LexisNexis® Legal Newsroom
    Committee In Rhythm And Hues Case Opposes $425,000 Break-Up Fee For Failed Bid

    LOS ANGELES - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of Rhythm And Hues Inc. (RAH), which provided the visual special effects for the film "Life of Pi," on April 22 filed a brief contending that a stalking horse bidder is not entitled to a $425,000 break-up fee (In Re: Rhythm And Hues Inc., No. 13-13775, Chapter 11, C.D. Calif. Bkcy.).

    11th Circuit: Trustee May Not Recover $536,686.91 Debtor Transferred To IRS

    ATLANTA - A panel of the 11th Circuit on April 23 ruled that the Internal Revenue Service was entitled to the good faith defense regarding the prepetition transfer of $536,686.91 it received from a debtor company and, therefore, the trustee could not recover the money for the bankruptcy estate (Soneet R. Kapula v. Internal Revenue Service $(In Re: ATM Financial Services LLC$), No. 12-11690, Chapter 11, 11th Cir.; 2013 U.S. App. LEXIS 8129).

    Asbestos Claims Force Former Manufacturer Into Bankruptcy

    WILMINGTON, Del. - Yarway Corp., a former Pennsylvania company that manufactured pipe clamps, steam traps, valves and controls, filed for Chapter 11 protection April 22 in Delaware federal bankruptcy court due to thousands of asbestos personal injury claims combined with the depletion of insurance assets to pay the claims (In re: Yarway Corporation, No. 13-11025, D. Del. Bkcy.).

    Dewey & LeBoeuf Trustee Seeks Approval Of Deal With CEO Valued At More Than $19.5M

    NEW YORK - The Dewey & LeBoeuf Liquidating Trust on April 22 moved in the U.S. Bankruptcy Court for the Southern District of New York for approval of a settlement valued at more than $19.5 million between the trust, Dewey & LeBoeuf's former CEO and his insurance company (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

    Michigan Grand Jury To Probe Possible Crimes In Fungal Meningitis Outbreak

    GRAND RAPIDS, Mich. - A Michigan appeals court on April 19 granted a petition by the state attorney general for a four-county grand jury to investigate whether crimes were committed during the manufacturing and distribution of a contaminated injectable steroid that is linked to a deadly outbreak of fungal meningitis that hit Michigan the hardest (In the Matter of a Petition for a Multi-County Citizens' Grand Jury for Genesee, Grand Traverse, Livingston, and Macomb Counties, No. 315393, Mich. App.).

    MF Global Trustee Sues Corzine And Other Directors For Breaches Causing Bankruptcy

    NEW YORK - The Chapter 11 trustee in the bankruptcy proceeding of MF Global Holdings Ltd. (MFGH) on April 22 sued former MFGH CEO Jon Corzine and other top executives in the U.S. Bankruptcy Court for the Southern District of New York, alleging that they breached their fiduciary duties and led MFGH into bankruptcy (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    Liquor Company's $172M Deal Prohibited By Bankruptcy Code, U.S. Trustee Argues

    WILMINGTON, Del. - The U.S. trustee in the Chapter 11 bankruptcy of liquor company Central European Distribution Corp. (CEDC) on April 22 filed a brief objecting to the debtor's motion seeking approval a $172 million investment agreement on grounds that the assumption of the contract at the heart of the investment agreement is prohibited by the Bankruptcy Code (In Re: Central European Distribution Corporation, No. 13-10738, Chapter 11, D. Del. Bkcy.).

    3rd Circuit: TD Bank Cannot Obtain Relief From Order Confirming Chapter 13 Plan

    PHILADELPHIA - A panel of the Third Circuit U.S. Court of Appeals on April 22 ruled that a bankruptcy court properly held that creditor TD Bank could not obtain relief from the order confirming a debtor couple's Chapter 13 payment plan (In Re: Richard Rodriguez and Claribel Rodriguez d/b/a Cr. Fun Development LLC d/b/a The Little Gym, No. 12-2146, Chapter 11, 3rd Cir.; 2013 U.S. App. LEXIS 7985).

