LexisNexis® Legal Newsroom
Bankruptcy Judge: Resort's Claims Against 'Girls Gone Wild' Just More Than $26.64M

LOS ANGELES - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of GGW Brands LLC, the parent company of the company that produces the "Girls Gone Wild" series of adult videos, on Aug. 9 approved a settlement between GGW and the Las Vegas resort Wynn Las Vegas LLC in which the resort will be allowed to file claims against the bankruptcy estate for more than $26.64 million (In Re: GGW Brands LLC, No. 1301513, Chapter 11, C.D. Calif. Bkcy.).

Judge Refuses To Order Settlement Activities In Cleanup Suit

RALEIGH, N.C. - A federal judge in North Carolina presiding over two lawsuits brought under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) on Aug. 12 denied requests to require third-party plaintiff PCS Phosphate Co. Inc. to engage in settlement activities but stated that she would discuss settlement timing and techniques at an upcoming conference (Duke Energy Progress Inc. v. Alcan Aluminum Corporation, et al., No. 08-CV-460-FL, Consolidation Coal Company v. Alcan Aluminum Corporation, et al., No. 08-CV-463-FL, E.D. N.C.; 2013 U.S. Dist. LEXIS 113337).

7th Circuit Addresses Class Certification In 401(k) Fiduciary Duty Breach Case

CHICAGO - The Seventh Circuit U.S. Court of Appeals on Aug. 7 reversed a district court's denial of class certification to participants in 401(k) plans on their claims that the plans' fiduciaries breached their duties under the Employee Retirement Income Security Act by investing in a stable-value fund (SVF) that did not result in a rate of return that was sufficient for a retirement asset (Anthony Abbott, et al. v. Lockheed Martin Corporation, et al., No. 12-3736, 7th Cir.; 2013 U.S. App. LEXIS 16376).

Dewey & LeBoeuf Trustee Seeks More Than $4.81M In Fraudulent Transfers

NEW YORK - The liquidating trustee in the Chapter 11 bankruptcy proceeding of former law firm Dewey & LeBoeuf on Aug. 9 filed 12 adversary actions in the U.S. Bankruptcy Court for the Southern District of New York seeking to recover a total of $4,815,806.66 in what the trustee says are fraudulent transfers. The complaints all follow the same boilerplate (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

7th Circuit: $34M Claim By Bank Of America Against Debtor Company Denied

CHICAGO - A panel of the Seventh Circuit U.S. Court of Appeals on Aug. 8 affirmed a district court's ruling that dismissed Bank of America's $34 million complaint against a debtor company on grounds its complaint lacked specific allegations (Bank of America v. James A. Knight, No. 12-2698, Chapter 13, 7th Cir.; 2013 U.S. App. LEXIS 16474).

3rd Circuit: Lender Entitled To $10M Belonging To Debtor's Subsidiary

PHILADELPHIA - A panel of the Third Circuit U.S. Court of Appeals on Aug. 8 affirmed a bankruptcy court and ruled that a lender was entitled to recover a bank account worth $10 million that belonged to the wholly owned subsidiary of the debtor corporation (Wachovia Bank National Association v. WL Homes LLC $(In Re: WL Homes LLC$), No. 12-3414, Chapter 7, 3rd Cir.; 2013 U.S. App. LEXIS 16440).

Committee: Bankrupt AMR's Reorganization Plan Should Be Approved Without Delay

NEW YORK - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of AMR Corp., the parent company of American Airlines Inc., on Aug. 8 filed a brief in support of confirmation of the airline's second amended joint Chapter 11 plan that is premised on the proposed merger of American Airlines and US Airways Inc. (In Re: AMR Corporation, No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

MF Global Trustee Says $1M In Compensation For His Services Is 'Reasonable'

NEW YORK - The trustee in the Chapter 11 bankruptcy of MF Global Holdings Ltd. (MFGH) on Aug. 5 filed an application for compensation seeking $1 million, which he contends is "fair and reasonable" and is also "significantly" less than the maximum amount he could request, but is in addition to payment he seeks related to the billable hours of his law firm (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

Hostess Sues Bakery For Losses Valued At $151,989.93 Related To Alleged Breach

NEW YORK - Bankrupt Old HB Inc., formerly known as Hostess Brands Inc., on Aug. 7 filed an adversary proceeding against a bakery seeking recovery of $157,989.93 in damages related to alleged breaches of contract related to bread it provided for Hostess (Old HB Inc. f/k/a Hostess Brands Inc. v. Papa Pita Bakery $(In Re: Old HB, f/k/a Hostess Brands Inc.$), No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).

