LexisNexis® Legal Newsroom
    Company That Was Subject To Involuntary Chapter 7 Filing Seeks Move To Chapter 11

    BALTIMORE - Bankrupt Inner Harbor West LLC (IHW) on Feb. 19 moved in the U.S. Bankruptcy Court for the District of Maryland for conversion of its involuntary Chapter 7 petition to a voluntary Chapter 11 bankruptcy (In Re: Inner Harbor West LLC, No. 13-12198, Chapter 7, D. Md. Bkcy.).

    11th Circuit: Bank Of America Did Not Break Contract With Bankrupt Fontainebleau

    ATLANTA - A panel of the 11th Circuit U.S. Court of Appeals on Feb. 20 ruled that Bank of America and its affiliates properly rejected a loan request from bankrupt Las Vegas resort Fontainebleau (Avenue CLO Fund Ltd. v. Bank of America N.A., No. 11-10468, Chapter 7, 11th Cir.).

    Former Dewey & LeBoeuf Partner Sues Barclays For Loan He Says Is 'A Fabrication'

    NEW YORK - A former partner of bankrupt law firm Dewey & LeBoeuf on Feb. 15 sued Barclays Bank PLC, alleging that a purported letter agreement under which the bank loaned money to the partner to fund his capital account at the law firm should be rescinded (L. Londell McMillan v. Barclays Bank PLC, No. 13-1095, S.D. N.Y.).

    9th Circuit: Dischargeability Ruling Proper; Bankruptcy Code's Standard Firm

    SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on Feb. 19 affirmed a bankruptcy court's ruling that denied a creditor the right to file a late appeal of a nondischargeability ruling, concluding that it was not permitted under the Bankruptcy Code (Amina Anwar v. D. Lee Johnson, et al., No. 11-16612, Chapter 7, 9th Cir.; 2013 U.S. App. LEXIS 3453).

    MF Global Proposes Plan Of Liquidation Using $70M In Exit Facility Financing

    NEW YORK - Bankrupt financial institution MF Global Holdings Ltd. (MFGH) on Feb. 15 filed a liquidation plan that relies on a $70 million exit facility to fund the plan (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    U.S. Trustee, Kaye Scholer Settle Dispute For $1.5M In GSC Bankruptcy

    NEW YORK - The U.S. trustee in the Chapter 11 bankruptcy of GSC Group Inc. on Feb. 15 moved in the U.S. Bankruptcy Court for the Southern District of New York for approval of a deal in which the law firm representing GSC would pay $1.5 million to the bankruptcy estate to settle claims against the estate as well as the U.S. trustee's allegations that the firm made false representations to the Bankruptcy Court (In Re: GSC Group Inc., No. 10-14653, Chapter 11, S.D. N.Y. Bkcy.).

    Readers' Digest Parent Company Files For Bankruptcy, With More Than $1.18B In Debt

    NEW YORK - The parent company that owns Reader's Digest on Feb. 17 filed for Chapter 11 bankruptcy for the second time in four years, citing debts greater than $1.18 billion (In re: RDA Holding Co, No. 13-22233, Chapter 11, S.D. N.Y. Bkcy.).

    U.S. Supreme Court: Solicitor General May Participate In Defalcation Arguments

    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.).

    7th Circuit Reverses; Plan Of Reorganization Must Be Open To Competitive Bids

    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.).

    On Remand, Bankruptcy Judge Finds No Collusion, Reaffirms GIT's Reorganization

    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).

    Judge: Trustee May Use Bankruptcy Code To Avoid Paying Certain Claims

    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.).

    Committee: School Specialty's Bid Proposal 'Threatens' Bankruptcy Estate's Value

    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.).

    MF Global SIPA Trustee, Broker Agree To Drop Their Claims To $20M Letter Of Credit

    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.).

    AMR Corp. Seeks Direct Appeal To 2nd Circuit Of Bank's Adversary Complaint

    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.).

    Bankrupt American Airlines, US Airways To Merge, Form World's Largest Airline

    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.

    U.S. Government Sues Bankrupt ATP Oil & Gas For Violations Of Environmental Law

    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.).

    Journal Register Company Stops Auction; No Bids To Rival $122.15M Stalking Horse

    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.).

    11th Circuit: Debtor's False Statements Mean Debt Is Not Dischargeable

    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).

    Bankruptcy Judge: WARN Claim Against Dewey & LeBoeuf May Proceed As Class Action

    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.).

    Borders Liquidation Trustee Seeks Recovery Of More Than $9.79M From Vendors

    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.).

    5th Circuit: Flexible Flyer Did Not Violate WARN Act In Filing For Bankruptcy

    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.).

    Creditors Want Trustee Named Or Chapter 7 Conversion For Texas Oil And Gas Company

    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.).

    U.K. Trustee Of Nortel Pension Funds Says Claim For More Than $1.33B Is Valid

    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.).

    Bakers Unions Want Hostess Sale Agreements Wording Changed To Reserve Rights

    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.).

    Dewey & LeBoeuf Proposes To Settle $80 Million In Partner Claims For $1.35 Million

    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.).