LexisNexis® Legal Newsroom
Russell Wasendorf Gets 50-Year Sentence For Fraud Related To Peregrine Bankruptcy

CEDAR FALLS, Iowa - A federal judge in Iowa on Jan. 31 sentenced Russell R. Wasendorf, the former CEO of bankrupt Peregrine Financial Group Inc., to 50 years in federal prison for stealing more than $215.53 million in customer funds while he operated his commodities futures business (USA v. Russell R. Wasendorf Sr., No. 12-131, N.D. Iowa).

Illinois Federal Judge Won't Toss Copyright Claim But Strikes Damage Request

SPRINGFIELD, Ill. - Although a copyright infringement plaintiff's complaint against a competitor may proceed, it will do so without a claim for statutory damages, an Illinois federal judge ruled Jan. 29 (Lead It Corporation v. Rebecca Tallapalli et al., No. 12-3099, C.D. Ill.).

2nd Circuit Reverses: Creditor In Trafalgar Bankruptcy Can Claim Settlement Money

NEW YORK - A panel of the Second Circuit U.S. Court of Appeals on Jan. 30 reversed and remanded a bankruptcy court and held that a creditor had a right to claim the money a bankrupt power company won in a settlement with the engineering firm it sued for work done prior to the bankruptcy filing (Algonquin Power Income Fund v. Christine Falls of NY, Inc., et al., No. 11-4945, Chapter 11, 2nd Cir.).

Kodak, Digital Camera Company Reach Deal On Trademark Payments, Bankruptcy Claims

NEW YORK - Bankrupt Eastman Kodak Co. on Jan. 29 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York, arguing that the Bankruptcy Court should approve a stipulation between it and a German company from which Kodak licensed certain trademarks in connection with digital camera lens systems (In Re: Eastman Kodak Company, No. 12-10202, Chapter 11, S.D. N.Y. Bkcy.).

Mexican Bread Maker: Hostess Bread Sale Would Give Rival Too Much Market Share

WASHINGTON, D.C. - Mexican bread maker Grupo Bimbo S.A.B. de C.V. on Jan. 29 filed a brief in the U.S. District Court for the District of Columbia arguing that the order requiring it to divest of certain assets should be temporarily suspended in light of a rival bread company's plan to purchase the bread assets of bankrupt Hostess Brands Inc., which would give it 87 percent of the bread market in California (United States of America v. Grupo Bimbo S.A.B. de C.V., No. 11-1857, D. D.C.).

California Judge Allows 3rd Amended Complaint In Patent Action

SAN FRANCISCO - A California federal judge on Jan. 29 granted in part a defendant's motion to strike a second amended complaint (Volterra Semiconductor Corporation v. Infineon Technologies AG, No. 11-6239, N.D. Calif.).

School Specialty Steering Committee Balks At $50M Post-Petition Loan Deal

WILMINGTON, Del. - The Steering Committee of Convertible Noteholders of bankrupt School Specialty Inc. on Jan.29 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to the debtor's motion seeking $50 million in post-petition financing (In Re: School Specialty Inc., No. 13-10125, Chapter 11, D. Del. Bkcy.).

Government Pension Agency Sues Bankrupt RG Steel Parent Renco Group, Alleges Fraud

NEW YORK - The Pension Benefit Guaranty Corp. (PBGC) sued The Renco Group Inc. in the U.S. District Court for the Southern District of New York on Jan. 28, alleging fraud and negligent misrepresentation regarding a deal it consummated just before the Chapter 11 bankruptcy filing of its subsidiary RG Steel LLC (Pension Benefit Guaranty Corporation v. The Renco Group Inc., No. 13-621, Chapter 11, S.D. N.Y.).

Hostess Says $28.85M Offer For Selected Assets In Good Faith, Should Be Approved

NEW YORK - Bankrupt Hostess Brands Inc. on Jan. 28 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York arguing that the bankruptcy court should approve the sale of some of its bakery assets for $28.85 million (In Re: Hostess Brands Inc., No. 12-22052, Chapter 11, S.D. N.Y. Bkcy.).

