LexisNexis® Legal Newsroom
Committee: Bankrupt AMR's Reorganization Plan Should Be Approved Without Delay

NEW YORK - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of AMR Corp., the parent company of American Airlines Inc., on Aug. 8 filed a brief in support of confirmation of the airline's second amended joint Chapter 11 plan that is premised on the proposed merger of American Airlines and US Airways Inc. (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

MF Global Trustee Says $1M In Compensation For His Services Is 'Reasonable'

NEW YORK - The trustee in the Chapter 11 bankruptcy of MF Global Holdings Ltd. (MFGH) on Aug. 5 filed an application for compensation seeking $1 million, which he contends is "fair and reasonable" and is also "significantly" less than the maximum amount he could request, but is in addition to payment he seeks related to the billable hours of his law firm (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

Hostess Sues Bakery For Losses Valued At $151,989.93 Related To Alleged Breach

NEW YORK - Bankrupt Old HB Inc., formerly known as Hostess Brands Inc., on Aug. 7 filed an adversary proceeding against a bakery seeking recovery of $157,989.93 in damages related to alleged breaches of contract related to bread it provided for Hostess (Old HB Inc. f/k/a Hostess Brands Inc. v. Papa Pita Bakery $(In Re: Old HB, f/k/a Hostess Brands Inc.$), No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).

Federal Judge Denies Motion For Reconsideration Except For 1 Narrow Modification

CENTRAL ISLIP, N.Y. - A New York federal judge on Aug. 5 denied a credit union insured's motion to reconsider a Dec. 15 order regarding coverage under a fidelity bond except for one narrow modification as to whether the insured relied on the remittance of payments in addition to the fraudulent reports created by its loan servicer (Suffolk Federal Credit Union v. Cumis Insurance Society Inc., No. 10-CV-0001 $(ADS$)$(GRB$), E.D. N.Y.; 2013 U.S. Dist. LEXIS 110600).

Federal Judge Stays Coverage Dispute In Favor Of London Arbitration

NEW YORK - A New York federal judge on Aug. 6 denied an Australian insurer's motion to dismiss an insurance coverage dispute but stayed the action in favor of London arbitration pursuant to an arbitration clause in the underlying policies (Marsh & McLennan Companies Inc. v. Gio Insurance Limited, No. 11-8391, S.D. N.Y.; 2013 U.S. Dist. LEXIS 110613).

Airline Customers: Merger Of American, US Airways Is Antitrust Violation

NEW YORK - A group of airline customers on Aug. 6 filed an adversary complaint against bankrupt AMR Corp., the parent company of American Airlines Inc., in the U.S. Bankruptcy Court for the Southern District of New York, alleging that the proposed $11 billion merger of American Airlines and US Airways Group Inc. would be a violation of federal antitrust laws (Carolyn Fjord, et al. v. AMR Corporation $(In Re: AMR Corporation$), No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

Lightsquared Owners Seek $4B From Dish Network, EchoStar For Alleged Fraud

NEW YORK - The investment fund that owns bankrupt Lightsquared Inc. on Aug. 6 filed an adversary proceeding in the bankruptcy seeking at least $4 billion in damages against Dish Network Corp. and other entities affiliated with Dish Network, alleging fraud and other tortious conduct aimed at destroying the investment fund's rights related to its ownership of Lightsquared (Harbinger Capital Partners, et al. v. Charles W. Ergen, et al. $(In Re: Lightsquared Inc.$), No. 12-12080, Chapter 11, S.D. N.Y. Bkcy.).

Judge Grants Motion In Relation To Petition To Confirm $95 Million Award

NEW YORK - A New York federal judge on Aug. 6 granted a Russian company's motion for summary judgment in relation to its petition to enforce a $95 million international arbitration award that was issued in a loan dispute in its favor, finding that a Russian oil producer's arguments that it did not receive proper notice of the arbitration and that the confirmation of the award violated public policy failed (Yukos Capital S.A.R.L. v. OAO Samaraneftegaz, No. 10- 6147, S.D. N.Y.).

