LexisNexis® Legal Newsroom
Dewey & LeBoeuf Trustee Seeks $450,132 From Creditors As Preferential Transfers

NEW YORK - The liquidating trustee in the Chapter 11 bankruptcy of former law firm Dewey & LeBoeuf on Sept. 26 filed three adversary complaints against creditors who had asserted a total of $538,287.39 in claims in the proceeding, contending not only that the creditors' claims should be voided but that those creditors are liable to the trustee for a total of $450,132.60 (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

Federal Judge: Creditors Lack Standing To Pursue Claims Against Tribune

NEW YORK - The New York federal judge presiding over the multidistrict litigation that consolidated fraudulent conveyance litigation against bankrupt Tribune Co. on Sept. 23 ruled that individual creditors who have claims against Tribune lack standing to pursue their claims while the Official Committee of Unsecured Creditors is asserting the same claims against the bankruptcy estate (In Re: Fraudulent Conveyance Litigation, MDL No.11-2296, S.D. N.Y.).

Guccione Collection: Damages Owed By 'Penthouse' Related To Intellectual Property

WILMINGTON, Del. - The Guccione Collection LLC (TGC) filed an adversary proceeding in the Chapter 11 bankruptcy of PMGI Holdings Inc., the parent company for the adult entertainment empire carrying the name "Penthouse," seeking declaratory relief and unspecified damages related to intellectual property (In Re: PMGI Holdings Inc., No. 13-12404, Chapter 11, D. Del. Bkcy.).

Hotel Owner Files Chapter 11 Bankruptcy, Cites 'Significant Reduction' In Revenue

TRENTON, N.J. - The chairwoman of the Lafayette Yard Community Development Corp. (LYCDC) on Sept. 23 filed a declaration in the U.S. Bankruptcy Court for the District of New Jersey, saying the company's Chapter 11 bankruptcy petition was filed with the goal of selling a hotel, which is the company's main asset (In Re: Lafayette Yard Community Development Corporation, No. 13-30752, Chapter 11, D. N.J. Bkcy.).

Woman Seeks Stay Relief To Pursue $900,000 Claim Against ResCap Affiliate

NEW YORK - A tenant who lived in a property owned and managed by GMAC Mortgage LLC (GMACM) moved in the U.S. Bankruptcy Court for the Southern District of New York for relief from the automatic stay in the Chapter 11 bankruptcy proceeding of Residential Capital LLC (ResCap), GMACM's parent company, to pursue a lawsuit for $900,000 against GMACM (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

Lightsquared Seeks OK Of At Least $315,000 Payment For Special Committee Members

NEW YORK - Bankrupt technology company Lightsquared Inc. on Sept. 23 filed an emergency motion in the U.S. Bankruptcy Court for the Southern District of New York seeking at least $315,000 in compensation for three members of a special committee that has played "a significant role" in selling the company's assets and helping it restructure. The compensation could increase depending on how long Lightsquared determines the special committee is needed (In Re: Lightsquared Inc., No.12-12080, Chapter 11, S.D. N.Y. Bkcy.).

Michigan Attorneys: Stay Covers Constitutionality Case Against Governor, Others

DETROIT - Attorneys for the State of Michigan on Sept. 24 filed a brief in the U.S. Bankruptcy Court for the Eastern District of Michigan contending that a group of Detroit residents who have sued Gov. Rick Snyder and other officials with the State of Michigan should not be permitted to lift the automatic stay to pursue that litigation (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

AMR Argues 4th Amended Plan Of Reorganization Should Be Confirmed

NEW YORK - Bankrupt AMR Corp., the parent of American Airlines Inc., on Sept. 23 filed its finds of fact and conclusion of law in support of confirmation of the company's fourth amended Chapter 11 plan of reorganization (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

'Penthouse' Parent PMGI Files Chapter 11 Reorganization Plan

WILMINGTON, Del. - PMGI Holdings Inc., the parent company for the adult entertainment empire carrying the name "Penthouse," on Sept. 21 filed a plan of reorganization in its Chapter 11 bankruptcy case that calls for payment in full for all first- and second-lien noteholders (In Re: PMGI Holdings Inc., No. 13-12404, Chapter 11, D. Del. Bkcy.).

