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Bankruptcy
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May 23, 2013
Highway Tech Looks To Unload Equipment Quickly In Ch. 11
A Delaware bankruptcy judge gave the nod Thursday for many of Highway Technologies Inc.'s first-day requests, including up to $3 million in bankruptcy financing and permission to immediately sell signs and other equipment the company had left out on active roadway projects.
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May 23, 2013
School Specialty Gets Ch. 11 Plan Confirmed
School Specialty Inc. won confirmation of its Chapter 11 plan Thursday, with a Delaware bankruptcy judge giving the green light to a reorganization that will see the educational supply company emerge from court protection owned by its noteholders.
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May 23, 2013
Full Speed Ahead For Bankrupt PE-Owned Ohio Printers
A bankruptcy judge in Delaware on Thursday approved the first-day requests of Ohio-based sister commercial printing companies D.B. Hess and The Press of Ohio, both owned by private equity firm Wellspring Capital Management LLC, including up to $20 million in financing to help the firms sell off their assets.
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May 23, 2013
9th Circ. Relieves Broke Law School Grad Of Student Debt
The Ninth Circuit ruled Thursday that a broke law school graduate who amassed $85,000 in student debt wasn't obligated to repay the loans because he couldn't find a job that would pay him enough to satisfy loan payments exceeding $800 per month.
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May 23, 2013
Trustee Says 'Girls Gone Wild' Founder Can't Stop Ch. 11
The trustee overseeing the California "Girls Gone Wild" bankruptcy derided efforts by founder Joe Francis to halt the bankruptcy of a subsidiary involved in the purportedly fraudulent overseas transfer of company trademarks on Thursday, saying his emergency motion was filed an hour and a half too late.
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May 23, 2013
FDIC Wins Malpractice Suit Against Law Firm Over $5M Loan
A Florida federal jury Wednesday sided with the Federal Deposit Insurance Corp. in its malpractice suit against Icard Merrill Cullis Timm Furen & Ginsburg over the firm's representation of a developer in a $5.3 million real estate loan.
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May 23, 2013
China Natural Gas Demands Toss Of Involuntary Ch. 11
China Natural Gas Inc. on Wednesday urged a New York bankruptcy judge to throw out the involuntary Chapter 11 proceedings commenced by a hedge fund owned by one of its directors, saying the filing was part of the directors' effort to gain control of the company.
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May 23, 2013
$22M Sale Of Bankrupt Big M's Assets Gets Judge's OK
A New Jersey bankruptcy judge on Thursday signed off on Canadian clothing retailer YM Inc.'s $22 million purchase of the assets of rival Big M Inc., the bankrupt owner of the clothing stores Mandee, Annie Sez and Afaze.
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May 23, 2013
LeClairRyan Adds Litchfield Cavo Finance, Bankruptcy Atty
LeClairRyan said Monday it has landed for its Boston office a Litchfield Cavo LLP commercial litigator who specializes in lender liability and insurance defense as well as bankruptcy matters.
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May 23, 2013
Grant Thornton Settles With Allianz In $1B Winstar Fraud Row
Affiliates of German insurer and financial services giant Allianz SE on Thursday settled their claims accusing accounting firm Grant Thornton LLP of helping to conceal a $1 billion revenue hole at now-bankrupt Internet company Winstar Communications Inc.
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May 23, 2013
Atty Says Dewey Claims Hearing Delay Would Be Abusive
A former partner of Dewey Ballantine LLP — the predecessor of bankrupt Dewey & LeBoeuf LLP — with a pending claim against the firm for outstanding debt has called a proposed hearing delay abusive and unnecessary.
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May 23, 2013
Bankrupt REIT Gets $50M In Deal With BlackRock, Lenders
A New York bankruptcy judge on Thursday approved a settlement that BlackRock Inc.'s bankrupt real estate investment trust Anthracite Capital Inc. reached with BlackRock and two banks, allowing Anthracite to bring in $50 million and begin winding down the estate.
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May 23, 2013
Q&A With Squire Sanders' Traci Rollins
Until we have greater inclusion, and significant numbers of women, attorneys of color and LGBT attorneys working on our cross-border and complex litigation cases, our approach to practicing will be pedestrian and provincial, says Traci Rollins, a partner in Squire Sanders LLP's restructuring and insolvency practice.
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May 23, 2013
ResCap Gets $2.1B From Ally To Settle Creditor Claims
Ally Financial Inc. will pay $2.1 billion to win peace with creditors of its former mortgage subsidiary, bankrupt Residential Capital LLC, nearly triple the auto lender’s original settlement offer, according to documents filed Thursday in New York bankruptcy court.
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May 22, 2013
$211M In Borders Gift Cards Worthless After Ruling
A New York federal judge on Wednesday dismissed appeals by customers who hold gift cards from bankrupt book seller Borders Group Inc. and sought refunds, saying the appeals are moot because the company’s distribution plan can't handle the approximately $210.5 million in claims.
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May 22, 2013
Chem Rx Bosses Ask 2nd Circ. To Toss $106M Clawback Suit
Former principals at bankrupt Chem Rx Corp. urged the Second Circuit on Wednesday to kill a trustee lawsuit aimed at forcing them to give up $106 million they made in the pharmacy’s leveraged buyout.
