WASHINGTON, D.C. - The U.S. Supreme Court on Feb. 19 granted a request of the U.S. solicitor general to participate in oral arguments in a case to determine whether a defalcation was committed by a debtor who, before filing for bankruptcy, had been appointed the trustee of his father's life insurance trust and took out three loans from the trust he managed. Oral arguments are scheduled for March 18 (Randy Curtis Bullock v. BankChampaign, No. 11-1518, Chapter 7, U.S. Sup.).
CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on Feb. 14 reversed a bankruptcy court ruling and remanded the case, saying a company's reorganization plan had to be open to competitive bidding (In The Matter Of: Castleton Plaza LP, No. 12-2639, Chapter 11, 7th Cir.).
PITTSBURGH - A Pennsylvania federal bankruptcy judge on Feb. 13 reconfirmed on remand the Chapter 11 plan of reorganization for Global Industries Technologies Inc. (GIT), finding that concerns of the Third Circuit U.S. Court of Appeals about the legitimacy of a trust established by the plan to benefit silica claimants were "unfounded, mistaken, and without record support" (In re: Global Industrial Technologies, Inc., et al., No. 02-21626, W.D. Pa. Bkcy.; 2013 Bankr. LEXIS 594).
NEW YORK - A federal judge in New York on Feb. 12 ruled that the liquidation trustee for Bernard L. Madoff Investment Securities LLC (BLMIS) may use a portion of the Bankruptcy Code to avoid making customer payments to a number of defendants that are subject to clawback suits for the recovery of funds they received as part of Bernard L. Madoff's massive Ponzi scheme (Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, No. 12 MC 115 $(JSR$), $(In re: Madoff Securities$), S.D. N.Y.).
WILMINGTON, Del. - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of school supply company School Specialty Inc. on Feb. 13 filed a brief objecting to School Specialty's proposed bidding procedures, arguing that they "threaten an appropriate allocation of estate value" (In Re: School Specialty Inc., No. 13-10125, Chapter 11, D. Del. Bkcy.).
NEW YORK - The liquidating trustee for the Securities Investor Protection Act (SIPA) litigation against bankrupt MF Global Inc. (MFGI) and a commodities broker on Feb. 14 stipulated to the dismissal of a lawsuit filed by the broker contesting the trustee's attempt to recover $20 million he said the broker owed the bankruptcy estate (Koch Supply & Trading LP v. James W. Giddens $(In Re: MF Global Inc.$), No. 11-2790, Adv. No. 12-05596, Chapter 11, S.D. N.Y. Bkcy.).
NEW YORK - Bankrupt AMR Corp., the parent company of American Airlines, on Feb. 14 moved in the U.S. Bankruptcy Court for the Southern District of New York for certification of a direct appeal to the Second Circuit U.S. Court of Appeals with regard to an adversary proceeding filed by U.S. Bank Trust National Association (U.S. Bank Trust National Association v. American Airlines Inc. $(In Re: AMR Corporation$), No. 11-15463, Adv. No. 12-01946, Chapter 11, S.D. N.Y. Bkcy.).
FORT WORTH, Texas - Bankrupt AMR Corp., the parent company of American Airlines Inc., announced Feb. 14 that the boards of directors for AMR Corp. and U.S. Airways Group Inc. have approved a merger forming the world's largest airline, which will have an equity value of $11 billion. The deal, announced in a press release issued by AMR, must be approved by the U.S. Bankruptcy Court for the Southern District of New York.
NEW ORLEANS - The U.S. government on Feb. 12 sued bankrupt oil and gas company ATP Oil & Gas Corp. in the U.S. District Court for the Eastern District of Louisiana, contending that the company made unlawful discharges of oil and another chemical into the Gulf of Mexico (United States of America v. ATP Oil & Gas Corporation, No.13-00262, E.D. La.).
NEW YORK - Bankrupt newspaper chain Journal Register Co. (JRC) on Feb. 12 canceled its asset auction because of a lack of offers to challenge the stalking horse bid of $122.15 million made by 21st CMH Acquisition Co. (In Re: Journal Register Company, No. 12-13774, Chapter 11, S.D. N.Y. Bkcy.).
ATLANTA - A panel of the 11th Circuit U.S. Court of Appeals on Feb. 13 ruled that a bankruptcy court's determination that a debtor's obligation to his bank was nondischargeable was proper because the debtor obtained a loan by falsifying statements about his financial situation (Davenport v. Frontier Bank, No. 12-14069, Chapter 7, 11th Cir.; 2013 U.S. App. LEXIS 2934).
NEW YORK - A federal bankruptcy judge on Feb. 11 ruled that a putative class action asserting claims under the Worker Adjustment and Renotification (WARN) Act against bankrupt law firm Dewey & LeBoeuf could proceed (Vittoria Conn v. Dewey & LeBoeuf $(In Re: Dewey & LeBoeuf$), No. 12-12321, Adv. No. 12-01672, Chapter 11, S.D. N.Y. Bkcy.).
