Business Bankruptcies Fall

Fewer businesses sought bankruptcy protection during February even as overall filings rose, suggesting that financial hardship still lingers among consumers.

Also in DER, Innkeepers USA Trust is offering to break itself apart in an effort to gain approval to sell the vast majority of its hotel properties to Five Mile Capital Partners and Lehman Brothers Holdings Inc., and Orchard Brands Inc. obtained court permission to move forward with an auction to sell itself should the catalog company's proposed reorganization plan fall apart. In DBR Small Cap, apartment owners PJ Finance Co. and its affiliates filed for bankruptcy protection.

The Wall Street Journal reports Dynegy Inc. said it may be forced to seek bankruptcy protection if it is unable to renegotiate credit agreements with its banks.

WSJ says final bids are due this week in the auction of Freedom Communications Inc. as several private-equity firms and media companies circle the publisher Orange County Register, which recently emerged form bankruptcy.

WSJ reports Jefferson County, Ala., which for years has fought to avoid filing what would be the largest municipal bankruptcy in history, hired FT! Consulting Inc. to help get the county's finances back on track, a county official said Tuesday.

The trustee recovering money for victims of Bernard Madoff said that he hopes to recover more than $50 billion, WSJ reports, and would attempt to begin distributing a small amount of money gathered for investors in the Ponzi scheme before year's end.

Blackstone Group LP heads to Kansas as turnaround firms eye debt-laden states for restructuring business, Bloomberg reports.