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.

    ResCap To Pay Fannie Mae $297.6M To Settle Claims Related To Contracts

    NEW YORK - Bankrupt Residential Capital LLC (ResCap) on Jan. 24 filed a stipulated agreement with the U.S. Bankruptcy Court for the Southern District of New York under which ResCap's subsidiary - GMAC Mortgage LLC - will pay Fannie Mae $297.6 million to settle Fannie Mae's claims (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

    Steroid Plaintiffs Seek To Freeze $21M Paid Out By Compounding Pharmacy

    BOSTON - A Massachusetts bankruptcy judge on Jan. 23 scheduled a hearing on an emergency motion by unsecured creditors to try to freeze $21 million the creditors say was transferred in the past year to insiders of New England Compounding Pharmacy Inc. (NECP), the company at the center of a fungal meningitis outbreak (In Re: New England Compounding Pharmacy, Inc., No. 12-19882, D. Mass., E. Div.).

    Asset Auction For Videogame Maker THQ Nets More Than $71.69 Million

    WILMINGTON, Del. - The federal bankruptcy judge presiding over the Chapter 11 proceeding of videogame maker THQ Inc. on Jan. 23 approved an auction of the company's assets that garnered $71,694,000 (In Re: THQ Inc., No. 12-13398, Chapter 11, D. Del. Bkcy.).

    Land America Trustee Says $70.2M Asset Sale Is In Best Interest Of Creditors

    RICHMOND, Va. - The dissolution trustee in the Chapter 11 bankruptcy of Land America Financial Group Inc. on Jan. 22 filed a brief in the U.S. Bankruptcy Court for the Eastern District of Virginia supporting a sale of Land America's assets for $70.2 million (In Re: Land America Financial Group Inc., No. 08-35994, Chapter 11, E.D. Va. Bkcy.).

    U.S. Government Seeks Life In Prison For Fraud By Peregrine CEO Russell Wasendorf

    CEDAR RAPIDS, Iowa - The U.S. government, which sued Peregrine Financial Group Inc. CEO Russell R. Wasendorf Sr. alleging securities fraud related to Peregrine's Chapter 7 bankruptcy filing, on Jan. 22 filed a memo in federal court calling for Wasendorf to be sentenced to life in prison (United States of America v. Russell R. Wasendorf Sr., No. 12-2021, N.D. Iowa).

    Videogame Maker Atari Files For Chapter 11 Bankruptcy

    NEW YORK - Videogame manufacturer Atari Inc. filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Jan. 21, despite listing assets between $10 million and $50 million and liabilities between only $100,000 and $500,000 (In Re: Atari Inc., No. 13-10177, Chapter 11, S.D. N.Y. Bkcy.).

    Malpractice Case Tied To Bankruptcy May Proceed In State Court, Judge Says

    PHILADELPHIA - A federal judge in Pennsylvania on Jan. 18 ruled that a malpractice lawsuit related to the underlying Chapter 11 bankruptcy proceeding of mortgage company Taylor Bean & Whitaker (TBW) could proceed in Pennsylvania state court (Stradley Ronon Steven & Young v. Sovereign Bank NA, No. 12-2466, E.D. Pa.).

    Bankruptcy Judge Denies Dismissal Of Insurer's Aiding, Abetting Claim

    WEST PALM BEACH, Fla. - A federal bankruptcy judge in Florida on Jan. 18 refused to dismiss bankrupt insurers' claims for aiding and abetting and breach of fiduciary duty against companies regarding real estate investments; however, the judge did dismiss the insurers' rescission claim under the claim preclusion doctrine (In re: British American Insurance Co. Ltd., No. 09-31881 & 09-35888, In re: British American Isle of Venice $(BVI$) Ltd., No. 10-21627, British American Isle of Venice $(BVI$) and British American Insurance Co. Ltd. v. Robert Fullerton, et al., Adv. Proc. No. 11-03117, British American Insurance Co. Ltd. v. Robert Fullerton, et al., Adv. Proc. No. 11-03118, Chapter 15, S.D. Fla. Bkcy.; 2013 Bankr. LEXIS 217).

