NEW YORK - The trustee for the Borders Group Inc. (BGI) Liquidating Trust, which was formed in the wake of the Chapter 11 bankruptcy filing of former bookseller Borders Group Inc., on May 1 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York opposing all proofs of claim asserted by its creditors (In Re: BGI Inc. f/k/a Borders Group Inc., No. 11-10614, Chapter 11, S.D. N.Y. Bkcy.).
CHICAGO - A directors and officers and corporate liability insurance policy indemnified an insured for shareholders' reasonable attorney fees in an underlying lawsuit regardless of how the fees were calculated, an Illinois federal judge ruled April 30, finding that although the insurer has a duty to pay the $3.15 million underlying attorney fee award, it did not vexatiously or unreasonably deny coverage for the multiplied portion of the award (Carolina Casualty Insurance Company v. Merge Healthcare Inc., f/k/a Amica Inc., No. 11 C 3844, N.D. Ill., Eastern Div.; 2012 U.S. Dist. LEXIS 60765).
RICHMOND, Va. - In an unpublished opinion, the Fourth Circuit U.S. Court of Appeals on April 30 reversed a ruling, finding that the plaintiffs' West Virginia Uniform Fraudulent Transfer Act (WVUFTA) claim based on a corporation's drawdown on its line of credit and purchase of annuities was time-barred, and vacated the denial of a motion to increase a damage award (Joseph LaRosa, et al. v. Virgil D. LaRosa, et al., No. 11-1234, 4th Cir.; 2012 U.S. App. LEXIS 8777).
PHILADELPHIA - The U.S. Bankruptcy Code trumps anti-assignment provisions in insurance policies, the Third Circuit U.S. Court of Appeals held May 1 (In re: Federal-Mogul Global Inc., et al., Nos. 09-2230 and 09-2231, 3rd Cir.; 2012 U.S. App. LEXIS 8814).
SAN DIEGO - A California federal judge on April 30 allowed plaintiffs in a vitamin class action to conduct discovery into defendant Bayer Corp.'s profits and expenses to possibly determine "restitutionary disgorgement" of profits (David Johns, et al. v. Bayer Corporation, et al., No. 3:09-cv-1935, S.D. Calif.; 2012 U.S. Dist. LEXIS 60121).
WILMINGTON, Del. - Bicent Holdings LLC, a company that owns and operates power plants in the United States, on May 1 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware, citing debt of $325.7 million (In Re: Bicent Holdings LLC, No. 12-11304, Chapter 11, D. Del. Bkcy.).
WILMINGTON, Del. - Sporting goods company Prince Sports Inc. on May 1 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware, citing $65 million in secured debt and $10.2 million in trade debt (In Re: Prince Sports Inc., No. 12-11439, Chapter 11, D. Del. Bkcy.).
SAN JUAN, Puerto Rico - In a case in which the Federal Deposit Insurance Corp. substituted as plaintiff for a failed bank that sued defendants because they allegedly defaulted on loans, a federal judge in Puerto Rico on April 26 granted the FDIC's motion to dismiss the defendants' counterclaims against it, finding that the defendants did not exhaust the administrative claims process pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), 12 U.S.C.S. § 1821. (Federal Deposit Insurance Corporation v. Beneficial Mortgage Corp., et al., No. 10-01827, D. Puerto Rico; 2012 U.S. Dist. LEXIS 58892).
BANGOR, Maine - A federal judge in Maine on April 27 granted the defendant's motion to dismiss a proposed class action accusing the defendant of violating the Fair and Accurate Credit Transaction Act of 2003 (FACTA), finding that the plaintiff failed to plausibly allege that the defendant committed a willful violation of the act when it included a credit card expiration date on a receipt (Adam Vidoni v. The Acadia Corporation, No. 11-00448, D. Maine; 2012 U.S. Dist. LEXIS 59967).
NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of the Eastman Kodak Co. on April 30 approved the company's plan to pay certain employees $13.5 million in bonuses (In Re: Eastman Kodak Company, No. 12-20202, Chapter 11, S.D. N.Y. Bkcy.).
NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of MF Global Holdings Ltd. (MFGH) on April 30 declined to grant a stay requested by a group of wealth management companies that objected to the bankruptcy court's decision to lift the automatic stay and permit certain insurers to pay the defense costs of current and former employees of MFGH (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).
WASHINGTON, D.C. - The U.S. Supreme Court on April 30 denied certiorari to a class of shareholders in bankrupt Idearc Inc. who had objected to the confirmation of Idearc's Chapter 11 reorganization plan on grounds that its approval violated due process (Spencer Ad Hoc Equity Committee v. Idearc Inc. (In Re: Idearc Inc.), No. 11-874, Chapter 11, U.S. Sup.). Subscribers may view more details of the reorganization plan within the full update.
WILMINGTON, Del. - A Delaware chancellor on April 27 found that a company lacks standing to bring derivative claims against a British Virgin Islands corporation because the company failed to follow certain requisite procedures under British Virgin Islands law (Microsoft Corporation v. Vadem, Ltd., et al., No. 6940-VCP, Del. Chanc.).
