LexisNexis® Legal Newsroom
Wells Fargo Shareholders Ask Court To OK Settlement With Directors And Officers

OAKLAND, Calif. - Shareholders of Wells Fargo & Co. asked a California federal court on Feb. 22 to approve a settlement between them and certain directors and officers of the company that implements corporate governances designed to alleviate possible future risks (W.M. Rogers v. G. Kennedy Thompson, et al., No. 12-cv-0203, N.D. Calif.).

Union Reserves Right To Sue Hostess For Damages Related To Sale Of Bread Assets

NEW YORK - The group that represents the International Brotherhood of Teamsters in collective bargaining situations on Feb. 25 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York, seeking a reservation of its rights to pursue liquidated damages in the Chapter 11 bankruptcy proceeding of Hostess Brands Inc. (In Re: Hostess Brands Inc., No. 12-22052, Chapter 11. S.D. N.Y. Bkcy.).

High Court: Debt Collection Act Does Not Prohibit Award Of Costs Under Rule

WASHINGTON, D.C. - Section 1692k(a)(3) of the Fair Debt Collection Practices Act (FDCPA) "is not contrary to, and, thus, does not displace a district court's discretion to award costs under" Federal Rule of Civil Procedure 54(d)(1), a divided U.S. Supreme Court ruled Feb. 26 (Olivea Marx v. General Revenue Corporation and Kevin Cobb, No. 11-1175, U.S. Sup.).

MSR Resort Creditors Object To Chapter 11 Plan, $1.49B Stalking Horse Deal

NEW YORK - A group of creditors that invested in bankrupt MSR Resort Golf Course LLC on Feb. 25 filed an official notice of appeal of the order issued by the U.S. Bankruptcy Court for the Southern District of New York approving the resort's Chapter 11 plan and $1.49 billion asset sale (In Re: MSR Resort Golf Course LLC, No. 11-10372, S.D. N.Y. Bkcy.).

Bankrupt Shipping Company OSG Sues BP For Violation Of Automatic Stay

WILMINGTON, Del. - A subsidiary of bankrupt shipping company Overseas Shipholding Group Inc. (OSG) on Feb. 25 sued BP Oil Shipping Co. USA Inc. in the U.S. Bankruptcy Court for the District of Delaware, seeking declaratory relief and damages for alleged violations of the automatic stay pursuant to 11 U.S. Code Section 362 (OSG America Operating Company LLC v. BP Oil Shipping Company USA Inc. $(In Re: Overseas Shipholding Group Inc.$), No. 12-20000, Adv. No. 13-50854, Chapter 11, D. Del. Bkcy.).

Judge: Coke Company Can Raise Entrapment-By-Estoppel Defense In CAA Case

BUFFALO, N.Y. - Towanda Coke Corp. (TCC) and its environmental control manager can raise the entrapment-by-estoppel defense in a criminal suit brought against them by the government over violations of the Clean Air Act (CAA), a federal judge in New York ruled Feb. 22, because the evidence they presented to support the defense was sufficient (United States of America v. Towanda Coke Corporation, et al., No. 10-CR-219S, W.D. N.Y.; 2013 U.S. Dist. LEXIS 25398).

Creditors Committee Seeks To Revive Case Against Principals Of Bankrupt WP Steel

WILMINGTON, Del. - The Official Committee of Unsecured Creditors in the Chapter 11 bankruptcy of WP Steel Venture LLC on Feb. 22 moved in the U.S. Bankruptcy Court for the District of Delaware for permission to revive its case against Ira L. Rennert and Vincent J. Goodwin as the principals in charge of WP Steel and its holdings, alleging that they breached their fiduciary duties (In Re: WP Steel Venture LLC, No. 12-11661, Chapter 11, D. Del. Bkcy.).

Trustee, Some Creditors Seek Removal Of Claims Against MF Global Bankruptcy Estate

NEW YORK - The trustee and a group of creditors in the Chapter 11 bankruptcy of MF Global Holdings (MFGH) on Feb. 22 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to more than $138.11 million in claims brought by a separate group of creditors against the MFGH estate on grounds that they are superseded by other claims valued at more than $162.97 million (In Re: MF Global Holdings Ltd., No. 11-15059, Chapter 11, S.D. N.Y. Bkcy.).

