California Judge Interprets Asbestos Liability Policies In Insurers' Favor

    SAN FRANCISCO - A California judge on Jan. 31 sided with insurance companies in a long-running dispute with Chapter 11 bankruptcy debtor Plant Insulation Co. over insurance policy coverage for asbestos personal injury claims, finding that the "completed operations" and "products hazard" definitions of the policies apply only where the bodily injury in a given policy period occurs after the operations have been completed or possession of the product has been relinquished (Plant Insulation Company v. Fireman's Fund Insurance Company, et al., No. 06-448618, Calif. Super., San Francisco Co.).

    Bankrupt Video Game Maker THQ Seeks Approval To Settle With Terminated Employees

    WILMINGTON, Del. - Bankrupt video game maker THQ Inc. on Jan. 31 moved in the U.S. Bankruptcy Court for the District of Delaware for authorization to enter into a settlement agreement with some of its terminated employees (In Re: THQ Inc., No. 12-13398, Chapter 11, D. Del. Bkcy.).

    Creditors Withdraw Fraud Case Against Bankrupt WP Steel's Parent Company

    WILMINGTON, Del. - The agent for second lien lenders in the Chapter 11 bankruptcy of RG Steel LLP on Jan. 31 withdrew its motion seeking permission to sue Ira L. Rennert, the principal in charge of Renco Group, which is WP Steel's parent company; the Official Committee of Unsecured Creditors had contended that Rennert breached his fiduciary duties in the course of WP Steel's filing for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware (In Re: WP Steel Venture LLC, No. 12-11661, Chapter 11, D. Del. Bkcy.).

    Bankrupt Powerwave CEO Says Cash Needed, Lender 'Swept' $8.3M From Bank Accounts

    WILMINGTON, Del. - The president of Powerwave Technologies Inc. on Jan. 30 filed a brief in the U.S. Bankruptcy Court for the District of Delaware arguing that the company needs immediate cash to finance its Chapter 11 bankruptcy proceeding because one of its lenders took $8.3 million from Powerwave's accounts without notice (In re: Powerwave Technologies Inc., No. 13-10134, Chapter 11, D. Del. Bkcy.).

    Elpida Ad Hoc Group Says Bankruptcy Court Should Reconsider Asset Sale

    WILMINGTON, Del. - The Steering Committee of the Ad Hoc Group of Bondholders of bankrupt Elpida Memory Inc. on Jan. 30 moved in the U.S. Bankruptcy Court for the District of Delaware for reconsideration of the court's order granting foreign representatives' motion to approve the sale of certain patents (In Re: Elpida Memory Inc., No. 12-10947, Chapter 15, D. Del. Bkcy.).

    5th Circuit: Creditors' Claim Against Bankrupt Pilgrim's Pride Barred By Contract

    NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on Jan. 31 affirmed a bankruptcy court's ruling that claims of estoppel brought by creditors who claimed a breach of contract by bankrupt Pilgrim's Pride Corp. were barred (Clinton Growers v. Pilgrim's Pride Corporation $(In the Matter of: Pilgrim's Pride Corporation$), No. 12-109063, Chapter 11, 5th Cir.; 2013 U.S. App. LEXIS 2201).

    Russell Wasendorf Gets 50-Year Sentence For Fraud Related To Peregrine Bankruptcy

    CEDAR FALLS, Iowa - A federal judge in Iowa on Jan. 31 sentenced Russell R. Wasendorf, the former CEO of bankrupt Peregrine Financial Group Inc., to 50 years in federal prison for stealing more than $215.53 million in customer funds while he operated his commodities futures business (USA v. Russell R. Wasendorf Sr., No. 12-131, N.D. Iowa).

    2nd Circuit Reverses: Creditor In Trafalgar Bankruptcy Can Claim Settlement Money

    NEW YORK - A panel of the Second Circuit U.S. Court of Appeals on Jan. 30 reversed and remanded a bankruptcy court and held that a creditor had a right to claim the money a bankrupt power company won in a settlement with the engineering firm it sued for work done prior to the bankruptcy filing (Algonquin Power Income Fund v. Christine Falls of NY, Inc., et al., No. 11-4945, Chapter 11, 2nd Cir.).

