Pilgrim's Pride May Have $2.5 billion Bidder and News on Other Challenged U.S. Companies

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. Please visit the insideARM bookstore for information on subscribing to the Bulletin.

Service Providers in a Turnaround Situation

Turnaround situations often are delicate ones. While good communication is essential between the turnaround manager and its landlords and vendors, proper communication with and evaluation of service providers can not be down played. Problems can be created when service providers are awarded projects based on the lowest bid rather than on giving the project to firms that can create or recover the highest asset value for a project. It is also important to choose the right appraisers, who have a good grasp of all the variables in the appraisal process and who can use that knowledge to create “best-value” situations. This being said, finding the right service providers in a turnaround situation becomes an integral part of the turnaround process.

Bankrupt Companies

Bally Total Fitness, having recently completed the reorganization plan outlined in its amended Joint Plan of Reorganization which was confirmed last month, has emerged from bankruptcy protection.

Frontier Airlines, the bankrupt firm which last month saw Republic Airlines of Indianapolis, In. win, at auction, the rights to make Frontier a wholly-owned subsidiary, has seen its unsecured creditors vote to approve its reorganization plan.

Hawaiian Telecommunications Inc. has seen a 9/30 deadline set for voting on its Chapter 11 reorganization plan. For more information contact the U.S. Bankruptcy Court at 808-522 8123 and refer to case number 08-02005.

Lazy Days RV Center Inc., the privately-held Seffner, Fl. firm which is the largest single-site RV dealer in the world, reported that its plans to file for Chapter 11 protection would help it eliminate more than $135 million in debt.  Feeling the weight of the recession, the company reached an agreement with lenders and creditors that would result in its suppliers being paid-in-full.

Pilgrim’s Pride Corp., the poultry firm that filed Chapter 11 in Texas at the end of last year, is allegedly being sought by JBS SA, a Brazilian beef company, in a transaction valued at $2.5 billion.  If completed, the purchase would help the second largest chicken company in the U.S., emerge from bankruptcy protection.

Samsonite Company Stores LLC, the privately-held Mansfield, Ma. firm, has filed Chapter 11 in the U.S. Bankruptcy Court in Delaware under case number 09-13102.  The company is the U.S. retail unit of Samsonite Corp., which is not part of the filing.  The now-bankrupt firm hopes to emerge from bankruptcy protection as a much leaner retailer, within 90 days.

Sun Times Media Group, which owns the Chicago Sun Times as well as fifty six suburban newspapers, has seen Chicago financier, Jim Tyree, offer to purchase the company out of bankruptcy for $5 million in cash.  The deal includes assuming certain of the paper group’s liabilities valued at $20 million.  The bankrupt firm has filed a motion with the court to conduct a 363 sale of its assets, which allows for an expedited sales process so as to preserve maximum value for shareholders.

Whitehall Jewelers Holdings, Inc. has seen the U.S. Bankruptcy Court set a 9/15 auction date regarding the sale of certain intellectual assets of the firm.