Bankrupt Broker Penson Seeks Permission To Tap Insurance Policy For Defense Costs

WILMINGTON, Del. - Bankrupt financial services company Penson Worldwide Inc. on Feb. 21 moved in the U.S. Bankruptcy Court for the District of Delaware for permission to use its policy insuring the company's directors and officers to pay for defense costs associated with a federal investigation of Penson's operations prior to bankruptcy (In Re: Penson Worldwide Inc., No. 13-10061, Chapter 11, D. Del. Bkcy.).

N.Y. Federal Judge Will Not Consider Veil Piercing In Vitamin C Price-Fixing Case

NEW YORK - The holding company of a vitamin C manufacturer must defend claims against it in litigation alleging that Chinese corporations participated in an illegal cartel to fix prices and limit supply for exports of vitamin C to the United States, a federal judge in New York ruled Feb. 20 in finding that the holding company's summary judgment motion was untimely filed (In re Vitamin C Antitrust Litigation $(Animal Science Products, Inc., et al. v. Hebei Welcome Pharmaceutical Co. Ltd., et al.$), No. 05-453, E.D. N.Y.; 2013 U.S. Dist. LEXIS 23277).

7th Circuit: Emails Between Justice Department Sections Are Protected Work Product

CHICAGO - Emails and memos exchanged between two sections of the U.S. Department of Justice (DOJ) in charge of enforcing environmental laws and defending the government in suits brought under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) over the terms of a consent decree with companies over the cleanup of a Superfund site in Wisconsin are protected by the work product doctrine, a panel of the Seventh Circuit U.S. Court of Appeals ruled Feb. 20, holding that the sections are not adversaries because they are still acting on behalf of the federal government (Menasha Corporation, et al. v. United States Department of Justice, No. 12-1720, 7th Cir.; 2013 U.S. App. LEXIS 3521).

Federal Judge Remands Breach Of Contract Case Against Bankrupt RG Steel

CHARLESTON, W.Va. - A federal judge in West Virginia on Feb. 21 remanded to state court a lawsuit brought by Mountain State Carbon LLC (MSC) against bankrupt RG Steel in which MSC contended that the steel company had breached its contract with MSC and stole excess coke that MSC stored at RG Steel's plant (Mountain State Carbon LLC v. RG Steel Wheeling LLC, No. 12-77, N.D. W. Va.).

Pennsylvania Federal Judge: Drug, Alcohol Tests For New U.S. Steel Workers Legal

PITTSBURGH - U.S. Steel Corp. can conduct random drug and alcohol testing on probationary employees because the practice is job-related and "consistent with business necessity" pursuant to the Americans with Disabilities Act (ADA), a Pennsylvania federal judge held Feb. 20 (Equal Employment Opportunity Commission v. United States Steel Corporation and United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial, and Service Workers International Union, AFL-CIO, No. 10-1284, W.D. Pa.; 2013 U.S. Dist. LEXIS 22748).

U.S. Bank Says Bankruptcy Court Erred In AMR Financing Ruling

NEW YORK - U.S. Bank Trust National Association, which has filed an adversary proceeding against bankrupt American Airlines Inc., a subsidiary of bankrupt AMR Corp., on Feb. 22 filed a statement of issues on appeal in which it contends that a New York federal bankruptcy court erred when it ruled that repayment of financing notes does not require the payment of a make-whole amount (U.S. Bank Trust National Association v. American Airlines Inc. $(In Re: AMR Corporation$), No. 11-15463, Adv. No. 12-01946, Chapter 11, S.D. N.Y. Bkcy.).

High Court Will Not Consider ERISA Misrepresentation Case

WASHINGTON, D.C. - The U.S. Supreme Court on Feb. 19 denied review of a Sixth Circuit U.S. Court of Appeals ruling that 225 current and former employees of United States Steel Corp. (U.S. Steel) may not continue with their claims that the company, their union and their retirement plan administrator violated the Employee Retirement Income Security Act by intentionally misleading them regarding how pension benefits would be calculated, inducing some to retire early (Dominic Cataldo, et al. v. United States Steel Corporation, et al., No. 12-306, U.S. Sup.).

Supreme Court Will Not Review Ruling On Normal Retirement Age

WASHINGTON, D.C. - The U.S. Supreme Court on Feb. 19 denied review of a Fourth Circuit U.S. Court of Appeals ruling that a cash balance pension plan sponsored by Bank of America Corp. did not unlawfully calculate participants' lump-sum benefits or violate anti-backloading provisions of the Employee Retirement Income Security Act by defining "normal retirement age" (NRA) as five years of vesting service (David L. McCorkle, et al. v. Bank of America Corporation, et al., No. 12-700, U.S. Sup.).

