Bankruptcy

  • September 30, 2014

    Sun Capital Found Not Liable For Trucking Unit's WARN Claims

    A Delaware federal judge ruled Monday that the bankruptcy court was right to clear Jevic Transportation Inc.’s owner Sun Capital Partners Inc. of liability connected to class action claims from laid-off employees, ruling the private equity firm did not bear ultimate responsibility for the debtor’s decision to close.

  • September 29, 2014

    Citi Unit, Others Get Thornburg Trustee's $2B Suit Trimmed

    A Maryland bankruptcy judge has pared a nearly $2 billion suit by Thornburg Mortgage Inc.'s trustee alleging that units of Citigroup Inc. and other banks made unfair margin calls and other improper agreements that brought the mortgage lender to its knees, finding that the agreements central to some of the claims are safe-harbored.

  • September 29, 2014

    Stockton Ruling Could Inject Pension Cuts Into Ch. 9

    The judge overseeing Stockton, California’s proposed debt restructuring is poised to address whether cities’ crushing pension obligations can be reduced in bankruptcy, a vexing question that could upend the balance of power between bankruptcy courts and elected municipal officials.

  • September 29, 2014

    Bankrupt Vitamin Maker Natrol Aims For Nov. Auction

    Nutritional supplement maker Natrol Inc. on Monday asked a Delaware bankruptcy judge to bless a slate of bid procedures establishing a timetable for a Section 363 sale, including a November auction of the company's assets.

  • September 29, 2014

    Aaroma Says Diacetyl Claims Belong To Bankruptcy Estate

    Aaroma Holdings LLC has urged the U.S. Supreme Court to uphold a Third Circuit decision freeing it from liability for injuries allegedly caused by a food additive manufactured by a company whose assets it purchased in 2010, arguing the plaintiffs’ claims belonged to the now-bankrupt company’s estate.

  • September 29, 2014

    Argentina Held In Contempt For Debt Bypass Plan

    A New York federal judge on Monday held Argentina in contempt of court for taking steps to evade his orders that bondholders who agreed to debt restructurings can only be paid if holdout hedge funds are also compensated, calling such plans illegal.

  • September 29, 2014

    Trump Resorts Aims To Ax Union Pact, Add $100M Icahn Stake

    Bankrupt Trump Entertainment Resorts Inc. moved Friday to reject its contract with unionized casino employees, saying a new labor deal is a key element in a designed Chapter 11 plan that would see Carl Icahn inject $100 million into the ailing Trump Taj Mahal in Atlantic City.

  • September 29, 2014

    ATP Oil Execs Escape Suit Over $1.5B Note Exchange

    A Louisiana federal judge on Friday tossed a consolidated securities class action alleging bankrupt ATP Oil & Gas Corp.’s top executives misled investors ahead of a $1.5 billion note exchange about its liquidity and business prospects following drilling moratoriums enacted after the Deepwater Horizon oil spill.

  • September 29, 2014

    Nortel Seeks Relief From Subpoenas In Rockstar Patent Suits

    Defunct Nortel Networks Corp. asked a Delaware bankruptcy judge Friday to grant it protection against subpoenas it has received in connection with patent infringement litigation involving Rockstar Consortium LP, the buyer of its patent portfolio, arguing that the requests would cause it great burden and expense.

  • September 29, 2014

    Carmakers, Insurers Want Garlock Asbestos Records Unsealed

    Ford Motor Co., Honeywell International, Volkswagen Group of America Inc. and a slew of insurers urged a North Carolina bankruptcy judge Thursday to reject a bid to seal aggregated estimations of past and pending mesothelioma claims against Garlock Sealing Technologies LLC, saying the information should be released to the public.

  • September 29, 2014

    Argentina Can't Fight $185M Arbitration Award, Justices Told

    British energy titan BG Group PLC has urged the U.S. Supreme Court to block Argentina's latest bid to undo the company's $185 million investment arbitration award, asserting that the country presents minor factual issues that do not warrant review by the justices, who have already weighed in on the case.

  • September 29, 2014

    7th Circ. Flubbed Bankruptcy Ruling, High Court Told

    The U.S. Supreme Court has received four amicus briefs in a case concerning the extent of bankruptcy courts' power, with most amici agreeing that a recent Seventh Circuit decision has taken too much power away from bankruptcy courts in noncore proceedings.

  • September 26, 2014

    AWI Creditors Say $193M DIP Snubs Trade Claims

    Trade creditors of bankrupt Associated Wholesalers Inc. took issue Friday with the cooperative food distributor's proposed $193 million debtor-in-possession facility, claiming the credit package as structured will give a “windfall” to lenders and shut out priority vendor claims.

  • September 26, 2014

    Fifth Third Takes 2nd Shot At Moving Simplexity To Ch. 7

    Fifth Third Bank on Thursday again urged a Delaware bankruptcy judge to convert the Chapter 11 case of cellphone activator Simplexity LLC, saying the reasons for rejecting its previous bid no longer apply while the need for a move to Chapter 7 has grown.

  • September 26, 2014

    Spirited-Away $6M Is Part of Telecom's Estate, 3rd Circ. Says

    A long-distance telephone service seller “recovered” a settlement payment to its former owners for bankruptcy purposes when the payment was ruled fraudulent, despite never obtaining tangible possession of the funds after the ex-owners transferred them to offshore bank accounts, according to a Third Circuit decision published Friday.

