LexisNexis® Legal Newsroom
    Peregrine Financial Trustee: Commodities Customer Class Action Should Be Stayed

    CHICAGO - The trustee in the Chapter 7 bankruptcy of former financial company Peregrine Financial Group on May 8 filed an adversary complaint in a federal bankruptcy court against a class of former Peregrine commodities customers, arguing that the class action should be stayed in order to allow maximum recovery for the former financial company's creditors (Ira Bodenstein v. Brian Pannkuk, et al. $(In Re: Peregrine Financial Group Inc.$), No. 12-27488, N.D. Ill. Bkcy.).

    Split 4th Circuit Says BAPCPA Does Not Bar Lien-Stripping For Chapter 20 Debtors

    RICHMOND, Va. - A split panel of the Fourth Circuit U.S. Court of Appeals on May 10 ruled that a bankruptcy court properly affirmed a debtor's Chapter 13 payment plan despite the trustee's argument that "lien-stripping" was barred by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) (Timothy P. Branigan v. Bryan Matthew Davis $(In Re: Bryan Matthew Davis$), No. 12-1184, Chapter 13, 4th Cir.; 2013 U.S. App. LEXIS 9535).

    Dewey & LeBoeuf Trustee Says He Will Not Be 'Bullied' By Former Partners

    NEW YORK - The liquidating trustee for the Dewey & LeBoeuf Liquidation Trust on May 10 filed a brief saying that he will "not be bullied" by two former executives of bankrupt firm Dewey & LeBoeuf who allege that he has a conflict of interest regarding the more than $19.5 million settlement reached among the Dewey & LeBoeuf Liquidation Trust, XL Specialty Insurance Co. and Steven H. Davis. The liquidation trustee contends that the former executives are trying to "aggravate" him into dropping a claw-back suit against them (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

    U.S. Supreme Court Remands Bankruptcy Defalcation Case, Says Higher Standard Needed

    WASHINGTON, D.C. - The U.S. Supreme Court on May 13 unanimously vacated and remanded a case involving a bank's claim that a debtor who had acted as trustee for his father's insurance trust was guilty of defalcation for making loans to himself during the time he had control of the trust, ruling that the 11th Circuit U.S. Court of Appeals needed to review the case to determine if it should apply the higher standard of "defalcation" outlined by the high court (Randy Curtis Bullock v. BankChampaign, No. 11-1518, Chapter 7, U.S. Sup.).

    Rooker-Feldman Doctrine Bars Creditor's Secured Claim, 8th Circuit Rules

    ST. LOUIS - A panel of the Eighth Circuit U.S. Court of Appeals on May 9 ruled that a bankruptcy court properly applied the Rooker-Feldman doctrine in ruling that a creditor's administrative expense claim should be disallowed (Thomas P .Cawley v. Frank Celeste $(In Re: Athens/Alpha Gas Corporation$), No. 12-1555, Chapter 11, 8th Cir.; 2013 U.S. App. LEXIS 9446).

    AMR Proposes Deal Cutting More Than $154.57 Million From Claims Asserted By FAA

    NEW YORK - Bankrupt AMR Corp., the parent company of American Airlines Inc., on May 9 moved for approval of a settlement with the Federal Aviation Administration that would reduce by $142,274,609 the allowed claims the FAA has related to litigation of alleged violations of federal aviation law and would reduce by $12.3 million the penalties associated with those alleged violations (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

    New Collective Bargaining Agreements Could Save $87M, AMR Contends

    NEW YORK - Bankrupt AMR Corp., the parent company of American Airlines Inc., on May 9 sought approval of a memorandum of understanding regarding contingent collective bargaining agreements (CBAs) among American Airlines, US Airways Inc. and two pilots unions that AMR contends could save the company $87 million (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.)

    2nd Circuit Says Sanctions Affirmed Against Creditor Who Ignored Subpoena

    NEW YORK - A panel of the Second Circuit U.S. Court of Appeals on May 9 ruled that an order awarding sanctions was final and appealable and remanded the case to a district court with instructions to affirm the penalty against a creditor who failed to comply with a subpoena in the Chapter 11 bankruptcy of Lothian Oil USA Inc. (Lothian Oil USA Inc., et al. v. Jessica Mara Sokol, No. 11-3911, Chapter 11, 2nd Cir.; 2013 U.S. App. LEXIS 9377).