2nd Circuit Upholds Denial Of Insurance Salesperson's Overtime Request

NEW YORK - An insurance program salesperson failed to prove that she was denied overtime in violation of federal and state laws, the Second Circuit U.S. Court of Appeals ruled Aug. 5 (Ramona Dejesus v. HF Management Services, LLC, No. 12-4565, 2nd Cir.; 2013 U.S. App. LEXIS 16105).

Securities Suit Remanded After Judge Fails To Provide Required Information

NEW YORK - A Second Circuit U.S. Court of Appeals panel on Aug. 2 remanded a New York federal judge's ruling to the lower court, ruling that the judge failed to provide any reason as to why he issued an immediate final judgment or why it was appropriate to do so (Kenneth M. Krys, et al. v. Christopher Sugrue, et al., Nos. 12-3575 and 12-3586, 2nd Cir.).

MTBE MDL Judge Finds Some Of Redevelopment Agency's Claims Untimely

NEW YORK - The federal judge in New York overseeing the methyl tertriary butyl ether (MTBE) products liability multidistrict litigation on Aug. 1 awarded summary judgment to the defendants on claims for negligence, trespass, products liability and nuisance brought by the City of Merced Redevelopment Agency (RDA), after finding that its claims were barred by California's three-year statute of limitations (In re: Methyl Tertiary Butyl Ether (MTBE) Products Liability Litigation, MDL 1358, Case No. 00-1898; City of Merced Redevelopment Agency, et al. v. Exxon Mobil Corp., et al., No. 08 Civ. 06306, S.D. N.Y.; 2013 U.S. Dist. LEXIS 109019).

2nd Circuit: Standing Lacking In Trademark Dispute Over 'Stolichnaya'

NEW YORK - A New York federal judge did not err in dismissing a dispute over the "Stolichnaya" trademark for want of statutory standing, the Second Circuit U.S. Court of Appeals ruled Aug. 5 (Federal Treasury Enterprise Sojuzplodoimport et al. v. SPI Spirits Ltd. et al., No. 11-4109, 2nd Cir.; 2013 U.S. App. LEXIS 16106).

Investor Failed To Plead Any Material Misrepresentations, Federal Judge Rules

NEW YORK - In an opinion made available on Aug. 3, a federal judge in New York dismissed a shareholder class action lawsuit stemming from the financial collapse of financial giant Lehman Brothers, ruling that an investor failed to plead any material misrepresentations or scienter in making its state and federal securities law claims (In re Lehman Brothers Securities and ERISA Litigation, No. 09-md-2017; $(Stichting Pensioenfonds ABP v. Merrill Lynch & Co. Inc., No. 10-6637$), S.D. N.Y.; 2013 U.S. Dist. LEXIS 107559).

Dewey & LeBoeuf Liquidating Trustee Seeks Extension Of Claim Objection Deadline

NEW YORK - The liquidating trustee in the Chapter 11 proceeding of former law firm Dewey & LeBoeuf on Aug. 2 filed a brief arguing that the deadline upon which objections can be filed to claims made against the bankruptcy estate should be extended to Jan. 16 (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

United States, States Debate Apple Over Remedies In E-Book Conspiracy Case

NEW YORK - The United States and the 33 states that prevailed in federal district court in New York on their claims that Apple Inc. conspired with five publishers to fix prices of electronic books submitted their proposed remedy on Aug.2 (United States of America v. Apple Inc., et al., No. 12 Civ. 2826, S.D. N.Y.; State of Texas, et al. v. Penguin Group $(USA$) Inc., et al., No. 12 Civ. 3394, S.D. N.Y.).

Justice Denies Investors' Request To Intervene In Insurer's Rehabilitation

NEW YORK - A New York justice on July 31 denied a petition by investors to intervene in the rehabilitation proceeding for Financial Services Insurance Co. (FGIC) (In the Matter of the rehabilitation of Financial Guaranty Insurance Co., No. 401265/12, N.Y. Sup., New York Co.; 2013 N.Y. Misc. LEXIS 3300).

Judge: Shareholder Failed To Prove Demand Futility Against Directors, Officers

NEW YORK - A federal judge in New York granted a company's directors' and officers' motion to dismiss a shareholder derivative complaint on July 26, finding that the shareholder had failed to show that presuit demand upon the company's board of directors would have been futile (Louisiana Municipal Police Employees' Retirement System, Derivatively on Behalf of Itself, and All Others Similarly Situated v. Dan R. Hesse, et al., No. 12-cv-04017, S.D. N.Y.).

