LexisNexis® Legal Newsroom
    U.S. Trustee Argues Rothstein Liquidation Plan Gives Too Much To TD Bank

    FORT LAUDERDALE, Fla. - The U.S. trustee in the Chapter 11 bankruptcy of law firm Rothstein Rosenfeldt Adler (RRA) on April 1 filed a brief in the U.S. Bankruptcy Court for the Southern District of Florida objecting to the proposed plan filed by the Chapter 11 liquidation, trustee contending that it gives TD Bank a greater claim against the bankruptcy estate than it should be given (In Re: Rothstein Rosenfeldt Adler, No. 09-34791, Chapter 11, S.D. Fla. Bkcy.).

    Md. Bankruptcy Judge Declines To Reconsider Lifting Stay To Settle Asbestos Claims

    BALTIMORE - A Maryland federal bankruptcy judge on March 29 denied a request to reconsider her decision to lift the automatic stay in Lloyd E. Mitchell Inc.'s (LEM) Chapter 11 case so a confidential settlement among the debtor, two insurers and a law firm representing 9,000 asbestos personal injury claimants can be implemented, finding that an opposing law firm failed to show that lifting the stay is clear error or an injustice (In re: Lloyd E. Mitchell Inc., No. 06-13250, D. Md. Bkcy.).

    Bankruptcy Judge Approves Deal Between Nortel, Retired Employees

    WILMINGTON, Del. - A federal bankruptcy judge in Delaware on April 2 approved bankrupt Nortel Networks Inc.'s deal with the committee representing retired employees that will terminate retiree welfare plans and would pay the Official Committee of Retired Employees (Retiree Committee) $66,879,000 to resolve all claims against Nortel related to retirement benefits (In Re: Nortel Networks Inc., No. 09-10138, Chapter 11, D. Del. Bkcy.).

    MF Global Committee: Plan Of Liquidation Meets Code, Should Be Approved

    NEW YORK - The Statutory Creditors' Committee of MF Global Holdings Ltd. (MFGH) on April 2 filed a brief supporting confirmation of the joint plan of liquidation in MFGH's Chapter 11 bankruptcy, contending that the plan should be confirmed because it will increase distributions to creditors (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    7th Circuit: Discretion Not Abused; Debtors Cannot Avoid Property Lien

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on March 29 ruled that a debtor couple could not avoid a lien on their condominium and held that the bankruptcy and district courts had not abused their discretion (Bryan D. Hinnen, et al. v. Emerald Hills Condominium Association, No. 12-2922, Chapter 13, 7th Cir.; 2013 U.S. App. LEXIS 6304).

    'Girls Gone Wild' Video Maker: Trustee Not Needed; Creditor Misrepresents Facts

    LOS ANGELES - Bankrupt adult entertainment company GGW Brands Inc., the parent company for the maker of "Girls Gone Wild" videos, on March 29 filed a brief contending that a creditor's motion seeking appointment of a trustee should not be granted because the creditor's allegations "distort or misrepresent the facts of the case" (In Re: GGW Brands Inc., No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

    Bankruptcy Judge: California City May Proceed With Chapter 9 Bankruptcy

    SACRAMENTO, Calif. - A federal bankruptcy judge in California on April 1 ruled that the City of Stockton, Calif., which had filed for Chapter 9 bankruptcy in June, was eligible to seek bankruptcy because the city did not file its petition in bad faith and was indeed insolvent at the time it sought bankruptcy. The bankruptcy judge's decision makes Stockton the largest municipality in the country to file for bankruptcy (In Re: City of Stockton, California, No. 12-32118, Chapter 9, E.D. Calif. Bkcy.).

    WP Steel Committee: Lien Agents Breached Duty Related To Bankruptcy Petition

    WILMINGTON, Del. - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of WP Steel Venture on March 29 sued Cerberus Business Finance in its capacity as a second lien agent and sued the Renco Group Inc. in its capacity as WP Steel's third lien agent, seeking declaratory judgment that Cerberus and Renco do not have any interest in WP Steel's claims, rights and causes of action (In Re: WP Steel Venture, No. 12-11661, Chapter 11, D. Del. Bkcy.).

