund returned 5.9 percent through Friday, continuing a neck-and-neck race with Invescos high-yield muni portfolio for the first-place title among open-end funds with at least $100 million in assets, data compiled by Bloomberg show.

Together, the decisions are a microcosm of the year that was in the $3.7 trillion municipal market. Bond buyers sought extra yield as interest rates remained near generational lows, yet many were hesitant to invest in Puerto Rico and Chicago until their financial paths became clearer.

In Puerto Rico, the way forward only got murkier in 2015. So Pimco kept its allocation to commonwealth bonds at zero as Gov. Alejandro Garcia Padilla said the island needs to restructure its debts to emerge from a severe fiscal crisis. This month, he said the US territory could default on Jan. 1, when almost $1 billion of interest is due.

It took the Puerto Rico Electric Power Authority more than a year to reach a tentative agreement last week with bondholders and insurers to lower its $8 billion debt, showing how difficult such talks are without the threat of filing for bankruptcy. Getting Chapter 9 extended to the commonwealth hasnt gained traction in Congress. The US Supreme Court in 2016 will rule on the islands Recovery Act, a measure allowing for the Puerto Ricos publicly owned corporations to restructure debt that was struck down in court.

A key part of our decision to not invest in Puerto Rico up until now is the lack of a clear set of rules to provide Puerto Rico debt relief, which we think is inevitable, Hammer said. We want to know what the rules are before were willing to commit investor capital.

The call paid off: Junk-rated Puerto Rico bonds have plunged 13 percent this year, the third worst of all market segments tracked by Barclaysc.

Id expect us to remain very cautious on Puerto Rico until we have a set of investable rules, Hammer said. There will be a lot of noise without a lot of clarity, and thats not good for bond prices.

Some investors extended their caution to Chicago, the only big city besides Detroit that Moodys deems junk. Some of its securities fell by more than 10 cents on the dollar in less than a week after the May downgrade, on speculation that Chicago would face a liquidity crisis because the rating cut exposed it to as much as $2.2 billion of payments to banks if it couldnt refinance its debt.

Pimco saw it as a buying opportunity. The high-yield fund took a $9 million position in general obligations due in 2033 that the city issued in July, making it the funds sixth-largest single holding by Sept. 30, Bloomberg data show. The debt priced at 98.5 cents on the dollar to yield 5.64 percent. It last traded in October at 103.6 cents to yield 5 percent.

Chicago avoided a cash squeeze by refinancing. The securities went on to rally after Mayor Rahm Emanuel in October pushed through the biggest property-tax increase in the citys history — $543 million over the next four years — to help pay the pension-fund bills at the root of the its distress. Emanuel, a Democrat who won re-election in 2015, had resisted raising the levy for years even though it was lower than surrounding localities.

Our view was that we would get a property-tax increase out of Chicago, that it would go a long way in beginning to address their fiscal imbalances when it comes to underfunded pension liabilities, and that the market would reward Chicago for demonstrating that they have not just the ability but the willingness to raise revenues, Hammer said.

While the city has challenges ahead, the property-tax increase does fundamentally improve their credit outlook, Hammer said.

On the topic of credit outlooks, no major segment of the municipal market seemed to have a worse prognosis heading into 2015 than tobacco bonds.

The agencies that sold the debt, which is repaid from legal-settlement money that states and localities receive from cigarette companies, didnt anticipate that smoking would decline as much as it has since they started issuing the securities more than a decade ago. Because of that oversight, four out of five will eventually default, Moodys said in a September 2014 report.

While that could still be the case, failures to pay may be pushed back. Cigarette consumption held steady this year for the first time since 2006. That sparked a rally in the riskiest tobacco bonds: theyve gained 14 percent in 2015, the second- best of any market segment.

Thats been a boon for Pimco because the three largest holdings in its high-yield fund are tobacco bonds from New Jersey and Ohio.

The tobacco sector has had pretty significant outperformance versus the broader high-yield muni market, Hammer said. Tobacco is still pretty attractive versus other traditional, less-liquid, lower-rated muni names.

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As more Forest Park Medical Centers file for bankruptcy protection, investors …

  • Dallas troubled Forest Park Medical Center headed for foreclosure
  • Forest Park Medical Centers financial woes mount with a fourth hospital in trouble
  • Forest Park Medical Center considers Chapter 11 bankruptcy to help fix its problems
  • Forest Park Medical Center in Dallas closed on Oct. 30, management works to reopen

Forest Park Medical Centers is a chain of five high-end, doctor-owned hospitals. Just ahead of a scheduled foreclosure sale on two of the hospitals, Forest Park Medical Center facilities in Dallas and Fort Worth, the company that owns the buildings — Forest Park Realty Partners III, LC — filed for Chapter 11 bankruptcy protection.

The filing said company that owns the facilities has assets worth between $50 million and $100 million, and debts between $100 million and $500 million.

As is customary, the filing immediately stayed the foreclosure sale.

In responding to the news, Sabra said it expects that the bankruptcy process will lead to the sale of the buildings and recovery of its assets. If a suitable buyer doesnt materialize, it will ask the court to lift the automatic stay on the previously scheduled foreclosure sales.

