LexisNexis® Legal Newsroom
    2nd Circuit Reverses; Creditor May Set Off Judgment She Owes Against Claim

    NEW YORK - A panel of the Second Circuit U.S. Court of Appeals on May 28 reversed and remanded a bankruptcy court's ruling and determined that a creditor was entitled to have a $226,000 judgment she owes set off by her claim against the debtor's bankruptcy estate (Sally Ogden v. Ronald Ian Chorches $(In Re: Bolin & Co. LLC$), No. 12-1310, Chapter 7, 2nd Cir.; 2013 U.S. App. LEXIS 10614).

    Creditor: Bankruptcy Court Should Deny Cash Collateral For Bankrupt Laser Company

    FORT WORTH, Texas - A creditor of Primcogent Solutions LLC, a distributor of a non-invasive body contouring laser, on May 27 filed a brief in the U.S. Bankruptcy Court for the Northern District of Texas objecting to Primcogent's motion seeking cash collateral on grounds that the money should not be approved because the company is litigating a contract dispute with the supplier that makes Primcogent's business operation possible in the first place (In Re: Primcogent Solutions LLC, No. 13-42368, Chapter 11, N.D. Texas Bkcy.).

    Tribune: Claims Not Valid; $20M Related To Underlying Newspaper Case Has Expired

    WILMINGTON, Del. - The reorganized version of The Tribune Co. on May 24 filed a series of briefs objecting to assorted claims against the bankruptcy estate, most notably arguing that a $20 million claim asserted by the estate of Parren Mitchell, a former Maryland congressman, had expired (In Re: Tribune Company, No. 08-13141, Chapter 11, D. Del. Bkcy.).

    U.S. Trustee: AMR Disclosure Statement Violates Bankruptcy Code, Should Be Denied

    NEW YORK - The U.S. trustee in the Chapter 11 bankruptcy of AMR Corp., the parent company of American Airlines Inc., on May 24 filed a brief objecting to the company's motion seeking approval of its disclosure statement on grounds that it violates the Bankruptcy Code (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

    'Girls Gone Wild' Trustee Says Founder Cannot Stop Marketing Arm's Bankruptcy Case

    LOS ANGELES - The trustee in the Chapter 11 bankruptcy of GGW Brands LLC, the company that makes adult videos carrying the name "Girls Gone Wild," on May 23 filed a brief contending that GGW's founder cannot seek a stay of the bankruptcy court order authorizing him to force GGW Marketing LLC - an affiliate of GGW Brands - to file for Chapter 11 bankruptcy (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

    Marketing Arm Of Bankrupt 'Girls Gone Wild' Video Maker Forced Into Chapter 11

    LOS ANGELES - The proposed counsel for GGW Marketing LLC, an affiliate of GGW Brands LLC - the maker of adult videos carrying the title "Girls Gone Wild" - on May 22 moved in the U.S. Bankruptcy Court for the Central District of California seeking to have its Chapter 11 case consolidated with that of GGW Brands after the trustee succeeded in forcing GGW Marketing to file for bankruptcy (In Re: GGW Marketing LLC, No. 13-23452, Chapter 11, C.D. Calif. Bkcy.).

    China Natural Gas Inc. Wants Involuntary Chapter 11 Case Dismissed, Seeks Damages

    NEW YORK - China Natural Gas Inc.(CNG) on May 22 moved in the U.S. Bankruptcy Court for the Southern District of New York for dismissal of an involuntary Chapter 11 bankruptcy petition filed by a member of the company's board of directors and a group of creditors on grounds that it was improperly filed (In Re: China Natural Gas Inc., No. 13-10419, Chapter 11, S.D. N.Y. Bkcy.).

    ResCap Seeks $2.1B Deal With Ally Financial To End Dispute, Speed Chapter 11 Exit

    NEW YORK - Bankrupt Residential Capital LLC on May 23 moved in the U.S. Bankruptcy Court for the Southern District of New York for authorization to enter into a settlement agreement with Ally Financial Inc. under which Ally would pay an additional $1.35 billion, for a total of $2.1 billion, to settle claims ResCap had against Ally (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

    9th Circuit: Student Loan Debt Discharge Proper; Debtor Acted In Good Faith

    SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on May 22 reversed a district court and held that a bankruptcy court's decision that a debtor was entitled to discharge of his student loan debt was proper (Michael Eric Hedlund v. The Educational Resources Institute Inc., No. 12-35258, Chapter 7, 9th Cir.; 2013 U.S. App. LEXIS 10294).

