Bankruptcy

  • May 29, 2015

    Ad Newsletter PennySaver Hits Ch. 7 In Wake Of WARN Suits

    PennySaver USA LLC, printer of an iconic advertising newsletter in southern California, filed for Chapter 7 bankruptcy Friday in Delaware, a week after it shuttered operations and after former employees lodged class actions claiming nearly 700 workers were abruptly laid off without notice or final pay.

  • May 29, 2015

    Bankruptcy Attorneys Should Fear Baker Botts Fee Case

    The U.S. Supreme Court could deliver bankruptcy practitioners a major blow if the justices determine attorneys shouldn't be reimbursed for defending fee applications in a case involving megafirm Baker Botts LLP, an outcome that would make it more difficult for bankruptcy attorneys to get paid fair rates and would give adversaries powerful negotiating leverage.

  • May 29, 2015

    Ex-Cable CEO Can't Shed $14M Tax Debt, US Tells High Court

    The federal government has asked the U.S. Supreme Court to reject a former cable company CEO’s challenge to an appellate decision that blocked him from discharging a $14.3 million tax debt in bankruptcy, saying the executive intentionally diverted assets and spent millions to leave little left for the IRS.

  • May 29, 2015

    Aussie Satellite Co. NewSat Wins Ch. 15 Recognition

    A Delaware bankruptcy judge on Friday granted Chapter 15 recognition to Australian satellite outfit NewSat Ltd., which said it has been making progress on a deal to restructure the company.

  • May 29, 2015

    Aramid Seeks Approval To Sell Stake In Film Co. For $2M

    Bankrupt film financing hedge fund Aramid Entertainment Fund Ltd. asked New York bankruptcy court Thursday to approve releasing a lien on the membership interest of production company Incentive Filmed Entertainment, enabling it to sell the interest back to Sierra Pictures for $2 million, helping AEF resolve its debts. 

  • May 29, 2015

    Yucaipa Asks To Freeze Allied Ch. 11 Until Court Fights End

    The Yucaipa Cos. LLC asked the Delaware bankruptcy court Thursday to freeze Allied Systems Holdings Inc.’s long-running and contentious Chapter 11 case, arguing that plan proposals shouldn’t go forward until the myriad litigation that has grown around the proceedings over creditor rights is resolved.

  • May 29, 2015

    Oracle Wants IP Protected In Wet Seal Asset Sale

    Oracle America Inc. on Thursday moved to protect its intellectual property and related licenses in Wet Seal Inc.'s bankruptcy, telling a Delaware federal judge that the retailer needs to provide more information about IP contracts that would be assumed by a unit of Versa Capital Management LLC that acquired the brand.

  • May 28, 2015

    Nortel Bankruptcy Judge Can't Rule On Avaya Claims: SNMP

    Software company SNMP Research International Inc. on Thursday urged the Delaware bankruptcy judge overseeing Nortel Networks Inc.'s Chapter 11 case to find that his court lacked the authority to rule on claims brought against Avaya Inc., which purchased one of the telecom's units.

  • May 28, 2015

    Karmaloop Can Pay Burns & Levinson For Early Ch. 11 Work

    A Delaware bankruptcy judge on Thursday allowed Burns & Levinson LLP to be paid as special counsel in the Karmaloop Inc. Chapter 11 case for the period which she did not allow the firm to be retained as debtors' counsel, despite objections from the U.S. Trustee's Office.

  • May 28, 2015

    K&L Gates Rebuts Oil Co. Investors' Malpractice Claims

    K&L Gates LLP urged a California federal judge on Thursday to toss a putative class of petroleum company investors' malpractice suit over the firm’s role in the company's bankruptcy case, arguing the bankruptcy court knew about the firm's alleged conflict of interest and found that it wasn't a problem.

