Bankruptcy

  • July 24, 2014

    Nortel's US Arm Strikes $1B Bondholder Interest Cap Deal

    The U.S. unit of the bankrupt Canadian Nortel Networks Inc. submitted a settlement deal Thursday that will cap at just over $1 billion the amount of interest the telecommunications company’s bondholders can collect on their holdings, according to a filing in Delaware federal court.

  • July 24, 2014

    Ex-Sentinel CEO Denied Acquittal, New Trial Request

    Former CEO Eric Bloom of the bankrupt Sentinel Management Group Inc.on Wednesday lost a bid to overturn a March guilty verdict that found he operated a $500 million securities fraud scheme, reached by a jury Bloom said made its decision out of laziness and a desire to be finished quicker.

  • July 24, 2014

    Crumbs Gets NJ Court Approval For Bankruptcy Auction

    A New Jersey bankruptcy judge on Thursday gave Crumbs Bake Shop Inc. the green light to move ahead with plans to sell off its assets at a bankruptcy auction in August, with an investor group serving as the stalking horse bidder for the now-shuttered New York cupcake chain.

  • July 24, 2014

    Former BES Chief Arrested As 3rd Espirito Co. Hits Bankruptcy

    Troubles worsened within Portugal’s Espirito Santo banking empire Thursday when prosecutors arrested the former chief executive of Banco Espirito Santo in a money-laundering and tax-evasion probe and a third company in the group sought court protection from creditors.

  • July 24, 2014

    Judge Upholds Madoff Aides' Convictions But Slams Feds

    A New York federal judge on Thursday upheld the convictions of five former Bernard L. Madoff Investment Securities LLC employees accused of aiding the Ponzi scheme but sharply criticized prosecutors for making “derogatory generalizations” in closing arguments to the jury.

  • July 24, 2014

    Grand Jury Charges TelexFree Heads With Pyramid Scheme

    A federal grand jury in Massachusetts on Wednesday charged the owners of bankrupt TelexFree Inc. with fraud and conspiracy in connection with the purported Internet telephone service company that authorities and investors contend was little more than a $1.1 billion pyramid scheme.

  • July 24, 2014

    TRW Sues Chrysler Trust To Ditch Steering-Defect Liability

    Global auto parts maker TRW Automotive Holdings Corp. filed an adversary suit against the old Chrysler company’s liquidation trust in New York bankruptcy court Thursday, seeking a declaration that it has no duty to indemnify Chrysler over allegedly defective steering systems.

  • July 24, 2014

    ResCap Borrower's Bad-Foreclosure Claim Pared In Ch. 11

    A $58 million bankruptcy trust set up to compensate Residential Capital LLC borrowers cannot entirely expunge a claim brought by a man blaming a wrongful foreclosure for his wife's death, a New York bankruptcy judge ruled Thursday, saying the claimant can recover for any resulting emotional distress.

  • July 24, 2014

    Garlock Estimation Trial Shouldn't Be Sealed, Judge Rules

    A North Carolina federal judge on Wednesday reversed a bankruptcy court's decision to close proceedings last year to estimate the mesothelioma liability of bankrupt Garlock Sealing Technologies LLC, citing the public's fundamental right to view documents filed in public courts.

  • July 24, 2014

    Mt. Gox Parent Blocked From Auctioning Bitcoins.com Domain

    A federal judge in Seattle has temporarily stopped the parent of bankrupt bitcoin exchange Mt. Gox from auctioning off the domain name bitcoins.com, finding that letting the sale proceed would hinder her ability to award potential damages in a $75 million contract suit against the company over licensing its intellectual property.

  • July 24, 2014

    DLA Piper Gets $1.1M Negligence Judgment Axed In Texas

    A Texas appeals court on Wednesday reversed a $1.1 million judgment against DLA Piper, finding that the former majority shareholder of defunct security technology company IdentiPHI Inc. lacked standing to pursue his claims against the firm.

  • July 24, 2014

    EFH Drops Restructuring Deal, Seeks Time For New Plan

    Power giant Energy Future Holdings Corp. said Wednesday it is scrapping its prearranged restructuring deal and needs time to develop a new Chapter 11 plan, and asked a Delaware bankruptcy judge to extend its exclusivity periods by six months.

  • July 23, 2014

    Madoff Judge Denies Fake Motion To Disqualify US Atty

    A New York federal judge on Wednesday denied an apparently fake motion on behalf of Bernie Madoff seeking to disqualify the U.S. Attorney from Madoff’s criminal suit on grounds that include the use of “voice-to-skull technology" to influence the court.

  • July 23, 2014

    Trustee Decries Worker Bonuses In GSE's Ch. 11 Plan

    The U.S. trustee’s office on Wednesday urged a Delaware bankruptcy judge to reject GSE Environmental Inc.’s proposed reorganization, saying the Chapter 11 plan includes an employee bonus program that doesn’t pass muster under the Bankruptcy Code.

  • July 23, 2014

    Ormet Judge Nixes Union Bid To Stay $25M Plant Sale

    A Delaware bankruptcy judge on Wednesday rejected a request to stay Ormet Corp.’s court-approved $25 million deal for a shuttered aluminum plant so a union trust could appeal the sale order, saying the debtor faced “enormous” harm if the deal didn’t close.

  • July 23, 2014

    Chase Can't Ditch Credit Reporting Suit Over Canceled Debts

    A New York bankruptcy judge on Tuesday refused to dismiss a nationwide class action accusing Chase Bank USA NA of enforcing discharged consumer debts by reporting they were still collectible, ruling that the bank was required under U.S. bankruptcy law to update the false information.

