LexisNexis® Legal Newsroom
    U.S. Trustee: Counsel For Bankrupt 'Girls Gone Wild' Must Turn Over $20,000

    LOS ANGELES - The U.S. trustee in the Chapter 11 bankruptcy of the company that makes adult videos carrying the name "Girls Gone Wild" on Aug. 27 moved in bankruptcy court for the company's bankruptcy attorney Robert M. Yaspan to return $20,000 to the bankruptcy estate on grounds that he failed to provide "competent legal services" and that the amount of money was not "reasonable" in the first place (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

    Thelen Trustee Seeks $853,292 From Former Partners As Fraudulent Conveyances

    NEW YORK - The Chapter 7 trustee in the bankruptcy of former law firm Thelen LLP on Aug. 23 filed six adversary complaints against former partners of the firm, seeking to recover a total of $853,292 on grounds that the money belongs to the estate because it constituted fraudulent conveyances (In Re: Thelen LLP, No. 09-15631, Chapter 7, S.D. N.Y. Bkcy.).

    Kodak Seeks OK Of Deal In Which It Would Retain 15 Of 18 Disputed Patents

    NEW YORK - Bankrupt Eastman Kodak Co. on Aug. 26 moved in bankruptcy court for approval of a settlement agreement with Global OLED Technology (GOT) LLC under which Kodak would retain 15 of 18 disputed patents related to Organic Light Emitting Diodes (OLEDs) (In Re: Eastman Kodak Company, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.).

    Detroit, Plaintiff Stipulate To Stay Relief Related To Underlying State Lawsuit

    DETROIT - Attorneys for the bankrupt City of Detroit and a plaintiff who has sued the city under the Michigan Open Meetings Act (OMA) in state court reached a stipulated agreement on Aug. 26 that the automatic stay in the bankruptcy does not apply to the OMA lawsuit (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

    Delaware Court Hears Arguments Over Appointment Of Receiver For Dissolved Company

    WILMINGTON, Del. - The Delaware Supreme Court on Aug. 21 heard oral arguments on whether a judge erred by not appointing a receiver to handle the undistributed insurance proceeds of a dissolved corporation based on asbestos plaintiffs' inability to prevail in actions against it (Anderson v. Krafft-Murphy Co., No. 85,2013, Del. Sup.).

    Detroit Seeks Discovery From Retired Police Officers Group Regarding Benefits

    DETROIT - The bankrupt City of Detroit on Aug. 23 filed interrogatories seeking to obtain discovery from the Retired Detroit Police Members Association (RDPMA) regarding its legal authority and the knowledge it has pertaining to proposals dealing with retirees' health benefits (In Re: City of Detroit, No. 13-53046, Chapter 9, E.D. Mich. Bkcy).

    U.S. Attorney Seeks Injunction Blocking American Airlines Merger 'In Its Entirety'

    NEW YORK - The U.S. attorney for the Southern District of New York on Aug. 23 filed a statement in the Chapter 11 bankruptcy of AMR Corp., the parent company of American Airlines Inc., seeking a permanent injunction blocking "in its entirety" the proposed merger of American Airlines and US Airways Inc. (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

    Detroit: Granting Stay Relief Would Deplete Resources, 'Undermine' City

    DETROIT - The bankrupt City of Detroit on Aug. 22 filed a brief in the U.S. Bankruptcy Court for the Eastern District of Michigan contending that a creditor should not be granted relief from the automatic stay in order to pursue litigation pertaining to a separate, underlying action commenced before the city filed for bankruptcy (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

    Secured Lender Trustee In Dewey & LeBoeuf Case Seeks Recovery Of More Than $3.5M

    NEW YORK - The secured lender trustee in the Chapter 11 bankruptcy of former law firm Dewey & LeBoeuf on Aug. 22 filed six adversary complaints against various former clients of the firm, seeking to recover more than $3.5 million for the bankruptcy estate. The complaint seeking the largest individual recovery is against OfficePower Inc. for more than $2.3 million (FTI Consulting Inc. v. OfficePower Inc. $(In Re: Dewey & LeBoeuf$), Adv. No. 13-01420, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

