Bankrupt Overseas Shipholding Group Inc. hit Proskauer Rose LLP and four of its partners with another legal malpractice lawsuit in New York state court on Tuesday, accusing its former general outside counsel of straddling OSG with hundreds of millions of dollars in “completely avoidable” tax liability.
An attorney for former Bernard Madoff aide Annette Bongiorno on Tuesday accused prosecutors of attempting to distract jurors from the case and make them “jealous” by repeatedly emphasizing the defendant’s previous wealth, including a $50 million investment account and her silver Bentley.
A Delaware bankruptcy judge on Tuesday gave hotel Internet provider iBahn Corp. the green light to sell its assets to Guest-Tek Interactive Entertainment Ltd., a $13 million deal that sees the Utah-based debtor acquired by a Canadian competitor.
A New York federal judge on Tuesday refused to revisit his February decision tossing breach of fiduciary duty claims from a class action against bankrupt MF Global Inc.’s former top brass, ruling again that the plaintiffs had waived those claims.
The U.S. Securities and Exchange Commission sued bankrupt AgFeed Industries Inc. and former principals of the company on Tuesday over an alleged accounting fraud scheme, in which revenues were inflated by $239 million in order to boost the industrial hog producer’s stock price.
Sbarro Holdings LLC's return to bankruptcy this week underscores the leasing troubles and brand battles many established restaurant chains are facing in the current economic climate — spotlighting the fact that companies need to make smarter deals to stay ahead of the competition and out of Chapter 11, experts say.
A Delaware federal judge on Monday dismissed an appeal of LifeCare Holdings Inc.'s $320 million bankruptcy sale to Carlyle Group LP, stymieing the U.S. government's bid to realize its $24 million tax claim from the sale proceeds.
Edison Mission Energy on Tuesday received bankruptcy court approval of its reorganization plan, allowing it to sell its assets to NRG Energy Inc., exit bankruptcy free of liabilities and implement a settlement that will bring in $200 million to its parent Edison International.
The Los Angeles-based production company that attempted short-lived online revivals of famous soap operas “One Life to Live” and “All My Children” filed for Chapter 11 protection late Monday in Delaware, listing up to $50 million in debt and indicating that it intends to wind down operations.
An Illinois federal judge on Tuesday ordered a temporary freeze on any U.S. assets held by the CEO of bankrupt bitcoin exchange Mt. Gox, handing a victory to customers in a class action alleging the executive was behind a scheme to defraud them and hide the fact that their bitcoins had been stolen.
The trustee overseeing the liquidation of Bernard L. Madoff Investment Securities LLC’s estate filed suit Tuesday against several individuals who launched class actions in Florida federal court to recover certain Madoff-related damages, saying they are violating an order barring them from pursuing the litigation.
When you are in the middle of a trial or a large transaction and have missed one too many soccer games, it is easy to say you must make a change. But the best thing to do is to get through the madness, and then re-evaluate your personal and professional balance, says Heidi Goldstein, leader of Thompson Hine LLP's women's initiative.
Successfully handling high-profile matters, with and against so many well-known insurance coverage professionals, offered me a chance to break into, then gain prominence and respect in, an industry dominated by men, says Sherilyn Pastor, leader of McCarter & English LLP's insurance coverage group and a member of the firm's executive committee.
The U.S. Securities and Exchange Commission urged the Second Circuit on Thursday to overturn a ruling that allowed unsecured creditors to unwind securities actions as part of the Tribune Co.'s bankruptcy proceedings, saying it would hinder its ability to protect the country's markets.
With Staples Inc.'s announcement last week that it plans to close up to 225 stores, bankruptcy professionals wonder whether it marks part of an alarm call for brick-and-mortar retailers facing online competition — and if the office supply giant could be staring at Chapter 11 if its aggressive downsizing strategy fails.
Creditors of OCZ Technology Group Inc. urged a Delaware bankruptcy judge on Monday to not approve a proposed $7.5 million settlement of a shareholder class action, saying the deal shouldn't be blessed until they've had a chance to look into all the estate's claims.
In damning emails in which they allegedly discussed “cooking the books” and “fake income,” former executives of now-defunct Dewey & LeBoeuf LLP handed prosecutors evidence they needed to charge them with accounting fraud and put themselves in the difficult position of trying to explain away their own words, experts say.