U.S. Bank Seeks Dismissal Of CFTC Case Related To Peregrine Financial Ponzi Scheme

CEDAR RAPIDS, Iowa - U.S. Bank National Association on Aug. 5 moved to dismiss a lawsuit filed against it by the U.S. Commodities Futures Trading Commission (CFTC) related to the Chapter 11 bankruptcy of Peregrine Financial Group, arguing that the CFTC's complaint improperly seeks to shift blame to the bank for the Ponzi scheme operated by Peregrine's CEO Russell Wasendorf Sr. (Commodity Futures Trading Commission v. U.S. Bank NA, No. 13-02041, N.D. Iowa).

Airline Customers: Merger Of American, US Airways Is Antitrust Violation

NEW YORK - A group of airline customers on Aug. 6 filed an adversary complaint against bankrupt AMR Corp., the parent company of American Airlines Inc., in the U.S. Bankruptcy Court for the Southern District of New York, alleging that the proposed $11 billion merger of American Airlines and US Airways Group Inc. would be a violation of federal antitrust laws (Carolyn Fjord, et al. v. AMR Corporation $(In Re: AMR Corporation$), No. 11-15463, Chapter 11, S.D. N.Y. Bkcy.).

Lightsquared Owners Seek $4B From Dish Network, EchoStar For Alleged Fraud

NEW YORK - The investment fund that owns bankrupt Lightsquared Inc. on Aug. 6 filed an adversary proceeding in the bankruptcy seeking at least $4 billion in damages against Dish Network Corp. and other entities affiliated with Dish Network, alleging fraud and other tortious conduct aimed at destroying the investment fund's rights related to its ownership of Lightsquared (Harbinger Capital Partners, et al. v. Charles W. Ergen, et al. $(In Re: Lightsquared Inc.$), No. 12-12080, Chapter 11, S.D. N.Y. Bkcy.).

Federal Judge Allows Late-Fees Suit Against Sallie Mae To Proceed

SAN FRANCISCO - A federal magistrate judge in Florida on Aug. 5 found that SLM Corp. (Sallie Mae) and other defendants have not established that the choice-of-law provisions in promissory notes bar claims at the pleading stage of a putative class action alleging that Sallie Mae's late fees violate California's consumer protection law, allowing the case to continue (Tina M. Ubaldi, et al. v. SLM Corporation, et al., No. 11-1320, N.D. Calif.; 2013 U.S. Dist. LEXIS 109877).

U.S. Trustee: Highway Technologies Settlement Not 'Fair And Reasonable'

WILMINGTON, Del. - The U.S. trustee in the Chapter 11 bankruptcy of Highway Technologies Inc. on Aug. 2 filed a brief objecting to a motion filed by the Official Committee of Unsecured Creditors in which it sought approval of a settlement agreement among the committee, the prepetition agent, various lenders and the equity sponsors, contending that it did not comply with the Bankruptcy Code (In Re: Highway Technologies Inc., No. 13-11326, Chapter 11, D. Del. Bkcy.).

8th Circuit: No Review Of Corporation's Dismissal In Trademark Case

ST. LOUIS - A Minnesota federal judge did not err in refusing to enforce a noncompete clause against a former franchisee as part of a preliminary injunction that prohibits the franchisee from using a plaintiff's trademarks, the Eighth Circuit U.S. Court of Appeals ruled Aug. 5 (Novus Franchising Inc. v. Michael L. Dawson, et al., No. 12-2982, 8th Cir.; 2013 U.S. App. LEXIS 16103).

CalPERS Disputes Bankruptcy Eligibility For City Of San Bernardino, Calif.

RIVERSIDE, Calif. - The California Public Employees' Retirement System (CalPERS), a creditor in the Chapter 9 bankruptcy of the City of San Bernardino, Calif., on Aug. 2 filed a brief arguing that the city has not shown that it is eligible to file for bankruptcy (In Re: City of San Bernardino, Calif., No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).

