LexisNexis® Legal Newsroom
    NMP Group LLC Files Chapter 11 Bankruptcy To Avoid Loss Of Property At Auction

    NEW YORK - Real estate company NMP Group LLC on July 10 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York to avoid having its property sold at auction following foreclosure proceedings (In Re: NMP Group LLC, No 13-12269, Chapter 11, S.D. N.Y. Bkcy.).

    Bankrupt Hardware Company Objects To Damages Claim Of More Than $17.55M

    WILMINGTON, Del. - Bankrupt Handy Hardware Wholesale Inc. on July 8 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to an additional claim filed by Trans Power Corp. for more than $17.55 million in damages (In Re: Handy Hardware Wholesale Inc., No. 13-10060, Chapter 11, D. Del. Bkcy.).

    Bankrupt Versace Mansion Seeks Court's OK To Sell Property

    FORT LAUDERDALE, Fla. - Casa Casuarina LLC, the former mansion of designer Gianni Versace that is the subject of a dispute in the Chapter 11 bankruptcy of the former law firm Rothstein Rosenfeldt Adler (RRA), on July 10 moved in bankruptcy court for permission to sell the property as part of its own Chapter 11 proceeding (In Re: Casa Casuarina LLC, No. 13-25645, Chapter 11, S.D. Fla. Bkcy.).

    Stockton, Calif., Taxpayers Want Official Committee Status In Bankruptcy Case

    SACRAMENTO, Calif. - A group representing the interests of taxpayers in the Chapter 9 bankruptcy of Stockton, Calif., on July 8 filed a brief arguing that the U.S. trustee should appoint an official taxpayers committee to give it a voice on the city's proposal to increase taxes as part of its plan to exit bankruptcy (In Re: Stockton, Calif., No.12-32118, Chapter 9, E.D. Calif. Bkcy.).

    Hostess Seeks To File Property Value Information Under Seal As It Sells Assets

    NEW YORK - Bankrupt Old HB Inc., formerly known as Hostess Brands Inc., on July 3 moved in bankruptcy court for permission to file under seal proprietary information pertaining to the valuation of real property the company seeks to sell as it unloads various assets (In Re: Old HB Inc. f/k/a Hostess Brands Inc., No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).

    Investors In KV Pharmaceutical Bankruptcy Say Their Debt Should Be Given Priority

    NEW YORK - A group of investors known as the Ad Hoc Senior Noteholders Group on July 3 filed an adversary complaint in the Chapter 11 bankruptcy of pharmaceutical company KV Discovery Solutions, seeking a declaration that the convertible notes are subordinated under the Convertible Notes Indenture to interest that has accrued on the Senior Notes (Silver Point Finance LLC, et al. v. Deutsche Bank Trust Company Americas $(In Re: KV Discovery Solutions Inc.$), No. 12-13346, Chapter 11, S.D. N.Y. Bkcy.).

    7th Circuit: Debtor Must Pay Tax Liens; Bankruptcy Code Wording 'Straightforward'

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on July 8 affirmed a bankruptcy court ruling and determined that a debtor was liable for all the tax liens filed against him by the IRS, and it held that the language of the Bankruptcy Code was "straightforward" on the matter (Patrick J. Ryan v. United States of America $(In Re: Patrick J. Ryan$), No. 12-3398, Chapter 13, 7th Cir.; U.S. App. LEXIS 13710).

    Bankruptcy Judge Remands Insolvent Insurer's Receiver's Fraudulent Transfer Claim

    LINCOLN, Neb. - A federal bankruptcy judge in Nebraska on July 3 remanded a lawsuit filed by an insolvent insurer's receiver against the estate of a former insurance agency regarding conversion of unremitted premiums and fraudulent transfers of assets (In the matter of: Diederike Marlene Fulkerson; State of Florida, ex rel. Florida Department of Insurance, receiver for United Southern Assurance Co. v. Diederike Marlene Fulkerson, No. BK12-41750-TLS & A12-4081-TLS, Chapter 7, D. Neb. Bkcy.; 2013 Bankr. LEXIS 2697).

    9th Circuit Partially Remands Debtor's Loan Case, Says Federal Law Violated

    SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on July 3 partially affirmed, partially reversed and remanded a district court ruling, determining that a debtor couple demonstrated that its lender had violated federal lending laws when it failed to honor the loan modification agreement the parties had agreed to during their bankruptcy (John Schlegel v. Wells Fargo Bank NA $(in re: John Schlegel$), No. 11-16816, Chapter 11, 9th Cir.; 2013 U.S. App. LEXIS 13595).

