LexisNexis® Legal Newsroom
MF Global Committee: Plan Of Liquidation Meets Code, Should Be Approved

NEW YORK - The Statutory Creditors' Committee of MF Global Holdings Ltd. (MFGH) on April 2 filed a brief supporting confirmation of the joint plan of liquidation in MFGH's Chapter 11 bankruptcy, contending that the plan should be confirmed because it will increase distributions to creditors (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

Statute Of Frauds Bars Estoppel, Misrepresentation Claims, Judge Rules

HOUSTON - A federal judge in Texas on March 30 awarded summary judgment to Wells Fargo Bank N.A. and the Federal Home Loan Mortgage Corp. (Freddie Mac) after finding that the statute of frauds barred a couple's claims that Wells Fargo wrongfully foreclosed on their home because they were told by a representative that the foreclosure sale was postponed (Janeiro Roberts, et al. v. Federal Home Loan Corporation, et al., No. H-11-3304, S.D. Texas; 2013 U.S. Dist. LEXIS 46530).

Judge Finds That Reinsurer's Defenses In Asbestos Dispute Are Without Merit

PHILADELPHIA - A federal judge in Pennsylvania on March 31 found in favor of an insurer in a reinsurance dispute, holding, among other findings, that a reinsurer's contention that certain payments were made outside the scope of an insurance policy is without merit (Ace Property & Casualty Insurance Company v. Global Reinsurance Corporation of America, No. 11-cv-02838, E.D. Pa.; 2013 U.S. Dist. LEXIS 46460).

8th Circuit: No Federal Jurisdiction Over Severance Contract

ST. LOUIS - A federal court lacks federal subject matter jurisdiction to consider arbitrability arising under a severance agreement, even though the severance benefits were measured by reference to plans governed by the Employee Retirement Income Security Act, because the benefits were not due under an ERISA plan, the Eighth Circuit U.S. Court of Appeals affirmed March 28 (Dakota, Minnesota & Eastern Railroad Corporation v. Kevin V. Schieffer, No. 12-1807, 8th Cir.; 2013 U.S. App. LEXIS 6188).

'Girls Gone Wild' Video Maker: Trustee Not Needed; Creditor Misrepresents Facts

LOS ANGELES - Bankrupt adult entertainment company GGW Brands Inc., the parent company for the maker of "Girls Gone Wild" videos, on March 29 filed a brief contending that a creditor's motion seeking appointment of a trustee should not be granted because the creditor's allegations "distort or misrepresent the facts of the case" (In Re: GGW Brands Inc., No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

Bankruptcy Judge: California City May Proceed With Chapter 9 Bankruptcy

SACRAMENTO, Calif. - A federal bankruptcy judge in California on April 1 ruled that the City of Stockton, Calif., which had filed for Chapter 9 bankruptcy in June, was eligible to seek bankruptcy because the city did not file its petition in bad faith and was indeed insolvent at the time it sought bankruptcy. The bankruptcy judge's decision makes Stockton the largest municipality in the country to file for bankruptcy (In Re: City of Stockton, California, No. 12-32118, Chapter 9, E.D. Calif. Bkcy.).

1st Circuit: Lender's Attempt To Collect Student Loan Debt Was Abuse Of Process

BOSTON - A panel of the First Circuit U.S. Court of Appeals on March 29 affirmed a bankruptcy court's ruling that a debtor's student loan debts were extinguished and held that the lender that tried to collect on the debt after it had been extinguished abused the bankruptcy process (Barbara J. Hann v. Educational Credit Management Corporation $(In Re: In Re: Barbara J. Hann$), No. 12-9006, Chapter 13, 1st Cir.).

WP Steel Committee: Lien Agents Breached Duty Related To Bankruptcy Petition

WILMINGTON, Del. - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of WP Steel Venture on March 29 sued Cerberus Business Finance in its capacity as a second lien agent and sued the Renco Group Inc. in its capacity as WP Steel's third lien agent, seeking declaratory judgment that Cerberus and Renco do not have any interest in WP Steel's claims, rights and causes of action (In Re: WP Steel Venture, No. 12-11661, Chapter 11, D. Del. Bkcy.).

