By Joseph Checkler
Next week in New York, NII Holdings Inc. (NIHDQ) will continue
pressing the case that its restructuring plan should be
approved.
The proposal, which would cut $4.35 billion from the Latin
American Nextel wireless carrier's balance sheet and put the
company in the hands of senior creditors, is based on broad
settlements with creditors as well as the recent sale of the
company's Mexican assets to AT&T Inc. (T) for $1.88
billion.
An ad-hoc group of hedge funds and other investors say the plan
unfairly benefits Mark Brodsky's Aurelius Capital Management LP by
settling $285.1 million in claims that NII itself had called
"without merit."
The underlying restructuring agreement is supported by Aurelius,
Capital Research and Management Co. and bondholders of NII's
Luxembourg subsidiaries, three major creditor groups in NII's
chapter 11 case. Those three also teamed up to lend NII $350
million while the company awaited final regulatory approvals of the
AT&T deal.
Capital Research, Aurelius and the Luxembourg bondholders, owed
more than $4 billion, will get a mix of cash and equity in a
reorganized NII if the plan is approved. Capital Research would
pick three members of the board of directors, with Aurelius picking
one and the Luxembourg subsidiaries selecting two. The seventh
member would be NII's chief executive.
Reston, Va.-based NII Holdings and several affiliates filed for
chapter 11 protection in New York last fall.
Monday in New York, a judge will decide whether to approve the
liquidation of defunct TV-streaming service Aereo Inc.
In front of Judge Sean H. Lane of U.S. Bankruptcy Court in
Manhattan is a proposal to pay the company's unsecured creditors,
owed between $7 million and $8 million, 10.7% of what they are
owed.
The company has used bankruptcy to sell off the pieces of its
once-hyped service, which let users stream and record broadcast TV
over the Internet.
Proceeds from the sales, which brought in much less than Aereo
had hoped, are earmarked to pay a $950,000 settlement it had
reached with broadcasters to put an end to litigation over the
legality of Aereo's business model. Broadcasters say the company
infringed their copyrights, and last year, the U.S. Supreme Court
agreed.
Aereo's other creditors will be paid in full under its
liquidation plan. Unlike many companies in bankruptcy, Aereo has no
secured debt. Its other bankruptcy expenses include tax payments,
professional fees and other administrative expenses.
Aereo, which allowed subscribers to stream local TV stations'
signals through a cloud-based antenna, offered its services for as
little as $8 a month. Eventually, the company was doomed by a
Supreme Court decision that the business violated copyright laws,
although it did continue to fight. In April, Aereo finalized sales
to TiVo Inc. (TIVO), RPX Corp. (RPXC) and others that brought less
than $2 million to the bankruptcy estate. Aereo sued the
broadcasters after the April auction's "disappointing" results,
accusing the companies of chilling the bidding by aggressively
pursuing baseless litigation strategies. Aereo dropped the suit as
part of a deal with broadcasters.
Tuesday in Grand Rapids, Mich., Judge John Gregg will decide on
the sale of the Family Christian retailer to FCS Acquisition
LLC.
The transaction is valued at roughly $43 million, largely
because FCS would assume the retail chain's bank loan. FCS won an
auction for the chain last month.
FCS said it plans to keep the 266-store chain alive, continuing
to operate as a "nonprofit supporting charitable causes for widows,
orphans and the needy," a Family Christian lawyer said earlier this
month.
Court filings haven't identified the investors behind FCS
Acquisition, though inquiries were directed to a health-care
company led by Richard L. Jackson. Mr. Jackson is one of three
Atlanta businessmen who purchased the retailer in 2012 and put it
under the ownership of a nonprofit called Family Christian
Ministries.
Family Christian filed for bankruptcy on Feb. 11, blaming a
large amount of debt from that 2012 sale and falling sales since
2008.
Founded in 1931 as the Zondervan chain of stores, the
Michigan-based retailer later became Family Bookstores before
changing its name to Family Christian Stores in the 1990s.
--Tom Corrigan, Patrick Fitzgerald and Katy Stech contributed to
this article.
Write to Joseph Checkler at joseph.checkler@wsj.com
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