LexisNexis® Legal Newsroom
    MSR Resort Creditors Object To Chapter 11 Plan, $1.49B Stalking Horse Deal

    NEW YORK - A group of creditors that invested in bankrupt MSR Resort Golf Course LLC on Feb. 25 filed an official notice of appeal of the order issued by the U.S. Bankruptcy Court for the Southern District of New York approving the resort's Chapter 11 plan and $1.49 billion asset sale (In Re: MSR Resort Golf Course LLC, No. 11-10372, S.D. N.Y. Bkcy.).

    Creditors Committee Seeks To Revive Case Against Principals Of Bankrupt WP Steel

    WILMINGTON, Del. - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of WP Steel Venture LLC on Feb. 22 moved in the U.S. Bankruptcy Court for the District of Delaware for permission to revive its case against Ira L. Rennert and Vincent J. Goodwin as the principals in charge of WP Steel and its holdings, alleging that they breached their fiduciary duties (In Re: WP Steel Venture LLC, No. 12-11661, Chapter 11, D. Del. Bkcy.).

    Trustee, Some Creditors Seek Removal Of Claims Against MF Global Bankruptcy Estate

    NEW YORK - The trustee and a group of creditors in the Chapter 11 bankruptcy of MF Global Holdings (MFGH) on Feb. 22 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to more than $138.11 million in claims brought by a separate group of creditors against the MFGH estate on grounds that they are superseded by other claims valued at more than $162.97 million (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

    Bankrupt Broker Penson Seeks Permission To Tap Insurance Policy For Defense Costs

    WILMINGTON, Del. - Bankrupt financial services company Penson Worldwide Inc. on Feb. 21 moved in the U.S. Bankruptcy Court for the District of Delaware for permission to use its policy insuring the company's directors and officers to pay for defense costs associated with a federal investigation of Penson's operations prior to bankruptcy (In Re: Penson Worldwide Inc., No. 13-10061, Chapter 11, D. Del. Bkcy.).

    Federal Judge Remands Breach Of Contract Case Against Bankrupt RG Steel

    CHARLESTON, W.Va. - A federal judge in West Virginia on Feb. 21 remanded to state court a lawsuit brought by Mountain State Carbon LLC (MSC) against bankrupt RG Steel in which MSC contended that the steel company had breached its contract with MSC and stole excess coke that MSC stored at RG Steel's plant (Mountain State Carbon LLC v. RG Steel Wheeling LLC, No. 12-77, N.D. W. Va.).

    U.S. Bank Says Bankruptcy Court Erred In AMR Financing Ruling

    NEW YORK - U.S. Bank Trust National Association, which has filed an adversary proceeding against bankrupt American Airlines Inc., a subsidiary of bankrupt AMR Corp., on Feb. 22 filed a statement of issues on appeal in which it contends that a New York federal bankruptcy court erred when it ruled that repayment of financing notes does not require the payment of a make-whole amount (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.).

    Tribune Litigation Trustee Seeks Recovery Of Transfers Related To Leveraged Buyout

    WILMINGTON, Del. - The litigation trustee in the Chapter 11 bankruptcy of media entity Tribune Co. on Feb. 20 moved in the U.S. Bankruptcy Court for the District of Delaware for authorization to be substituted as the plaintiff in certain adversary proceedings seeking to recover fraudulent transfers pertaining to the leveraged buyout of Tribune belonging to the litigation trust (In Re: Tribune Company, No. 08-13141, Chapter 11, D. Del. Bkcy.).

    Dewey & LeBoeuf: Liquidation Plan Proposed'In Good Faith'; Objections 'Improper'

    NEW YORK - Bankrupt law firm Dewey & LeBoeuf on Feb. 21 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York contending that its plan of liquidation was proposed in good faith and meets all the requirements of the Bankruptcy Code, despite objections from the firm's former partners (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

    Creditor Wants To Sell Property Of Revstone Subsidiary For $4.5 Million

    WILMINGTON, Del. - A creditor of bankrupt Revstone Industries LLC on Feb. 20 filed a brief in the U.S. Bankruptcy Court for the District of Delaware, contending that it should be granted relief from the automatic stay to sell property belonging to one of Revstone's bankrupt subsidiaries (In Re: Revstone Industries LLC, No. 12-13262, Chapter 11, D. Del. Bkcy.).

    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.).