Bankruptcy

  • August 4, 2015

    9th Circ. Sanctions Atty With ‘Propensity For Distortion'

    The Ninth Circuit on Tuesday sanctioned the co-founder of a Montana ski resort and his lead counsel for bringing a frivolous appeal of a twice-rejected bid to disqualify a bankruptcy judge, saying the lead attorney has a "propensity for distortion" and acted unprofessionally throughout the proceedings.

  • August 4, 2015

    Optim Judge Won't Put Ch. 11 Plan On Hold For Appeal

    A Delaware bankruptcy judge declined Monday to put the Chapter 11 plan for power plant company Optim Energy LLC, owned by Bill Gates' Cascade Investment LLC, on hold while self-professed largest creditor Walnut Creek Mining Co appeals confirmation of a reorganization it says includes gerrymandered claims.

  • August 4, 2015

    Ocala Trust Sues USAmeriBank Over $5M Transfer In Fraud

    The litigation trust for Ocala Funding LLC launched an adversary suit Monday in Florida bankruptcy court against USAmeriBank Inc. over an allegedly fraudulent $5 million transfer executives of parent Taylor Bean & Whitaker Mortgage Corp. made to the bank in 2009 to cover up a massive fraud.

  • August 4, 2015

    Lehman Gets Green Light For $1.89B Creditor Distribution

    The liquidating trustee for Lehman Brothers Inc. got approval from a New York bankruptcy judge Tuesday to distribute approximately $1.89 billion for customers of Lehman's brokerage business, pushing the total payout for unsecured general creditors to $7.8 billion.

  • August 4, 2015

    GE Slips Suit Alleging Role In $3.6B Petters Ponzi Plot

    A New York federal judge tossed a suit Tuesday alleging General Electric Capital Corp. knew about and helped facilitate the $3.6 billion Ponzi scheme orchestrated by Tom Petters, finding that plaintiff Ritchie Capital Management LLC’s claims lacked merit and were already covered by the Petters bankruptcy trustee.

  • August 4, 2015

    2nd Circ. Rejects NH City's Tax Claim Against FairPoint Unit

    A subsidiary of FairPoint Communications Inc. was relieved from having to pay $103,000 in property taxes to the city of Concord, New Hampshire, on Tuesday after the Second Circuit ruled that a 2009 lien on the properties expired when the company’s bankruptcy plan was approved.

  • August 3, 2015

    Farmers Agent Axed To Pay Debt Loses Appeal To 8th Circ.

    The Eighth Circuit refused to revive a suit by a former Farmers Insurance Group agent who defaulted on a loan from his employer and was forced to resign to pay off his debt with a severance bonus on Monday.

  • August 3, 2015

    NJ Foreclosure Firm Zucker Goldberg Files Chapter 11

    New Jersey foreclosure law firm Zucker Goldberg & Ackerman LLC  has followed through on its lead-up to bankruptcy, filing a Chapter 11 petition Monday that listed $11.5 million in assets eclipsed by liabilities of $53 million.

  • August 3, 2015

    50 Cent Discloses $3M In Monthly Expenses, Income In Ch. 11

    Curtis James Jackson III, better known as 50 Cent, filed a statement of his financial affairs in Connecticut bankruptcy court on Monday, following the rapper’s mid-June Chapter 11 filing.

  • August 3, 2015

    Puerto Rico Misses Bond Payment, Defaults

    Puerto Rico officials confirmed Monday that they will be unable to make a multimillion-dollar bond payment that came due on the first of the month, marking the first time the territory has defaulted on its obligations as it attempts to restructure $73 billion in debt.

  • August 3, 2015

    Ex-Delta Petroleum Exec Asks Justices To Clarify Causation

    A former oil company executive ordered to face shareholder allegations he pumped Delta Petroleum Corp.'s stock before its plunge into bankruptcy has asked the U.S. Supreme Court to address circuit disagreement over what investors must prove to link stock losses with misrepresentation by executives.

  • August 3, 2015

    Borders Trust Asks High Court To Pass On Gift Card Spat

    The Borders Group Inc. liquidating trust is urging the U.S. Supreme Court to pass on an appeal seeking to revive class action litigation over $210.5 million in unredeemed customer gift cards, saying the plaintiffs sat on their claims against the shuttered bookstore for too long.

  • August 3, 2015

    Baha Mar Judge Agrees To Consider Bid To Scrap Ch. 11

    A Delaware bankruptcy judge said Monday he would weigh requests later this month by the Chinese export-import bank and a state-owned construction company to scrap the unfinished $3.5 billion Baha Mar resort's Chapter 11 case in favor of a parallel proceeding in the Bahamas.

  • August 3, 2015

    Calif. Says Ch. 11 No Bar To Corinthian Disciplinary Action

    The California Department of Consumer Affairs pushed the Delaware bankruptcy court Friday to find that its disciplinary action against Corinthian Colleges Inc. isn't barred by the for-profit educator's Chapter 11 filing, joining several state agencies seeking a definitive ruling on whether their enforcement actions can go forward.

  • August 3, 2015

    Idaho Gold Miner Premium Exploration Lands In Ch. 11

    Gold mining operation Premium Exploration USA Inc. filed for Chapter 11 on Friday in Idaho, becoming the latest U.S.-based mining operation in recent months to seek bankruptcy protection.

  • August 3, 2015

    Ky. Improperly Charged Fuel Co. For Excise Tax: 7th Circ.

    A bankrupt regional gas distributor was improperly charged a Kentucky excise tax on gasoline that was destined for out-of-state final purchasers, the Seventh Circuit ruled Friday, concluding that the company had borne the tax through extra fees paid to its upstream suppliers.