    Kodak, Digital Camera Company Reach Deal On Trademark Payments, Bankruptcy Claims

    NEW YORK - Bankrupt Eastman Kodak Co. on Jan. 29 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York, arguing that the Bankruptcy Court should approve a stipulation between it and a German company from which Kodak licensed certain trademarks in connection with digital camera lens systems (In Re: Eastman Kodak Company, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.).

    Mexican Bread Maker: Hostess Bread Sale Would Give Rival Too Much Market Share

    WASHINGTON, D.C. - Mexican bread maker Grupo Bimbo S.A.B. de C.V. on Jan. 29 filed a brief in the U.S. District Court for the District of Columbia arguing that the order requiring it to divest of certain assets should be temporarily suspended in light of a rival bread company's plan to purchase the bread assets of bankrupt Hostess Brands Inc., which would give it 87 percent of the bread market in California (United States of America v. Grupo Bimbo S.A.B. de C.V., No. 11-1857, D. D.C.).

    School Specialty Steering Committee Balks At $50M Post-Petition Loan Deal

    WILMINGTON, Del. - The Steering Committee of Convertible Noteholders of bankrupt School Specialty Inc. on Jan.29 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to the debtor's motion seeking $50 million in post-petition financing (In Re: School Specialty Inc., No. 13-10125, Chapter 11, D. Del. Bkcy.).

    7th Circuit: Citation Valid; Creditor Can Claim Money In Debtor's Bank Account

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on Jan. 28 ruled that a creditor who had won a state court judgment against a debtor had served a valid citation on the debtor's bank and was entitled to the money in the debtor's account (In the Matter of William N. Porayko, No. 12-2777, Chapter 13, 7th Cir.; 2013 U.S. App. LEXIS 1919).

    Government Pension Agency Sues Bankrupt RG Steel Parent Renco Group, Alleges Fraud

    NEW YORK - The Pension Benefit Guaranty Corp. (PBGC) sued The Renco Group Inc. in the U.S. District Court for the Southern District of New York on Jan. 28, alleging fraud and negligent misrepresentation regarding a deal it consummated just before the Chapter 11 bankruptcy filing of its subsidiary RG Steel LLC (Pension Benefit Guaranty Corporation v. The Renco Group Inc., No. 13-621, Chapter 11, S.D. N.Y.).

    Hostess Says $28.85M Offer For Selected Assets In Good Faith, Should Be Approved

    NEW YORK - Bankrupt Hostess Brands Inc. on Jan. 28 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York arguing that the bankruptcy court should approve the sale of some of its bakery assets for $28.85 million (In Re: Hostess Brands Inc., No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).

    Firm: Any Alleged Violations In GSC Bankruptcy Were Not Intentional

    NEW YORK - The law firm representing the liquidating trustee in the Chapter 11 bankruptcy of GSC Group Inc. on Jan. 28 filed a brief arguing that the bankruptcy judge should deny the U.S. trustee's motion seeking to have the liquidating trustee and the firm removed from the case (In Re: GSC Group Inc., No. 10-14653, Chapter 11, S.D. N.Y. Bkcy.).

    Hotel Entertainment Provider LodgeNet Files For Chapter 11 With $60M In Financing

    NEW YORK - LodgeNet Interactive Corp., a provider of hotel entertainment services, on Jan. 27 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York listing debts greater than $448.74 million and assets of slightly more than $291.72 million (In Re: LodgeNet Interactive Corporation, No. 13-10238, Chapter 11, S.D. N.Y. Bkcy.).