    1st Circuit: Lender's Attempt To Collect Student Loan Debt Was Abuse Of Process

    BOSTON - A panel of the First Circuit U.S. Court of Appeals on March 29 affirmed a bankruptcy court's ruling that a debtor's student loan debts were extinguished and held that the lender that tried to collect on the debt after it had been extinguished abused the bankruptcy process (Barbara J. Hann v. Educational Credit Management Corporation $(In Re: In Re: Barbara J. Hann$), No. 12-9006, Chapter 13, 1st Cir.).

    Advisor To Bankrupt GSC Opposes Sanctions, Says Conflict Not Shown

    NEW YORK - Capstone Advisory Group LLC, which is the financial advisor to bankrupt GSC Group Inc., on March 29 filed a brief opposing a call for sanctions made by an investment firm that contends that Capstone should be sanctioned for conflict of interest (In Re: GSC Group Inc., No. 10-14653, Chapter 11, S.D. N.Y. Bkcy.).

    Bankruptcy Judge Approves Deal To Reduce Former Partners' Claims By $41 Million

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of law firm Dewey & LeBoeuf on April 1 approved a settlement among the firm, the firm's former partners and law firm Paul Hastings LLP that will eliminate $41 million in claims against Dewey & LeBoeuf. The claims had been filed by the former partners who alleged that Dewey & LeBoeuf owed them for money the partners were required to pay to secure their partnership interest in the firm (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

    Tribune Says More Than $13.25M Sought by Indenture Trustees Is 'Without Merit'

    WILMINGTON, Del. - The reorganized version of bankrupt media entity Tribune Co. on March 28 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to $13.25 million in "substantial contribution" applications filed by the Law Debenture Trust Company of New York (LDTCNY) and the Wilmington Trust Co., contending that they are not entitled to fees and expenses for services rendered as indenture trustees (In Re: Tribune Company, No. 08-13141, Chapter 11, D. Del. Bkcy.).

    10th Circuit: Tax Ruling Against Debtor Stands, Automatic Stay Not Violated

    DENVER - A panel of the 10th Circuit U.S. Court of Appeals on March 28 ruled that a tax court properly upheld tax deficiency rulings against a debtor and said that doing so did not violate the automatic stay (John H. Schoppe v. Commissioner of Internal Revenue, No. 12-9010, Chapter 13, 10th Cir.; 2013 U.S. App. LEXIS 6266).

    Judge In SIPA Action Against MF Global CEO Approves Settlement Preliminarily

    NEW YORK - The federal judge presiding over a class of investors who sued former MF Global Holdings Ltd. (MFGH) CEO Jon Corzine alleging violations under the Securities Investor Protection Act (SIPA) in the wake of MFGH's Chapter 11 bankruptcy granted preliminary approval March 28 to a settlement that MFGH reached with JP Morgan Chase Bank N.A. that will return $300 million to commodities customers who had money invested with MFGH's consumer investment affiliate MFGlobal Inc. (MFGI). The judge set July 3 as the date for the official hearing on the settlement (Joseph DeAngelis, et al. v. Jon S. Corzine, No. 12-2338, Chapter 11, S.D. N.Y.).

    Journal Register Says Asset Sale Has Bankruptcy Court Approval; Set For April 2

    NEW YORK - Digital First Media (DFM), the parent company of bankrupt newspaper company Journal Register Co. (JRC), announced March 28 that the federal bankruptcy judge presiding over its case has granted approval of its motion to sell JRC's assets to 21st CMH Acquisition Co. (In Re: Journal Register Company, No. 12-13774, Chapter 11, S.D. N.Y. Bkcy.).

    Bankrupt Revel Casino Secures $250 Million In Post-Petition Financing

    TRENTON, N.J. - The federal bankruptcy judge overseeing the Chapter 11 proceeding of casino Revel AC Inc. on March 27 approved $250 million in post-petition financing, also known as debtor-in-possession (DIP) financing (In Re: Revel AC Inc., No. 13-16253, Chapter 11, D. N.J. Bkcy.).