Bankrupt Capitol Bancorp: Discovery Needed Regarding FDIC's Bank Seizures

DETROIT - Bankrupt Capitol Bancorp Ltd. on Aug. 2 moved in the U.S. Bankruptcy Court for the Eastern District of Michigan for an order compelling the Federal Deposit Insurance Corp. to produce documents and to submit to examination through deposition testimony regarding allegations that the FDIC used its power to close - or pressured bank regulators to close - certain banks by seizing private property (In Re: Capitol Bancorp Ltd., No. 12-58409, Chapter 11, E.D. Mich. Bkcy.).

European Union's Competition Commission Conditionally OKs American Airlines Merger

BRUSSELS, Belgium - The European Commission, a division of the European Union in charge of competition policy, on Aug. 5 announced that it had granted conditional approval to the proposed $11 billion merger between bankrupt American Airlines Inc. and US Airways.

Split 1st Circuit Partially Reinstates Health Care Workers' Wage And Hour Claims

BOSTON - A split First Circuit U.S. Court of Appeals panel on Aug. 1 partially reinstated wage claims against a health care facilities operator and its former president and reopened the possibility of the case proceeding on behalf of a class after vacating the order striking the class and collective allegations (Elizabeth Manning, et al. v. Boston Medical Center Corporation, et al., Nos. 12-1573, 12-1653, 1st Cir.; 2013 U.S. App. LEXIS 16025).

Judge Rejects Insurer's Contention That Contract, Fraud Exclusions Bar Coverage

PROVIDENCE, R.I. - A Rhode Island federal judge on Aug. 2 found that a claimant has pleaded sufficient allegations to support the availability of corporate liability insurance coverage for an underlying intentional misrepresentation verdict, rejecting the insurer's reliance on the policy's contract and fraud exclusions in denying coverage (TranSched Systems Limited v. Federal Insurance Co., No. 12-939-M, D. R.I.; 2013 U.S. Dist. LEXIS 108736.)

Dewey & LeBoeuf Liquidating Trustee Seeks Extension Of Claim Objection Deadline

NEW YORK - The liquidating trustee in the Chapter 11 proceeding of former law firm Dewey & LeBoeuf on Aug. 2 filed a brief arguing that the deadline upon which objections can be filed to claims made against the bankruptcy estate should be extended to Jan. 16 (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

Bankrupt WP Steel, EPA Agree: Agency's Claims Are Valued At More Than $19.88M

WILMINGTON, Del. - The federal bankruptcy judge presiding over the Chapter 11 proceeding of WP Steel Venture LLC on Aug. 2 approved an agreement under which the environmental claims held by the U.S. Environmental Protection Agency will be allowed against the bankruptcy estate as general unsecured claims valued at more than $19.88 million (In Re: WP Steel Venture LLC, No. 12-11661, Chapter 11, D. Del. Bkcy.).

Detroit: Tax Appeals Should Be Allowed During Ordinary Course Of Bankruptcy

DETROIT - The bankrupt City of Detroit on Aug. 2 moved for relief from the automatic stay in order to permit appeals of city property tax assessments, which it claims is appropriate on grounds that the equities weigh in favor of it and because it will cost the city less in the long run (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

Garlock Bankruptcy Judge Denies News Site's Bid To Open Estimation Proceeding

CHARLOTTE, N.C. - The "significant" privacy rights of asbestos claimants and their attorneys outweigh the public's interest in certain evidence deemed confidential in the asbestos liability estimation trial for Chapter 11 debtor Garlock Sealing Technologies LLC, a North Carolina federal bankruptcy judge ruled July 31 in denying a bid by a news organization to open the entire estimation proceeding to the public (In re: Garlock Sealing Technologies, LLC, No. 10-31607, W.D. N.C. Bkcy.).

Judge Preliminarily Approves Corporate Governance Changes In Stipulation

WILMINGTON, Del. - A federal judge in Delaware on July 30 preliminarily approved the settlement of a shareholder derivative lawsuit in which the parties agreed to certain corporate governance changes (Jared Staal, derivatively on behalf of K12 Inc. v. Andrew H. Tisch, et al., No. 12-cv-00365, D. Del.).