    Airline Customers: AMR Merger Should Not Be Confirmed While Lawsuits Are Pending

    NEW YORK - A group of individuals who have already sued bankrupt AMR Corp. opposing its proposed merger with US Airways Inc. on antitrust grounds on Aug. 22 filed a brief arguing that the deal should not be confirmed while there is an additional antitrust lawsuit pending by the U.S. Department of Justice (DOJ) (In Re: AMR Corporation, No. 11-015463, Chapter 11, S.D. N.Y. Bkcy.).

    U.S. Trustee: AgFeed Fails To Provide Financial Data Needed To Conduct Asset Sale

    WILMINGTON, Del. - The U.S. trustee in the Chapter 11 bankruptcy of agricultural business AgFeed USA LLC on Aug. 21 filed a brief objecting to the company's motion seeking approval to sell substantially all of its assets on grounds that the company has failed to provide reliable financial data needed to conduct a sale (In Re: AgFeed USA LLC, No. 13-11761, Chapter 11, D. Del. Bkcy.).

    Bankrupt Insurer May Depose Unsecured Creditors Committee On Valuation Issue

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of Excel Maritime Carriers Ltd. on Aug. 20 approved a motion filed by the debtor seeking to depose a group of companies that are members of the Official Committee of Unsecured Creditors (In Re: Excel Maritime Carriers Ltd., No. 13-23060, Chapter 11, S.D. N.Y. Bkcy.).

    7th Circuit Reverses In Part; Constitutional Objection Is Not 'Waivable'

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on Aug. 21 partially reversed and remanded a case involving a Chapter 7 debtor on grounds that a constitutional objection on the basis of the U.S. Supreme Court ruling in Stern v. Marshall (131 S. Ct. 2594 $(2011$)) is not waivable because it involves issues of separation of powers (Wellness International Network Ltd. v. Richard Sharif, No. 12-1349, Chapter 7, 7th Cir.; 2013 U.S. App. LEXIS 17553).

    8th Circuit BAP Reverses; Holding Company Liable To Patriot Coal's Employees

    ST. LOUIS - The U.S. Bankruptcy Appellate Panel (BAP) for the Eighth Circuit on Aug. 21 reversed a bankruptcy court's ruling and held that a holding company that formerly had an employee agreement with bankrupt Patriot Coal Corp. still had liabilities regarding health care provisions for employees (Patriot Coal Corporation v. Peabody Holding Company $(In Re: Patriot Coal Corporation$), No. 13-6031, Chapter 11, 8th Cir. BAP).

    Dynegy Holdings Seeks Approval For $3.5 Million Asset Sale To Helios Power Capital

    NEW YORK - Bankrupt energy company Dynegy Holdings LLC on Aug. 20 moved in the U.S. Bankruptcy Court for the Southern District of New York for approval of a $3.5 million asset purchase agreement (APA) with energy company Helios Power Capital LLC (In Re: Dynegy Holdings LLC, No. 11-38111, Chapter 11, S.D. N.Y. Bkcy.).

    6th Circuit: Creditor Had No Right To Appeal Order Denying Consolidation

    CINCINNATI - A panel of the Sixth Circuit U.S. Court of Appeals on Aug. 20 affirmed a bankruptcy court's decision denying a creditor's motion to consolidate two related bankruptcies on grounds that the order was not final; therefore, it had no right to appeal (Huntington National Bank v. Thomas Richardson $(In Re: Cyberco Holdings Inc.$), No. 10-2537, Chapter 7, 6th Cir.; 2013 U.S. App. LEXIS 17263).

