LexisNexis® Legal Newsroom
Shareholders Say Presuit Demand On Company's Subsidiary Is Not Necessary

CHICAGO - Shareholders told an Illinois federal court on May 6 that presuit demand upon the board of a wholly owned subsidiary of a financial company is not required before filing suit against the subsidiary's parent corporation (James F. Groen, et al. v. David W. Nelms, et al., No. 12-cv-06436, N.D. Ill.).

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.).

ICSID Refuses To Award Damages On Treaty Claims Against Romania

WASHINGTON, D.C. - A tribunal for the International Centre for Settlement of Investment Disputes (ICSID) on May 6 issued an award in a dispute over an investment in an oil refinery, finding that a Netherlands corporation failed to show that it suffered losses as a result of Romania's breaches of a bilateral investment treaty (The Rompetrol Group N.V. v. Romania, No. ARB/06/3, ICSID).

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.).

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).

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.).

Court: No Penalties For Employer That Failed To Timely Pay For Unused Vacation

VENTURA, Calif. - A California corporation violated California Labor Code Sections 227.3 and 201 when it failed to immediately pay terminated employees for all their vested vacation time, as its collective bargaining agreement that stated otherwise "lacked clarity," a California Second District Court of Appeal panel ruled May 2 (Howard Choate, et al. v. Celite Corporation, No. B239160, Calif. App., 2nd Dist., Div. 6; 2013 Cal. App. LEXIS 349).

U.S. Trustee: $15 Million Sought For Financial Advisers Of AMR Not Justified

NEW YORK - The U.S. trustee in the Chapter 11 bankruptcy of AMR Corp., the parent company of American Airlines Inc., on May 2 objected to the application of AMR and the Official Committee of Unsecured Creditors (the committee) seeking approval of $15 million for two separate firms that act as AMR's financial advisers (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

Trustee In 'Girls Gone Wild' Bankruptcy Subpoenas 8 People Tied To Parent Company

LOS ANGELES - The trustee in the Chapter 11 bankruptcy of GGW Brands LLC, the parent company for the company that produces adult videos under the name "Girls Gone Wild," on May 3 filed notice in the U.S. Bankruptcy Court for the Central District of California that he was serving subpoenas on eight individuals, compelling them to testify and produce documents in connection with GGW's bankruptcy proceeding (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

Justice Finds Chevron Has No Canadian Assets To Pay $18.2 Billion Ruling

TORONTO - A Canadian judge on May 1 stayed an action filed by a group of Ecuadorian claimants in relation to alleged environmental exposures, finding that Chevron Corp. has no assets in Canada to satisfy an $18.2 billion judgment issued in their favor in Ecuador (Yaiguaje v. Chevron Corporation, No. CV-12-9808-00CL, Ontario Super.).

Patent Claim For More Than $4.12 Million Against K-V Discovery Is Valid, Lab Says

NEW YORK - A pharmaceutical laboratory on May 1 filed a brief opposing bankrupt K-V Discovery Solutions Inc.'s attempt to reclassify certain bankruptcy claims, arguing that it has a valid claim for more than $4.12 million related to a patent that it says a division of K-V Discovery infringed (In Re: K-V Discovery Solutions Inc., No. 12-13346, Chapter 11, S.D. N.Y. Bkcy.).

Reorganization Plans For GIT, NARCO Become Effective

PITTSBURGH - The plans of reorganization for refractory products manufacturers Global Industrial Technologies Inc. (GIT) and North American Refractories Co. (NARCO), which include multimillion-dollar trusts to pay asbestos and silica personal injury claims, became effective April 30, more than 11 years after the companies filed Chapter 11 petitions, according to notices filed May 1 in a Pennsylvania federal bankruptcy court (In re: Global Industrial Technologies, Inc., et al., No. 02-21626, and In re: North American Refractories Co., et al., W.D. Pa. Bkcy.).

Creditors: MF Global Plan Of Liquidation Violates Code; Bankruptcy Court Erred

NEW YORK - Creditors Sapere Wealth Management LLC, Granite Asset Management and Sapere CTA Fund L.P. (collectively, the Sapere entities) on May 2 filed a statement of issues on appeal pertaining to the bankruptcy court's confirmation of the plan of liquidation proposed by MF Global Holdings Ltd. (MFGH), contending the plan violates the Bankruptcy Code (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

Dewey & LeBoeuf Executives: $19.5M Deal With Insurer Lacks 'Supportable Basis'

NEW YORK - Two former executives with bankrupt law firm Dewey & LeBoeuf on May 2 filed a brief objecting to the more than $19.5 million settlement reached among the Dewey & LeBoeuf Liquidation Trust, XL Specialty Insurance Co. and Steven H. Davis, on grounds that the liquidating trustee has failed to provide any evidence in supporting the deal other than his own "self-serving, conclusory statements" that the agreement is favorable to the liquidation trust (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

2nd Circuit Affirms $33.72M Kodak Award In Asia Optical Patent Dispute

NEW YORK - The Second Circuit U.S. Court of Appeals on May 1 affirmed a ruling by a district court awarding bankrupt Eastman Kodak Co. more than $33.72 million in a patent licensing dispute with Asia Optical (Eastman Kodak Company v. Asia Optical Company Inc., No. 3206, 2nd Cir.).