10th Circuit Affirms Judgment For Microsoft In Novell's Monopolization Suit

DENVER - Novell Inc. failed to present evidence sufficient for a jury to find that Microsoft Corp. unlawfully used its dominant position in the personal computing (PC) operating-systems market to monopolize the word-processing and spreadsheet applications markets when it withdrew access to its namespace extensions, the 10th Circuit U.S. Court of Appeals ruled Sept. 23 (Novell, Inc. v. Microsoft Corporation, No. 12-4143, 10th Cir.; 2013 U.S. App. LEXIS 19463).

Detroit: Creditor's Motion For Stay Relief Fails To Show Cause, Should Be Denied

DETROIT - The bankrupt City of Detroit on Sept. 20 filed a brief in the U.S. Bankruptcy Court for the Eastern District of Michigan arguing that a city resident who seeks relief from the automatic stay offers no support for his request to lift the stay so that he may pursue liquidation of his unsecured prepetition claim outside the ordinary course prescribed under Chapter 9 of the Bankruptcy Code (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

Airlines In Antitrust Case Seek DOJ Documents Related To Other Mergers

WASHINGTON, D.C. - US Airways and American Airlines Inc., which are defendants in an antitrust lawsuit filed by the U.S. Department of Justice (DOJ) related to the proposed merger of the two airlines, on Sept. 20 moved in the U.S. District Court for the District of Columbia for an order compelling the DOJ to produce factual materials regarding the agency's prior approvals of other airline mergers (United States of America v. US Airways Group Inc., et al., No. 13-01236, D. D.C.).

Foundation: U.S. High Court Must Vacate Ruling On Bankruptcy Court's Power

WASHINGTON, D.C. - In an amicus curiae brief made available Sept. 20, the Robert McCormick Foundation urged the U.S. Supreme Court to rule in favor of the Executive Benefits Insurance Agency (EBIA) and vacate a ruling by the Ninth Circuit U.S. Court of Appeals because Article III of the U.S. Constitution does not permit the exercise of the judicial power of the United States by bankruptcy courts on the basis of litigant consent (Executive Benefits Insurance Agency v. Arkinson, No. 12-1200, Chapter 7, U.S. Sup.).

Jury Awards $1.3M In Zometa Jaw Injury Trial After Botching 1st Verdict Form

ORLANDO, Fla. - A Florida federal jury on Sept. 20 found that Novartis Pharmaceuticals Corp. failed to warn a cancer patient about the risk of osteonecrosis of the jaw (ONJ) and awarded her $1.3 million in medical expenses and non-economic damages (Nancy Guenther, et al. v. Novartis Pharmaceutical Corporation, No. 6:08-456, M.D. Fla., Orlando Div.).

Paxil Birth Defect Plaintiff Dismissed Case 1 Day Before GSK's Removal, Judge Finds

PHILADELPHIA - A Pennsylvania federal judge on Sept. 19 remanded a Paxil birth defect case after finding that the plaintiff properly dismissed her state court case one day before defendant SmithKline Beecham Corp. (now GlaxoSmithKline PLC $(GSK$)) removed it to federal court on the basis of diversity jurisdiction (Jade Benge, et al. v. SmithKline Beecham Corporation, et al., No. 13-3388, E.D. Pa.).

5th Circuit Panel Affirms Defense Summary Judgment In Nematicide Injury Suits

NEW ORLEANS - A unanimous Fifth Circuit U.S. Court of Appeals panel on Sept. 19 affirmed summary judgment against banana field workers alleging product liability personal injury claims against dibromochloropropane manufacturers and distributors and corporations that used the nematicide because the claims filed in Louisiana federal court were prescribed by the one-year statute of limitations (Eduardo Alvarado Chaverri, et al. v. Dole Food Co. Inc., et al., No. 12-31026, 5th Cir.).

