LexisNexis® Legal Newsroom
Kodak Bankruptcy Judge Values $250M Claim At $125M For For Plan Voting Purposes

NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of Eastman Kodak Co. on July 19 ordered that the claims of a creditor who sought $250 million would be reduced to $125 million solely for the purposes of voting on an amended plan of reorganization (In Re: Eastman Kodak Company, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.).

Insurers: Conversion Of Power Company Case To Chapter 7 'Entirely Unnecessary'

GREAT FALLS, Mont. - A group of insurance companies who are creditors in the Chapter 11 bankruptcy of the Southern Montana Electric Generation and Transmission Cooperative Southern Montana on July 18 filed a brief arguing that the motion of the Unsecured Creditors Committee to convert the bankruptcy to a Chapter 7 liquidation is "entirely unnecessary" (In Re: Southern Montana Electric Generation and Transmission Cooperative, No. 11-62031, Chapter 11, D. Mont.).

Detroit: Cases Against City Should Be Stayed As It Proceeds With Bankruptcy

DETROIT - The City of Detroit, the largest municipality to file for Chapter 9 bankruptcy, on July 19 moved in bankruptcy court for application of the automatic stay to state entities, non-officer employees and agents and representatives of the city (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

6th Circuit Upholds Ruling Denying Motion To Reopen Foreclosure Suit

CINCINNATI - A Sixth Circuit U.S. Court of Appeals panel on July 17 upheld a federal judge in Michigan's ruling refusing to reopen a woman's class action lawsuit challenging the foreclosure on her home, finding that consent orders entered into between two defendants and the Office of the Comptroller of the Currency (OCC) in April 2011 did not affect the outcome of her case (Patricia Green, et al. v. Bank of America Corporation, et al., No. 12-2275, 6th Cir.; 2013 U.S. App. LEXIS 14673).

Shipping Companies Argue For Confirmation Of London Arbitration Award

NEW YORK - Four foreign shipping companies on July 17 filed a memorandum in a New York federal court in support of their petition to confirm a London arbitration award that was issued in their favor and against an oil corporation in a charterparty dispute (Roxy Inc., et al. v. International Oil Overseas Inc., et al., No. 1:12-cv-03625, S.D. N.Y.).

8th Circuit: Sanctions Proper For Company President Who Violated Court's Orders

ST. LOUIS - A panel of the Eighth Circuit U.S. Court of Appeals on July 19 affirmed a district court's ruling that held that sanctions were appropriate against the president of a company that filed for Chapter 11 bankruptcy because she had been warned not to file briefs containing unsubstantiated allegations and did so anyway (Naomi Isaacson v. Nauni Jo Manty, No. 12-2384, Chapter 7, 8th Cir.; 2013 U.S. App. LEXIS 14629).

Reinsurer Says Reinsurance Dispute Should Be Settled In Arbitration, Not Court

NEW HAVEN, Conn. - A reinsurer asked a Connecticut federal court on July 18 to stay or dismiss a reinsurance dispute because the reinsurer and its reinsured are allegedly bound by an arbitration clause to settle their dispute (Travelers Casualty & Surety Company f/k/a The Aetna Casualty and Surety Company v. Excalibur Reinsurance Corporation f/k/a PMA Capital Insurance Company, No. 13-cv-00752, D. Conn.).

Bankrupt Reader's Digest Seeks Disallowance Of Employee Indemnification Claims

NEW YORK - RDA Holding Co., the parent company for publisher Reader's Digest, on July 17 filed a brief in bankruptcy court objecting to employee indemnification claims on grounds that they should be expunged until there is an effective date when the reorganization plan will be implemented (In Re: RDA Holding Co., No. 13-22233, Chapter 11, S.D. N.Y. Bkcy.).

