LexisNexis® Legal Newsroom
7th Circuit Dismisses $17M Malpractice Claim Related To Company's Bankruptcy

CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on June 21 affirmed the dismissal of a $17 million legal malpractice case against law firm Mayer Brown Rowe & Maw related to the advice it gave a company in bankruptcy (David E. Grochocinski v. Mayer Brown Rowe & Maw, No. 10-2057, Chapter 7, 7th Cir.; 2013 U.S. App. LEXIS 12728).

U.S. Supreme Court To Rule On Bankruptcy Judges' Power In 'Core' Proceedings

WASHINGTON, D.C. - The U.S. Supreme Court on June 24 granted certiorari in a case dealing with the questions of whether Article III of the U.S. Constitution permits the exercise of the judicial power of the United States by bankruptcy courts on the basis of litigant consent and whether a bankruptcy court may submit proposed findings of fact and conclusions of law for de novo review by a district court in a "core" proceeding under 28 U.S. Code Section 157(b) (Executive Benefits Insurance Agency v. Arkinson, No. 12-1200, U.S. Sup.).

1st Circuit: Error To Apply Heightened Pleading Standard In Antitrust Case

BOSTON - A recycling company sufficiently alleged that polystyrene food service packaging manufacturers and trade associations refused in concert to deal with the company in its recycling business method in violation of Section 1 of the Sherman Act, the First Circuit U.S. Court of Appeals ruled June 19, finding that the trial court misapplied the plausibility requirement at the pleading stage (Evergreen Partnering Group, Inc. v. Pactiv Corporation, et al., No. 12-1730, 1st Cir.; 2013 U.S. App. LEXIS 12505).

ICSID Issues Order On Discontinuance Of Arbitration With Ecuador

WASHINGTON, D.C. - The International Centre for Settlement of Investment Dispute (ICSID) on June 19 released an order taking note of the discontinuance of an arbitration action filed by a corporation against the Republic of Ecuador (Corporation Quiport SA V. Republic of Ecuador, No. ARB/09/23).

Rothstein Trustee: Creditors 'Misrepresent' Agreement, Wrongly Oppose Plan

FORT LAUDERDALE, Fla. - The trustee in the Chapter 11 bankruptcy proceeding of Rothstein, Rosenfeldt Adler (RRA), the former law firm of convicted Ponzi scheme operator Scott Rothstein, on June 21 filed a brief in bankruptcy court arguing that certain creditors known as the Levy parties "misrepresent" terms of a settlement they had with the trustee and wrongfully oppose the RRA plan of liquidation (In Re: Rothstein Rosenfeldt Adler, No. 09-34791, Chapter 11, S.D. Fla. Bkcy.).

N.J. Supreme Court: Asbestos Claims Are Not Covered Under Insolvent Insurer's Policies

TRENTON, N.J. - Asbestos claims against a bankrupt insured manufacturer are not covered under excess comprehensive general liability insurance policies issued by its insolvent insurer, the New Jersey Supreme Court held June 19, finding that the doctrine of collateral estoppel applies (In the matter of the liquidation of Integrity Insurance Co./The Celotex Asbestos Trust, No. 068970, N.J. Sup.; 2013 N.J. LEXIS 588).

Bankruptcy Judge OKs $3M Deal To Settle K-V Discovery Overpricing Claims

NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of pharmaceutical company K-V Discovery Solutions Inc. on June 20 granted a motion by bankrupt K-V and approved a $3 million settlement between the company and the State of Texas pertaining to alleged overpricing of medication (In Re: K-V Discovery Solutions Inc., No. 12-13346, Chapter 11, S.D. N.Y. Bkcy.).

Asbestos Coverage Disputes Between Flintkote, Insurers Go To Binding Arbitration

WILMINGTON, Del. - A Delaware federal bankruptcy judge on June 20 granted relief from the automatic stay in The Flintkote Co.'s Chapter 11 case so that Flintkote and certain London market insurance companies can participate in binding arbitration to resolve disputes over insurance coverage for asbestos bodily injury claims (In re: The Flintkote Co., et al., No. 04-11300, D. Del. Bkcy.).

