LexisNexis® Legal Newsroom
    Bank Of America Says Its $1.7B Claim In Bankruptcy Case Of Taylor Bean Is Valid

    WASHINGTON, D.C. - Bank of America National Association, the indenture trustee for short-term notes issued by a division of bankrupt mortgage company Taylor Bean Whitaker Mortgage Corp. (TBW), on June 17 filed a brief opposing a motion to dismiss the bank's lawsuit against the Federal Deposit Insurance Corp. (FDIC) and asserting its right to $1.7 billion in funds related to the TBW bankruptcy (Bank of America National Association v. Federal Deposit Insurance Corporation, No. 10-01681, D. D.C.).

    6th Circuit Reverses, Says Debtor's Retirement Savings Not Available To Creditors

    CINCINNATI - A panel of the Sixth Circuit U.S. Court of Appeals on June 17 reversed and remanded a case in which a bankruptcy court had previously ruled that a Chapter 7 debtor could not shield the savings in his individual retirement account (IRA) from creditors. The panel held that there is a statutory presumption in 11 U.S. Code Section 522(b)(4)(A) that the funds are exempt (James L. Daley Jr. v. Ann Reilly Mostoller $(In Re: James L. Daley Jr.$), No. 12-6130, Chapter 7, 6th Cir.; 2013 U.S. App. LEXIS 12138).

    Solyndra Trustee: Reduction, Elimination Of $141,140.46 In Employee Claims Needed

    WILMINGTON, Del. - The trustee of the Solyndra Residual Trust, which was established as part of the Chapter 11 bankruptcy plan for alternative energy company Solyndra LLC, on June 14 filed six briefs objecting to claims asserted by former employees of the company, seeking to reduce or disallow some claims in their entirety. The combined total of reductions and disallowances sought equals $141,140.46 (In Re: Solyndra LLC, No. 11-12799, Chapter 11, D. Del. Bkcy.).

    Battery Maker Exide, With $500M Financing Deal In Place, Files Chapter 11 Petition

    WILMINGTON, Del. - Battery maker Exide Technologies filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on June 10, despite citing debts more than $1.14 billion and assets more than $1.89 billion. The company also says it has lined up $500 million in post-petition financing from JPMorgan Chase Bank (In Re: Exide Technologies, No. 13-11482, Chapter 11, D. Del. Bkcy.).

    Howrey LLP Committee Seeks Examination Of 3 Law Firms Regarding Former Clients

    SAN FRANCISCO - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of former law firm Howrey LLP on June 7 filed three separate, but identical, motions seeking approval to conduct examinations of three law firms pursuant to Federal Rule of Bankruptcy Procedure 2004 (In Re: Howrey LLP, No. 11-31376, Chapter 11, N.D. Calif. Bkcy.).

    Debtor Manufacturer Gets Extension For $8.2 Million DIP Financing

    WILKES-BARRE, Pa. - A Pennsylvania federal bankruptcy judge on June 6 gave Chapter 11 debtor United Gilsonite Laboratories (UGL) another year to have access to an $8.2 million post-petition credit facility after UGL said that while it had not yet drawn any funds on the facility, it needed continued access to the financing while working on a plan of reorganization (In re: United Gilsonite Laboratories, 11-2032, M.D. Pa. Bkcy.).

    SIPA Trustee In MF Global Case Says 'Hard Cap' Needed On Insurance Payments

    NEW YORK - The trustee in the Chapter 11 bankruptcy of MF Global Holdings Ltd. (MFGH) on June 6 said the federal bankruptcy judge presiding over the case should issue a ruling that the recent $10 million increase to the insurance payment limit for the defense costs of directors and officer is a "hard cap" (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    Bankruptcy Judge Approves $275M Stock Purchase Deal For K-V Discovery Solutions

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of pharmaceutical company K-V Discovery Solutions Inc. on June 7 approved a $275 million stock purchase plan that will help the company exit bankruptcy (In Re: K-V Discovery Solutions Inc., No. 12-13346, Chapter 11, S.D. N.Y. Bkcy.).