NEW YORK - The liquidating trustee in the Chapter 11 bankruptcy of BGI Inc., formerly known as Borders Group Inc., on Feb. 8 filed 23 adversary complaints against its former vendors, seeking to recover more than $9.79 million for the bankruptcy estate. The largest single complaint is against DPI Specialty Foods Inc. for $2.51 million (Curtis R. Smith v. DPI Specialty Foods Inc. $(In Re: BGI Inc. f/k/a Borders Group Inc., No. 11-10614, Chapter 11, S.D. N.Y. Bkcy.).
NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on Feb. 11 affirmed a bankruptcy court's ruling that a company did not violate federal employment law when it suddenly filed for bankruptcy, closed its plan and conducted mass layoffs because those developments were not foreseeable (David Angles, et al. v. Flexible Flyer Liquidating Trust $(In Re: Flexible Flyer Liquidating Trust$), No. 12-60242, Chapter 11, 5th Cir.).
HOUSTON - The Official Committee of Unsecured Creditors of ATP Oil & Gas Corp. on Feb. 10 filed an emergency motion in the U.S. Bankruptcy Court for the Southern District of Texas seeking the appointment of a Chapter 11 trustee or conversion of the proceeding to Chapter 7 liquidation (In Re: ATP Oil & Gas Corporation, No. 12-36187, Chapter 11, S.D. Texas Bkcy.).
WILMINGTON, Del. - The trustee of Nortel Networks Inc.'s U.K. pension plan, along with the Board of the Pension Protection Fund, on Feb. 8 filed a brief in the U.S. Bankruptcy Court for District of Delaware arguing that it has a valid claim of more than $1.33 billion (In Re: Nortel Networks Inc., No. 09-10138, Chapter 11, D. Del. Bkcy.).
NEW YORK - The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) and the Bakery and Confectionery Union and Industry International Pension Fund (Fund) on Feb. 8 filed a brief reserving their rights with regard to the plan of bankrupt Hostess Brands Inc. to sell the majority of its snack cake business to affiliates of Apollo Global Management, LLC and Metropoulos & Co. (In Re: Hostess Brands Inc., No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).
NEW YORK - Bankrupt law firm Dewey & LeBoeuf on Feb. 7 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York supporting an agreement between it and two different groups representing former partners that would settle $80 million in claims for $1.35 million (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).
NEW YORK - Bankrupt Arcapita Bank BSC, a Bahrainian entity, on Feb. 8 filed its plan of reorganization in its Chapter 11 bankruptcy proceeding that calls for $185 million in exit financing that conforms with Shariah Law, which is required because the bank is headquartered in an Islamic country (In Re: Arcapita Bank BSC, No. 12-11076, Chapter 11, S.D. N.Y. Bkcy.).
WILMINGTON, Del. - The foreign representatives of bankrupt computer chip maker Elpida Memory Inc. on Feb. 8 filed a brief in the U.S. Bankruptcy Court for the District of Delaware contending that the bondholder's motion seeking reconsideration of the sale of Elpida's patents should be denied because there is no evidence to suggest that the sale agreement was not negotiated in good faith (In Re: Elpida Memory Inc., No. 12-10947, Chapter 15, D. Del. Bkcy.).
NEW YORK - The U.S. trustee in the Chapter 11 bankruptcy of GSC Group Inc. on Feb. 7 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York, arguing that GSC should not be permitted to retain the law firm representing it because of a conflict of interest (In Re: GSC Group Inc., No. 10-14653, Chapter 11, S.D. N.Y. Bkcy.).
WILMINGTON, Del. - The federal bankruptcy judge presiding over the Chapter 7 proceeding of 38 Studios LLC, the former video game manufacturing company of retired Major League Baseball pitcher Curt Schilling, on Feb. 6 ordered that an directors and officers insurance policy could be used to pay defense costs up to $10 million in an underlying lawsuit in Rhode Island state court (In Re: 38 Studios LLC, No. 12-11743, Chapter 7, D. Del. Bkcy.).
WILMINGTON, Del. - Bankrupt alternative energy company A123 Systems Inc. on Feb. 6 filed a 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. However, creditor interests based on the issuance of stock in A123 Systems are slated for no recovery (In Re: A123 Systems Inc., No. 12-12859, Chapter 11, D. Del. Bkcy.).
NEW YORK - Bankrupt law firm Dewey & LeBoeuf on Feb. 6 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York arguing that a claim filed by Banc of America Leasing & Capital LLC (BALC), as collection agent for fees owed to Microsoft Corp., should be reduced by $576,704.97 (In Re: Dewey & LeBoeuf LLP, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).
LOS ANGELES - Reorganized Chapter 11 debtor Thorpe Insulation Co. and its asbestos trust received approval Feb. 6 from a California federal bankruptcy judge of a settlement with three insurance companies that have opposed Thorpe's reorganization. The deal covers three insurance policies and includes a $36 million payment by the insurers to the asbestos trust (In re Thorpe Insulation Co., No. 2:07-bk-19271, C.D. Calif. Bkcy.).