    Bankruptcy Judge OKs $17.55M Asset Sale, Takeover Of Entertainment Publications

    WILMINGTON, Del. - The federal bankruptcy judge presiding over the Chapter 7 proceeding of Entertainment Publications LLC on April 22 authorized the sale of the company's assets to a stalking horse bidder for $17.55 million and authorized the trustee to take over operations of the debtor company (In Re: Entertainment Publications LLC, No. 13-10496, Chapter 7, D. Del. Bkcy.).

    9th Circuit Says Deloitte Not Liable; Misconduct Imputed To Debtor Company

    SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on April 22 ruled that a liquidating trust's claims against a debtor's former auditor failed because any misconduct related to the concealment of financial information in the bankruptcy was imputed to the debtor company and not the auditor (USACM Liquidating Trust v. Deloitte & Touche, No. 11-15626, Chapter 11, 9th Cir.).

    Bankruptcy Judge: $35M Claim Against MF Global 'Frivolous'; Sanctions Imposed

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 case of MF Global Holdings Ltd. (MFGH) on April 18 expunged a $35 million claim against the financial services company and sanctioned the woman who brought the claim $250 because it was "frivolous" (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    5th Circuit: Liquidation Plan Does Not Confer Standing To Bring Derivative Claims

    NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on April 18 ruled that two creditors lacked standing to bring derivative claims against a debtor company because the liquidation plan and the disclosure statement did not state with specificity that they had the right to bring the claims in question (John C. Wooley, et al. v. Haynes & Boone $(In The Matter of SI Restruction Inc.$), No. 11-51106, Chapter 11, 5th Cir.; 2013 U.S. App. LEXIS 7828).

    Ricoh Sues Kodak, Alleges Post-Petition Copyright Infringement

    NEW YORK- Ricoh Co. Ltd. on April 19 sued bankrupt Eastman Kodak Co. in the U.S. Bankruptcy Court for the Southern District of New York, seeking declaratory and injunctive relief for alleged post-petition patent infringement (Ricoh Company Ltd. v. Eastman Kodak Company $(In Re: Eastman Kodak Company$), No. 12-10202, Adv. No. 13-01332, Chapter 11, S.D. N.Y. Bkcy.).

    W.R. Grace Asbestos Trust To Receive $900,000 From Deal With Insurer

    WILMINGTON, Del. - A federal bankruptcy judge in Delaware on April 17 approved a settlement agreement between Chapter 11 debtor W.R. Grace & Co. and one of its insurers that will provide more than $900,000 to the debtor's asbestos personal injury trust in one lump-sum payment rather than in installments (In re: W.R. Grace & Co., et al., No. 01-01139, D. Del. Bkcy.).

    5th Circuit: Debtor Company's Principal Lacks Standing; Claims Properly Dismissed

    NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on April 18 ruled that the claims made by a principal of a company that filed for bankruptcy were moot because they were derivative of other claims and he lacked standing to challenge the order dismissing those claims (Lewis Miller Smyth v. Simeon Land Development $(In Re: Escarent Entities$), No. 12-50297, Chapter 11, 5th Cir.; 2013 U.S. App. LEXIS 7779).

    Maritime Company In Asbestos MDL Files Chapter 7 Petition

    NEW YORK - A New York steamship and maritime company that is a defendant in 28 cases in a multidistrict asbestos litigation filed a notice April 16 in a Pennsylvania federal court that it has filed a voluntary Chapter 7 petition in New York federal bankruptcy court (In re: Asbestos Products Liability Litigation $(No. VI$), MDL No. 02-875, E.D. Pa.).