    Dewey & LeBoeuf Liquidating Trustee Objects To Claim Of More Than $6.62 Million

    NEW YORK - The liquidating trustee in the Chapter 11 bankruptcy of former law firm Dewey & LeBoeuf on July 5 filed a brief objecting to a claim valued at $6,626,777 filed by Gallagher Fiduciary Advisors LLC (GFA) on grounds that the claim was already waived by the firm's former partners (In Re: Dewey & LeBoeuf, No. 12-12321. Chapter 11, S.D. N.Y. Bkcy.).

    Rothstein Trustee: Victims Of Ponzi Scheme Are Trying To 'Derail Confirmation'

    FORT LAUDERDALE, Fla. - The trustee in the Chapter 11 bankruptcy of former law firm Rothstein Rosenfeldt Adler (RRA) on July 7 moved in bankruptcy court to strike down an emergency motion filed by victims of the Ponzi scheme run by former RRA partner Scott Rothstein. The trustee argues that the victims' motion is an attempt to "derail the confirmation process" (In Re: Rothstein Rosenfeldt Adler, No. 09-34791, Chapter 11, S.D. Fla. Bkcy.).

    11th Circuit: Debtor's Appeal Dismissed For 'Indifference' And 'Dilatory Conduct'

    ATLANTA - A panel of the 11th Circuit U.S. Court of Appeals on July 2 ruled that a debtor's refusal to comply with bankruptcy court orders, as well as his failure to prosecute his appeal at the district court level, demonstrated "indifference;" therefore, his appeal was properly dismissed (Walter Jesse Lawrence Jr. v. Educational Credit Management Corporation, No. 12-16032, Chapter 7, 11th Cir.; 2013 U.S. App. LEXIS 13510).

    Bankruptcy Judge To Reconsider $33.5M Funding Ruling For Bankrupt Allied Systems

    WILMINGTON, Del. - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of Allied Systems Holdings Inc. on July 2 granted a motion to reconsider the ruling that approved replacement debtor-in-possession (DIP) financing of $33.5 million. Lenders had argued that Allied failed to provide adequate protection for the holders of first- and second-lien post-petition debt (In Re: Allied Systems Holdings Inc., No. 12-11564, Chapter 11, D. Del. Bkcy.).

    9th Circuit: Creditors May Challenge Dischargeability Because Of Firm Deadline

    SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on July 2 ruled that the former employees of a company that went bankrupt could not challenge the dischargeability of certain debts, even though they may have involved fraud, because federal bankruptcy rules do not permit late filings for such challenges (Amina Anwar, et al. v. D. Lee Johnson, et al., No. 11-16612, Chapter 7, 9th Cir.; 2013 U.S. App. LEXIS 13492).

    Split 4th Circuit: Social Security Income Valid In Chapter 13 Plan Feasibility

    RICHMOND, Va. - A split panel of the Fourth Circuit U.S. Court of Appeals on July 1 reversed and remanded a case, ruling that a bankruptcy court must consider a debtor's Social Security income when determining the feasibility of his Chapter 13 payment plan (Robert D. Mort Ranta v. Thomas Patrick Gorman, No. 12-2017, Chapter 13, 4th Cir.; 2013 U.S. App. LEXIS 13426).

    Casa Casuarina, Former Versace Estate Tied To Rothstein Case, Files For Bankruptcy

    FORT LAUDERDALE, Fla. - Casa Casuarina LLC, the former mansion of designer Gianni Versace from which the trustee in the separate Chapter 11 bankruptcy of the former law firm of Rothstein Rosenfeldt Adler (RRA) sought to recover what he said were fraudulent transfers, on July 1 filed for Chapter 11 bankruptcy. VM South Beach LLC, which is not a creditor in RRA's bankruptcy, says it holds a valid and perfected first mortgage on Casa Casuarina and moved immediately for appointment of a Chapter 11 trustee (In Re: Casa Casuarina LLC, No. 13-25645, Chapter 11, S.D. Fla. Bkcy.).