    9th Circuit: Property Sale Did Not Constitute Fraudulent Transfer

    SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on June 5 affirmed a ruling which held that a court-ordered sale of a debtor's property did not constitute a fraudulent transfer based on the actual value of the property sold (Kenneth Bailey v. Georges Elias, et al. $(In Re: Kenneth Bailey$), No. 10-60031, Chapter 11, 9th Cir.; 2013 U.S. App. LEXIS 11322).

    Employees: Expert May Not Speak On Ethics Issue In San Bernardino Bankruptcy

    RIVERSIDE, Calif. - The California Public Employees' Retirement System (CalPERS) on June 6 filed a brief responding to objections to its motion seeking disqualification of the law firm that it contends switched sides in the Chapter 9 bankruptcy proceedings of the City of San Bernardino, Calif., arguing that the expert opinion provided by Creditor National Public Finance Guarantee Corp. (National) is "inadmissible" (In Re: City of San Bernardino, Calif., No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).

    U.K. Pension Claimants Make 'Unfounded Attacks' Against It, Committee, Nortel Says

    WILMINGTON, Del. - Bankrupt Nortel Networks Inc. and the Official Committee of Unsecured Creditors on June 6 filed a brief in the U.S. Bankruptcy Court for the District of Delaware, arguing that the U.K. pension claimants in Nortel's Chapter 11 bankruptcy "unfortunately have chosen to make unfounded attacks against" Nortel (In Re: Nortel Networks Inc., No. 09-10138, Chapter 11, D. Del. Bkcy.).

    5th Circuit: Wren Alexander Owes $173M In Taxes It Inherited Prior To Bankruptcy

    NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on June 4 affirmed a lower court's decision that held that a debtor company was liable for $173 million IRS tax lien despite that fact that the lien was originally levied against the previous owner of a property the debtor purchased prior to bankruptcy (Wren Alexander Investments LLC v. Internal Revenue Service $(In Re: Wren Alexander Investments LLC$), No. 12-50376, Chapter 11, 5th Cir.; 2013 U.S. App. LEXIS 11315).

    MFGI Customers: Insurance Payments For MFGH Officers Should Be Fixed At $40M

    NEW YORK - A group calling itself the customer representatives in an ongoing class action against former directors and officers of MF Global Inc. (MFGI), an affiliate of bankrupt MF Global Holdings Ltd. (MFGH), on June 6 filed a brief arguing that the cap on what insurers can pay defendants to cover defense costs should be set at a "hard cap" limit of $40 million (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    AMR Reorganization Plan Would Issue Stock In New Company To Satisfy Some Claims

    NEW YORK - Bankrupt AMR Corp., the parent company of American Airlines Inc., on June 5 filed a declaration supporting its amended Chapter 11 reorganization plan that calls for the full satisfaction of general unsecured guaranteed claims by issuing new common stock in the company formed by the merger of American Airlines with US Airways Inc. (In Re: AMR Corp., No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

    Federal Agency: U.S. Bank Improperly Used Funds Of Bankrupt Peregrine Financial

    CEDAR RAPIDS, Iowa - The U.S. Commodities Futures Trading Commission (CFTC) sued U.S. Bank NA in the U.S. District Court for the Northern District of Iowa on June 5, seeking damages and restitution for money it says the bank improperly held in connection with the commodities violations and subsequent bankruptcy filing of Peregrine Financial Group Inc. (Commodity Futures Trading Commission v. U.S. Bank NA, No. 13-02041, N.D. Iowa).

    Sly And The Family Stone's Music Production Company Files For Bankruptcy

    LOS ANGELES - The former manager of musician Sly Stone, the frontman for Rock and Roll Hall of Fame inductees Sly and the Family Stone, on June 4 put Stone's production company into Chapter 11 bankruptcy, citing assets between $1 million and $10 million, as well as debts in that same range of value (In Re: Even St. Productions Ltd., No. 13-24363, Chapter 11, C.D. Calif. Bkcy.).

    San Bernardino Says It Has Complied With Eligibility Requirements For Bankruptcy

    RIVERSIDE, Calif. - The City of San Bernardino, Calif., on June 4 said it is eligible for Chapter 9 bankruptcy protection, despite objections from the California Public Employees Retirement System (CalPERS), because the city has complied with California Government Code Section 53760.5 (In Re: City of San Bernardino, Calif., No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).