NEW YORK - A federal bankruptcy judge in the U.S. Bankruptcy Court for the Southern District of New York on April 30 approved $2.5 million in debtor-in-possession (DIP) financing for bankrupt fashion house Betsey Johnson LLC as it attempts to restructure debts listed between $10 million and $50 million (In Re: Betsey Johnson LLC, No. 12-11732, Chapter 11, S.D. N.Y. Bkcy.). Subscribers may view the order and petition available within the full update.
ALBANY, N.Y. - A widow's claim that her husband's death from acute myelogenous leukemia (AML) was caused by his work around coke ovens is timely, a New York appellate court said in an April 26 opinion, because the written medical opinion connecting her husband's illness with his working conditions was received within the statute of limitations (In the Matter of the Claim of Silvia Kasic, as Widow of Stephen Kasic, Deceased v. Bethlehem Steel Corporation, et al., No. 512068, N.Y. Sup., App. Div., 3rd Dept.; 2012 N.Y. App. Div. LEXIS 3251).
TAMPA, Fla. - A federal judge in Florida on April 27 dismissed a rescission claim from a suit arising from a mortgage loan related to a failed bank, but she allowed the plaintiffs' state law claims to remain (Wane, et al. v. Loan Corporation, et al., No. 11-02126, M.D. Fla.; 2012 U.S. Dist. LEXIS 59114).
BOSTON - Damages arising from allegations of wrongdoing as well as actual wrongdoing are within an excess insurance policy's coverage, a Massachusetts appeals panel ruled April 30, further finding that the underlying defense and settlement costs incurred by an insured are potentially attributable in some proportion to the covered claims (Allmerica Financial Corporation & others v. Certain Underwriters at Lloyd's, London, No. 11-P-193, Mass. App.). Subscribers may view the opinion available within the full update.
WILMINGTON, Del. - Bankrupt broadcasting company Capitol Infrastructure LLC on April 27 moved in the U.S. Bankruptcy Court for the District of Delaware for approval of an $11 million Stalking Horse agreement for the sale of the company (In Re: Capitol Infrastructure LLC, No. 12-11362, Chapter 11, D. Del. Bkcy.).
NEW YORK - Bankrupt energy company Dynegy Holdings LLC on April 27 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York, objecting to a creditor's motion seeking to compel testimony and the production of documents from Dynegy and two of its principals (In Re: Dynegy Holdings LLC, No. 11-38111, Chapter 11, S.D. N.Y. Bkcy.).
ORLANDO, Fla. - A company's tender of payment to a former employee on his unpaid overtime claim does not constitute a settlement of the claim because it is not a "full payment" and the worker did not accept the offer, a Florida federal judge held April 25 (James Evans v. General Mechanical Corporation, No. 6:12-cv-229, M.D. Fla.; 2012 U.S. Dist. LEXIS 57715).
PHILADELPHIA - The mayor of the City of Harrisburg, Pa., on April 25 moved in the Third Circuit U.S. Court of Appeals for sanctions against the attorney who represents the Harrisburg City Council, arguing that the council's appeal of a bankruptcy court's dismissal of the Chapter 9 bankruptcy petition the council filed is frivolous (In Re: City of Harrisburg, No. 12-1541, Chapter 9, 3rd Cir.). Subscribers may view the motion for sanctions available within the full update.
SANTA ANA, Calif. - A federal judge in California on April 25 declined to dismiss a breach of contract count arising from appraisal services in a suit filed by the Federal Deposit Insurance Corp. as the receiver for Washington Mutual Bank (WaMu), finding that a written contract requirement was designed only to protect the bank (Federal Deposit Insurance Corporation v. LSI Appraisal LLC, et al., No. 11-00706, C.D. Calif.; 2012 U.S. Dist. LEXIS 58008).
SANTA ANA, Calif. - A California federal judge on April 24 remanded a class complaint accusing a pharmacy chain of selling a product marketed as honey in its California stores that failed to meet the state's requirements to be sold as honey (Meryl Overton v. CVS Caremark Corporation, et al., No. 12-121, C.D. Calif.; 2012 U.S. Dist. LEXIS 57537).
CINCINNATI - A panel of the Sixth Circuit U.S. Court of Appeals on April 25 ruled that a bankruptcy court order denying a creditor's attempt to transfer his adversary action to the district court was not a final order; therefore, the appellate court lacked jurisdiction and the appeal was dismissed (Demetrious Yadirf Smith v. Bluegrass Mortgage Services Inc., No. 10-5785, Chapter 7, 6th Cir.; 2012 U.S. App. LEXIS 8391).
WILMINGTON, Del. - The Official Committee of Equity Security Holders in bankrupt Syms Corp. on April 25 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to Syms' motion for appointment of an examiner to investigate potential estate causes of action related to the company's directors and officers, contending that the examiner's report will be of no value (In Re: Filene's Basement LLC, No. 11-13511, Chapter 11, D. Del. Bkcy.).