Firm: Any Alleged Violations In GSC Bankruptcy Were Not Intentional

NEW YORK - The law firm representing the liquidating trustee in the Chapter 11 bankruptcy of GSC Group Inc. on Jan. 28 filed a brief arguing that the bankruptcy judge should deny the U.S. trustee's motion seeking to have the liquidating trustee and the firm removed from the case (In Re: GSC Group Inc., No. 10-14653, Chapter 11, S.D. N.Y. Bkcy.).

Claims Relating To Refusal To License Patents Fail, California Federal Judge Rules

OAKLAND, Calif. - A federal judge in California on Jan. 24 dismissed without prejudice an alleged patent troll's antitrust claims alleging that manufacturers of devices that use the Android operating system and an anti-troll company engaged in a group boycott of the plaintiffs' technology licenses (Cascades Computer Innovation LLC v. RPX Corporation, et al., No. 12-CV-01143, N.D. Calif.; 2013 U.S. Dist. LEXIS 10526).

Hotel Entertainment Provider LodgeNet Files For Chapter 11 With $60M In Financing

NEW YORK - LodgeNet Interactive Corp., a provider of hotel entertainment services, on Jan. 27 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York listing debts greater than $448.74 million and assets of slightly more than $291.72 million (In Re: LodgeNet Interactive Corporation, No. 13-10238, Chapter 11, S.D. N.Y. Bkcy.).

Dewey & LeBoeuf, Former Partners Reach Agreement To Settle Unpaid Fees

NEW YORK - Bankrupt law firm Dewey & LeBoeuf on Jan. 25 moved in the U.S. Bankruptcy Court for the Southern District of New York for approval of a settlement agreement with a group of lawyers who left the firm shortly before Dewey & LeBoeuf filed for Chapter 11, taking with them a client for which Dewey & LeBoeuf says it is owed fees and expenses (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

Bankruptcy Judge: Hawker Beechcraft May Reject Some Contracts, Warranties

NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of Hawker Beechcraft Inc. on Jan. 28 partially granted the company's motion to reject some of its customer contracts and warranties, ruling that because they are executory in nature, the company has the right to reject them (In Re: Hawker Beechcraft Inc., No. 12-11873, Chapter 11, S.D. N.Y. Bkcy.).

More Than $2.46M Fraudulently Transferred To Peregrine CEO's Ex-Wife, Trustee Says

CHICAGO - The Chapter 7 trustee in the bankruptcy case of Peregrine Financial Group Inc. on Jan. 25 filed an adversary complaint against Connie J. Wasendorf, the former wife of Peregrine CEO Russell Wasendorf Sr., seeking to recover more than $2.46 million in transfers that were part of the agreement the Wasendorfs reached regarding the dissolution of their marriage before the bankruptcy (Ira Bodenstein v. Connie J. Wasendorf $(In Re: Peregrine Financial Group Inc.$), No. 12-27488, Chapter 7, N.D. Ill. Bkcy.).

Lawyers Denied Judgment On Most Of Garlock's Fraud, Conspiracy Claims

CHARLOTTE, N.C. - All but one claim by Garlock Sealing Technologies LLC in an adversary action alleging that attorneys fraudulently obtained a settlement from Garlock for a mesothelioma victim have survived the attorneys' first bid to have the case dismissed, according to two orders issued Jan. 28 by a North Carolina federal bankruptcy judge (Garlock Sealing Technologies, LLC, et al. v. Chandler, et al., No. 12-03137, W.D. N.C. Bkcy.).

Judge: Freddie Mac Cannot Face Claims Over Servicer's Failure To Pay Insurance

SEATTLE - A federal judge in Washington on Jan. 25 dismissed a man's claims for declaratory judgment and violation of the Real Estate Settlement Procedures Act (RESPA) after finding that the Federal Home Loan Mortgage Corp. (Freddie Mac) cannot be held liable for a loan servicer's failure to pay the borrower's insurance premium, thus requiring the acquisition of a force-placed insurance policy (Joel Johnson v. Federal Home Loan Mortgage Corporation, No. C12-1712 TSZ, W.D. Wash.; 2013 U.S. Dist. LEXIS 10485).