Sentinel Management Group Inc.’s former chief financial officer testified Monday that the investment firm wasn’t entirely forthright with customers about its financial health and risky trading strategy leading up to its 2007 collapse, as her old boss’s trial on charges that he oversaw a $500 million fraud continued in Chicago.
A Georgia federal court last week added a new step for insurers to take before they can head to court to challenge directors and officers coverage for the Federal Deposit Insurance Corp.'s litigation over bank failures, a peculiar ruling that attorneys warned could drive up costs for insurers.
If Sbarro Holdings LLC hopes to make its second bankruptcy go-around more successful — and lasting — than its previous trip, the chain must dig in deep to carve off a chunk of its lease burdens, rework its bloated organizational structure and eke out new concessions from already burned creditors, experts say.
A properly drafted intercreditor agreement among parties to a complex debt financing transaction, including “mezzanine” debt financiers, is necessary to ensure that their relative rights and obligations are enforced in a distress or bankruptcy situation. Setting forth lien priority in intercreditor agreements, for example, serves to mitigate against the risk of the senior creditor not being “first in time” in filing a lien, says Ata Dinlenc of Dentons.
Although an appointment order will define the scope of a federal court receiver’s duties, there are typically a handful of “do’s” that every receiver should strive to accomplish immediately. For example, any electronic access to the receivership entity’s files should be immediately disabled, and hence, having a digital forensic specialist available is necessary, says Patrick Rengstl of Levine Kellogg Lehman Schneider & Grossman LLP.
Cloud users must know how to use the cloud responsibly to prevent later difficulties with document production. When negotiating a cloud service agreement, users should look for certain services that will prove useful when responding to discovery requests, such as comprehensive search options, instant suspension of the auto-delete function, and preservation of metadata and embedded data, say attorneys with Sidley Austin LLP.
Thanks to the Third Circuit’s recent holding in In re Emoral Inc., entities purchasing a distressed debtor’s assets through a Section 363 bankruptcy sale may have greater protections against the subsequent claims of those seeking to hold the purchaser liable for damages arising from the debtor’s presale conduct, says Travis Powers of Buchanan Ingersoll & Rooney PC.
The First Circuit's recent decision in In re Munce’s Superior Petroleum Products Inc. is consistent with other circuits in concluding that noncompensatory environmental fines should receive administrative priority under the Bankruptcy Code. The decision, however, is at odds with other courts that have addressed the treatment of prepetition violations that result in post-petition penalties, say attorneys at Lowenstein Sandler LLP.
Section 503(b) of the Bankruptcy Code provides a unique opportunity for creditors to aid the estate in recovering assets and to be compensated for their efforts. However, a recent Florida court decision highlights the consequences of leaping to undertake such efforts but failing to obtain prior permission, says Reagan Boyce of Ezra Brutzkus Gubner.
If a company fails to comply with certain obligations under a loan agreement, it should engage the lender in discussions regarding the reasons for the failed compliance, whether the company is able to cure any existing default, or whether it believes a waiver, forbearance or amendment is appropriate. It could not be in the lender’s best interest to declare an event of default, and hence, the parties can begin negotiations, say George South and Daniel Egan of DLA Piper LLP (US).
In stark contrast to the changing environment for the majority of lawyers today, the evolution for the general counsel is driven less by necessity than by opportunity. Today’s GC may touch every aspect of his or her organization to solve challenges and propel the company forward, keeping the GC far ahead of what is expected of the average lawyer, says James Merklinger, vice president and general counsel of the Association of Corporate Counsel.
As reflected in a recent decision by the U.S. Bankruptcy Court for the District of New Jersey, in preparing loan documentation, it is important for practitioners to appreciate how applicable state law and bankruptcy courts will treat assignments of rents and whether, given that treatment, certain facts or structuring could alter whether and how the rents may be used in the event of the borrower’s bankruptcy, say attorneys with Alston & Bird LLP.
The trustee of bankrupt agribusiness giant SK Foods LP recently completed the Herculean task of recovering approximately $50 million from Australia for the company’s creditors in a saga that involved one of the largest Chapter 11 cases in the Eastern District of California, criminal charges, and a last-minute attempt by Australian authorities to confiscate assets. Among other things, the trustee's ability to establish personal jurisdiction in the U.S. over asset protection vehicles proved invaluable, say attorneys with Schnader Harrison Segal & Lewis LLP.