Advisor To Bankrupt GSC Opposes Sanctions, Says Conflict Not Shown

NEW YORK - Capstone Advisory Group LLC, which is the financial advisor to bankrupt GSC Group Inc., on March 29 filed a brief opposing a call for sanctions made by an investment firm that contends that Capstone should be sanctioned for conflict of interest (In Re: GSC Group Inc., No. 10-14653, Chapter 11, S.D. N.Y. Bkcy.).

Bankruptcy Judge Approves Deal To Reduce Former Partners' Claims By $41 Million

NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of law firm Dewey & LeBoeuf on April 1 approved a settlement among the firm, the firm's former partners and law firm Paul Hastings LLP that will eliminate $41 million in claims against Dewey & LeBoeuf. The claims had been filed by the former partners who alleged that Dewey & LeBoeuf owed them for money the partners were required to pay to secure their partnership interest in the firm (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

Customer Service Reps Seeking Overtime Granted Conditional Certification

KANSAS CITY, Kan. - A Kansas federal judge on March 27 refused to certify under Federal Rule of Civil Procedure 23 a class of customer service representatives (CSRs) seeking unpaid overtime for work they allege they were required to perform before and after their shifts as well as during their unpaid breaks; however, the judge granted conditional certification pursuant to 29 U.S. Code Section 216(b) (Jennifer Tommey, et al. v. Computer Sciences Corporation, No. 11-2214, D. Kan.; 2013 U.S. Dist. LEXIS 43242).

7th Circuit Upholds Dismissal Of Suit Over Refinanced Mortgage

CHICAGO - A Seventh Circuit U.S. Court of Appeals panel on March 29 affirmed the dismissal of a couple's lawsuit over the refinancing of their home mortgage loan after finding that the lender was not negligent when considering their ability to repay and that the terms of the loan were not unconscionable (Phillip Jackson, et al. v. Bank of America Corporation, et al., No. 12-3338, 7th Cir.; 2013 U.S. App. LEXIS 6298).

Supreme Court Vacates Ruling Certifying Class Of Washing Machine Purchasers

WASHINGTON, D.C. - Based on a determination in a recent ruling, the U.S. Supreme Court on April 1 issued an order granting a petition for writ of certiorari filed by a manufacturer of washing machines, vacating a decision that upheld the certification of a class of Ohio residents who purchased washing machines that allegedly grew mold (Whirlpool Corporation v. Gina Glazer and Trina Allison, individually and on behalf of others similarly situated, No. 12-322, U.S. Sup.).

Tribune Says More Than $13.25M Sought by Indenture Trustees Is 'Without Merit'

WILMINGTON, Del. - The reorganized version of bankrupt media entity Tribune Co. on March 28 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to $13.25 million in "substantial contribution" applications filed by the Law Debenture Trust Company of New York (LDTCNY) and the Wilmington Trust Co., contending that they are not entitled to fees and expenses for services rendered as indenture trustees (In Re: Tribune Company, No. 08-13141, Chapter 11, D. Del. Bkcy.).

Judge In SIPA Action Against MF Global CEO Approves Settlement Preliminarily

NEW YORK - The federal judge presiding over a class of investors who sued former MF Global Holdings Ltd. (MFGH) CEO Jon Corzine alleging violations under the Securities Investor Protection Act (SIPA) in the wake of MFGH's Chapter 11 bankruptcy granted preliminary approval March 28 to a settlement that MFGH reached with JP Morgan Chase Bank N.A. that will return $300 million to commodities customers who had money invested with MFGH's consumer investment affiliate MFGlobal Inc. (MFGI). The judge set July 3 as the date for the official hearing on the settlement (Joseph DeAngelis, et al. v. Jon S. Corzine, No. 12-2338, Chapter 11, S.D. N.Y.).

Federal Judge: 'The Policy Giveth And 'The Policy Taketh Away'

LEXINGTON, Ky. - A Kentucky federal judge on March 27 found that an insurer has no duty to defend or indemnify its insured against underlying allegations that it misappropriated trade secrets by improperly accessing a claimant's customer database and obtaining and using confidential customer information for its commercial benefit (Liberty Corporate Capital Limited v. Security Safe Outlet Inc., No. 5:12-cv-178-KSF, E.D. Ky., Central Div.; 2013 U.S. Dist. LEXIS 42975).