    CalPERS: San Bernardino Fails To Meet Burden Of Eligibility For Bankruptcy

    RIVERSIDE, Calif. - The California Public Employees' Retirement System (CalPERS) on June 3 filed a status report in the Chapter 9 bankruptcy of the City of San Bernardino, Calif., in which it claims that "it appears that the bankruptcy case was filed improperly for the purpose of delay" (In Re: City of San Bernardino, Calif., No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).

    4th Circuit: Debtor Owes Damages For Fraud Based On Breach Of Business Contract

    RICHMOND, Va. - A panel of the Fourth Circuit U.S. Court of Appeals on June 4 ruled that damages awarded as the result of fraud in a business arrangement were not dischargeable in the personal bankruptcy of man who held a 50 percent stake in the company that committed the fraud (SG Homes Associates LP v. Michael J. Marinucci, No. 12-1621, Chapter 11, 4th Cir.; 2013 U.S. App. LEXIS 11176).

    Bankruptcy Judge Rejects Barclays' Fee Enhancement For Work On ASARCO Case

    CORPUS CHRISTI, Texas - Barclays Capital Inc. was adequately compensated for the 14 months of financial advisory services it provided in ASARCO LLC's bankruptcy case and is not entitled to a fee enhancement because Barclays should have anticipated the complicated developments in the case when it was hired, a Texas federal bankruptcy judge held May 30 in taking away a previously approved $975,000 fee enhancement award on remand (In re: ASARCO LLC, et al., No. 05-21207, S.D. Texas Bkcy.).

    'Girls Gone Wild' Founder: Appeal Must Not Be Heard By Bankruptcy Appellate Panel

    LOS ANGELES - Joseph Francis, the founder of bankrupt GGW Brands LLC, the parent company of the maker of adult videos carrying the name "Girls Gone Wild," on June 3 filed a statement that the appeal of the order that authorized the trustee to file a voluntary Chapter 11 petition for GGW Marketing LLC should be heard in the district court because he does not consent to the jurisdiction of the U.S. Bankruptcy Appellate Panel (BAP) for the Central District of California (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

    2nd Circuit: Allegations Of Fraudulent Conveyance Belong To Bankruptcy Trustee

    NEW YORK - The Second Circuit U.S. Court of Appeals on June 3 affirmed a district court's ruling determining that allegations of fraudulent conveyances by directors of a bankrupt company were the property of the bankruptcy trustee, not individual investors in the debtor company (D. Kent Sissel, et al. v. Maxine Eimicke, et al., No.12-952, Chapter 11, 2nd Cir.; 2013 U.S. App. LEXIS 11059).

    MF Global, Bank Of America Agree That $4M Claim Is Allowed

    NEW YORK - Bankrupt MF Global Holdings Ltd.(MFGH) and Bank of America on May 31 stipulated to an agreement in a federal bankruptcy court in New York in which the bank will be allowed to make an unsecured claim for $4 million against MFGH (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    Meningitis Outbreak MDL Judge Centralizes Most Injury Cases In Bankruptcy Court

    BOSTON - All federal and state personal injury and wrongful death lawsuits against New England Compounding Pharmacy and related entities and persons on May 31 were ordered transferred into a federal bankruptcy court, but state court cases that don't name the bankrupt defendant can stay where they are for now (In Re: New England Compounding Pharmacy, Inc., Products Liability Litigation, MDL Docket No. 2419, No. 1:13-md-2419, D. Mass.).

    Lender Says It Has Standing To Oppose Rothstein Trustee's Deal On Versace Mansion

    FORT LAUDERDALE, Fla. - The lender that holds a $25 million first mortgage on the former mansion of designer Gianni Versace on May 30 filed a brief arguing that it has standing to object to the agreement entered into by the trustee in the Chapter 11 bankruptcy of Rothstein Rosenfeldt Adler (RRA) regarding the sale of the property (In Re: Rothstein Rosenfeldt Adler, No. 09-34791, Chapter 11, S.D. Fla. Bkcy.).