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May 22, 2013
PE-Owned Ohio Printers Seek Ch. 11 As Buyer Looms
Two Ohio-based sister commercial printing companies, both owned by private equity firm Wellspring Capital Management LLC, filed for Chapter 11 bankruptcy protection Wednesday with a prepacked plan in hand and rival company Bang Printing of Ohio at the ready with a $19 million stalking horse bid.
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May 22, 2013
Atari Seeks OK For Plan To Sell Off Assets Piece By Piece
The U.S. branch of French holding firm Atari SA on Wednesday asked a New York bankruptcy judge to greenlight its plan to sell off its assets piece by piece, after it failed to garner acceptable offers from potential stalking horse buyers to bid on the game maker's entire business.
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May 22, 2013
Convenience Store Supplier Cooper-Booth Enters Ch. 11
Cooper-Booth Wholesale Co., a convenience store supplier serving the Mid-Atlantic, on Tuesday filed for Chapter 11 protection in Pennsylvania, saying its main bank account was seized by the government as part of an investigation into a Cooper-Booth customer that allegedly smuggled cigarettes between states.
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May 22, 2013
Orrick Loses Bid To Flip Heller Ehrman Fraud Transfer Ruling
A California federal district judge on Tuesday rejected Orrick Herrington & Sutcliffe LLP’s argument that a bankruptcy judge lacked authority to make a ruling that the law firm wrongfully hired former partners of defunct Heller Ehrman LLP.
Expert Analysis
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I Would Do Anything For Confirmation, But I Won’t Do That
The decision by the U.S. Bankruptcy Court for the District of New Mexico in In re Deming Hospitality LLC demonstrates that courts will grant wide latitude to debtors at the disclosure statement stage to allow them to explain or resolve any potential defects or concerns during the plan confirmation process — but even the most lenient courts have their limits, says Kyle Ortiz of Weil Gotshal & Manges LLP.
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Contrasting 363 And Out-Of-Court Sales
Excerpt from Lexis Practice Advisor
In most respects, a bankruptcy sale is nearly identical to a sale of assets outside of bankruptcy. The differences lie in five specific areas, says Neil Herman of Morgan Lewis & Bockius LLP.
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A Twist In Terminating German Commercial Agreements
Commercial agreements usually provide for extraordinary termination rights or even automatic cancellation in the case of insolvency of one of the parties. Such a cancellation right may, however, contradict the general principles of German insolvency law, say Dr. Juergen van Kann and Dr. Rouven Redeker of Fried Frank Harris Shriver & Jacobson LLP.
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Harrisburg Demonstrates Danger Of Public Statements
The U.S. Securities and Exchange Commission has long made clear that when information about a municipal issuer is reasonably expected to reach investors and the trading markets, those disclosures are subject to anti-fraud laws. But the recent Harrisburg, Pa., enforcement represents the first time the SEC has charged a municipality for misleading statements made outside of its securities disclosure documents, say attorneys with Day Pitney LLP.
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Rise Of The Machines — Predictive Coding Goes Mainstream
The pros of using predictive coding far outweigh the cons. Given the heavy pressure on law firms and in-house counsel to reduce discovery costs, as well as the Justice Department's recent stance on the subject, it appears predictive coding will continue to emerge from the obscure world of legal technology to the mainstream of legal practice, say Michael Moscato and Myles Bartley of Curtis Mallet-Prevost Colt & Mosle LLP.
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What’s In Store For E-Discovery In Bankruptcy?
As savvy bankruptcy litigators begin to consider the strategic possibilities of spoliation allegations in connection with electronically stored information preservation obligations, the prudent DIP attorney will also consider potential defenses against such tactics. The ABA working group has proposed one such possible solution in the ESI Protocol, says Joanne Lee of Foley & Lardner LLP.
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Understanding The Process For Initiating Ch. 11
Excerpt from Lexis Practice Advisor
A prepackaged Chapter 11 filing consists of three significant groups of pleadings: the administrative pleadings, the “first day” substantive pleadings and the plan-related pleadings. For any company to file and enter into Chapter 11 smoothly, counsel and advisers must work with the company for at least several weeks to conduct due diligence and understand all aspects of the business, says Morris Massel of Simpson Thacher & Bartlett LLP.
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How The Fed's Stress Test Rules Mitigate Systemic Risk
The savings and loan holding company regulatory regime established by the Dodd-Frank Act appears to be having the ultimate effect of reducing the number of SLHCs, especially those that are predominantly insurance enterprises, say attorneys with Debevoise & Plimpton LLP.
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A Tale Of 2 Burdens Of Proof In Ch. 11
As a matter of strategy, it can be vital to understand the differing burdens of proof under various provisions of the Bankruptcy Code and when those burdens shift. For example, the Southern District of New York recently clarified the distinction between section 362(d) and 363(e) burdens of proof in In re AMR Corp., say attorneys with Duane Morris LLP.
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Nuts And Bolts Of Negotiating Forbearance Agreements
Excerpt from Lexis Practice Advisor
When faced with default under a loan agreement, a company may request that the lender forbear for a limited period of time from taking legal actions in order to allow the company time to resolve its financial problems. In such a scenario, parties should consider a number of items in determining whether a forbearance agreement is appropriate, say George South and Daniel Egan of DLA Piper LLP.