    Unsecured Creditors Committee Says WP Steel Parent Breached Duties, Seeks $238M

    WILMINGTON, Del. - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of WP Steel Venture LLC on Jan. 17 moved in the U.S. Bankruptcy Court for the District of Delaware for permission to sue Ira L. Rennert, the principal in charge of the Renco Group Inc., which is the parent company of WP Steel, alleging that he breached his fiduciary duties in the course of WP Steel's filing for bankruptcy. The committee says it can recover more than $238 million for the bankruptcy estate by suing Rennert (In Re: WP Steel Venture LLC, No. 12-11661, Chapter 11, D. Del. Bkcy.).

    Pittsburgh Corning Gets Approval For $52 Million Insulation Plant In China

    Pittsburgh Corning Gets Approval For $52 Million Insulation Plant In China

    Former MF Global Executives: Case Against Them Fails; No Evidence Of Fraud Shown

    NEW YORK - A group of former executives of bankrupt MF Global Holdings Inc. (MFGH) on Jan. 16 filed a brief in the U.S. District Court for the Southern District of New York arguing that the class action that was filed against them alleging violations of the Commodity Exchange Act (CEA) in connection with MFGH's bankruptcy should be dismissed (Joseph DeAngelis v. Jon S. Corzine, et al. $(In re: MF Global Holdings Limited Securities Litigation$), No. 11-7866, S.D. N.Y.).

    American Airlines Gets $1.5B In Additional Financing; Judge Denies Objections

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy proceeding of AMR Corp., the parent company of American Airlines Inc., on Jan. 17 approved $1.5 billion in additional financing for the airline, overruling the objections of the indenture trustee (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

    Hostess Seeks Approval To Reject Contracts, Leases As Part Of Wind Down

    NEW YORK - Bankrupt Hostess Brands Inc. on Jan. 16 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York, saying the Bankruptcy Court should approve the rejection of contacts and leases to facilitate the speedy wind down of the business (In Re: Hostess Brands Inc., No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).

    Bankruptcy Judge Approves Patent Sale In Elpida Chapter 15 Proceeding

    WILMINGTON, Del. - The federal bankruptcy judge presiding over the Chapter 15 bankruptcy of Elpida Memory Inc. on Jan. 16 approved a motion by foreign representatives of the company who sought the sale of various patents to Rambus Inc., a company that has reached a patent sale agreement with Elpida (In Re: Elpida Memory Inc., No. 12-10947, Chapter 15, D. Del. Bkcy.).

    Bankruptcy Judge Approves $52M In Additional Financing For Pinnacle Airlines

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of Pinnacle Airlines Corp. on Jan. 16 approved $52 million in additional post-petition financing, which was needed to avoid Pinnacle's proceeding from being converted to Chapter 7 liquidation (In Re: Pinnacle Airlines Corp., No. 12-11343, Chapter 11, S.D. N.Y. Bkcy.).

    10th Circuit Reverses; BAPCPA Did Not Repeal Absolute Priority Rule

    DENVER - A panel of the 10th Circuit U.S. Court of Appeals on Jan. 15 reversed and remanded a case, holding that the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) did not repeal the absolute priority rule (APR) and that a debtor couple's Chapter 11 plan of reorganization was confirmed in error (Dill Oil Company LLC v. Arvin E. Stephens, et al. $(In Re Arvin E. Stephens, et al.$), No. 11-6309, Chapter 11, 10th Cir.; 2013 U.S. App. LEXIS 1011).

