Bankruptcy

  • October 17, 2014

    Madoff Trustee Files $62M Deal In Customer Clawback Suit

    The trustee tasked with winding down Bernie Madoff’s investment fund reached a deal valued at $62 million with a group of investors who were paid out of funds tainted by the Ponzi scheme, according to a motion filed in New York bankruptcy court on Friday.

  • October 17, 2014

    Energy Future Plugs Auction Plan, Draws Fire From Creditors

    Energy Future Holdings Corp. urged a Delaware bankruptcy judge on Friday to bless a proposal to auction its prized stake in Oncor Electric Delivery Co. LLC but faced resistance from various creditor groups who contend the auction scheme would deprive them of billions of dollars.

  • October 17, 2014

    US Airways Pilots Near Settlement In Lump-Sum Pension Fight

    A group of former US Airways Group Inc. pilots are nearing a settlement with the airline’s pension plan trustee over accusations it takes too long to hand out lump-sum benefits, a D.C. federal judge revealed on Friday in a class certification order five months after the D.C. Circuit revived the case.

  • October 17, 2014

    Filing Mistake Can End GM Secure Interest, Del. Justices Say

    The Delaware Supreme Court ruled Friday that a secured lending interest is terminated simply by filing the appropriate paperwork, regardless of the party's intent or understanding, answering a question from the Second Circuit over a challenge involving a JPMorgan Chase & Co. unit in the General Motors Corp. bankruptcy case.

  • October 17, 2014

    Venable-Acquired Firm Escapes $590M Movie Loan Suit

    A New Jersey federal judge on Thursday dismissed a Los Angeles firm, since acquired by Venable LLP, from a suit over $590 million in movie financing, agreeing the absolute litigation privilege shields the firm from claims it aided and abetted a client's fraudulent activity.

  • October 17, 2014

    Skadden Dispute Over Radnor Sale To Stay In Bankruptcy Court

    A Delaware federal judge on Friday denied defunct packaging company Radnor Holdings Co.'s motion to move an adversary case out of bankruptcy court, after its former executive failed to convince judges that Skadden Arps Slate Meagher & Flom LLP conspired with a hedge fund to sell off its assets.

  • October 17, 2014

    Corinthian Lenders Hold Off On Defaults Amid Wind-Down

    Corinthian Colleges Inc.’s lenders have agreed to hold off on taking action to seize assets after a loan default last month, according to a Friday statement from the for-profit college operator, which is spinning off its assets in a government-ordered wind-down.

  • October 17, 2014

    AA Pilots Can't Challenge CBA Ruling, Judge Says

    A New York federal judge on Friday refused a challenge to a bankruptcy court’s approval of a collective bargaining agreement between American Airlines and a pilots’ union that scaled back benefits, finding a group of disgruntled pilots nearing retirement lack the standing to object.

  • October 17, 2014

    Nautilus Wins Bank Lenders' OK To Tee Up Ch. 11 Plan

    Bankrupt container shipping venture Nautilus Holdings Ltd. secured more time to cut deals with bank syndicate lenders skeptical of its proposed restructuring plan, which is purportedly being challenged by a mystery investor who wants to acquire a blocking position in its debt.

  • October 17, 2014

    Trump Entertainment Allowed To Nix Union Deal In Ch. 11

    A Delaware bankruptcy judge Friday allowed Trump Entertainment Resorts Inc. to ax its collective bargaining agreement with the union representing more than 1,000 employees of the Taj Mahal and impose its alternative that trades pensions for 401(k)s and employer-provided health insurance for coverage under the Affordable Care Act.

  • October 17, 2014

    3rd Circ. Revives Genaera Investor Suit Over Asset Sales

    The Third Circuit on Friday sided with shareholders who contended a Pennsylvania federal judge had wrongly tossed their putative class action claiming defunct biotech company Genaera Corp. had undervalued assets sold through a liquidating trust, finding the judge’s decision was “premature.”

  • October 17, 2014

    Embattled GM General Counsel Millikin To Retire in 2015

    General Motors Co.'s general counsel Michael Millikin will retire in early 2015, the company said on Friday, amid months of criticism from lawmakers this year about his role in the automaker's failure to address a serious ignition switch defect that led to the recall of millions of vehicles. 

