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.).

    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.).

    Bankrupt Capitol Bancorp: Discovery Needed Regarding FDIC's Bank Seizures

    DETROIT - Bankrupt Capitol Bancorp Ltd. on Aug. 2 moved in the U.S. Bankruptcy Court for the Eastern District of Michigan for an order compelling the Federal Deposit Insurance Corp. to produce documents and to submit to examination through deposition testimony regarding allegations that the FDIC used its power to close - or pressured bank regulators to close - certain banks by seizing private property (In Re: Capitol Bancorp Ltd., No. 12-58409, Chapter 11, E.D. Mich. Bkcy.).

    European Union's Competition Commission Conditionally OKs American Airlines Merger

    BRUSSELS, Belgium - The European Commission, a division of the European Union in charge of competition policy, on Aug. 5 announced that it had granted conditional approval to the proposed $11 billion merger between bankrupt American Airlines Inc. and US Airways.

    7th Circuit Reverses; Debtor's Former Wife Not Entitled To Annuity Payments

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on Aug. 2 reversed and remanded a case, holding that the claim made against a bankruptcy estate by the debtor's former wife was incorrectly granted by the bankruptcy court (In Re: Gary E. Peel, No. 13-1547, Chapter 7, 7th Cir.; 2013 U.S. App. LEXIS 16049).

    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.).

    Bankrupt WP Steel, EPA Agree: Agency's Claims Are Valued At More Than $19.88M

    WILMINGTON, Del. - The federal bankruptcy judge presiding over the Chapter 11 proceeding of WP Steel Venture LLC on Aug. 2 approved an agreement under which the environmental claims held by the U.S. Environmental Protection Agency will be allowed against the bankruptcy estate as general unsecured claims valued at more than $19.88 million (In Re: WP Steel Venture LLC, No. 12-11661, Chapter 11, D. Del. Bkcy.).

    Detroit: Tax Appeals Should Be Allowed During Ordinary Course Of Bankruptcy

    DETROIT - The bankrupt City of Detroit on Aug. 2 moved for relief from the automatic stay in order to permit appeals of city property tax assessments, which it claims is appropriate on grounds that the equities weigh in favor of it and because it will cost the city less in the long run (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

    Garlock Bankruptcy Judge Denies News Site's Bid To Open Estimation Proceeding

    CHARLOTTE, N.C. - The "significant" privacy rights of asbestos claimants and their attorneys outweigh the public's interest in certain evidence deemed confidential in the asbestos liability estimation trial for Chapter 11 debtor Garlock Sealing Technologies LLC, a North Carolina federal bankruptcy judge ruled July 31 in denying a bid by a news organization to open the entire estimation proceeding to the public (In re: Garlock Sealing Technologies, LLC, No. 10-31607, W.D. N.C. Bkcy.).

    Massachusetts Federal Judge Dismisses 1 Defendant From Copyright Case

    BOSTON - Allegations that several defendants reproduced, displayed, advertised and distributed a plaintiff's copyrighted works after ousting the plaintiff from their organization will largely proceed, a Massachusetts federal judge ruled July 25 (Smith Vil v. Jacky Poteau, et al., No. 11-11622, D. Mass.).

    9th Circuit Reverses, Remands; Creditor Couple Not Allowed To File Adversary Case

    SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on July 25 vacated and remanded a bankruptcy case, ruling that a creditor couple should not have been permitted to file an adversary complaint objecting to the discharge of the bankruptcy because the couple failed to explain why they were unable to meet the deadline for filing the complaint in the first place (Hank Willms, et al. v. Rowe Sanderson III, No. 12-35135, Chapter 7, 9th Cir.; 2013 U.S. App. LEXIS 15187).

    Bankruptcy Judge Nixes Garlock Appeal Of Pittsburgh Corning's Plan Confirmation

    PITTSBURGH - An appeal of confirmation of Pittsburgh Corning Corp.'s Chapter 11 plan of reorganization by fellow asbestos bankruptcy debtor Garlock Sealing Technologies LLC was rejected July 23 by a Pennsylvania federal bankruptcy judge, who found the appeal to be a "nullity" pending a motion by two insurers to reconsider the plan confirmation (In re: Pittsburgh Corning Corporation, No. 00-22876, W.D. Pa. Bkcy.).

    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.).

    Bankruptcy Judge Stays All Litigation Pending Against City Of Detroit

    DETROIT - The federal bankruptcy judge presiding over the Chapter 9 case of the City of Detroit on July 25 granted the city's request and ordered all lawsuits pending against the city stayed (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

    'Girls Gone Wild' Debtors Owe More Than $1.55M From Underlying Case, Class Says

    LOS ANGELES - A class that won a judgment worth more than $1.55 million against now-bankrupt GGW Brands LLC, the producer of adult videos that carry the name "Girls Gone Wild," on July 24 filed an adversary complaint in bankruptcy court seeking payment of the award, which the class has never been able to collect (Judgment Creditors In 'In Re: Girls Gone Wild Class Action Litigation' v. GGW Brands LLC, et al. $(In Re: GGW Brands LLC, et al.$), No. 13-15130, Adv. No. 13-01746, Chapter 11, C.D. Calif. Bkcy.).

    Detroit Seeks Termination Of Contracts With Lenders To Save $1.45 Billion

    DETROIT - The bankrupt City of Detroit on July 24 moved for bankruptcy court authorization to terminate an agreement with lenders related to what are called swap obligations in an attempt to save $1.45 billion (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

    3rd Circuit Rejects Garlock's Appeal Of Grace's Plan For Lack Of Injury, Standing

    PHILADELPHIA - Chapter 11 debtor Garlock Sealing Technologies Inc. does not have standing to object to fellow debtor W.R. Grace & Co.'s confirmed plan of reorganization because Garlock cannot show that it will be harmed by the plan, the Third Circuit U.S. Court of Appeals held July 24 (In re: W.R. Grace & Co., et al. $(Garlock Sealing Technologies LLC, et al. v. W.R. Grace & Co., et al.$), No. 12-2807, 3rd Cir.).

    Corzine, MF Global Executives: Trustee Fails To State Claim; Bad Faith Not Shown

    NEW YORK - Jon S. Corzine, former CEO of bankrupt MF Global Holdings (MFGH) Ltd., and his co-defendants on July 22 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York arguing that the lawsuit filed against them by the trustee should be dismissed because the complaint fails to state a claim (Louis J. Freeh v. Jon S. Corzine, et al. $(In Re: MF Global Holdings Ltd., Adv. No. 13-01333, No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    Garlock Loses Bid To Unseal Evidence Of Trust Claims, Asbestos Exposures

    CHARLOTTE, N.C. - A North Carolina federal bankruptcy judge on July 23 denied a request by Chapter 11 debtor Garlock Sealing Technologies LLC to make public evidentiary documents that were filed under seal for Garlock's asbestos liability estimation trial, including evidence that Garlock says shows that some claimants lied about their exposures to asbestos products to boost their judgments or settlements against Garlock in the tort system (In re: Garlock Sealing Technologies, LLC, No. 10-31607, W.D. N.C. Bkcy.).