    Indenture Trustee: Tribune's Denial Of Fees 'Meritless'; Notions 'Preposterous'

    WILMINGTON, Del. - Deutsche Bank Trust Company Americas (DBTCA), as successor indenture trustee, on April 16 filed a brief in the U.S. Bankruptcy Court for the District of Delaware contending that the objection of the reorganized version of bankrupt Tribune Co. to its fee request is "meritless" (In Re: Tribune Company, No. 08-13141, Chapter 11, D. Del. Bkcy.).

    11th Circuit: Property Sale Proceeds Belong To Estate Of Chapter 7 Debtor

    ATLANTA - A panel of the 11th Circuit U.S. Court of Appeals on April 16 ruled that the sale proceeds resulting from a transaction that was agreed to prior to a debtor's Chapter 7 bankruptcy petition were property of the bankruptcy estate (William Arthur Thomas III v. Theresa M. Bender $(In Re: William Arthur Thomas III$), No. 12-13936, Chapter 7, 11th Cir.; 2013 U.S. App. LEXIS 7542).

    Former FBI Special Agent Named As Trustee For 'Girls Gone Wild' Case

    LOS ANGELES - The federal bankruptcy judge presiding over the Chapter 11 proceeding of GGW Brands LLC, the parent company that produces adult-entertainment videos under the name "Girls Gone Wild," on April 16 named former FBI special agent R. Todd Nielson as the Chapter 11 trustee (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

    Bankruptcy Judge: Insurer's $378M Fraud Case Against JPMorgan Stayed

    BIRMINGHAM, Ala. - The federal bankruptcy judge presiding over the Chapter 9 proceeding of Jefferson County, Ala., on April 15 ruled that an insurer who alleges that it was fraudulently induced to provide $378 million in insurance coverage could not pursue its lawsuit because of the automatic stay (In Re: Jefferson County, Ala., No. 11-05736, Chapter 9, N.D. Ala. Bkcy.).

    G-I Holdings Settles Environmental Claims For Tennessee Site

    NEWARK, N.J. - Reorganized Chapter 11 debtor G-I Holdings Inc. will pay $129,000 to settle claims related to environmental damage at a Tennessee site, according to a stipulation and order entered April 12 in New Jersey federal bankruptcy court (In re: G-I Holdings, Inc., et al., Nos. 01-30135 and 01-38790, D. N.J. Bkcy.).

    Kaye Scholer: $1.5M Deal With GSC Group Trustee Should Be Affirmed

    NEW YORK - The law firm representing bankrupt GSC Group Inc. on April 15 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York arguing that objections to the $1.5 million settlement reached between it and the U.S. trustee should be denied (In Re: GSC Group Inc., No. 10-14653, Chapter 11, S.D .N.Y. Bkcy.).

    AMR Examiner Seeks $749,271 Reduction Of Fees, Expenses By Counsel, Other Firms

    NEW YORK - The fee examiner in the Chapter 11 bankruptcy proceeding of AMR Corp., the parent company of American Airlines Inc., on April 16 filed a report proposing to reduce the fees and expenses for six firms involved in the litigation by a total of $749,271.81 (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

    Coalition: Peregrine Trustee's Compensation Application Is 'Inappropriate'

    CHICAGO - The Commodity Customer Coalition Inc. (CCC) on April 15 filed a brief in the U.S. Bankruptcy Court for the Northern District of Illinois objecting to the Chapter 7 trustee's first interim application for more than $1.23 million in compensation, contending that it is inappropriate under the provisions of the Bankruptcy Code (In Re: Peregrine Financial Group Inc., No. 12-27488, Chapter 7, N.D. Ill. Bkcy.).

    Bankrupt Firm Charged With Corruption To Pay $2.6M To State Of New Jersey

    TRENTON, N.J. - Bankrupt Birdsall Services Group Inc. (BSG) on April 15 reached an agreement with the State of New Jersey under which it will pay $2.6 million to settle claims the state made against the company as part of a forfeiture action (In Re: Birdsall Services Group Inc., No. 13-16743, Chapter 11, D. N.J. Bkcy.).