Nellson Nutraceutical Inc. has filed a disclosure statement and chapter 11 liquidation plan outlining its procedure, endorsed by the creditors’ committee and first-lien lenders’ committee agent UBS AG, for paying back $255 million in outstanding debt the diet bar maker owes first-lien lenders, Bankruptcy Law360 reported yesterday. Other than the debt owed first-lien lenders, Nellson has principal obligations under an agreement with second-lien lenders totaling about $75 million. It also owes another $5 million to $7 million in unsecured debt, according to court documents.

Bankruptcy Judge Brendan L. Shannon approved Hancock Fabric Inc.’s disclosure statement for its recently filed chapter 11 plan and its backstop agreement related to the debtor’s planned public offering, Bankruptcy Law360 reported yesterday. Judge Shannon authorized the backstop agreement between Hancock and Sopris Capital Partners LP, Berg & Berg Enterprises LLC and Trellis Management, in connection with Hancock’s plan to publicly offer $20 million in secured notes and warrants to buy 8 million shares of its stock. The three firms will buy any of the notes and warrants left over after the public offering within certain limits. Objections to the chapter 11 plan are due July 15 and the confirmation hearing on the plan is set for July 22.

Relocation company Sirva Inc. said Wednesday that Bankruptcy Judge James Peck approved its chapter 11 plan and that it expects to emerge from bankruptcy protection soon, Bankruptcy Law360 reported yesterday. Sirva, which owns Allied Van Lines, submitted the amended reorganization plan for approval to Judge Peck on April 30. The amended plan resulted from a deal with its unsecured creditors’ committee, which had objected to the plan Sirva filed in February. Under the plan, Class 5 creditors, which hold general unsecured claims, would receive 25 percent of their allowed amounts. The initial plan would have provided such claimants with no recovery.

Pacific Lumber Co. and its subsidiaries (Palco) have asked the U.S. Bankruptcy Court for the Southern District of Texas to approve a global settlement reached on May 1 following months of negotiations and two weeks of confirmation hearings, Bankruptcy Law360 reported yesterday. Palco’s debtors – including Pacific Lumber, Scotia Development LLC, Britt Lumber Co. Inc., Salmon Creek LLC and Scotia Inn Inc. – support the reorganization plan proposed by MRC/Marathon, a plan that is widely supported by federal officials and environmentalists. A hearing on the matter has been tentatively scheduled for May 15.

Eos Airlines, which offers business class flights between New York and London, said that it has filed for chapter 11 protection, Reuters reported yesterday. Eos, the latest carrier to fail in the face of record fuel prices and a softening economy, said that it would stop operations today and cut most of its work force. Eos filed for bankruptcy protection on yesterday in the U.S. Bankruptcy Court in the Southern District of New York.

Free from bankruptcy, Federal-Mogul Corp. reported a net loss, but an operating profit, for the first three months of the year, the Detroit Free Press reported today. Federal-Mogul yesterday reported a first-quarter loss of $31.5 million, or 31 cents per share, after a $68 million charge the company had to take as it emerged from chapter 11 bankruptcy. The Southfield, Mich.-based company said that the $68 million charge was caused by the need to revalue its inventory. Sales for the quarter increased to $1.86 billion, up 8 percent from the first quarter last year. The company said that the sales increase was boosted by $120 million because of favorable currency exchange rates and an increase of $23 million in sales to European automakers.

The union representing pilots of ATA Airlines Inc. and its parent company filed a lawsuit against the company for allegedly failing to give prior notice when it shut down operations, Dow Jones Newswires reported yesterday. The Indianapolis-based carrier filed for chapter 11 protection and began shutting down its flight operations on April 2. The Air Line Pilots Association International alleges that ATA violated the federal Workers Adjustment and Retraining Notification ACT, which requires businesses with more than 100 employees to notify workers 60 days in advance of closing or layoffs.

New York Attorney General Andrew Cuomo has launched a broad investigation into auction-rate securities, instruments used by municipalities, schools, closed-end mutual funds and others to raise money, the Wall Street Journal reported today. Cuomo’s office sent subpoenas to 18 institutions on Monday and Tuesday seeking information on their auction-rate-securities, including some of Wall Street’s biggest, such as UBS AG, Citigroup Inc., Merrill Lynch & Co., J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. The $330 billion auction-rate market virtually collapsed in February when demand for the securities dried up and Wall Street firms stopped providing the support for the market they’d given in the past.

Since a group of hedge funds led by Appaloosa Management LP walked away from a deal to invest $2.55 billion in Delphi Corp. earlier this month, the struggling auto parts maker has been is asking the bankruptcy court to extend its financing through the end of the year while it struggles to emerge from chapter 11, Bankruptcy Law360 reported yesterday. Delphi asked the U.S. Bankruptcy Court for the Southern District of New York on Wednesday to issue an order authorizing the company to extend the maturity date of its debtor-in-possession (DIP) facility, and revise its arrangement with General Motors over the timing of certain reimbursements, in order to improve Delphi’s liquidity. The company wants to extend the term of the DIP facility from its current maturity date of July 1 to Dec. 31.

Bear Stearns said in a securities filing yesterday that it had received a notice from the Securities and Exchange Commission (SEC) that civil charges could be on the horizon for anticompetitive practices in its bidding for municipal securities, the Wall Street Journal reported today. That notice comes in connection with a probe the SEC and the Justice Department are conducting on the conduct of Wall Street firms that packaged and sold municipal derivatives (securities based on underlying assets such as city bonds) beginning in 1990. Bear Stearns expects an opportunity to respond to the charges before the SEC staff makes a formal recommendation to the commission. In addition, the Federal Trade Commission has said that it believes Bear Stearns and its EMC Mortgage Corp. mortgage-servicing unit have violated federal consumer-protection statutes, according to the filing. Bear Stearns said that it is cooperating with both agencies.