    Elpida Foreign Representatives Seek OK Of Micron's 200B Yen Reorganization Offer

    WILMINGTON, Del. - The foreign representatives of bankrupt computer chip maker Elpida Memory Inc. on May 22 moved in the U.S. Bankruptcy Court for the District of Delaware for an order enforcing Micron Technology Inc.'s 200 billion yen Japanese reorganization plan for the company (In Re: Elpida Memory Inc., No. 12-10947, Chapter 15, D. Del. Bkcy.).

    3rd Circuit: Debtor's Change In Tax Status Not Property; Transfer Not Fraudulent

    PHILADELPHIA - A panel of the Third Circuit U.S. Court of Appeals on May 21 vacated and remanded a ruling that a debtor could not treat its parent company's change in corporate tax status, which changed the debtor's tax obligation, as a fraudulent transfer (The Majestic Star LLC v. Barden Development Inc., et al. $(In Re: The Majestic Star Casinio LLC$), No. 12-3201, Chapter 11, 3rd Cir.; 2013 U.S. App. LEXIS 10186).

    Nonprofit KidsPeace Corp. Files For Chapter 11, Citing $100M In Pension Plan Debt

    PHILADELPHIA - KidsPeace Corp., a nonprofit that operates a 96-bed psychiatric hospital and provides what it calls "acute behavioral healthcare" to children and young adults, among other services, on May 22 filed for Chapter 11 bankruptcy, citing debt of $100 million related to its pension plan alone (In Re: KidsPeace, No. 13-14509, E.D. Pa. Bkcy.).

    Bankruptcy Judge Approves $9.5M In DIP Funding For Oreck Corp.

    NASHVILLE, Tenn. - The federal bankruptcy judge in the Chapter 11 case of Oreck Corp. on May 21 approved $9.5 million in post-petition financing, also called debtor-in-possession (DIP) financing (In Re: Oreck Corporation, No. 13-04006, Chapter 11, M.D. Tenn. Bkcy.).

    In Demand LLC Sues Trustee, Subsidiary In Bankruptcy Of 'Girls Gone Wild'

    LOS ANGELES - In Demand LLC, a video entertainment conglomerate, on May 21filed an adversary complaint in the Chapter 11 proceeding of GGW Brands LLC, the parent company of adult video maker "Girls Gone Wild," seeking $118,000 which it says is overdue pursuant to a licensing agreement with GGW. On the same day, a bankruptcy judge granted the trustee's motion to file for Chapter 11 bankruptcy on behalf of GGW Marketing LLC (In Demand LLC v. Argyle Media Sales LLC, et al. $(In Re: GGW Brands LLC$), No 13-15130, Chapter 11, C.D. Calif. Bkcy.).

    Bankruptcy Judge Sets Specialty Products' Asbestos Liability At $1.16 Billion

    WILMINGTON, Del. - Former joint compound producer Bondex International Inc. and its related holding company Specialty Products Holding Corp. face an estimated $1.16 billion in pending and future asbestos personal injury claims, about double what the companies estimate their asbestos liabilities at, a federal bankruptcy judge in Delaware overseeing the companies' joint Chapter 11 case ruled May 20 (In re: Specialty Products Holding Corp., et al., No. 10-11780, D. Del. Bkcy.; 2013 Bankr. LEXIS 2051).

    7th Circuit Rules Clause In Loan Contract With Debtor Couple Proper

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on May 20 reversed a district court ruling and held that a cross-colleteralization clause in a loan agreement between a bank and a debtor couple was not invalid (Peoples National Bank v. Banterra Bank, No. 12-3079, Chapter 11, 7th Cir.; 2013 U.S. App. LEXIS 10034).