Tribune Litigation Trustee Seeks Recovery Of Transfers Related To Leveraged Buyout

WILMINGTON, Del. - The litigation trustee in the Chapter 11 bankruptcy of media entity Tribune Co. on Feb. 20 moved in the U.S. Bankruptcy Court for the District of Delaware for authorization to be substituted as the plaintiff in certain adversary proceedings seeking to recover fraudulent transfers pertaining to the leveraged buyout of Tribune belonging to the litigation trust (In Re: Tribune Company, No. 08-13141, Chapter 11, D. Del. Bkcy.).

Pa. Federal Judge Refuses To Reconsider Dismissal Of Gym Membership Class Suit

PHILADELPHIA - A Pennsylvania federal judge on Feb. 21 refused to reconsider his dismissal of a class complaint against two gyms for allegedly breaching lifetime membership agreements, finding that the plaintiffs' attorney's failure to respond to the motions was "egregious" (Blaise Tobia, et al. v. Bally Total Fitness Holding Corporation, et al., No. 12-1198, E.D. Pa.; 2013 U.S. Dist. LEXIS 23575).

Insurer Says Reinsurer Must Arbitrate Dispute

NEW HAVEN, Conn. - An insurer urged a Connecticut federal court on Feb. 19 to dismiss a reinsurance case and said the language of three reinsurance agreements at issue shows that a reinsurer has agreed to arbitrate a dispute over certain amounts allegedly owed (Trenwick America Reinsurance Corporation v. Unionamerica Insurance Company Limited, No. 13-cv-00094, D. Conn.).

Dewey & LeBoeuf: Liquidation Plan Proposed'In Good Faith'; Objections 'Improper'

NEW YORK - Bankrupt law firm Dewey & LeBoeuf on Feb. 21 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York contending that its plan of liquidation was proposed in good faith and meets all the requirements of the Bankruptcy Code, despite objections from the firm's former partners (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

Judge: Benzene Claims Were Dismissed Based On Multiple Grounds

NEW ORLEANS - Saying plaintiffs' motion for reconsideration failed to take into account all reasons benzene-related injury claims were dismissed, a Louisiana federal judge on Feb. 19 rejected the motion (Craig Moore, et al. BASF Corporation, et al., No. 11-1001 E.D. La.; 2013 U.S. Dist. LEXIS 22156).

Creditor Wants To Sell Property Of Revstone Subsidiary For $4.5 Million

WILMINGTON, Del. - A creditor of bankrupt Revstone Industries LLC on Feb. 20 filed a brief in the U.S. Bankruptcy Court for the District of Delaware, contending that it should be granted relief from the automatic stay to sell property belonging to one of Revstone's bankrupt subsidiaries (In Re: Revstone Industries LLC, No. 12-13262, Chapter 11, D. Del. Bkcy.).

Company That Was Subject To Involuntary Chapter 7 Filing Seeks Move To Chapter 11

BALTIMORE - Bankrupt Inner Harbor West LLC (IHW) on Feb. 19 moved in the U.S. Bankruptcy Court for the District of Maryland for conversion of its involuntary Chapter 7 petition to a voluntary Chapter 11 bankruptcy (In Re: Inner Harbor West LLC, No. 13-12198, Chapter 7, D. Md. Bkcy.).

Calif. Top Court: Dissolved Delaware Company Not Subject To Corporations Code

SAN FRANCISCO - The state's corporation code permitting actions against dissolved companies applies to California corporations only and does not save a widow's asbestos action against a dissolved Delaware corporation, the California Supreme Court held Feb. 21 (Walter Greb, et al. v. Diamond International Corp., No. S183365, Calif. Sup.).

11th Circuit: Bank Of America Did Not Break Contract With Bankrupt Fontainebleau

ATLANTA - A panel of the 11th Circuit U.S. Court of Appeals on Feb. 20 ruled that Bank of America and its affiliates properly rejected a loan request from bankrupt Las Vegas resort Fontainebleau (Avenue CLO Fund Ltd. v. Bank of America N.A., No. 11-10468, Chapter 7, 11th Cir.).