  • July 23, 2014

    EFH Noteholders Denied 3rd Circ. Hearing On $4B Debt Deal

    Energy Future Holdings Corp. senior noteholders have been barred from fast-tracking their appeal of a settlement repaying $4 billion in first-lien bonds directly to the Third Circuit, a setback for their claim that the pact discriminates among similarly situated creditors.

  • July 23, 2014

    Kelly Hart, Beard Kultgen Beat RE Co.'s Malpractice Suit

    A Texas federal judge on Wednesday tossed a real estate company's malpractice suit against Beard Kultgen Brophy Bostwick Dickson & Squires LLP and Kelly Hart & Hallman LLP, saying the plaintiff lacked standing because it didn't properly reserve claims related to hotel foreclosures in a bankruptcy proceeding.

  • July 23, 2014

    Ex-Quiznos Brass Defrauded Investor Funds, Suit Says

    Avenue Capital Group and Fortress Investment Group LLC funds launched a suit in Colorado federal court Tuesday accusing former executives of bankrupt sandwich chain Quiznos of defrauding them by misrepresenting and artificially inflating the company’s financial data to get them to prop up the ailing company.

  • July 22, 2014

    Revstone Says Founder Used Kids' Trusts To Hide Assets

    Bankrupt auto parts conglomerate Revstone Industries LLC is accusing its founder of funneling assets into trusts he controls in order to avoid the reach of Revstone and its creditors, according to documents filed Tuesday in Delaware bankruptcy court.

Expert Analysis

  • 6 Years In, Why Haven't FRE 502(d) Orders Caught On?

    John A. Rosans

    In this e-discovery era, why aren't more litigants using Federal Rule of Evidence 502(d) orders and affording themselves basic protection of their most sensitive information? Or, if they are moving for such orders, why are they doing it wrong? asks John Rosans of Katten Muchin Rosenman LLP.

  • Rakoff's Foreign Fund Clawback Ruling Has Limitations

    Raniero D’Aversa

    Judge Jed Rakoff’s recent ruling in the case of Madoff Securities gives comfort to foreign investors that the proceeds of their indirect investments in U.S. companies will not likely be clawed back, but it does not come without certain warnings and limitations — especially considering a contradictory Ninth Circuit ruling issued a mere three days prior to Rakoff’s decision, say attorneys with Orrick Herrington & Sutcliffe LLP.

  • Code Trumps Contract In The 5th Circ.

    Debra McElligott

    The Fifth Circuit opinion in Goldsby v. 804 Congress suggests that even where parties agree upon foreclosure-related fees, costs and charges before a bankruptcy, Section 506(b) of the Bankruptcy Code may still trump the provisions of their contract, says Debra McElligott of Weil Gotshal & Manges LLP.

  • Trial-Ready In 180 Days: Prepare For SDNY's Rocket Docket

    Isaac S. Greaney

    A growing trend in the Southern District of New York akin to a sua sponte rocket docket can provide defendants with an opportunity to set the tone of discovery and shift the burden and risks of the schedule to their adversaries, say Isaac Greaney and Jackie Lu of Sidley Austin LLP.

  • When You Are Responsible For Your Book Of Business

    Jennifer Topper

    Finding prospective clients and retaining them has little to do with your legal training and expertise, and yet you have no practice without successful client acquisition and retention. There is no reason you cannot apply your basic legal training to successful sales efforts hinging upon your practice strength and experience, says independent law firm consultant Jennifer Topper.

  • 4th Circ. Provides Guidance On Nondebtor Releases

    Jason W. Harbour

    The Fourt Circuit's second opinion in the case of National Heritage Foundation shows that it is imperative for the proponent of a nonconsensual nondebtor release to provide appropriate evidence to justify approving such a release, although the court did not draw a bright line as to how many of the six Dow Corning factors must be satisfied, say Jason Harbour and Tara Elgie of Hunton & Williams LLP.

  • An Inventive Way To Remove Pure State Court Claims

    Michael E. Blumenfeld

    Nondiverse state court defendants facing purely state law claims that seek to secure federal jurisdiction should determine whether a good faith basis exists to pursue a third-party action against a federal actor in order to trigger the representative U.S. Attorney’s certification and remove such claims under the Westfall Act, say Michael Blumenfeld and Jonathan Singer of Miles & Stockbridge PC.

  • Separate Classification Gone Too Far

    Scott M. Grossman

    A district court decision in CWCapital Asset Management v. Burcam Capital II may bolster the arguments of secured creditors in opposing cramdown efforts by debtors who may have been emboldened by other recent decisions supporting creative classification schemes, say Scott Grossman and Ari Newman of Greenberg Traurig LLP.

  • Powerful Tools For Discovery And Litigation Strategy

    Nathalie Hofman

    Analytics offer opportunities for refining both discovery strategy and overall litigation strategy by providing information to support better informed decisions. As an added bonus, they can result in significant cost savings, say Nathalie Hofman and Carolyn Southerland of Huron Consulting Group Inc.

  • Madoff Foreign Entanglement Ruling Unsurprising

    Michael L. Cook

    U.S. District Judge Jed Rakoff’s recent decision to block the Madoff Securities trustee's ability to recover customer funds transferred abroad by foreign feeder funds is hardly novel in view of U.S. Supreme Court and Second Circuit precedent, says Michael Cook of Schulte Roth & Zabel LLP.