Arcapita Seeks Approval Of $365M Sale Of Nondebtor Subsidiary To Logistics Firm

NEW YORK - Bankrupt Arcapita Bank B.S.C. on July 18 moved for bankruptcy court approval of its request to sell its nondebtor subsidiary 3PD Inc. to a logistics company for $365 million (In Re: Arcapita Bank B.S.C., No. 12-11076, Chapter 11, S.D. N.Y. Bkcy.).

Detroit Files For Chapter 9 Bankruptcy; Cash Flow At Negative $198.5M

DETROIT - The City of Detroit on July 18 filed for Chapter 9 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Michigan as its emergency manager declared that the city is insolvent and that, absent restructuring, he projects cash flows of negative $198.5 million in the current fiscal year, with that number likely to jump to negative $260.4 million in fiscal year 2015 (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

AMR Creditor: Motion Seeking Maximum Limit On Disputed Claims Should Be Denied

NEW YORK - A creditor in the Chapter 11 bankruptcy of AMR Corp., the parent company of American Airlines Inc., on July 17 filed a brief in bankruptcy court arguing that the bankruptcy court should deny the company's motion to set a maximum limit on the amount to be paid on disputed claims (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

10th Circuit: Trustee May Sue Canadians For Breaches Resulting In Bankruptcy

DENVER - A panel of the 10th Circuit U.S. Court of Appeals on July 17 partially reversed a ruling and held that a liquidating trustee had jurisdiction to sue the directors and officers of a Canadian company whose U.S. affiliate filed for bankruptcy on grounds that the officers did enough business in the United States for them to be sued in federal district court (P. David Newsome Jr. v. William Gallacher, et al., No. 12-5068, Chapter 11, 10th Cir.; 2013 U.S. App. LEXIS 14415).

4th Circuit Upholds Ruling Barring Co-Defendant's Testimony As A Sanction

RICHMOND, Va. - A Fourth Circuit U.S. Court of Appeals panel on July 17 upheld a ruling barring a co-defendant in an adversary proceeding to a bankruptcy case from testifying as a sanction for numerous discovery violations after finding that the decision was not prejudicial to the challenging defendant (Southern Management Corporation Retirement Trust v. Charles Timothy Jewell, et al., No. 12-2319, 4th Cir.; 2012 U.S. App. LEXIS 14434).

Lukoil To Pay $93M To Getty To Settle Claims Of Alleged Fraudulent Transfers

NEW YORK - The liquidating trustee for the Chapter 11 bankruptcy of Getty Petroleum Marketing Inc.(GPMI) on July 17 moved in bankruptcy court for approval of a deal in which Lukoil Americas Corp. would pay $93 million to GPMI to settle claims related to allegedly fraudulent transfers before GPMI filed for bankruptcy (Getty Petroleum Marketing Inc. v. Lukoil Americas Corporation, et al. $(In Re: Getty Petroleum Marketing Inc.$), Adv. No. 11-02942, No. 11-15606, Chapter 11, S.D. N.Y. Bkcy.).

Judge Confirms Reinsurance Arbitration Award, Finding It Rational

PHILADELPHIA - A federal judge in Pennsylvania confirmed an arbitration award on June 15, finding that the award was rational and that the arbitration panel did not exceed its power (Platinum Underwriters Bermuda, Ltd. v. Excalibur Reinsurance Corporation, No. 12-mc-00070, E.D. Pa.; 2013 U.S. Dist. LEXIS 98671).

Bankrupt 'Girls Gone Wild,' Las Vegas Casino Reach Deal On $31M In Claims

LOS ANGELES - The trustee of Bankrupt GGW Brands LLC, the producer of adult videos carrying the name "Girls Gone Wild," on July 15 moved for bankruptcy court approval of a stipulated agreement that would resolve a $31 million claim against the GGW bankruptcy estate made by Wynn Las Vegas LLC and its principal, Stephen A. Wynn (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

Beauty School Admissions Reps Granted Conditional Certification In Overtime Suit

MINNEAPOLIS - A Minnesota federal judge on July 15 conditionally certified a class of beauty school admissions representatives seeking overtime compensation after first dismissing the reps' record-keeping claims (Michelle Le, et al. v. Regency Corporation d/b/a Regency Beauty Institute, et al., No. 13-391, D. Minn.; 2013 U.S. Dist. LEXIS 98276).