Panel: No Coverage For Medical Negligence Suit Stemming From Autism Treatment

ATLANTA - The 11th Circuit U.S. Court of Appeals on June 20 affirmed a lower federal court's ruling that an insurer had no duty to defend a doctor and a medical practice in a medical negligence lawsuit because the policy's professional services exclusion barred coverage for the underlying claims (Nationwide Mutual Fire Insurance Co. v. Creation's Own Corporation, et al., No. 12-16223, 11th Cir.; 2013 U.S. App. LEXIS 12591).

Bankrupt Residential Capital: $200M In Claims Should Be Dismissed Or Expunged

NEW YORK - Bankrupt Residential Capital (ResCap) on June 20 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York arguing that the $200 million in claims filed by the National Credit Union Administration (NCUA) should be dismissed or disallowed (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

Judge Finds Panamanian Company Was Not Properly Served With Petition

LOS ANGELES - A California federal judge on June 18 granted a Panamanian corporation's motion to quash service of a petition to confirm an arbitration award, finding that a theatrical group failed to properly serve the petition under federal law (Latinamerican Theatrical Group LLC v. Swen International Holding, No. 13-1270, C.D. Calif.; 2013 U.S. Dist. LEXIS 86383).

Couple's Mortgage Case Against Bankrupt GMAC Fails, Tennessee Federal Judge Says

MEMPHIS, Tenn. - A federal judge in Tennessee on June 19 found that bankrupt GMAC Home Mortgage Corp. did not wrongfully move for foreclosure against a couple who failed to make loan payments (Carl G. Nichols III v. GMAC Home Mortgage Corporation, No. 10-02072, W.D. Tenn.).

Bankruptcy Judge Orders Law Firm To Show Why Brief Should Not Be Stricken

NEW YORK - A New York federal bankruptcy judge on June 17 ordered a New Jersey law firm to show cause why its brief opposing confirmation of a plan of reorganization for Chapter 11 debtor Quigley Co. Inc., filed on the verge of the plan confirmation hearing, should not be stricken (In re Quigley Company Inc., No. 04-15739, S.D. N.Y. Bkcy.).

Judge Declines Woman's Request For Sanctions, Awards Summary Judgment To Target

NEW YORK - A federal judge in New York on June 14 awarded summary judgment to Target Corp. in a slip-and-fall case after denying a woman's request to sanction the retailer over its failure to preserve surveillance footage of events preceding the incident (Adele Simoes v. Target Corporation, No. 11 CV 2032, E.D. N.Y.; 2013 U.S. Dist. LEXIS 83896).

Company Fails To Prove Conspiracy, Monopolization, 1st Circuit Rules

BOSTON - A company that sells aviation fuel at an airport failed to demonstrate that a competitor conspired with the airport authority to interfere with its business in violation of federal antitrust law, the First Circuit U.S. Court of Appeals affirmed June 17 (Diaz Aviation Corporation, et al. v. Airport Aviation Services, Inc., et al., No. 12-1859, 1st Cir.; 2013 U.S. App. LEXIS 12069).

Specialty Products Seeks Expedited Appeal Of Asbestos Liability Ruling

WILMINGTON, Del. - Specialty Products Holding Corp. and Bondex International Inc. on June 18 sought to appeal directly to the Third Circuit U.S. Court of Appeals a Delaware federal bankruptcy court ruling setting their asbestos liabilities at $1.16 billion, saying "prompt guidance" from the appellate court is needed to resolve an issue at the heart of the debtors' bankruptcy case and important to the public (In re: Specialty Products Holding Corp., et al., No. 10-11780, D. Del. Bkcy.).

Lawyers Again Seek Summary Judgment On Garlock's Fraud, Conspiracy Claims

CHARLOTTE, N.C. - Allegations by Garlock Sealing Technologies LLC that attorneys fraudulently obtained a settlement from Garlock for a mesothelioma victim should be dismissed because Garlock fails to provide evidence to create a genuine issue of material fact for a claim of fraud, the attorneys say June 14 in their second bid for summary judgment in North Carolina federal bankruptcy court (Garlock Sealing Technologies, LLC, et al. v. Chandler, et al., No. 12-03137, W.D. N.C. Bkcy.).