    Bankruptcy Judge OKs A123's Liquidation Plan; Most Claims Repaid In Full

    WILMINGTON, Del. - The bankruptcy judge presiding over the Chapter 11 liquidation of alternative energy company A123 Systems Inc. on May 20 confirmed the company's liquidation plan under which most creditors would recover 100 percent of their claims, with subordinated noteholders recovering 65 percent of the money they are owed (In Re: A123 Systems Inc., No. 12-12859, Chapter 11, D. Del. Bkcy.).

    AMF Bowling Seeks Approval Of $310M Loan With Credit Suisse, Merger With Bowlmor

    RICHMOND, Va. - Bankrupt AMF Bowling Worldwide Inc. on May 18 moved in the U.S. Bankruptcy Court for the Eastern District of Virginia for authorization to enter a credit agreement with Credit Suisse Securities LLC with a total value of $310 million that would also merge the company with Bowlmor, an independent operator of bowling centers (In Re: AMF Bowling Worldwide Inc., No. 12-36495, Chapter 11, E.D .Va. Bkcy.).

    Tax Refunds Belong To Bank's Holding Company, Not FDIC, Judge Finds

    SAN DIEGO - The Federal Deposit Insurance Corp., as the receiver for the failed Imperial Capital Bank, is not entitled to $30 million in tax refunds, a federal judge in California ruled May 16, finding that the funds instead belong to the bank's holding company (Imperial Capital Bancorp Inc. v. Federal Deposit Insurance Corp., No. 10-1991, N.D. Calif.).

    Howrey Committee, Trustee Want To Sue Law Firms For 'Unfinished Business'

    SAN FRANCISCO - The Official Committee of Unsecured Creditors and the trustee in the Chapter 11 bankruptcy of former law firm Howrey LLP on May 20 moved in bankruptcy court for permission to prosecute and settle various pending causes of action that are potential assets of the bankruptcy estate (In Re: Howrey LLP, No.11-31376, Chapter 11, N.D. Calif. Bkcy.).

    3rd Circuit: Debtors Should Have Disclosed Claims In Bankruptcy Proceeding

    PHILADELPHIA - A panel of the Third Circuit U.S. Court of Appeals on May 17 affirmed a lower court's ruling that a debtor couple were responsible for inconsistencies in their bankruptcy petition as well as the nondisclosure of claims that should have been included in their bankruptcy schedules (J.H. Group LLC d/b/a Ocean Rolling Chairs, et al. v. Royal Rolling Chairs LLC, No. 12-3476, Chapter 11, 3rd Cir.; 2013 U.S. App. LEXIS 9898).

    Pittsburgh Corning's Chapter 11 Reorganization Plan Confirmed

    PITTSBURGH - Thirteen years after seeking bankruptcy protection from hundreds of thousands of asbestos personal injury claims, building products manufacturer Pittsburgh Corning Corp. (PCC) on May 16 received confirmation from a Pennsylvania federal bankruptcy judge for a plan of reorganization that establishes a more than $2 billion trust to pay those claims and future asbestos demands (In re: Pittsburgh Corning Corporation, No. 00-22876, W.D. Pa. Bkcy.; 2013 Bankr. LEXIS 2030).

    'Girls Gone Wild' Entities: Trustee Is 'Frankly Absurd' Regarding Marketing Group

    LOS ANGELES - Three of the subsidiary parties associated with bankrupt GGW Brands LLC, the parent company of adult video maker "Girls Gone Wild," on May 20 filed an additional brief opposing the trustee's motion seeking authority to file a Chapter 11 petition on behalf of GGW Marketing LLC, arguing that the trustee's position is "frankly absurd" (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

    MF Global Customers Say They Are Entitled To Recovery Of More Than $300M In Funds

    NEW YORK - Commodities customers who invested money with MF Global Inc., an affiliate of bankrupt MF Global Holdings Ltd. (MFGH), on May 17 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York, contending that their claim to more than $300 million in funds is "indisputably" valid (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    Bankrupt Oil Company GMX Seeks Bankruptcy Court's OK For $338M Asset Sale

    OKLAHOMA CITY - Bankrupt oil and natural gas exploration company GMX Resources Inc. on May 16 moved in bankruptcy court for approval of its plan to sell all of its assets to a stalking horse bidder for $338 million (In Re: GMX Resources Inc., No. 13-11456, Chapter 11, W.D. Okla. Bkcy.).