    9th Circuit: Bankruptcy Judge Did Not Err In Hearing Marshall Chapter 11 Case

    SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on June 28 ruled that a bankruptcy judge who refused to recuse himself from a bankruptcy proceeding did not abuse his discretion when he presided over both the bankruptcy of Vickie Lynn Marshall, also known as Anna Nicole Smith, and that of another potential heir to the estate of J. Howard Marshall II, his son J. Howard Marshall III (Elaine T. Marshall v. J. Howard Marshall III $(In the Matter Of: J. Howard Marshall III$), No. 09-55573, Chapter 11, 9th Cir.; 2013 U.S. App. LEXIS 13398).

    Jefferson County, Ala., Plan Calls For JPMorgan Chase To Cut Claims To $1.9B

    BIRMINGHAM, Ala. - Bankrupt Jefferson County, Ala., on June 30 filed is Chapter 9 plan in the U.S. Bankruptcy Court for the Northern District of Alabama in which JPMorgan Chase Bank would agree to reduce its $3.2 billion in claims to $1.9 billion in order for the county to emerge from bankruptcy (In Re: Jefferson County, Ala., No. 11-5736, Chapter 9, N.D. Ala. Bkcy.).

    7th Circuit: Illinois Law Bars State's Recovery Of Debtor's Tax Payments

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on June 28 ruled that tax credits sought by the State of Illinois from a now-bankrupt company were not available based on amendments to the state's public utilities law (State of Illinois v. Chiplease Inc. $(In Re: Resource Technology Corp.$), No. 11-1633, Chapter 7, 7th Cir.; 2013 U.S. App. LEXIS 13271).

    8th Circuit: No Violation In Decision Forcing Debtors' Home To Be Vacated

    ST. LOUIS - A panel of the Eighth Circuit U.S. Court of Appeals on June 28 ruled that the City of St. Paul, Minn., and U.S. marshals did not violate a man's constitutional rights when they forced him to vacate a property in which a bankruptcy court had determined he could no longer live based on a long-standing ownership dispute in two bankruptcies that had been filed by his parents (Andrew Will Alexander v. John A. Hedback, No. 12-2834, Chapter 11, 8th Cir.; 2013 U.S. App. LEXIS 13302).

    Split 8th Circuit Upholds Damages Award To Debtor Couple; Stay Violated

    ST. LOUIS - A split panel of the Eighth Circuit U.S. Court of Appeals on June 27 upheld a sanctions award for a debtor couple who contended that a company that bid on their house at auction had violated the automatic stay in moving for the auction in the first place (Richard P. Garden v. Central Nebraska Housing Corp., No. 12-2344, Chapter 7, 8th Cir.; 2013 U.S. App. LEXIS 13200).

    Ponzi Scheme Victims' Motion To Compel In Rothstein Case 'Prejudicial,' Bank Says

    FORT LAUDERDALE, Fla. - TD Bank NA, a creditor in the Chapter 11 bankruptcy of law firm Rothstein Rosenfeldt Adler (RRA), on June 27 moved in bankruptcy court for an order that would deny a motion to compel filed by other creditors that were victims of the Ponzi scheme run by Scott Rothstein, on grounds the bank should not be forced to answer the interrogatories posed by the Ponzi scheme victims (In Re: Rothstein Rosenfeldt Adler, No. 09-34791, Chapter 11, S.D. Fla. Bkcy.).

    Bankruptcy Judge: Deal Makes Reorganization Plan Possible For Residential Capital

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of Residential Capital LLC (ResCap) on June 27 approved a plan supplement agreement (PSA) without which he said the case would "return to square one" (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

    Federal Regulators: Corzine Misused Funds, 'Responsible' For MF Global's Collapse

    NEW YORK - The U.S. Commodities Futures Trading Commission (CFTC) on June 27 filed a civil complaint in the U.S. District Court for the Southern District of New York alleging that Jon S. Corzine, as CEO of bankrupt MF Global Holdings Ltd. (MFGH), is legally responsible for MFGH's misuse of $952 million in customer money that was invested with the firm. The complaint also names MFGH's assistant treasurer Edith O'Brien as a defendant (U.S. Commodities Futures Trading Commission v. MF Global Inc., et al., No. 13-4463, S.D. N.Y.).

    State Of Michigan: THQ Plan Of Liquidation Violates Tax Law, Should Be Denied

    WILMINGTON, Del. - The Department of the Treasury for the State of Michigan (DOT) on June 27 filed a brief in the bankruptcy of video game maker THQ Inc., arguing that its plan of liquidation violates the federal Tax Injunction Act, 28 U.S. Code Section 1341, and therefore should be denied (In Re: THQ Inc., No. 12-13398, Chapter 11, D. Del. Bkcy.).