    Casa Casuarina Creditors: RRA Trustee's More Than $4.92M Claim Should Be Rejected

    FORT LAUDERDALE, Fla. - A group of secured creditors in the Chapter 11 bankruptcy of Casa Casuarina LLC, the former mansion of designer Gianni Versace, on Aug. 19 filed a brief objection to a proof of claim of more than $4.92 million filed by the liquidating trustee in the related bankruptcy of the former law firm Rothstein Rosenfeldt Adler (RRA) (In Re: Casa Casuarina LLC, No. 13-25645, Chapter 11, S.D. Fla. Bkcy.).

    Insurers: K-V Discovery's Reorganization Plan Should Not Be Confirmed

    NEW YORK - A group of insurance companies that are creditors in the Chapter 11 bankruptcy of pharmaceutical company K-V Discovery Solutions Inc. on Aug. 19 filed a brief arguing that the company's reorganization plan should not be confirmed because it may jeopardize their claims (In Re: K-V Discovery Solutions Inc., No. 12-13346, Chapter 11, S.D. N.Y. Bkcy.).

    Syncora Guarantee: Detroit Not Entitled To Tap Casino Revenue To Fund Operations

    DETROIT - Syncora Guarantee Inc., the financial guarantee insurance provider, on Aug. 20 filed a brief in the Chapter 9 bankruptcy of the City of Detroit arguing that the city needs to comply with the collateral agreement and is not permitted to terminate an agreement to access casino revenue to fund its operations during the bankruptcy proceeding (In Re: City of Detroit, No. 13-01236, Chapter 9, E.D. Mich. Bkcy.).

    Bankruptcy Judge Denies Specialty Products' Bid To Stay Estimation Ruling

    WILMINGTON, Del. - A Delaware federal bankruptcy judge on Aug. 20 refused a request by Chapter 11 debtors Specialty Products Holding Corp. and Bondex International Inc. to stay a decision establishing the companies' asbestos personal injury liability at more than $1 billion pending the debtors' appeal of the ruling (In re: Specialty Products Holding Corp., et al., No. 10-11780, D. Del. Bkcy.).

    Hostess CFO Says Asset Sale Valued At $64.25 Million Is Valid

    NEW YORK - The chief financial officer (CFO) of bankrupt Old HB Inc., formerly known as Hostess Brands Inc., on Aug. 19 filed a declaration in support of the sale of real estate and equipment assets free and clear of all liens and encumbrances for $64.25 million (In Re: Old HB Inc. f/k/a Hostess Brands Inc., No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).

    Residential Capital Seeks To Settle $8M Claim By Paying $287,740.40 To Loan Agency

    NEW YORK - Bankrupt Residential Capital LLC (ResCap) on Aug. 19 moved for approval of a plan to pay a cure amount of $287,740.40 to settle an $8 million claim against the estate by a loan servicing agency based on assets that were excluded from ResCap's asset purchase agreement in which it sold its loan service platform (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

    Federal Judge Finds Nondischargeability Issue Can Be Heard In State Court

    INDIANAPOLIS - A federal bankruptcy judge on Aug. 16 refused to stay a state court action filed by the purchasers of a home who sought compensation from the bankrupt sellers of the property for mold remediation, finding that the issue of nondischargeability did not have to be heard in a bankruptcy court (In re: Aaron Muir and Stephanie Muir, No. 12-4065, Aaron Muir, et al. v. Matthew McWilliams, et al., Adv. No. 13-50136, S.D. Ind. Bky.; 2013 Bankr. LEXIS 3347).

    Unions: Detroit's Bankruptcy Unconstitutional, Violates Federalism, State Law

    DETROIT - A group of unions on Aug. 19 filed an objection to the Chapter 9 bankruptcy filing of the City of Detroit, contending that the city is not eligible to file for bankruptcy and that the petition itself was unconstitutional (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

    Attorney: MF Global, JPMorgan Deal Should Be Approved To Resolve All Claims

    NEW YORK - An attorney representing bankrupt MF Global Holdings Ltd. (MFGH) on Aug. 16 filed a declaration supporting the plan administrator's motion seeking approval of a settlement between the plan administrator and JPMorgan Chase Bank NA to resolve rival claims between the bank and MFGH (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).