Dewey & LeBoeuf Creditors Say $15M Claim Should Be Allowed Even Though It's Late

NEW YORK - Creditors of bankrupt law firm Dewey & LeBoeuf on July 16 filed a brief arguing that the bankruptcy court should permit them to file a late claim for $15 million as a result of alleged malpractice by one of the firm's attorneys (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

Judge Grants Motion To Compel Arbitration Of Reinsurance Dispute

NEW HAVEN, Conn. - A federal judge in Connecticut on July 12 granted a motion to dismiss and compel arbitration, holding that a valid arbitration agreement exists between a reinsurer and a nonsignatory to a reinsurance agreement (Trenwick America Reinsurance Corporation v. Unionamerica Insurance Company Limited, No. 13-cv-00094, D. Conn.; 2013 U.S. Dist. LEXIS 97518).

Exide Committee: DIP Loan Is 'Extremely Prejudicial' To Unsecured Creditors

WILMINGTON, Del. - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of Exide Technologies on July 16 filed a brief objecting to the company's request for bankruptcy court approval of $500 million in post-petition financing, also known as debtor-in-possession (DIP) financing, on grounds that the case control milestones encompassed in the loan are "extremely prejudicial" (In Re: Exide Technologies, No. 13-11482, Chapter 11, D. Del. Bkcy.).

Directors And Officers Say Shareholder Complaint Should Be Dismissed As Moot

TRENTON, N.J. - Directors and officers of a company told a New Jersey federal court on July 11 that they have remedied a shareholder's complained-of issues and that the shareholder's suit against them is therefore moot (Justin Holland v. New Jersey Resources Corporation, et al., No. 12-cv-07858, D. N.J.).

Cross-Elasticity Of Supply Dooms Attempted Monopolization Claim, 11th Circuit Rules

ATLANTA - The 11th Circuit U.S. Court of Appeals on July 15 affirmed the dismissal of attempted monopolization claims brought by the losing bidder in a bankruptcy auction of a steel mill's assets against the successful bidder, finding that there was high cross-elasticity of supply, which deters monopoly pricing (Gulf States Reorganization Group, Inc. v. Nucor Corporation, No. 11-14983, 11th Cir.; 2013 U.S. App. LEXIS 14187).

2nd Circuit Reverses; Evidence Needed On Automatic Stay Issue In ResCap Bankruptcy

NEW YORK - A panel of the Second Circuit U.S. Court of Appeals on July 15 reversed a District Court ruling and held that more evidence was needed to determine whether the automatic stay applied in a case where the Federal Housing Finance Agency (FHFA) sued the parent and affiliates of Bankrupt Residential Capital (ResCap) related to home loans (Residential Capital v. Federal Housing Finance Agency $(In Re: Residential Capital LLC$), No. 12-3342, Chapter 11, 2nd Cir.).

Judge: Insurer Has No Duty To Defend Counterclaims In Patent Infringement Dispute

SAN FRANCISCO - An insurer has no duty to defend its insured against counterclaims as they are currently pleaded in an underlying patent infringement lawsuit, a California federal judge ruled July 12 (Travelers Property Casualty Company of America v. KFx Medical Corporation, No. C 13-00710 JSW, N.D. Calif.; 2013 U.S. Dist. LEXIS 97777).

U.S. Trustee: OnCure's More Than $425,000 Retainer Does Not Meet Criteria

WILMINGTON, Del. - The U.S. trustee in the Chapter 11 bankruptcy case of OnCure Holdings Inc. on July 12 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to the more than $425,000 retainer the company proposes to pay its bankruptcy counsel, on grounds that it does not meet the criteria for what is called an evergreen retainer (In Re: OnCure Holdings Inc., No. 13-11540, Chapter 11, D. Del. Bkcy.).