  • May 28, 2015

    5th Circ. Nixes Co.'s Suit Against Its Bankruptcy Trustee

    The Fifth Circuit on Thursday upheld a lower court's dismissal of a case brought by a company that alleged its bankruptcy trustee failed to pursue a claim against its insurance provider, ruling that plaintiffs didn't get the consent of the bankruptcy court.

  • May 28, 2015

    NJ Supreme Court Sides With Citi In Bankruptcy Tolling Spat

    New Jersey's Supreme Court ruled Thursday that lower courts properly extended the yearlong period CitiMortgage Inc. could challenge a couple's ability to discharge liens on their property following their emergence from bankruptcy, because Citi was never served notice of the bankruptcy.

  • May 28, 2015

    50 Cent Sex Tape Trial Back On After Ch. 11 Filing Detour

    A New York federal judge Thursday ruled that 50 Cent must face a trial in state court over his online posting of a sex tape featuring the mother of rival emcee Rick Ross’ child, dashing the rapper’s bid to remove the lawsuit with a last-minute bankruptcy filing.

  • May 28, 2015

    Bankrupt Saladworks Gets Nod For $17M Sale To PE Firm

    A Delaware bankruptcy judge agreed Thursday to approve casual restaurant chain Saladworks LLC's $16.9 million sale to a unit of private equity firm Centre Lane Partners LLC after no suitors came forward to best the stalking horse bid.

  • May 28, 2015

    Old Chrysler Squashes Clutch Maker's Adversary Suit

    Auto parts manufacturer FTE Automotive USA Inc. failed Thursday in a bid for declaratory judgment in New York federal court that it doesn’t have to provide liability insurance to Old Chrysler in a proposed class action in Texas over allegedly defective clutches FTE sold to the automaker before it went bankrupt.

  • May 28, 2015

    Frederick's Of Hollywood Likely To Sell IP To ABG For $22.5M

    Frederick's of Hollywood Inc. said Wednesday in Delaware court that it has canceled an auction to sell off its intellectual property because the bankrupt lingerie retailer received no qualified bids that challenged the $22.5 million put up by stalking horse Authentic Brands Group LLC.

  • May 28, 2015

    Criminal Restitution Trumps Bankruptcy Stay, 9th Circ. Says

    A Ninth Circuit panel ruled Wednesday in a case involving a woman convicted of embezzling union funds that a debtor's obligation to pay criminal restitution trumps the protection of an automatic bankruptcy stay.

  • May 28, 2015

    Suzuki Dodges Suit Over GM Compact Car Fires

    An Oklahoma federal judge on Wednesday tossed a putative class action alleging Suzuki Motor of America Inc. concealed a defect in certain General Motors LLC-manufactured Forenza and Reno compact cars, saying the company didn’t acquire all of the assets of its pre-bankruptcy predecessor and can’t be held liable for its actions.

  • May 27, 2015

    Troutman Sanders Can't Nix Bankruptcy Deadline Extension

    Troutman Sanders LLP on Wednesday lost a bid to overturn an order extending the statute of limitations period to bring claims in the underlying bankruptcy of a health care asset holding company after a Florida federal judge ruled that the firm’s appeal should be tossed for lack of jurisdiction.

  • May 27, 2015

    GM Bankruptcy Judge Grants Stay Of Ignition Switch Suits

    A New York bankruptcy judge on Wednesday agreed to stay dozens of suits filed against General Motors Co. in connection with ignition switch defects for certain cars, saying that dismissing the cases at this juncture could prove “cumbersome” if plaintiffs’ appeal of his order barring the suits is successful.

Expert Analysis

  • 4 In-House Preferences For Better Outside Counsel

    Patrick H. Reilly

    The best outside counsel change their optics to think like the client. For these lawyers, client service is not just about top-notch legal work — it is about making life easier for the entire in-house team. In the words of litigation counsel at medical device company Zimmer Inc. and outside counsel at Faegre Baker Daniels LLP, here are four ways outside counsel can better serve clients.