  • August 3, 2015

    Alpha Files For Bankruptcy With $7.1B In Debt

    Alpha Natural Resources on Monday became the latest coal producer to file for bankruptcy, less than five years after its $8.5 billion purchase of Massey Energy Co., whose former leader is now facing criminal charges over safety violations that federal prosecutors say caused a 29-death explosion.

  • July 31, 2015

    Bahamanian Judge Delays $3.5B Baha Mar Liquidator Hearing

    A Bahamanian judge on Friday stalled a key hearing for the unfinished $3.5 billion Baha Mar resort, granting the government until Aug. 19 to name a new liquidator to handle the beleaguered resort’s restructuring after its original candidate, PricewaterhouseCoopers, was nixed over a conflict of interest.

  • July 31, 2015

    Upstream-Downstream Tiff Over Bankrupt Oil Middleman Ends

    Oil producers who sold to middleman SemCrude LP before its bankruptcy do not have a right to recover money from a purchaser downstream of SemCrude who allegedly shielded itself from the company's troubles by taking unfair advantage of the upstream producers' credit agreements, a Delaware federal judge said Thursday.

  • July 31, 2015

    Tribe Urges High Court To Pass On Ex-Contractor's Suit

    California's Santa Ynez Band of Chumash Indians has asked the U.S. Supreme Court to pass on reviewing a former contractor's sanctions bid against the tribe, arguing that a bankruptcy court's denial of the motion had nothing to do with tribal sovereign immunity.

Expert Analysis

  • Bankruptcy Triggers For The Duty To Preserve Evidence

    William R. O’Bryan Jr.

    The debtor’s filing of a petition is the first significant event in a bankruptcy case that may give rise to a reasonable expectation of litigation and, thus, the duty to preserve evidence. Where the debtor and its creditors are engaged in prepetition litigation or such litigation is contemplated, the duty to preserve evidence has already been triggered, say William O’Bryan Jr. and Adam Langley of Butler Snow LLP.

  • Will 3rd Circ. Be Next To Ban ‘Equitable Mootness’?

    Bruce D. Buechler

    Amid various circuits' movement away from the equitable mootness doctrine, a recent decision in the Chapter 11 case of One2One Communications LLC cries out for the Third Circuit to reconsider the equitable mootness portion of Continental Airlines en banc, say Bruce Buechler and Cassandra Porter of Lowenstein Sandler LLP.

  • 7 Keys To Improving Your Direct Examination

    James Murray

    Trial lawyers should approach direct examination with the same excitement as cross-examination. If you do not, the jury will notice and your case will suffer. An effective direct examination backs the lawyer out of the action and puts the witness front and center to tell the story in a conversational, comforting, interesting fashion, says James Murray of Dickstein Shapiro LLP.

  • Lessons From 5th Circ. Application Of Scienter Standard

    David Dodds

    The Fifth Circuit’s recent dismissal of a federal securities fraud class action that arose out of the failure of Guaranty Bank serves as a reminder that even where some specific allegations tend to support an inference of scienter, they may not invariably lead to a finding of the required “strong inference,” says David Dodds of Haynes and Boone LLP.

  • 7th Circ. Empowers In Pari Delicto Defense In Bankruptcy

    Lisa M. Schweitzer

    A recent Seventh Circuit decision in a case related to Tom Petters' Ponzi scheme establishes the viability of in pari delicto as a defense potentially available to pre-bankruptcy advisers to a debtor, even in cases where the claims against the outside professionals go beyond an alleged failure to discover misconduct, say Lisa Schweitzer and Grace Kurland of Cleary Gottlieb Steen & Hamilton LLP.

  • Mid-2015 Restructuring Review: Europe And Emerging Markets

    Stephen Phillips

    Opportunities for distressed debt funds to buy attractively priced distressed corporate assets have been few and far between in recent terms, but do not expect activity levels to be quiet forever. One market that funds have been eyeing closely is Italy, say attorneys with Orrick Herrington & Sutcliffe LLP.

  • Vote More Than Once? Numerosity And Possible Reform

    Craig M. Price

    While current law indicates that claims of affiliated lenders may be treated as separate to the extent documented by different proofs of claim, allowing affiliates to count as different creditors for numerosity purposes in bankruptcy, change may be ahead, say attorneys with Chapman and Cutler LLP.

  • 2nd Circ. Cites Creditor Risks In Involuntary Bankruptcy

    Michael L. Cook

    Creditors are often tempted to file an involuntary bankruptcy petition against their debtor as a way to compel the payment of a debt. But as a recent Second Circuit affirmation in the TPG Troy LLC case shows, the involuntary bankruptcy petition is not just another collection device, says Michael Cook of Schulte Roth & Zabel LLP.

  • Will Congress Bar College Tuition Clawback In Bankruptcy?

    Lynne B. Xerras

    An increasing number of colleges and universities find themselves defending litigation initiated by Chapter 7 trustees administering bankruptcy cases of the parents of past or present students. One congressman is seeking to reverse this trend, says Lynne Xerras of Holland & Knight LLP.

  • The Precedential Value Of Sagamore Partners

    Steven Wilamowsky

    The Eleventh Circuit, in the case of hotel owner Sagamore Partners, expressly rejected the notion that under Florida and federal bankruptcy law, late fees and default interest are somehow inconsistent remedies. The case also reflects an increasing reluctance on the part of appellate courts to dismiss appeals of consummated, confirmed plans, say Steven Wilamowsky and Laura Appleby of Chapman and Cutler LLP.