    Dewey & LeBoeuf, Former Partners Reach Agreement To Settle Unpaid Fees

    NEW YORK - Bankrupt law firm Dewey & LeBoeuf on Jan. 25 moved in the U.S. Bankruptcy Court for the Southern District of New York for approval of a settlement agreement with a group of lawyers who left the firm shortly before Dewey & LeBoeuf filed for Chapter 11, taking with them a client for which Dewey & LeBoeuf says it is owed fees and expenses (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

    Bankruptcy Judge: Hawker Beechcraft May Reject Some Contracts, Warranties

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of Hawker Beechcraft Inc. on Jan. 28 partially granted the company's motion to reject some of its customer contracts and warranties, ruling that because they are executory in nature, the company has the right to reject them (In Re: Hawker Beechcraft Inc., No. 12-11873, Chapter 11, S.D. N.Y. Bkcy.).

    Lawyers Denied Judgment On Most Of Garlock's Fraud, Conspiracy Claims

    CHARLOTTE, N.C. - All but one claim by Garlock Sealing Technologies LLC in an adversary action alleging that attorneys fraudulently obtained a settlement from Garlock for a mesothelioma victim have survived the attorneys' first bid to have the case dismissed, according to two orders issued Jan. 28 by a North Carolina federal bankruptcy judge (Garlock Sealing Technologies, LLC, et al. v. Chandler, et al., No. 12-03137, W.D. N.C. Bkcy.).

    More Than $2.46M Fraudulently Transferred To Peregrine CEO's Ex-Wife, Trustee Says

    CHICAGO - The Chapter 7 trustee in the bankruptcy case of Peregrine Financial Group Inc. on Jan. 25 filed an adversary complaint against Connie J. Wasendorf, the former wife of Peregrine CEO Russell Wasendorf Sr., seeking to recover more than $2.46 million in transfers that were part of the agreement the Wasendorfs reached regarding the dissolution of their marriage before the bankruptcy (Ira Bodenstein v. Connie J. Wasendorf $(In Re: Peregrine Financial Group Inc.$), No. 12-27488, Chapter 7, N.D. Ill. Bkcy.).

    2nd Circuit: Stay Relief Not Proper In Chapter 11 Case Of Grocery Chain A&P

    NEW YORK - A Second Circuit U.S. Court of Appeals panel on Jan. 24 ruled that a bankruptcy court correctly denied a creditor of bankrupt grocery chain the Great Atlantic & Pacific Tea Co. (A&P) relief from the automatic stay to pursue litigation against the company (Grocery Haulers Inc. v. The Great Atlantic & Pacific Tea Co. $(In Re: The Great Atlantic & Pacific Tea Co.$), No. 12-800, Chapter 11, 2nd Cir.).

    Dewey & LeBoeuf Nets More Than $7.16M In Settlement With Former Partners In Italy

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of law firm Dewey & LeBoeuf on Jan. 24 approved a settlement worth more than $7.16 million between the law firm and the former partners of its Italian practice who left Dewey & LeBoeuf prior to the firm's bankruptcy filing (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

    Casey Anthony Files For Chapter 7 Bankruptcy, Citing $792,119 In Debts

    TAMPA, Fla. - Casey Anthony, the Florida woman who, after a 2011 trial that garnered national attention, was acquitted of charges that she had murdered her 2-year-old daughter, on Jan. 25 filed for Chapter 7 bankruptcy, citing debts of $792,119.23 and assets of only $1,084 (In Re: Casey Anthony, No. 13-922, Chapter 7, M.D. Fla. Bkcy.).

    5th Circuit: Deadline Passed To Object To Oil Company's Bankruptcy Agreement

    NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on Jan. 23 affirmed a bankruptcy court's approval of settlement agreements despite allegations of fraud, ruling that the deadline for objections to the bankruptcy plan had passed (Anti Lothian Bankruptcy Fraud Committee, et al. v. Lothian Oil Inc, et al. $(In the Matter of: Lothian Oil Inc.$), No. 11-51082, 5th Cir.).

    Federal Law Would Make Private Student Loans Dischargeable In Consumer Bankruptcy

    WASHINGTON, D.C. - U.S. Sen. Richard Durbin, D-Ill., on Jan. 23 announced the re-introduction of legislation that would restore language in consumer bankruptcy law to allow private student loans to be dischargeable in bankruptcy like most other forms of private debt.