Former Employee Not Entitled To Penalties Under COBRA, Divided 8th Circuit Rules

ST. LOUIS - The Eighth Circuit U.S. Court of Appeals on Jan. 25 affirmed 2-1 that a terminated employee was not entitled to civil penalties or attorney fees based on his former employer's failure to give notices required under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) (In re: Interstate Bakeries Corporation $(Sean Deckard v. Interstate Bakeries Corporation, et al.$), No. 11-1595, 8th Cir.; 2013 U.S. App. LEXIS 1663).

2nd Circuit: Stay Relief Not Proper In Chapter 11 Case Of Grocery Chain A&P

NEW YORK - A Second Circuit U.S. Court of Appeals panel on Jan. 24 ruled that a bankruptcy court correctly denied a creditor of bankrupt grocery chain the Great Atlantic & Pacific Tea Co. (A&P) relief from the automatic stay to pursue litigation against the company (Grocery Haulers Inc. v. The Great Atlantic & Pacific Tea Co. $(In Re: The Great Atlantic & Pacific Tea Co.$), No. 12-800, Chapter 11, 2nd Cir.).

Dewey & LeBoeuf Nets More Than $7.16M In Settlement With Former Partners In Italy

NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of law firm Dewey & LeBoeuf on Jan. 24 approved a settlement worth more than $7.16 million between the law firm and the former partners of its Italian practice who left Dewey & LeBoeuf prior to the firm's bankruptcy filing (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

5th Circuit: Deadline Passed To Object To Oil Company's Bankruptcy Agreement

NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on Jan. 23 affirmed a bankruptcy court's approval of settlement agreements despite allegations of fraud, ruling that the deadline for objections to the bankruptcy plan had passed (Anti Lothian Bankruptcy Fraud Committee, et al. v. Lothian Oil Inc, et al. $(In the Matter of: Lothian Oil Inc.$), No. 11-51082, 5th Cir.).

D.C. Circuit: Labor Board Lacked Quorum In February 2012

WASHINGTON, D.C. - The District of Columbia U.S. Circuit Court of Appeals on Jan. 25 declined to enforce a National Labor Relations Board ruling that an employer violated the National Labor Relations Act (NLRA) by refusing to reduce an oral agreement to writing and signing off on a collective bargaining agreement (CBA), after finding that the NLRB could not lawfully issue its February 2012 ruling because it lacked a quorum (Noel Canning, A Division of the Noel Corporation v. National Labor Relations Board, No. 12-1115, D.C. Cir.; 2013 U.S. App. LEXIS 1659).

ResCap To Pay Fannie Mae $297.6M To Settle Claims Related To Contracts

NEW YORK - Bankrupt Residential Capital LLC (ResCap) on Jan. 24 filed a stipulated agreement with the U.S. Bankruptcy Court for the Southern District of New York under which ResCap's subsidiary - GMAC Mortgage LLC - will pay Fannie Mae $297.6 million to settle Fannie Mae's claims (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

Asset Auction For Videogame Maker THQ Nets More Than $71.69 Million

WILMINGTON, Del. - The federal bankruptcy judge presiding over the Chapter 11 proceeding of videogame maker THQ Inc. on Jan. 23 approved an auction of the company's assets that garnered $71,694,000 (In Re: THQ Inc., No. 12-13398, Chapter 11, D. Del. Bkcy.).

Land America Trustee Says $70.2M Asset Sale Is In Best Interest Of Creditors

RICHMOND, Va. - The dissolution trustee in the Chapter 11 bankruptcy of Land America Financial Group Inc. on Jan. 22 filed a brief in the U.S. Bankruptcy Court for the Eastern District of Virginia supporting a sale of Land America's assets for $70.2 million (In Re: Land America Financial Group Inc., No. 08-35994, Chapter 11, E.D. Va. Bkcy.).