Bankrupt 'Pink Slime' Maker Proposes Deal In Which WARN Class Gets $1.65 Million

WILMINGTON, Del. - AFA Investment Inc., the maker of the so-called pink slime additive used in some ground beef, on June 14 moved for approval of a revised global settlement in which a class of claimants who asserted violations of the Worker Adjustment and Retraining Notification (WARN) Act would receive $1.65 million (In Re: AFA Investment Inc., No. 12-11127, Chapter 11, D. Del. Bkcy.).

Bank Of America Says Its $1.7B Claim In Bankruptcy Case Of Taylor Bean Is Valid

WASHINGTON, D.C. - Bank of America National Association, the indenture trustee for short-term notes issued by a division of bankrupt mortgage company Taylor Bean Whitaker Mortgage Corp. (TBW), on June 17 filed a brief opposing a motion to dismiss the bank's lawsuit against the Federal Deposit Insurance Corp. (FDIC) and asserting its right to $1.7 billion in funds related to the TBW bankruptcy (Bank of America National Association v. Federal Deposit Insurance Corporation, No. 10-01681, D. D.C.).

Solyndra Trustee: Reduction, Elimination Of $141,140.46 In Employee Claims Needed

WILMINGTON, Del. - The trustee of the Solyndra Residual Trust, which was established as part of the Chapter 11 bankruptcy plan for alternative energy company Solyndra LLC, on June 14 filed six briefs objecting to claims asserted by former employees of the company, seeking to reduce or disallow some claims in their entirety. The combined total of reductions and disallowances sought equals $141,140.46 (In Re: Solyndra LLC, No. 11-12799, Chapter 11, D. Del. Bkcy.).

Battery Maker Exide, With $500M Financing Deal In Place, Files Chapter 11 Petition

WILMINGTON, Del. - Battery maker Exide Technologies filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on June 10, despite citing debts more than $1.14 billion and assets more than $1.89 billion. The company also says it has lined up $500 million in post-petition financing from JPMorgan Chase Bank (In Re: Exide Technologies, No. 13-11482, Chapter 11, D. Del. Bkcy.).

Howrey LLP Committee Seeks Examination Of 3 Law Firms Regarding Former Clients

SAN FRANCISCO - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of former law firm Howrey LLP on June 7 filed three separate, but identical, motions seeking approval to conduct examinations of three law firms pursuant to Federal Rule of Bankruptcy Procedure 2004 (In Re: Howrey LLP, No. 11-31376, Chapter 11, N.D. Calif. Bkcy.).

Debtor Manufacturer Gets Extension For $8.2 Million DIP Financing

WILKES-BARRE, Pa. - A Pennsylvania federal bankruptcy judge on June 6 gave Chapter 11 debtor United Gilsonite Laboratories (UGL) another year to have access to an $8.2 million post-petition credit facility after UGL said that while it had not yet drawn any funds on the facility, it needed continued access to the financing while working on a plan of reorganization (In re: United Gilsonite Laboratories, 11-2032, M.D. Pa. Bkcy.).

SIPA Trustee In MF Global Case Says 'Hard Cap' Needed On Insurance Payments

NEW YORK - The trustee in the Chapter 11 bankruptcy of MF Global Holdings Ltd. (MFGH) on June 6 said the federal bankruptcy judge presiding over the case should issue a ruling that the recent $10 million increase to the insurance payment limit for the defense costs of directors and officer is a "hard cap" (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

Employees: Expert May Not Speak On Ethics Issue In San Bernardino Bankruptcy

RIVERSIDE, Calif. - The California Public Employees' Retirement System (CalPERS) on June 6 filed a brief responding to objections to its motion seeking disqualification of the law firm that it contends switched sides in the Chapter 9 bankruptcy proceedings of the City of San Bernardino, Calif., arguing that the expert opinion provided by Creditor National Public Finance Guarantee Corp. (National) is "inadmissible" (In Re: City of San Bernardino, Calif., No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).