    Bankruptcy Judge Confirms Thorpe Insulation Co.'s Reorganization Plan On Remand

    LOS ANGELES - Reorganized Thorpe Insulation Co.'s Chapter 11 plan of reorganization, revised to reflect settlements reached on remand with all of the remaining insurance companies objecting to the plan, received confirmation again May 8 from a California federal bankruptcy judge, who said that once the plan is effective, the last appeals to the case in the Ninth Circuit U.S. Court of Appeals will be withdrawn (In re Thorpe Insulation Co., No. 2:07-bk-19271, C.D. Calif. Bkcy.).

    Federal Agency: Commodities Claims Should Not Be Subordinated In MFGH Case

    NEW YORK - The U.S. Commodity Futures Trading Commission (CFTC) on May 9 filed a brief in the Chapter 11 bankruptcy of MF Global Holdings Ltd. (MFGH) opposing the amended 13th objection of proponents of the company's liquidation plan, arguing that its claims on behalf of commodities that were damaged by MFGH's bankruptcy should not be subordinated (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    'Girls Gone Wild' Trustee: Offshore Transfers Fraudulent; Immediate Action Needed

    LOS ANGELES - The Chapter 11 trustee in the bankruptcy proceeding of GGW Brands LLC, the parent company for the company that produces adult videos under the name "Girls Gone Wild," on May 8 filed an emergency motion seeking authorization to review certain email files, arguing that the company is making fraudulent transfers to an off-shore business entity (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

    2nd Circuit: Lender Violated Automatic Stay 'Willfully' By Repossessing Vehicle

    NEW YORK - A panel of the Second Circuit U.S. Court of Appeals on May 8 ruled that a credit union that repossessed a debtor's vehicle willfully violated the automatic stay provision in the Bankruptcy Code and, therefore, the debtor is entitled to actual damages (Christopher Weber v. SEFCU $(In Re: Christopher Weber$), No. 12-1632, Chapter 13, 2nd Cir.; 2013 U.S. App. LEXIS 9327).

    Dewey & LeBoeuf Liquidating Trustee: Motion To Strike Declaration 'Frivolous'

    NEW YORK - The liquidating trustee in the Chapter 11 bankruptcy of former law firm Dewey & LeBoeuf on May 8 filed a brief arguing that a motion to strike his declaration pertaining to the more than $19.5 million settlement reached among the Dewey & LeBoeuf Liquidation Trust, XL Specialty Insurance Co. and Steven H. Davis, which was filed by two of the firm's former executives, is "frivolous" (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

    Chapter 11 Debtor Yarway Sues To Insulate Tyco From Derivative Asbestos Claims

    WILMINGTON, Del. - New Chapter 11 debtor Yarway Corp. filed an adversary complaint May 6 in Delaware federal bankruptcy court seeking to halt hundreds of asbestos personal injury actions filed against Swiss parent Tyco International Ltd. and other nondebtor affiliates (In re: Yarway Corporation, No. 13-11025 $(Yarway Corporation v. Those Parties Listed on Appendix A to Complaint, et al., No. 13-51040$), D. Del. Bkcy.).

    Revel AC Reorganization Plan Fails To Protect Rights, Says Creditor Konami Gaming

    TRENTON, N.J. - Konami Gaming Inc., a creditor in the Chapter 11 bankruptcy of casino Revel AC Inc., on May 6 filed a limited objection to the casino's plan of reorganization, contending that it proposes an inappropriate cure amount and fails to protect Konami's intellectual property rights (In Re: Revel AC Inc., No. 13-16253, Chapter 11, D. N.J. Bkcy.).

    Bankruptcy Judge Calls $7.5B Asset Allocation Appeal In Nortel Case 'Frivolous'

    WILMINGTON, Del. - The federal bankruptcy judge presiding over the case of Nortel Networks Inc. on May 7 called "frivolous" the appeal lodged by the joint administrators of the bankruptcy estate pertaining to the allocation of $7.5 billion in assets. Specifically, the bankruptcy judge said that arbitration, which the joint administrators sought to compel, was not warranted (In Re: Nortel Networks Inc., No. 09-10138, Chapter 11, D. Del. Bkcy.).

