LexisNexis® Legal Newsroom
    Hostess Sells Remaining Bread Assets To Mountain States For $28.85 Million

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of Hostess Brands Inc. on April 9 approved the sale of the company's bread assets to Mountain States Bakeries LLC, which paid a deposit of $1.5 million in anticipation of the full purchase price of $28.85 million pursuant to the asset sale agreement (In Re: Hostess Brands Inc., No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).

    Clothier Big M, Parent Of Mandee, Annie Sez, Seeks OK For Asset Sale

    TRENTON, N.J. - Bankrupt Big M Inc., the parent company for women's clothing companies Mandee and Annie Sez, on April 6 moved for authorization to sell all of its assets free and clear of liens, as well as approval of its stalking horse agreement (In Re: Big M Inc., No. 13-10233, Chapter 11, D. N.J. Bkcy.).

    7th Circuit Reverses: Delay In Naming Trustee Did Not Extend Limitations Period

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on April 8 reversed and remanded a bankruptcy case, ruling that the statute of limitations for filing avoidance claims was not extended as a result of a delay in appointing the Chapter 7 trustee (Richard M. Fogel v. Ronald Shabat $(In Re: Nachshon Draiman$), No, 12-3888, Chapter 7, 7th Cir.; 2013 U.S. App. LEXIS 7045).

    European Vodka Seller's Chapter 11 Would Resolve More Than $1.73B In Debt

    WILMINGTON, Del. - Liquor company Central European Distribution Co. (CEDC) on April 7 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware using a prepackaged plan of reorganization that would resolve its more than $1.73 billion in debt (In Re: Central European Distribution Company, No. 13-10738, Chapter 11, D. Del. Bkcy.).

    AmBac Financial Seeks Approval Of $101.9M Settlement Payment To Resolve IRS Claims

    NEW YORK - Bankrupt AmBac Financial Group Inc. on April 8 moved in the U.S. Bankruptcy Court for the Southern District of New York for approval of a settlement with the Internal Revenue Service under which AmBac will pay $101.9 million to the U.S. government (In Re: AmBac Financial Group Inc., No. 10-15973, Chapter 11, S.D. N.Y. Bkcy.).

    Judge Says Ethical Wall Allows Silver Point To Trade MF Global Securities

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of MF Global Holdings Ltd. (MFGH) on April 8 approved the motion of Silver Point Capital for an order permitting securities trading upon the establishment of an ethical wall (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    Bankrupt Milwaukee Archdiocese To Publish Documents Related To Sexual Abuse Claims

    MILWAUKEE - The bankrupt Archdiocese of Milwaukee, the Official Committee of Unsecured Creditors and certain claimants who have alleged sexual abuse on April 3 filed a stipulation under which the archdiocese will produce and publish on its website certain documents pertaining to the sexual abuse claims against priests in the archdiocese (In Re: Archdiocese of Milwaukee, No. 11-20059, Chapter 11, E.D. Wis. Bkcy.).

    5th Circuit: Bankruptcy Court Erred; Creditor's Liens Not Valid And Enforceable

    NEW ORLEANS - A panel of the Fifth Circuit of the U.S. Court of Appeals on April 5 ruled that a bankruptcy court erred when it found that creditors in a bankruptcy proceeding had valid mechanic's liens against the debtor (First National Bank v. Crescent Electric Supply Company $(In the Matter of: Renaissance Hospital Grand Prairie Inc.$), No. 12-10386, Chapter 11, 5th Cir.; 2013 U.S. App. LEXIS 6945).

