Bankruptcy

  • August 21, 2014

    Capmark, Ex-CEO Ink Secret Pact In $17M Compensation Suit

    Reorganized real estate lender Capmark Financial Group Inc. on Tuesday asked for approval of a settlement over $16.7 million in disputed stock redemption and severance payments its former president and CEO William F. Aldinger III collected following his resignation, though it is keeping the deal’s terms a secret.

  • August 21, 2014

    Judge Calls Argentina Debt Proposal Illegal, Balks At Contempt

    A New York federal judge on Thursday lambasted a proposal by Argentina to pay holders of its sovereign debt beyond the reach of U.S. courts, but stopped short of holding the country in contempt.

  • August 21, 2014

    Ex-DBSI President Gets 20 Years For Ponzi-Like Fraud

    The former president of DBSI Inc. was sentenced Wednesday in Idaho federal court to 20 years in prison for his role in running a Ponzi-like scheme through the bankrupt real estate firm, while the firm's ex-general counsel was handed a five-year sentence.

  • August 21, 2014

    MF Global Brass Scores $15M 'Stopgap' In D&O Battle

    A New York bankruptcy judge on Thursday upped by $15 million the amount of directors and officers insurance that former top MF Global Holdings Ltd. executives can tap, a stopgap measure pending a decision on whether they control more than $200 million in disputed policy proceeds.

  • August 21, 2014

    US Defends $150B Forfeiture Claim Against Madoff Aides

    Federal prosecutors told a New York federal judge Wednesday that five people convicted of buttressing Bernie Madoff's 40-year investment fraud should receive the harshest sentences possible, including $150 billion in forfeitures, arguing that all five reasonably foresaw the fraud at least a decade before it collapsed in spectacular fashion.

  • August 20, 2014

    Canadian Court Nixes Added Interest On $4B Nortel Bonds

    The judge overseeing Nortel Networks Corp.’s Canadian bankruptcy ruled Tuesday that noteholders aren’t entitled to post-petition interest on nearly $4.1 billion in crossover bonds, finding that payment of such interest would tip the scales against the telecom’s other unsecured creditors.

  • August 20, 2014

    GM Should Face Wrongful-Conviction Claims, Trustee Says

    Trustee Wilmington Trust Co. and General Motors LLC filed dueling briefs Tuesday in New York bankruptcy court in response to a former GM employee’s bid to pursue claims against GM over his wrongful conviction for rape, with Wilmington arguing GM should face the claims.

  • August 20, 2014

    Lehman Scuttles Claims From Energy Unit Shareholders

    A New York bankruptcy judge on Tuesday threw out damages claims against Lehman Brothers Holdings Inc. brought by shareholders in defunct SkyPower Corp., a Canadian renewable energy developer that fell apart when Lehman, its controlling shareholder, collapsed and stopped supporting it.

  • August 20, 2014

    Allens Creditor Seeks Sanctions Against Freeborn Atty

    A creditor of bankrupt frozen vegetable producer Allens Inc. on Tuesday reiterated its bid for sanctions against the Freeborn & Peters LLP attorney overseeing the company’s Perishable Agricultural Commodities Act claims, arguing that the attorney delayed payment of its $3.5 million allowed claim by filing a "frivolous" objection.

  • August 20, 2014

    Lehman Trustee Wants 2nd Circ. Rehearing Over $4B Assets

    The Lehman Brothers Inc. liquidating trustee on Tuesday asked for the full Second Circuit to rehear his claims that Barclays PLC is not entitled to $4 billion in Lehman Brothers Inc. trading collateral, arguing that a panel’s decision could allow attorneys to negotiate bankruptcy sales in secret.

  • August 20, 2014

    India's Sesa Sterlite Takes $83M Hit Over Failed Asarco Deal

    A Texas federal judge has refused to grant Indian natural resources major Sesa Sterlite Ltd. a reprieve from a $83 million judgment arising from its aborted $2.5 billion deal to buy Asarco LLC out of bankruptcy in 2008, ruling that it can’t prioritize payments due to noteholders over its debt to Asarco.

  • August 20, 2014

    Revel Casino Hotel Folds For The Second Time

    Atlantic City's Revel Casino Hotel will close Sept. 1, according to a Wednesday order, after failing to find a buyer in its second round of Chapter 11 bankruptcy protection, making it the fourth closure announced this year in Atlantic City's hobbled gaming industry.

  • August 20, 2014

    GM Bankruptcy Stay Doesn't Halt Remand Bid, Calif. Says

    Attorneys for the state of California asked a New York bankruptcy judge on Tuesday not to halt proceedings in a suit alleging General Motors LLC concealed serious ignition switch safety defects to avoid having to issue recalls, to provide the state an opportunity to have the case sent back to state court.

  • August 20, 2014

    Ex-CEO Says Phoenix Should Think Reorg Instead Of Sale

    The former CEO and controlling stakeholder of bankrupt card transaction processor Phoenix Payment Systems Inc. took issue late Tuesday with the debtor’s $50 million stalking horse sale plan, arguing that it should instead consider proposals for a reorganization plan supported by an equity infusion.

  • August 20, 2014

    Canadian Steelmaker Algoma Wins Ch. 15 Recognition

    A Delaware bankruptcy judge on Wednesday granted final Chapter 15 recognition to Ontario-based Essar Steel Algoma Inc., providing the steelmaker with court protection while it works to lighten its $1.2 billion debt load in Canadian restructuring proceedings.