Journal Register Says Asset Sale Has Bankruptcy Court Approval; Set For April 2

NEW YORK - Digital First Media (DFM), the parent company of bankrupt newspaper company Journal Register Co. (JRC), announced March 28 that the federal bankruptcy judge presiding over its case has granted approval of its motion to sell JRC's assets to 21st CMH Acquisition Co. (In Re: Journal Register Company, No. 12-13774, Chapter 11, S.D. N.Y. Bkcy.).

Bankrupt Revel Casino Secures $250 Million In Post-Petition Financing

TRENTON, N.J. - The federal bankruptcy judge overseeing the Chapter 11 proceeding of casino Revel AC Inc. on March 27 approved $250 million in post-petition financing, also known as debtor-in-possession (DIP) financing (In Re: Revel AC Inc., No. 13-16253, Chapter 11, D. N.J. Bkcy.).

A&P Wants Claims Disallowed As Duplicative, Inconsistent With Reorganized Company

NEW YORK - Bankrupt grocer The Great Atlantic & Pacific Tea Co. Inc. (A&P) on March 27 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to certain proofs of claim and contending that they should be disallowed (In Re: The Great Atlantic & Pacific Tea Company Inc., No. 10-24549, Chapter 11, S.D. N.Y. Bkcy.).

Peregrine Trustee Seeks To Compel Financial Adviser To Produce Documents

CHICAGO - The trustee in the Chapter 7 bankruptcy of Peregrine Financial Group Inc. on March 25 moved in the U.S. Bankruptcy Court for the Northern District of Illinois to compel Halyard Capital Advisors LLC to produce documents pursuant to a subpoena related to the embezzlement of funds from Peregrine (In Re: Peregrine Financial Group Inc., No. 12-27488, Chapter 7, N.D. Ill. Bkcy.).

San Bernardino Sues State Of California, Alleges Violation Of Automatic Stay

RIVERSIDE, Calif. - The bankrupt city of San Bernardino, Calif., on March 26 sued the State of California, contending that the state is violating the automatic stay by demanding payment from the city for services. The city also argues that the state cannot withhold revenue it owes the city from sales tax collected from various agencies (In Re: City of San Bernardino, Calif., No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).

Federal Judge Converts London Arbitration Award Amounts To U.S. Currency

WASHINGTON, D.C. - A District of Columbia federal judge on March 26 granted a Nigerian corporation's request to amend a judgment that confirmed a $252 million London arbitration award in its favor and against the federal government of Nigeria, converting certain amounts that were awarded in foreign currency to U.S. dollars (Continental Transfert Technique Limited v. Federal Government of Nigeria, et al., No. 08-2026, D. D.C.; 2011 U.S. Dist. LEXIS 85016).

Judge: Loan Assignees Cannot Be Held Liable Over Loan Origination

DETROIT - A federal judge in Michigan on March 26 dismissed a woman's lawsuit against the Federal Home Loan Mortgage Corp. (Freddie Mac) and Bank of America N.A. (BANA), finding that they cannot be held liable for claims stemming from alleged fraud that occurred during the refinancing of the plaintiff's loan (Charlene R. Warner v. Federal Home Loan Mortgage Corporation, et al., No. 12-13616-PJD-MKM, E.D. Mich.; 2013 U.S. Dist. LEXIS 41847).

Judge Rules Against FDIC, Allowing Bank Company To Keep Tax Refund

CLEVELAND - Bankrupt holding company AmFin Financial Corp. (AFC) can keep a $195 million tax refund that the Federal Deposit Insurance Corp. argued belongs to an affiliate bank in the FDIC's receivership, a federal judge in Ohio ruled March 26, granting AFC's motion for judgment on the pleadings (Federal Deposit Insurance Corp. v. AmFin Financial Corporation, et al., No. 11-2574, N.D. Ohio; 2013 U.S. Dist. LEXIS 42488).

High Court: Class Certification In Antitrust Case Was Improper

WASHINGTON, D.C. - The U.S. Supreme Court on March 27 ruled 5-4 that a district court may not certify a class action under Federal Rule of Civil Procedure 23(b)(3) without resolving whether the class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a classwide basis (Comcast Corporation, et al. v. Caroline Behrend, et al., No. 11-864, U.S. Sup.).