    Former TWA Pilots: Bankruptcy Court Erred In AMR Proceeding; CBA Motion Was Valid

    NEW YORK - The former pilots with now-defunct TransWorld Airlines (TWA) on Jan. 15 filed a statement of issues on appeal in the Chapter 11 bankruptcy proceeding of AMR Corp., the parent company for American Airlines Inc., arguing that a federal bankruptcy court in New York erred in overruling their motion with respect to the collective bargaining agreement (CBA) between the pilots and the airline (In Re: AMR Corp., No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

    Bankrupt OSG Seeks Stay Of Securities Class Actions Against Officers, Directors

    WILMINGTON, Del. - Bankrupt Overseas Shipholding Group Inc. (OSG) on Jan. 15 filed an adversary complaint in the U.S. Bankruptcy Court for the District of Delaware, seeking a declaration that the automatic stay applies to litigation against its current and former directors and officers (In Re: Overseas Shipholding Group Inc., No. 12-20000, Chapter 11, D. Del. Bkcy.).

    Kodak Says Kyocera Patent Infringement Case Should Be Stayed, Dismissed

    NEW YORK - Bankrupt Eastman Kodak Co. on Jan. 15 moved in the U.S. Bankruptcy Court for the Southern District of New York for an order enforcing an automatic stay and dismissing Kyocera Corp.'s adversary complaint alleging patent infringement claims (Kyocera Corporation v. Eastman Kodak Company $(In Re: Eastman Kodak Company, Adv. No. 13-01093, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.).

    Lack Of Bidders Forces Ritz Camera To Convert To Chapter 7 Bankruptcy

    WILMINGTON, Del. - The federal bankruptcy judge in Delaware who is presiding over the Chapter 11 bankruptcy of Ritz Camera & Image LLC on Jan. 15 ordered the proceeding to be converted to Chapter 7 liquidation because of Ritz's inability to find a buyer for all of its assets (In Re: Ritz Camera & Image LLC, No. 12-11868, Chapter 7, D. Del. Bkcy.).

    Hostess, Insurer Agree To Terms For Use Of Cash Collateral To Pay Deductible

    NEW YORK - Bankrupt Hostess Brands Inc. and ACE American Insurance Co. on Jan. 10 reached an agreement pertaining to a dispute concerning Hostess' use of cash collateral in the bankruptcy proceeding whereby the parties agree that ACE's obligation has been paid from the cash collateral since Nov. 12, but the parties each reserve their rights to assert a breach of the agreement in other regards (In Re: Hostess Brands Inc., No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).

    Former GSC Employees Join In U.S. Trustee's Brief Calling For Removal Of Trustee

    NEW YORK - A group of former employees of bankrupt GSC Group Inc. on Jan. 11 joined a brief filed by the U.S. trustee seeking to vacate an order approving the retention of Capstone Advisory Group LLC and requiring disgorgement of all fees and seeking the removal of the liquidating trustee (In Re: GSC Group Inc., No. 10-14653, Chapter 11, S.D. N.Y. Bkcy.).

    Hardware Company Gets $30M From Wells Fargo To Finance Chapter 11 Bankruptcy

    WILMINGTON, Del. - Texas-based Handy Hardware Wholesale Inc. (HHW) filed for Chapter 11 bankruptcy on Jan. 11 in the U.S. Bankruptcy Court for the District of Delaware, citing assets and debts between $50 million and $100 million (In Re: Handy Hardware Wholesale Inc., No. 13-10060, Chapter 11, D. Del. Bkcy.).

    Johnson Controls: Fee Related To A123 Systems Sale Is Being Wrongly Withheld

    WILMINGTON, Del. - Johnson Controls Inc. on Jan. 14 filed a brief in the U.S. Bankruptcy Court for the District of Delaware contending that in the Chapter 11 bankruptcy of alternative energy company A123 Systems Inc., the Official Committee of Unsecured Creditors (committee) wrongly seeks to hold in escrow the break-up fee related to the proposed sale of A123 Systems to Wangxiang Group Corp. Johnson Controls had hoped to purchase A123 Systems' assets (In Re: A123 Systems Inc., No. 12-12859, Chapter 11, D. Del. Bkcy.).