  • August 20, 2014

    Barclays Capital And Thornburg Trustee Settle For $23M

    Barclays Capital Inc. has agreed to pay $23 million to resolve a suit brought by the trustee for defunct Thornburg Mortgage Inc. over a $2.7 billion mortgage-backed securities liquidation that allegedly undervalued Thornburg's assets and contributed to its collapse, according to court documents filed on Wednesday in Maryland bankruptcy court.

  • August 20, 2014

    Crumbs Skips Auction As Stalking Horse Goes Unchallenged

    A joint venture between television investment guru Marcus Lemonis and the owner of ice cream chain Dippin’ Dots is poised to buy Crumbs Bake Shop Inc. out of bankruptcy with a $6.5 million bid, after the shuttered cupcake chain said on Wednesday that no competing suitors had emerged.

  • August 20, 2014

    Argentina Plans To Skirt US Courts, Pay Bonds Locally

    The president of Argentina on Tuesday announced a plan to pay holders of its sovereign debt outside of the reach of U.S. courts, after a New York federal judge blocked a payment to bondholders who agreed to restructurings, which led the country to default for the second time in 13 years.

  • August 19, 2014

    National Enquirer Publisher To Convert $121M Debt To Equity

    The owners of American Media Inc., which recently acquired all issued and outstanding shares of the National Enquirer publisher, said Monday that they would convert $121.3 million of second lien notes into common equity and that they have taken efforts to minimize the fallout from the bankruptcy of distribution partner Source Interlink Cos.

  • August 19, 2014

    Detroit Slams Syncora For Ch. 9 Grand Bargain 'Falsehoods'

    Detroit on Monday fired back at bond insurer Syncora Holdings Ltd. for saying the city's plan for exiting bankruptcy $7 billion lighter in debt is a conspiracy to defraud the city's creditors, urging a Michigan bankruptcy judge to sanction Syncora for its “falsehoods.”

Expert Analysis

  • How To Control Risk And Cost Of E-Discovery

    "If you follow the philosophy of saving everything you're just multiplying exponentially the costs and risks of litigation and investigations," says Robert Owen, partner in charge of Sutherland Asbill & Brennan LLP's New York office and president of the Electronic Discovery Institute.

  • Free And Clear Of Successor Liability Claims

    Christopher Hopkins

    The Delaware bankruptcy court’s holding in the case of Ormet Corp. that the express provisions of Section 363(f) are not trumped by the policy considerations embodied in the Employee Retirement Income Security Act and the Multiemployer Pension Plan Amendments Act should give comfort to debtors and purchasers of assets in a free-and-clear sale, says Christopher Hopkins of Weil Gotshal & Manges LLP.

  • Picard Powerless To Block Independent Madoff Settlements

    Jonathan Sablone

    The Second Circuit ruling that Bernard L. Madoff bankruptcy trustee Irving Picard may not block two large settlements involving Madoff feeder funds is welcome news for institutions that invested in “intermediate” funds that are still solvent. Commentators, however, fully expect that Picard will continue to appeal adverse decisions, including this most recent ruling, say Jonathan Sablone and Danielle McLaughlin of Nixon Peabody LLP.

  • Genco Valuation Leaves Equity Interests Under Water

    Daniel M. Glosband

    The Chapter 11 case of Genco Shipping & Trading Ltd. presented the Southern District of New York with a complex question of value. Unfortunately for the official committee of equity holders, the only valuation that put equity in the money was a rejected discounted cash flow, say Daniel Glosband and Thomas Good of Goodwin Procter LLP.

  • High Court’s Sleight Of Hand In Bankruptcy Jurisdiction

    Mark A. Broude

    With all attention focused on Executive Benefits Insurance Agency v. Arkison, the U.S. Supreme Court's Daimler AG v. Bauman decision could represent the real sea change in jurisdiction over noncore actions, say attorneys with Latham & Watkins LLP.

  • An In-House Lawyer's Top 10 Tips For Outside Counsel

    Francis M. Drelling

    To this day, I have yet to see a litigation hold letter that was written by someone who understands the realities of how a business is actually run. In-house counsel cannot issue decrees to business units that read like they are issued by the king to his subjects, says Francis Drelling, in-house counsel at Specialty Restaurants Corp.

  • Consider Hearsay Issues Before A Rule 30(b)(6) Deposition

    Susan F. DiCicco

    To avoid the risk of multiple depositions or inadmissible testimony, all counsel should focus prior to a deposition — and before designating a witness — on knowledge and hearsay issues that may arise at Rule 30(b)(6) depositions, say Susan DiCicco and Stephen Scotch-Marmo of Bingham McCutchen LLP.

  • Problem With Multiple Accounts In Ponzi Clawback Actions

    Kathy Bazoian Phelps

    The ways that multiple accounts may be set up for individuals investing in a Ponzi scheme are endless, and numerous questions arise when the scheme has ended up in an insolvency proceeding. Unfortunately, courts' divergent views only create opportunities for yet more litigation, says Kathy Bazoian Phelps of Diamond McCarthy LLP.

  • Law Firms May Be Violating Copyrights

    Roy Kaufman

    On average, a legal professional forwards content to 14 different people per week. Yet many attorneys and staff lack an understanding of copyright and their firm’s specific policies regarding shared third-party materials, says Roy Kaufman of Copyright Clearance Center.

  • A 'Commercial Reality' Check In Lehman-Barclays Dispute

    Jonathan T. Koevary

    Given the expedited nature of the 2008 sale of Lehman Brothers’ brokerage business to Barclays Capital, it is not entirely surprising that ambiguities existed, but market participants can take comfort in a Second Circuit examination of the “commercial reality” of the transaction in a ruling that may affect future payouts to Lehman creditors, say Adam Friedman and Jonathan Koevary of Olshan Frome Wolosky LLP.