    Credit Suisse Buys ATP Oil Assets For $690.8 Million

    HOUSTON - Credit Suisse AG agreed to pay bankrupt ATP Oil & Gas Corp. $690.8 million for its assets on May 7 (In Re: ATP Oil & Gas Corporation, No. 12-36187, Chapter 11, S.D. Texas Bkcy.).

    Bankruptcy Judge Authorizes W.R. Grace To Sell Land In Maryland For $13 Million

    WILMINGTON, Del. - A federal bankruptcy judge in Delaware on May 6 gave W.R. Grace and Co. the go-ahead to sell more than 66 acres next to the company's Maryland headquarters for $13.1 million so the property can be used for residential development (In re: W.R. Grace & Co., et al., No. 01-1139, D. Del. Bkcy.).

    SEC Reaches Settlement With City Over Federal Securities Law Violations

    WASHINGTON, D.C. - The Securities and Exchange Commission and the City of Harrisburg, Pa., have agreed to a cease-and-desist order preventing the city from continuing its violation of federal securities laws in connection with statements it made both publicly and in financial documents regarding the city's failure to comply "with written undertakings executed by the City in the form of Continuing Disclosure Certificates," the SEC said in its order, filed on May 6 (In the Matter of the City of Harrisburg, Pennsylvania, No. 3-15316, SEC).

    Hostess Settles With 7 Unionized Pension Plans

    NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of Hostess Brands Inc. on May 6 approved a pension settlement plan among the bakery and seven unions (In Re: Old HB Inc. f/k/a Hostess Brands Inc., No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).

    ResCap Seeks Approval Of $800M Settlement With Junior Secured Noteholders

    NEW YORK - Bankrupt mortgage company Residential Capital LLC (ResCap) on May 7 moved for authorization of a plan to partially satisfy certain secured claims held by junior secured noteholders, under which it would pay $800 million to avoid potentially having to pay more to the noteholders if they were to prevail in an adversary proceeding (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

    Vacuum Maker Oreck Files For Chapter 11, Seeks $11M In Post-Petition Funding

    NASHVILLE, Tenn. - Vacuum cleaner company Oreck Corp. filed for Chapter 11 bankruptcy on May 6, citing assets and debts ranging from $10 million to $50 million, and immediately moved for approval of $11 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.).

    11th Circuit: Stock Transfer Not Fraudulent; Trustee May Not Recover Money

    ATLANTA - A panel of the 11th Circuit U.S. Court of Appeals on May 6 affirmed a ruling that a transfer involving shareholder stock in a bankrupt company was not fraudulent and, therefore, could not be recovered by the trustee, based on the shareholder agreement that governed the transaction (David H. Crumpton v. Richard Stephens $(In Re: Northlake Foods Inc.$), No. 12-15603, Chapter 11, 11th Cir.; 2013 U.S. App. LEXIS 9142).

    NECC Tort Claimants Envision $100M Fund, Reorganization Plan By December 2013`

    BOSTON - A bankruptcy committee representing tort claimants against New England Compounding Center (NECC) on May 2 told a federal court that its objective is to get a reorganization plan confirmed for December that will provide for distributions to tort victims and other creditors from aggregate contributions to the plan exceeding $100 million (In Re: New England Compounding Pharmacy, Inc. Products Liability Litigation, MDL Docket No. 2419, No. 1:13-md-2419, In Re: New England Compounding Pharmacy Cases, No. 12-12052, D. Mass.).

    FDIC: Bank Of America's Claim To $1.7 Billion In Taylor Bean Bankruptcy Is 'Moot'

    WASHINGTON, D.C. - The Federal Deposit Insurance Corp. on May 3 moved in the U.S. District Court for the District of Columbia for dismissal of claims made by Bank of America N.A., the indenture trustee for short-term notes issued by a division of bankrupt mortgage company Taylor Bean Whitaker Mortgage Corp. (TBW), arguing that the bank's claim to $1.7 billion in funds is "prudentially moot" (Bank of America National Association v. Federal Deposit Insurance Corporation, No. 10-01681, D. D.C.).