Syncora: Depositions Of Key Detroit Managers Should Be Admitted Into Evidence

DETROIT - Syncora Guarantee Inc., the financial guarantee insurance provider, on Sept. 19 moved in the U.S. Bankruptcy Court for the Eastern District of Michigan for admission of the deposition testimony of Emergency Manager Kevyn Orr and attorney Kenneth Buckfire on grounds they both qualify as managing agents of the Chapter 9 bankruptcy of the City of Detroit (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

Creditors Of Body Armor Maker ArmorWorks Say Law Firm Not Permitted To Switch Sides

PHOENIX - Two creditors in the Chapter 11 bankruptcy proceeding of military body armor manufacturer ArmorWorks Enterprises LLC (AWE) on Sept. 19 filed a brief in the U.S. Bankruptcy Court for the District of Arizona contending that the Bankruptcy Court should disqualify a law firm from representing the debtor because the firm previously represented the creditors regarding matters that pertain to the current bankruptcy proceeding (In Re: ArmorWorks Enterprises LLC, No. 13-10332, Chapter 11, D. Ariz. Bkcy.).

ResCap: $7.5M Claim By Investment Board That 'Bet' On RMBS Should Be Rejected

NEW YORK - Bankrupt Residential Capital LLC (ResCap) on Sept. 19 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to a $7.5 million claim filed against its estate by the West Virginia Investment Management Board (WVIMB) (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

Federal Circuit Reverses Denial Of Attorney Fee Award In Patent Case

WASHINGTON, D.C. - An Ohio federal judge improperly denied a prevailing patent infringement defendant an award of attorney fees, the Federal Circuit U.S. Court of Appeals ruled Sept. 19 (Buckhorn Corporation et al. v. ORBIS Corporation, No. 12-1643, Fed. Cir.).

10th Circuit Reverses, Remands Ruling On Fees; Says Bankruptcy Court Miscalculated

DENVER - A panel of the 10th Circuit U.S. Court of Appeals on Sept. 19 reversed and remanded a bankruptcy case, concluding that the bankruptcy court erred in its calculation of attorney fees by looking to factors outside of those prescribed in the Bankruptcy Code (Market Center East Retail Property Inc. v. Barak Lurie [In Re: Market Center East Retail Property Inc.], No. 12-2053, Chapter 11, 10th Cir.; 2013 U.S. App. LEXIS 19307).

Syncora: Detroit Not Allowed To Access Casino Money As DIP Financing Collateral

DETROIT - Syncora Guarantee Inc., the financial guarantee insurance provider, which has previously objected to the bankrupt City of Detroit's attempt to terminate an agreement between the parties to access casino revenue, on Sept. 18 moved to preclude the city from offering evidence regarding its need to obtain that revenue to secure post-petition financing, also called debtor-in-possession (DIP) financing (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

Judge: City Of San Bernardino Is Eligible For Bankruptcy, Objections 'Meritless'

RIVERSIDE, Calif. - The federal bankruptcy judge presiding over the Chapter 9 proceeding of the City of San Bernardino, Calif., on Sept. 17 ruled that the city is eligible to file for bankruptcy and said the objections of the California Professional Employees Retirement System (CalPERS) were "meritless" (In Re: City of San Bernardino, Calif., No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).

Bankruptcy Judge: Rothstein Trustee To Get 9.99 Percent Of Mansion Sale Proceeds

FORT LAUDERDALE, Fla. - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of the former mansion of Gianni Versace, Casa Casuarina LLC, on Sept. 16 issued an order approving a settlement between the mansion and the bankruptcy estate of former law firm Rothstein Rosenfeldt Adler (RRA) which gives the RRA trustee 9.99 percent of the $41.5 million in proceeds from the mansion's auction (In Re: Casa Casuarina LLC, No. 13-25645, Chapter 11, S.D. Fla. Bkcy.).

Lawyers Lose Summary Judgment Bid On Garlock's Fraud, Conspiracy Claims

CHARLOTTE, N.C. - A North Carolina federal bankruptcy judge on Sept. 17 for a second time denied summary judgment to an attorney and law firm accused by Chapter 11 debtor Garlock Sealing Technologies LLC of fraudulently obtaining a settlement from Garlock for a mesothelioma victim (Garlock Sealing Technologies, LLC, et al. v. Chandler, et al., No. 12-03137, W.D. N.C. Bkcy.).