By Marie Beaudette
On Wednesday, Eastman Kodak Co. (EKDKQ) will ask the New York
bankruptcy court to reject an ownership claim from Apple Inc.
(AAPL) on certain patents it may try to sell in its bid to raise
funds to exit Chapter 11 protection.
Apple, however, has balked at Kodak's attempt to put the matter
before a bankruptcy judge, saying a district court is the
appropriate venue for the matter.
Kodak has accused Apple of trying to thwart its patent sale
process, which would serve as the foundation for the company's
restructuring plan. It is trying to get a bankruptcy judge to
declare Apple has no interest in 10 of its patents.
Kodak says Apple is the biggest infringer of Kodak's portfolio
of digital camera patents, used in some of Apple's most popular
products. Apple is also a potential buyer of those same patents,
which could be worth as much as $2.6 billion and which Kodak is
counting on to pay its creditors. Kodak has said it expects to
present its auction sale timeline soon. The company is facing a
June 30 deadline to file its request to sell the patents with the
bankruptcy court.
Kodak, based in Rochester, N.Y., filed for Chapter 11 protection
in January after failing to sell its patents outside of bankruptcy
court.
A Dallas bankruptcy judge is expected to issue his ruling by
Wednesday on Mexican glassmaker Vitro SAB's (VITRO.MX)
controversial debt restructuring.
The company is asking Judge Harlin D. Hale to enforce a Mexican
court's approval of Vitro's $3.4 billion restructuring plan under
Chapter 15, the section of the U.S. Bankruptcy Code governing
international insolvencies.
But the plan is facing heavy opposition from Vitro's
bondholders, who are owed $1.2 billion. The bondholders are upset
they are recovering only about 40 cents on the dollar under Vitro's
plan, despite the glassmaker's existing shareholders receiving an
expected recovery of more than $500 million.
The bondholders include distressed-debt investors Aurelius
Capital Management, Davidson Kempner Partners and Elliott
Management. They have been at odds with the company since it first
proposed a restructuring plan.
Witnesses for the bondholders at a four-day trial on the plan
held this week in Dallas claimed a decision to enforce the Mexican
plan, or "concurso," would hurt investor confidence and raise
borrowing costs for foreign companies seeking to raise money in the
U.S.
The bondholders aim to show the plan, which they have called
corrupt, is "manifestly contrary" to U.S. public policy, a
consideration judges must make when considering matters under
Chapter 15.
Vitro attorney Andrew M. Leblanc of Milbank, Tweed, Hadley &
McCloy has said arguments about investor confidence are irrelevant
to what he described as "one of the most important cases ever
decided" under Chapter 15.
"If it's a fundamental policy to protect the capital markets and
the jobs of bankers on Wall Street," then Congress would never have
created regulatory measures like Sarbanes-Oxley," Mr. Leblanc
said.
On Thursday, the trustee unwinding MF Global Holdings Ltd.'s
(MFGLQ) brokerage will ask the New York bankruptcy court for
permission to sell furniture, artwork and office supplies in the
brokerage's former Chicago offices.
Professional liquidators are the likely buyers of the assets,
according to Kent Jarrell, a spokesman for trustee James
Giddens.
"Anything we can sell and make a recovery on adds to the pot,"
Mr. Jarrell said. The art, he said, is "the art that you would find
in an office."
MF Global's collapse into bankruptcy in October set off a round
of investigations by the Federal Bureau of Investigation, the
Commodities Futures Trading Commission and others. Mr. Giddens is
unwinding the brokerage under the Securities Investor Protection
Act.
(This item appears in Dow Jones' Daily Bankruptcy Review
newsletter.)
-Write to Marie Beaudette at marie.beaudette@dowjones.com
-Peg Brickley in Wilmington, Joseph Checkler in New York and
Patrick Fitzgerald in Washington contributed to this article.