New York Federal Judge Dismisses RICO Claim Against Insurance Agents

NEW YORK - A putative class fails to allege a claim for violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act, 18 U.S. Code Section 1961, et seq., against insurance agents regarding the sale of nonexistent health insurance, a New York federal judge held July 30, dismissing the RICO claim (Holly Dulsky, et al. v. William M. Worthy II, et al., No. 11-4925, S.D. N.Y.).

Recommendation To Dismiss RICO Counterclaims Upheld In $18 Billion Award Challenge

NEW YORK - Counterclaims filed by a defendant in the Racketeer Influenced and Corrupt Organizations Act lawsuit filed by Chevron USA in the U.S. District Court for the Southern District of New York to prevent enforcement of an $18 billion personal injury and property damage judgment entered in Lago Agrio, Ecuador, were dismissed July 29 with leave to amend; a management order was issued July 30 in anticipation of an Oct. 15 trial (Chevron Corp. v. Steven R. Donziger, et al., No. 11-691, S.D. N.Y.).

U.K. Privy Council Grants Time Extension For Cukurova To Recover Shares

LONDON - After a ruling by a New York federal court that granted injunctive relief that will prohibit Cukurova Finance International Ltd. (CFI) and a related entity from redeeming shares in relation to a dispute over a Turkish telephone company, the Privy Council of the United Kingdom on July 29 granted their application for an extension of time in which to recover the shares (Cukurova Finance International Limited v. Alfa Telecome Turkey Limited, No. $(2013$) UKPC 25, United Kingdom, Privy Council).

Federal Judge Dismisses Breach Of Contract Claims Against Insurance Agents

NEW YORK - A New York federal judge on July 25 dismissed breach of contract claims filed against insurance agents relating to their primary obligations under guarantees and with various covenants in the guarantees (Greenlight Reinsurance Ltd., et al. v. Appalachian Underwriters Inc., et al., No. 12-8544, S.D. N.Y.; 2013 U.S. Dist. LEXIS 104605).

2nd Circuit Affirms $104M MTBE Contamination Verdict Against Exxon

NEW YORK - The Second Circuit U.S. Court of Appeals on July 26 affirmed a $104.6 million methyl tertiary butyl ether (MTBE) contamination verdict for New York City against Exxon Mobil Corp., finding in part that the state tort verdict is not preempted by the Clean Air Act (In Re: Methyl Tertiary Butyl Ether $(MTBE$) Products Liability Litigation, Nos. 10-4135 and 10-4329, 2nd Cir.).

Operator Of Tunnel Between Detroit And Windsor, Ontario, Files For Bankruptcy

NEW YORK - The private company that owns and operates the tunnel between the City of Detroit and Windsor, Ontario - as well as other toll roads in the United States - filed a prepackaged Chapter 11 bankruptcy on July 25 under which the debtor would emerge from bankruptcy under the ownership of Syncora Holdings Inc. with no outstanding debt (In Re: American Rodes LLC, No. 13-12412, Chapter 11, S.D. N.Y. Bkcy.).

Judge: Directors, Officers Insurer Has Duty To Defend, Indemnify Sexual Abuse Suit

BROOKLYN, N.Y. - Judgment was entered against a directors and officers liability insurer on July 23 after a New York federal judge found that the insurer has a duty to defend and indemnify its community center insured against an underlying lawsuit alleging that the insured condoned and ratified the acts of sexual abuse committed by its assistant executive director of health/physical education (Jewish Community Center of Staten Island v. Trumbull Insurance Co., No. 09-CV-02028 $(ENV$) $(JMA$), E.D. N.Y.; 2013 U.S. Dist. LEXIS 102063).

Texas Court Won't Dismiss Action Challenging Pneumo Abex Settlement

HOUSTON - Differences between a Texas action alleging tortious acts and a now-closed New York case that resulted in the settlement of asbestos claims against Pneumo Abex LLC make comity principles irrelevant, a Texas court held on July 25 in denying a writ petition seeking dismissal of the case (In re: Cooper Industries LLC and Cooper US Inc., No. 14-13-00500-CV, Texas App., 14th Dist.).