A statement issued this morning said that the borrower under the Forest Park-Dallas mortgage loan and the borrower under the Forest Park-Fort Worth construction loan each filed a petition for relief under Chapter 11 of the United States Bankruptcy Code in the Northern District of Texas.

The Borrowers are the owners of the real estate of the respective facilities and lease the facilities to physician-owned entities operating under the Forest Park name. As of December 1, 2015, we are not aware of either Operator filing for bankruptcy relief.

We expect the Borrowers bankruptcy petitions to result in a competitive sales process of the Borrowers assets where we would have the ability to credit bid up to the level of our investments. If the bankruptcy process does not result in a timely sale of either asset to a suitable buyer, we expect to request the bankruptcy court to lift the automatic stay to allow a foreclosure sale under the appropriate deed of trust to take place.

Forest Parks financial troubles surfaced in September, when its Frisco facility filed for bankruptcy. Things worsened Oct. 30 when the Dallas facility shut down, forcing layoffs of 196 workers. It subsequently has said that it hopes bankruptcy protection will allow it to reorganize and reopen.

More details to follow after the 1 pm CST press conference.

Forest Park Realty Partners, Chapter 11 Petition

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RIP Rdio, Mailbox and other tech we lost in 2015

The music stopped playing for a number of music services in 2015.

After acquiring the Beats Music streaming service as part of Beats in 2014, Apple officially shut down the service on Nov. 30, 2015. But its not a big deal — many of the elements that made Beats Music great (including playlists) are available for Apple Music, its proper successor. Apple Music is available on iOS, Android, Mac and Windows, and Beats Music subscribers were able to move their picks and preferences over to the newer service.

Similarly, Google announced it will be shutting down Songza at the end of Jan. 2016. Songza was one of our favorite streaming radio services and its mood and event-based playlists live on as part of the radio feature in Google Play Music.

Remember Zune? Microsofts ill-fated iPod competitor? Years after killing off the poor-selling device, the company still maintained its Zune Music Pass subscription service. As of Nov. 2015, the company officially retied the service. Users have the ability to convert a Zune Music Pass into a Groove Music Pass.

Of course, not all services got to live on in some way. Rdio — which once hoped to be Spotify before Spotify launched in the US — died in 2015. The service had a small, but loyal group of subscribers, and despite being a solid product, the service was never able to really compete with the likes of Spotify.

After filing for bankruptcy, Rdios assets were acquired by Pandora in November. Its possible that Pandora may revive certain Rdio features in a future on-demand streaming product in the future, but for current Rdio users — the music really did stop.

Graveyard of productivity: Mailbox, Tempo, Sunrise, Carousel

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Arch Coal to delay bond interest payment as bankruptcy looms

(In December 15 story, corrects analysts name in paragraph 13 to Zachary Bader from Zach Bader)

By Amrutha Gayathri

n>Arch Coal Inc, the second-largest coal miner in the United States, delayed a $90 million interest payment that was due Tuesday, pushing back a widely expected bankruptcy filing.

The companys shares shot up nearly 35 percent to $1.20.

It tells you how bad things have become when hanging on becomes a victory, analysts at BBT Capital Markets wrote in a note. This year, an ACI filing looks like a near certainty.

The company was widely expected to file for bankruptcy by Tuesday.

If Arch Coal files a Chapter 11 petition, it will become the fourth coal miner to declare bankruptcy this year, joining Walter Energy Inc, Alpha Natural Resources Inc and Patriot Coal.

Shareholders in this troubled sector are likely relieved that (Arch Coals) management is exploring options to maximize value to the benefit of all stakeholders, said David Johnson, a founding partner at restructuring firm ACM Partners.

Short covering also contributed to the spike in Arch Coals shares, analysts said. Nearly 48 percent of the companys outstanding shares are shorted, according to Thomson Reuters data.

Arch Coal, which ended a proposed debt swap in October, said it had 30 days to continue talks with creditors to restructure its balance sheet.

Companies typically undertake debt exchanges to cut interest expenses, said Odeon Capital Group analyst Anup Goswami. However, Arch Coal ended its debt exchange in October after failing to strike a deal with creditors.

Debt swaps have become common in the wider energy industry, with companies such as Chesapeake Energy Corp exchanging unsecured debt for secured debt.

Arch Coal, burdened by strict regulations and plummeting coal prices, said last month it could file for bankruptcy, even if it struck a restructuring agreement.

The company had about $694.5 million of liquidity as of September-end and about $5 billion in long-term debt, stemming mainly from its purchase of International Coal Group in 2011.

You are seeing coal companies that are filing (for bankruptcy) with a lot of cash on the balance sheet, said Reorg Research analyst Zachary Bader. One reason is that they have over-leveraged capital structures … it doesnt make economic sense to pay interest to debt holders that have claims that are essentially worthless.

Arch Coals market value has been nearly wiped out this year. The company, whose market capitalization was $3.78 billion at the end of last year, was valued at about $19 million as of Mondays close.

(Reporting by Amrutha Gayathri and Sneha Banerjee in Bengaluru; Editing by Shounak Dasgupta)

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