LexisNexis® Legal Newsroom
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.).

Federal Judge Confirms Swiss Arbitration Award In Licensing Agreement Dispute

NEW YORK - A New York federal judge on May 1 confirmed an arbitration award that was issued in favor of a Swiss corporation in a dispute over a licensing agreement with two U.S. entities, finding that none of the defenses under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards applied (Marker Volkl $(International$) GMBH v. Epic Sports International Inc., et al., No. 12-8729, S.D. N.Y.; 2013 U.S. Dist. LEXIS 62412).

Nortel: $7.5B Asset Appeal 'Premature'; 3rd Circuit Certification Unwarranted

WILMINGTON, Del. - Bankrupt Nortel Networks Inc. on May 1 objected to the motion filed by joint administrators of Nortel's bankruptcy estate pertaining to the allocation of $7.5 billion in asset sale proceeds, contending that the interlocutory appeal should not be certified directly to the Third Circuit U.S. Court of Appeals (In Re: Nortel Networks Inc., No. 09-10138, Chapter 11, D. Del. Bkcy.).

Kodak, Kyocera Settle Patent Dispute For $4.95 Million

NEW YORK - Kyocera Corp. on May 1 agreed to pay $4.95 million to bankrupt Eastman Kodak Co. to settle patent infringement claims and unconditionally release both parties from future litigation pertaining to the patents at issue (Kyocera Corporation v. Eastman Kodak Company $(In Re: Eastman Kodak Company$), Adv. No. 13-01093, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.).

11th Circuit: Creditors That Filed Involuntary Bankruptcy Required To Post Bond

ATLANTA - A panel of the 11th Circuit U.S. Court of Appeals on May 1 affirmed a bankruptcy court's decision that required creditors who had filed an involuntary bankruptcy to post a $100,000 bond (Fisher Island Limited v. Fisher Island Investments Inc., No. 12-13045, Chapter 11, 11th Cir.; 2013 U.S. App. LEXIS 8856).

Flintkote Says Former Parent's Objections To Reorganization Plan Are Self-Serving

WILMINGTON, Del. - The former parent of Chapter 11 debtor The Flintkote Co. is not concerned about asbestos personal injury claimants and is objecting to Flintkote's plan of reorganization merely to use the bankruptcy case to its own litigation advantage, Flintkote says in an April 29 brief in the former parent's Delaware federal court appeal of the plan's confirmation (In re: The Flintkote Co., et al. [Imperial Tobacco Canada Limited, et al. v. The Flintkote Company, et al., No. 13-227, D. Del.]).

Kodak Reorganization Plan: $49.2M In Claims Fully Paid; Others Partially Recovered

NEW YORK - Bankrupt Eastman Kodak Co. on April 30 filed its joint plan of reorganization, which would pay priority claims and secured claims in full, for a total recovery of $49.2 million, while the recovery of $2.8 billion in general unsecured claims is projected to be better than if Kodak converted the case to Chapter 7 liquidation (In Re: Eastman Kodak Company, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.).

Bankruptcy Judge: Committee Not Required To Provide RDA Confidential Information

NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of RDA Holding Co., the company that owns Readers' Digest publications, on April 30 ruled that the Official Committee of Unsecured Creditors is not authorized or required to provide access to confidential or privileged information (In Re: RDA Holding Co., No. 13-22233, Chapter 11, S.D. N.Y. Bkcy.).

Wisconsin Judge Orders Dismissal Of Dispute Over Trademark

MILWAUKEE - A defendant accused of infringing the "Hearing Is Believing" trademark obtained dismissal of the allegations on April 28, when a Wisconsin federal judge agreed that jurisdiction is lacking (Koss Corporation v. Max Sound Corporation, No. 12-854, E.D. Wis.).

9th Circuit: Transfer Of More Than $11.99 Million May Have Been Fraudulent

SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on April 30 vacated and remanded to a district court a case involving a trustee's complaint that a debtor company made a fraudulent transfer greater than $11.99 million, ruling that the district court did not apply the correct standard in its initial ruling (Official Committee of Unsecured Creditors of the Estate of Fitness Holdings International Inc. v. Hancock Park Capital II [In the Matter of: Fitness Holdings International Inc], No. 11-56677, Chapter 11, 9th Cir.; 2013 U.S. App. LEXIS 8729).

Committee In B456 Case Says GM's Claim Greater Than $27.91M Is 'Deficient'

WILMINGTON, Del. - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of B456 Systems Inc., the renamed version of alternative energy company A123 Systems, on April 29 filed a brief objecting to a more than $27.91 million claim asserted by General Motors LLC that alleges breach of contract (In Re: B456 Systems Inc., No. 12-12859, Chapter 11, D. Del. Bkcy.).

Merck Wins Defense Verdict In 1st Fosamax Femur Case To Go To Verdict

TRENTON, N.J. - A New Jersey federal jury on April 29 quickly found that Fosamax did not cause a plaintiff's femur fracture, the first verdict in a case in which a plaintiff claims that the osteoporosis drug weakened her thigh bone (In Re: Fosamax [Alendronate Sodium] Products Liability Litigation, MDL Docket No. 08-md-00008, Bernadette Glynn, et al. v. Merck Sharp & Dohme Corporation, No. 11-5304, D. N.J.).

Lenders In K-V Discovery Case: Disclosure Proper; Reorganization Should Proceed

NEW YORK - The post-petition lenders and a group of senior noteholders in the Chapter 11 bankruptcy of pharmaceutical company K-V Discovery Solutions Inc. on April 25 filed a brief arguing that the bankruptcy court should approve their disclosure statement for the reorganization plan because it complies with the Bankruptcy Code (In Re: K-V Discovery Solutions Inc., No. 12-13346, Chapter 11, S.D. N.Y. Bkcy.).

Employer Ordered To Turn Over Employee Information In Wage Payment Class Suit

MARTINSBURG, W.Va. - A retail employer must turn over employee records to a class plaintiff alleging that her former employer violated the West Virginia Wage Payment and Collection Act (WPCA) when it failed to pay her wages within 72 hours of her termination, a West Virginia federal judge ruled April 25 (Stephanie N. Paulino, et al. v. Dollar General Corporation, et al., No. 12-75, N.D. W.Va.; 2013 U.S. Dist. LEXIS 59371).

Kodak Plans To Sell Imaging Businesses To Settle $2.8B In U.K. Pension Claims

NEW YORK - Bankrupt Eastman Kodak Co. on April 29 announced that it has reached a comprehensive settlement agreement with the U.K. Kodak Pension Plan (KPP), its largest creditor, which will settle $2.8 billion in claims held by KPP against Kodak by transferring ownership of Kodak's personalized-imaging and document-imaging businesses to KPP (In Re: Eastman Kodak Company, No.12-10202, Chapter 11, S.D. N.Y. Bkcy.).