  • September 26, 2014

    Lehman Bros. Says It Was Cheated Out Of $1.9M Swap Gain

    Lehman Brothers Holdings Inc. accused Raymond James Financial Inc. of moving in on one of its swap agreements just after its 2008 collapse and taking a windfall of $1.9 million that the bankrupt financial institution now wants back, according to a lawsuit filed in New York federal court on Thursday.

  • September 26, 2014

    Citigroup Cleared To Make One-Time Argentine Bond Payment

    The New York federal judge overseeing the fight between hedge funds and Argentina over payments on the country’s sovereign debt on Friday said Citigroup Inc. could make a scheduled payment on around $8.4 billion in bonds governed by Argentine law.

  • September 26, 2014

    Judge OKs Bankrupt Video Transmission Co.'s Asset Sale

    A Delaware bankruptcy judge on Thursday approved a plan for Brevity Ventures Inc., a video transmission company whose technology was used by NBC during the Sochi Winter Olympics, to sell its assets to AllDigital Holdings Inc.

  • September 26, 2014

    Mich. Single-Biz Tax Can't Be Cut In Ch. 11, Court Says

    The State of Michigan Court of Appeals in a case of first impression Thursday affirmed that the Michigan single-business tax is an excise tax and not dischargeable under Chapter 11 of the Bankruptcy Code.

  • September 26, 2014

    Old Hostess To Pay $21M To Cyclist Hit By Bread Truck

    A New York bankruptcy judge on Friday approved a $21 million settlement between the former Hostess Brands Inc. and a German cyclist who was struck by one of the bankrupt baker’s trucks in Virginia in 2011, suffering an extensive brain injury that caused him to need a permanent care facility.

Expert Analysis

  • 3rd Circ. Sheds Light On Insider Status In Bankruptcy

    Shmuel Vasser

    A recent nonbankruptcy Third Circuit decision, Aleynikov v. Goldman Sachs Group Inc., may clarify what it means to be an officer of a debtor, and it would appear that the presumption established by the case of Foothills Texas may no longer be followed, say Shmuel Vasser and Shana White of Dechert LLP.

  • Pension Plan Minefields For Distressed Auto Equipment Cos.

    Jim Lukenda

    Few people understand the complexities of defined benefit pension plans, particularly those of distressed companies. For attorneys who work with clients or lenders in the automotive equipment business, these issues can be difficult to navigate without guidance on the complicated and sometimes arcane issues involved, say Laura Marcero and Jim Lukenda of Huron Consulting Group.

  • The New-Value Defense, Section 503(b)(9) Debate Continues

    Debora Hoehne

    The overlap of Section 503(b)(9) of the Bankruptcy Code and the new-value defense gives rise to an interesting question, and the Eastern District of Virginia has been clarifying the law in this area, including most recently in Siegel v. Sony Electronics Inc. — related to the Circuit City Stores Inc. bankruptcy. However, case law on this topic remains unresolved, says Debora Hoehne of Weil Gotshal & Manges LLP.

  • What Happens To Lenders' Collateral During Bankruptcy?

    Michael J. Venditto

    Lenders and their attorneys are conditioned to believe that being oversecured is as good as life gets for a creditor. But post-closing confidence in a job well done can quickly evaporate if the borrower files a bankruptcy case intending to sell the collateral, say Michael Venditto and Sarah Kam of Reed Smith LLP.

  • Mass. High Court Clarifies Fine Art Consignment Law

    Nicholas O'Donnell

    The Massachusetts high court’s interpretation of the state’s fine art consignment law — in a case involving a bankrupt art dealer — should bolster artists’ rights, and the case should be a strong encouragement for all sides to get a consignment agreement in place, says Nicholas O'Donnell of Sullivan & Worcester.

  • Bankruptcy Sale Of Hospitals: 4 Questions Before You Begin

    Thomas R. Califano

    It is advisable for hospitals entering Chapter 11 for the purpose of effectuating a sale or other transaction to have a potential strategic partner lined up at the time of filing, which will provide much-needed certainty for not only the hospitals, but also patients, residents, physicians, employees and suppliers, say attorneys with DLA Piper.

  • Opportunities And Pitfalls In The Legal Cloud

    David Houlihan

    Like "big data" and other effective software marketing buzzwords, “cloud” makes something that is very complex sound simple — and even friendly. Most attorneys are not prepared to dig into the distinctions between public, private and hybrid cloud models, or the niceties of how or where their data is transmitted and stored, says David Houlihan of Blue Hill Research Inc.

  • A General Counsel's Top 10 Billing Tips

    Francis M. Drelling

    Nothing makes an in-house counsel feel like they are being nickeled-and-dimed more than receiving a $3.50, stand-alone invoice. Forcing anyone to spend time on a $3.50 invoice is, quite frankly, just not cool, says Francis Drelling, in-house counsel at Specialty Restaurants Corp.

  • Momentive Ruling Part 4: Clarifying Make-Wholes

    Jessica Liou

    Judge Robert Drain’s ruling in Momentive Performance Materials provides yet another stake in the ground that telegraphs to creditors that their underlying contracts need to be more explicit regarding when they are entitled to a make-whole claim, says Jessica Liou of Weil Gotshal & Manges LLP.

  • Momentous Ruling In Momentive Part 3: Subordination

    Charles M. Persons

    Decisions interpreting subordination agreements often serve as a reminder of the importance of using precise language. In the Chapter 11 case of Momentive Performance Materials, potential ambiguity created by four words — “junior in any respect” — opened the door to litigation, says Charles Persons of Weil Gotshal & Manges LLP.