LexisNexis® Legal Newsroom
    9th Circuit: Debtor's Actions 'Egregious'; Dismissal Proper For Abuse Of Process

    SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on Aug. 15 affirmed a bankruptcy court's ruling that a Chapter 13 debtor's case was dismissed because she abused the process by repeatedly filing petitions and not completing the plans and used the bankruptcy process in an attempt to foil the foreclosure on her property (In Re: Bernice Carol Glover, No. 11-60033, Chapter 13, 9th Cir.; 2013 U.S. App. LEXIS 16950).

    CFTC: U.S. Bank Is Liable For Fraud That Led To Peregrine Financial Bankruptcy

    CEDAR RAPIDS, Iowa - The U.S. Commodity Futures Trading Commission (CFTC) on Aug. 15 filed a brief in the U.S. District Court for the Northern District of Iowa contending that U.S. Bank National Association is directly liable for the Ponzi scheme operated by Russell Wasendorf Sr., the former chief executive officer of bankrupt Peregrine Financial Group Inc. (CFTC v. U.S. Bank NA, No. 13-02041, Chapter 7, N.D. Iowa).

    'Girls Gone Wild' Creditor: Wynn Settlement Will 'Massively Dilute' Her Award

    LOS ANGELES - A creditor in the Chapter 11 bankruptcy of GGW Brands LLC, the parent company of a group of entities that produce adult videos carrying the name "Girls Gone Wild," on Aug. 15 filed a brief and a statement of issues on appeal, contending that the bankruptcy court erred when it approved GGW's more than $26.64 million settlement with the casino Wynn Las Vegas LLC and its operator Stephen A. Wynn (collectively, the Wynn entities) (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

    11th Circuit Reverses; Tax Refunds Not Part Of Bankruptcy Estate

    ATLANTA - A panel of the 11th Circuit U.S. Court of Appeals on Aug. 15 reversed a bankruptcy court's ruling that more than $48.11 million in tax refunds were part of the bankruptcy estate for a bank that had become insolvent and held that the money had to be turned over to the Federal Deposit Insurance Corp. for distribution to the debtor's subsidiary corporations (Clifford A. Zucker v. FDIC $(In Re: BankUnited Financial Corporation$), No. 12-11392, Chapter 11, 11th Cir.; 2013 U.S. App. LEXIS 16896).

    3rd Circuit: Workers Entitled To More Than $14.76M From Railroad Merger Agreement

    PHILADELPHIA - A panel of the Third Circuit U.S. Court of Appeals on Aug. 14 affirmed an award of $14,761,238 to a group of former railroad employees who said they were owed benefits as a result of an agreement that they entered with the Pennsylvania Railroad Co. prior to the merger that created the Penn Central Transportation Co. (PCTC) (In The Matter of: Penn Central Transportation Company, No. 12-3807, Chapter 11, 3rd Cir.).

    Kodak Creditor Says Its Claim Of More Than $250.61M Stands

    NEW YORK - STWB Inc., a creditor in the Chapter 11 bankruptcy of Eastman Kodak Co., on Aug. 14 filed a brief arguing that bankruptcy court's decision to allow STWB's claim against Kodak's estate of $125 million for the purposes of voting on the plan of reorganization is not an actual estimation of the claim's value, which STWB says is greater than $250.61 million (In Re: Eastman Kodak Company, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.).

    5th Circuit Rules Debtor's Appeal 'Frivolous,' Says Case Lacked Merit

    NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on Aug. 13 dismissed a debtor's appeal as "frivolous" on grounds that her case lacked merit because it was filed in an attempt to avoid foreclosure on her home (Audrey Coleman v. Roy Williams Jr., No. 13-10165, Chapter 13, 5th Cir.; 2013 U.S. App. LEXIS 16763).

    U.S. Trustee: Kodak's Plan Of Reorganization Does Not Meet Statutory Requirements

    NEW YORK - The U.S. trustee in the Chapter 11 bankruptcy of the Eastman Kodak Co. on Aug. 13 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to confirmation of the company's Chapter 11 plan on grounds that Kodak has failed to show that the plan meets the statutory requirements of 11 U.S. Code Section 1129 (In Re: Eastman Kodak Company, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.).

    3rd Circuit: Family's Claim Against Debtor Company Preempted By Federal Law

    PHILADELPHIA - A panel of the Third Circuit U.S. Court of Appeals on Aug. 13 reversed and remanded a bankruptcy court's ruling and held that a family that sued a debtor company for wrongful death was not entitled to file a claim in the bankruptcy proceeding because it was preempted by the Hazardous Materials Transportation Act (HMTA), 49 U.S. Code Section 5101 (Kenneth Elder Sr. v. Amtrol Holdings Inc. $(In Re: Amtrol Holdings Inc.$), No. 10-3273, 3rd Cir.; 2013 U.S. App. LEXIS 16703).

