Bankruptcy Judge OKs Finova Recovery Plan
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Finova Group Inc. won a bankruptcy judge’s permission to move ahead with a $7.35-billion recovery plan for the finance company proposed by Warren Buffett and Leucadia National Corp. The judge in Wilmington, Del., approved Finova’s Chapter 11 plan over objections by rival bidders GE Capital Corp. and Goldman Sachs Group Inc.
The judge also approved a $6-billion loan from Berkadia, a joint venture of Buffett’s Berkshire Hathaway Inc. and Leucadia. Scottsdale, Ariz.-based Finova will use the loan plus its cash reserves to pay $7.35 billion of creditor’s claims.
The ruling clears the way for Finova to solicit creditors’ approval of the rescue plan, on which a final hearing will be held Aug. 10.
Finova shares fell 13 cents to close at $4.65 on the NYSE.
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