  • Key Takeaways From High Court's Wellness V. Sharif Ruling

    Ferve Ozturk

    The U.S. Supreme Court ruling in Wellness International v. Sharif will no doubt encourage debtors and other litigants who wish to centralize avoidance action litigation and other “core” disputes in bankruptcy court, says Ferve Ozturk of BakerHostetler.

  • What Distressed Cos. Can Take Away From Quadrant V. Vertin

    Matthew B. Harvey

    The Delaware Chancery Court’s analysis in Quadrant Structured Products Co. Ltd. v. Vertin of the “irretrievable insolvency” test for creditor derivative standing provides guidance for corporations in performing solvency analysis. Vertin also provides insight into where Delaware fiduciary duty law currently stands with respect to insolvent corporations, say Eric Klinger-Wilensky and Matthew Harvey of Morris Nichols Arsht & Tunnell LLP.

  • San Bernardino Ch. 9 Plan Looks Like An Opportunity Missed

    Karol K. Denniston

    Instead of restructuring its largest liability, San Bernardino has created a situation where the California city’s financial future remains very much in question. It is not enough to virtually eliminate financial obligations to bondholders, contract out services and exit with backbreaking pension obligations, says Karol Denniston of Squire Patton Boggs LLP.

  • Sign Of Courts' Growing Impatience With Procedural Errors

    Bruce P. Merenstein

    The Third Circuit decision in Lehman Brothers Holdings Inc. v. Gateway Funding Diversified Mortgage Services LP — and some strong words from the court in its opinion — have raised concerns that the court may be becoming more rigid in its application of procedural rules, and signals that federal appellate courts may be losing patience with procedural errors, say Carl Solano and Bruce Merenstein of Schnader Harrison Segal & Lewis LLP.

  • Digging Through The New Federal Rules Of Civil Procedure

    Leeron Morad

    Last month, behind the scenes, the U.S. Supreme Court quietly approved changes to the Federal Rules of Civil Procedure. Though the ultimate impact of the amendments remains to be seen, they will affect discovery and document production proceedings for both litigants and practitioners, say Leeron Morad and Andrew Bramhall of Quinn Emanuel Urquhart & Sullivan LLP.

  • Examining Bankruptcy Rights Under Oil And Gas Contracts

    Excerpt from Lexis Practice Advisor
    Ira L. Herman

    A few of the common issues that can arise in an oil and gas bankruptcy case include the treatment of joint operating agreements, oil and gas leases, and farmout agreements. Specifically, the treatment of oil and gas agreements pursuant to the Bankruptcy Code is based on precisely how such agreements are categorized under state law, says Ira Herman of Thompson & Knight LLP.

  • What Corp. Attys Can Learn From High Court Ch. 13 Ruling

    Abigail L. Lerner

    While the particular Bankruptcy Code sections most implicated by the U.S. Supreme Court decision in Harris v. Viegelahn are not ones corporate restructuring attorneys generally grapple with, any insight into the Supreme Court’s statutory interpretation framework is always useful. In addition, there are broader lessons to be learned from this one, says Abigail Lerner of Weil Gotshal & Manges LLP.

  • The New Rules Of Condo Construction Financing In Florida

    Rebecca Abrams Sarelson

    Developers in today’s South Florida condominium market need to convince their investors to accept a more hands-off approach as major decisions for which investors could traditionally exert control are now subject to the lender’s consent. In addition, many lenders have taken the position that routine bankruptcy-remote safeguards are no longer sufficient, says Rebecca Abrams Sarelson of Arnstein & Lehr LLP.

  • Nonprofits In The Zone Of Insolvency: 2 Cautionary Tales

    Christopher M. Desiderio

    The nebulous zone of insolvency for nonprofits demands the exercise of proper corporate governance, but for whose benefit? Lemington III is a warning that the insolvency zone can span years during which directors’ actions will be scrutinized. Sweet Briar College, on the other hand, is a demonstration of the difficulties directors face when they perceive the rapid approach of financial calamity and act as they see fit, say attorneys... (continued)