    Detroit Bankruptcy Judge Appoints Mediator For 'Facilitative Mediation'

    DETROIT - The federal bankruptcy judge presiding over the Chapter 9 bankruptcy of the City of Detroit on Aug. 13 issued an order appointing a mediator for various issues that require "facilitative mediation" (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

    U.S. Government, 6 States Seek Injunction Blocking Merger Of American, US Airways

    WASHINGTON, D.C. - The U.S. Department of Justice on Aug. 13 filed a lawsuit against US Airways Group Inc. and AMR Corp., the parent company of American Airlines Inc., seeking a full injunction to prevent the proposed merger of the two airlines on grounds that it violates federal antitrust law and that "consumers will get the shaft" (United States of America, et al. v. US Airways Group, et al., No. 13-01236, D. D.C.).

    Federal Judge: Debtor's Loan Appeal Lacks Merit; Right To Trial Still Stands

    PHILADELPHIA - A federal judge in Pennsylvania on Aug. 7 ruled that a debtor's appeal regarding the dischargeability of his medical student loans lacked merit and said that nothing deprived him of a right to a jury trial (D. Erik Von Kiel v. Department of Health and Human Services $(In Re: D. Erik Von Kiel$), No. 12-4345, Chapter 7, E.D. Pa.).

    Bankruptcy Judge: Resort's Claims Against 'Girls Gone Wild' Just More Than $26.64M

    LOS ANGELES - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of GGW Brands LLC, the parent company of the company that produces the "Girls Gone Wild" series of adult videos, on Aug. 9 approved a settlement between GGW and the Las Vegas resort Wynn Las Vegas LLC in which the resort will be allowed to file claims against the bankruptcy estate for more than $26.64 million (In Re: GGW Brands LLC, No. 1301513, Chapter 11, C.D. Calif. Bkcy.).

    Dewey & LeBoeuf Trustee Seeks More Than $4.81M In Fraudulent Transfers

    NEW YORK - The liquidating trustee in the Chapter 11 bankruptcy proceeding of former law firm Dewey & LeBoeuf on Aug. 9 filed 12 adversary actions in the U.S. Bankruptcy Court for the Southern District of New York seeking to recover a total of $4,815,806.66 in what the trustee says are fraudulent transfers. The complaints all follow the same boilerplate (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

    3rd Circuit: Debtor's Case Against Trustee 'Frivolous'; Sanctions Award Upheld

    PHILADELPHIA - A panel of the Third Circuit U.S. Court of Appeals on Aug. 8 affirmed a bankruptcy court's award of sanctions to a trustee and dismissed a debtor's lawsuit against him on the ground that it was frivolous (In Re: Syed M. Hussain, No. 13-1278, Chapter 7, 3rd Cir.; 2013 U.S. App. LEXIS 16412).

    7th Circuit: $34M Claim By Bank Of America Against Debtor Company Denied

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on Aug. 8 affirmed a district court's ruling that dismissed Bank of America's $34 million complaint against a debtor company on grounds its complaint lacked specific allegations (Bank of America v. James A. Knight, No. 12-2698, Chapter 13, 7th Cir.; 2013 U.S. App. LEXIS 16474).

    3rd Circuit: Lender Entitled To $10M Belonging To Debtor's Subsidiary

    PHILADELPHIA - A panel of the Third Circuit U.S. Court of Appeals on Aug. 8 affirmed a bankruptcy court and ruled that a lender was entitled to recover a bank account worth $10 million that belonged to the wholly owned subsidiary of the debtor corporation (Wachovia Bank National Association v. WL Homes LLC $(In Re: WL Homes LLC$), No. 12-3414, Chapter 7, 3rd Cir.; 2013 U.S. App. LEXIS 16440).

    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.).

    U.S. Bank Seeks Dismissal Of CFTC Case Related To Peregrine Financial Ponzi Scheme

    CEDAR RAPIDS, Iowa - U.S. Bank National Association on Aug. 5 moved to dismiss a lawsuit filed against it by the U.S. Commodities Futures Trading Commission (CFTC) related to the Chapter 11 bankruptcy of Peregrine Financial Group, arguing that the CFTC's complaint improperly seeks to shift blame to the bank for the Ponzi scheme operated by Peregrine's CEO Russell Wasendorf Sr. (Commodity Futures Trading Commission v. U.S. Bank NA, No. 13-02041, N.D. Iowa).

    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.).

    U.S. Trustee: Highway Technologies Settlement Not 'Fair And Reasonable'

    WILMINGTON, Del. - The U.S. trustee in the Chapter 11 bankruptcy of Highway Technologies Inc. on Aug. 2 filed a brief objecting to a motion filed by the Official Committee of Unsecured Creditors in which it sought approval of a settlement agreement among the committee, the prepetition agent, various lenders and the equity sponsors, contending that it did not comply with the Bankruptcy Code (In Re: Highway Technologies Inc., No. 13-11326, Chapter 11, D. Del. Bkcy.).

    CalPERS Disputes Bankruptcy Eligibility For City Of San Bernardino, Calif.

    RIVERSIDE, Calif. - The California Public Employees' Retirement System (CalPERS), a creditor in the Chapter 9 bankruptcy of the City of San Bernardino, Calif., on Aug. 2 filed a brief arguing that the city has not shown that it is eligible to file for bankruptcy (In Re: City of San Bernardino, Calif., No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).