    Bankruptcy Judge Approves MF Global Liquidation Plan

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of MF Global Holdings Ltd. (MFGH) on April 5 approved the joint plan of liquidation (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    U.S. Trustee: ResCap Fails To Provide Details On $7.8M In Bonus Payments

    NEW YORK - The U.S. trustee in the Chapter 11 bankruptcy of Residential Capital (ResCap) LLC on April 3 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to ResCap's plan to pay $7.8 million in bonuses to various employees because ResCap's plan fails to provide crucial information about the details of how bonuses will be paid (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

    MF Global Chapter 11 Trustee: Corzine's 'Negligent Conduct' Contributed To Demise

    NEW YORK - Louis J. Freeh, the Chapter 11 trustee in the bankruptcy of MF Global Holdings Ltd. (MFGH), on April 4 issued a report following his investigation of the collapse of MFGH in which he concludes that former CEO Jon Corzine engaged in "negligent conduct" that contributed to the company's collapse (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    2nd Circuit Authorizes Appeal Of $1.5B Post-Petition Financing In AMR Bankruptcy

    NEW YORK - The Second Circuit U.S. Court of Appeals on April 2 authorized the appeal of U.S. Bank Trust National Association Inc., which contends that a New York federal bankruptcy court erred when it ruled that repayment of financing notes in the Chapter 11 bankruptcy of AMR Corp., the parent company of American Airlines Inc., does not require the payment of a make-whole amount (American Airlines Inc., et al. v. U.S. Bank Trust National Association, No. 13-716, Chapter 11, 2nd Cir.).

    6th Circuit Partially Remands Fraud Case To Calculate Key Witness's Sentence

    CINCINNATI - A panel of the Sixth Circuit U.S. Court of Appeals on April 2 partially affirmed and partially remanded the ruling in a consolidated bankruptcy fraud case, ruling that the sentence handed down to one of the debtors who operated a business scheme needed to be reviewed given his cooperation as the key witness against his business partner (United States of America v. Bernard J. Kurlemann, et al., No. 11-3394, Chapter 11, 6th Cir.; 2013 U.S. App. LEXIS 6539).

    U.S. Trustee Argues Rothstein Liquidation Plan Gives Too Much To TD Bank

    FORT LAUDERDALE, Fla. - The U.S. trustee in the Chapter 11 bankruptcy of law firm Rothstein Rosenfeldt Adler (RRA) on April 1 filed a brief in the U.S. Bankruptcy Court for the Southern District of Florida objecting to the proposed plan filed by the Chapter 11 liquidation, trustee contending that it gives TD Bank a greater claim against the bankruptcy estate than it should be given (In Re: Rothstein Rosenfeldt Adler, No. 09-34791, Chapter 11, S.D. Fla. Bkcy.).

    Md. Bankruptcy Judge Declines To Reconsider Lifting Stay To Settle Asbestos Claims

    BALTIMORE - A Maryland federal bankruptcy judge on March 29 denied a request to reconsider her decision to lift the automatic stay in Lloyd E. Mitchell Inc.'s (LEM) Chapter 11 case so a confidential settlement among the debtor, two insurers and a law firm representing 9,000 asbestos personal injury claimants can be implemented, finding that an opposing law firm failed to show that lifting the stay is clear error or an injustice (In re: Lloyd E. Mitchell Inc., No. 06-13250, D. Md. Bkcy.).

    Bankruptcy Judge Approves Deal Between Nortel, Retired Employees

    WILMINGTON, Del. - A federal bankruptcy judge in Delaware on April 2 approved bankrupt Nortel Networks Inc.'s deal with the committee representing retired employees that will terminate retiree welfare plans and would pay the Official Committee of Retired Employees (Retiree Committee) $66,879,000 to resolve all claims against Nortel related to retirement benefits (In Re: Nortel Networks Inc., No. 09-10138, Chapter 11, D. Del. Bkcy.).