    A&P Wants Claims Disallowed As Duplicative, Inconsistent With Reorganized Company

    NEW YORK - Bankrupt grocer The Great Atlantic & Pacific Tea Co. Inc. (A&P) on March 27 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to certain proofs of claim and contending that they should be disallowed (In Re: The Great Atlantic & Pacific Tea Company Inc., No. 10-24549, Chapter 11, S.D. N.Y. Bkcy.).

    Peregrine Trustee Seeks To Compel Financial Adviser To Produce Documents

    CHICAGO - The trustee in the Chapter 7 bankruptcy of Peregrine Financial Group Inc. on March 25 moved in the U.S. Bankruptcy Court for the Northern District of Illinois to compel Halyard Capital Advisors LLC to produce documents pursuant to a subpoena related to the embezzlement of funds from Peregrine (In Re: Peregrine Financial Group Inc., No. 12-27488, Chapter 7, N.D. Ill. Bkcy.).

    San Bernardino Sues State Of California, Alleges Violation Of Automatic Stay

    RIVERSIDE, Calif. - The bankrupt city of San Bernardino, Calif., on March 26 sued the State of California, contending that the state is violating the automatic stay by demanding payment from the city for services. The city also argues that the state cannot withhold revenue it owes the city from sales tax collected from various agencies (In Re: City of San Bernardino, Calif., No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).

    Magistrate Refuses To Sanction Bankrupt Company For Production Failures

    DANVILLE, Va. - A federal magistrate judge in Virginia has denied one tobacco company's attempt to collect more than $78,000 in attorney fees as a sanction from a bankrupt tobacco company for production failures, saying March 26 that the defendant's behavior did not warrant sanctions and that the plaintiff had failed to execute a writ of execution (Virginia Brands LLC v. Kingston Tobacco Company Inc., No.: 4:10-cv-9, W.D. Va., Danville Div.; 2013 U.S. Dist. LEXIS 42417).

    9th Circuit: Debtors' Plan Not Proposed In Bad Faith

    SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on March 25 ruled that a debtor couple did not act in bad faith when it proposed their Chapter 13 payment plan despite the fact that they did not commit the entirety of their income to paying their creditors (Robert G. Drummond v. David C. Welsh, et al. $(In Re: David C. Welsh, et al.$), No. 12-60009, Chapter 13, 9th Cir.; 2013 U.S. App. LEXIS 5880).

    Judge Rules Against FDIC, Allowing Bank Company To Keep Tax Refund

    CLEVELAND - Bankrupt holding company AmFin Financial Corp. (AFC) can keep a $195 million tax refund that the Federal Deposit Insurance Corp. argued belongs to an affiliate bank in the FDIC's receivership, a federal judge in Ohio ruled March 26, granting AFC's motion for judgment on the pleadings (Federal Deposit Insurance Corp. v. AmFin Financial Corporation, et al., No. 11-2574, N.D. Ohio; 2013 U.S. Dist. LEXIS 42488).

    7th Circuit: Company That Bought Debtor's Assets Liable For Labor Violations

    CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on March 26 ruled that a company that purchased the assets of an insolvent company also became liable for alleged violations of federal labor law that had been asserted by one of the company's employees (Brian Teed v. Thomas & Betts Power Solutions, No. 12-2440, Chapter 7, 7th Cir.).

    Bankrupt Telecommunications Company Otelco Seeks Prepackaged Reorganization

    WILMINGTON, Del. - Wireless communications company Otelco Inc. on March 24 filed a disclosure statement in the U.S. Bankruptcy Court for the District of Delaware, seeking acceptance of a prepackaged reorganization plan on the same day it filed for Chapter 11 bankruptcy (In Re: Otelco Inc., No. 13-10593, Chapter 11, D. Del. Bkcy.).

    U.S. Trustee Opposes AMR, US Airways Merger; CEO's Bonus Violates Bankruptcy Law

    NEW YORK - The U.S. trustee in the Chapter 11 bankruptcy of AMR Corp., the parent company of American Airlines Inc., on March 25 filed a sur-reply brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to the proposed $11 billion merger of AMR and US Airways Group Inc. (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).