    MF Global Committee: Plan Of Liquidation Meets Code, Should Be Approved

    NEW YORK - The Statutory Creditors' Committee of MF Global Holdings Ltd. (MFGH) on April 2 filed a brief supporting confirmation of the joint plan of liquidation in MFGH's Chapter 11 bankruptcy, contending that the plan should be confirmed because it will increase distributions to creditors (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    7th Circuit: Discretion Not Abused; Debtors Cannot Avoid Property Lien

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on March 29 ruled that a debtor couple could not avoid a lien on their condominium and held that the bankruptcy and district courts had not abused their discretion (Bryan D. Hinnen, et al. v. Emerald Hills Condominium Association, No. 12-2922, Chapter 13, 7th Cir.; 2013 U.S. App. LEXIS 6304).

    'Girls Gone Wild' Video Maker: Trustee Not Needed; Creditor Misrepresents Facts

    LOS ANGELES - Bankrupt adult entertainment company GGW Brands Inc., the parent company for the maker of "Girls Gone Wild" videos, on March 29 filed a brief contending that a creditor's motion seeking appointment of a trustee should not be granted because the creditor's allegations "distort or misrepresent the facts of the case" (In Re: GGW Brands Inc., No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

    Bankruptcy Judge: California City May Proceed With Chapter 9 Bankruptcy

    SACRAMENTO, Calif. - A federal bankruptcy judge in California on April 1 ruled that the City of Stockton, Calif., which had filed for Chapter 9 bankruptcy in June, was eligible to seek bankruptcy because the city did not file its petition in bad faith and was indeed insolvent at the time it sought bankruptcy. The bankruptcy judge's decision makes Stockton the largest municipality in the country to file for bankruptcy (In Re: City of Stockton, California, No. 12-32118, Chapter 9, E.D. Calif. Bkcy.).

    WP Steel Committee: Lien Agents Breached Duty Related To Bankruptcy Petition

    WILMINGTON, Del. - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of WP Steel Venture on March 29 sued Cerberus Business Finance in its capacity as a second lien agent and sued the Renco Group Inc. in its capacity as WP Steel's third lien agent, seeking declaratory judgment that Cerberus and Renco do not have any interest in WP Steel's claims, rights and causes of action (In Re: WP Steel Venture, No. 12-11661, Chapter 11, D. Del. Bkcy.).

    1st Circuit: Lender's Attempt To Collect Student Loan Debt Was Abuse Of Process

    BOSTON - A panel of the First Circuit U.S. Court of Appeals on March 29 affirmed a bankruptcy court's ruling that a debtor's student loan debts were extinguished and held that the lender that tried to collect on the debt after it had been extinguished abused the bankruptcy process (Barbara J. Hann v. Educational Credit Management Corporation $(In Re: In Re: Barbara J. Hann$), No. 12-9006, Chapter 13, 1st Cir.).

    Advisor To Bankrupt GSC Opposes Sanctions, Says Conflict Not Shown

    NEW YORK - Capstone Advisory Group LLC, which is the financial advisor to bankrupt GSC Group Inc., on March 29 filed a brief opposing a call for sanctions made by an investment firm that contends that Capstone should be sanctioned for conflict of interest (In Re: GSC Group Inc., No. 10-14653, Chapter 11, S.D. N.Y. Bkcy.).

    Bankruptcy Judge Approves Deal To Reduce Former Partners' Claims By $41 Million

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of law firm Dewey & LeBoeuf on April 1 approved a settlement among the firm, the firm's former partners and law firm Paul Hastings LLP that will eliminate $41 million in claims against Dewey & LeBoeuf. The claims had been filed by the former partners who alleged that Dewey & LeBoeuf owed them for money the partners were required to pay to secure their partnership interest in the firm (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

    Tribune Says More Than $13.25M Sought by Indenture Trustees Is 'Without Merit'

    WILMINGTON, Del. - The reorganized version of bankrupt media entity Tribune Co. on March 28 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to $13.25 million in "substantial contribution" applications filed by the Law Debenture Trust Company of New York (LDTCNY) and the Wilmington Trust Co., contending that they are not entitled to fees and expenses for services rendered as indenture trustees (In Re: Tribune Company, No. 08-13141, Chapter 11, D. Del. Bkcy.).