  • October 17, 2014

    Pantech Files For Ch. 15 Relief Amid Korean Debt Workout

    South Korean mobile phone manufacturer Pantech Co. Ltd. sought shelter in Georgia bankruptcy court Thursday to protect itself from 15 intellectual property lawsuits as it attempts to cut a debt load of more than $500 million through its home country’s insolvency laws.

  • October 17, 2014

    Bank Lenders Jump Into Caesars Restructuring Talks

    Lenders under Caesars Entertainment Corp.’s $5.4 billion lines of bank credit will enter closed-door talks around an impending debt restructuring as the distressed casino operator drops hints about a possible early-2015 bankruptcy filing.

  • October 17, 2014

    GM Says Calif. DA's Ignition-Switch Suit Belongs In MDL

    General Motors LLC on Thursday urged a New York federal judge to nix the Orange County district attorney’s bid to remand California’s suit over the automaker’s ignition-switch defect to the state, saying it’s a "carbon copy" of other suits in the multidistrict litigation and that it doesn't qualify as a police-power action exempt from removal.

  • October 17, 2014

    IRS Wipes Out Secured Debt In Scott Cable Bankruptcy Case

    The Internal Revenue Service has succeeded in subordinating secured debt issued by Scott Cable Communications Inc., with a Delaware bankruptcy judge finding the debtholders obtained the notes in a Chapter 11 plan structured to keep the agency from collecting up to $50 million in capital gains taxes.

  • October 16, 2014

    Fifth Third Says Simplexity Can't Afford To Stay In Ch. 11

    Simplexity LLC's senior lender squared off with unsecured creditors in Delaware bankruptcy court Thursday, as Fifth Third Bank took another swing at converting the cellphone activator's case to Chapter 7, arguing that the estate can't foot the bill for a Chapter 11 plan.

  • October 16, 2014

    Lehman Balks At Boosting RMBS Reserve By $7.1B

    Lehman Brothers Holdings Inc. accused four financial institutions of requesting a $7.1 billion set-aside from the defunct firm's bankruptcy estate over bogus mortgage loan securities in order to hold up payouts to other creditors and extort a sweeter settlement.

  • October 16, 2014

    Clock Ticks On Momentive To Pull Off Thorny Ch. 11

    The stakeholders that crafted Momentive Performance Materials Inc.’s Chapter 11 plan are facing a Friday deadline to iron out differences between their respective constituencies that have prevented the hotly contested debt restructuring from going effective.

  • October 16, 2014

    Bankrupt AWI Gets Nod For Executive Bonus Plan

    A Delaware bankruptcy judge blessed a bonus plan Thursday that could pay executives of Associated Wholesalers Inc. more than $500,000, finding the food cooperative's program was incentive-based and modest in size.

Expert Analysis

  • 2nd Circ. Fails To See The Comity In Chapter 15

    Daniel M. Glosband

    The Second Circuit in the case of Fairfield Sentry Ltd. missed the point that applying Section 363 to the sale of a Securities Investor Protection Act claim — in the context of a Chapter 15 ancillary proceeding — to the same extent that it would apply to property of an estate does not eliminate the principles of comity that infuse Chapter 15, say Daniel Glosband and Kizzy Jarashow of Goodwin Procter LLP.

  • What Litigators Can Learn From Novelists

    Michael H. Rubin

    Many legal briefs are written in impenetrable jargon and begin with an introduction telling the court what it already knows, using words that stem from the 18th century, such as “hereinafter.” Instead, we should approach briefs the way novelists approach their writing, says Michael Rubin of McGlinchey Stafford PLLC.

  • When Your General Contractor Files Bankruptcy

    Vicki R. Harding

    All is not lost when a general contractor files bankruptcy — subcontractors may be able to perfect their construction liens post-petition, as in the case of Branch Banking & Trust Co. v. Construction Supervision Services Inc., says Vicki Harding of Pepper Hamilton LLP.

  • 2nd Circ. Expands US Court Role In Ch. 15 Cases

    George W. Shuster Jr.

    In a recent Madoff-related decision, the Second Circuit took a relatively aggressive stance on U.S. court review of asset sales in Chapter 15 cases, and the ruling may have effects in bankruptcy cases outside Chapter 15, say George Shuster and Benjamin Loveland of WilmerHale.

  • Del. Clarifies Approach To Derivative Suits In Insolvency

    Brad Eric Scheler

    Before the Delaware Supreme Court’s landmark Gheewalla ruling, application of the business judgment rule to actions by directors of insolvent companies had been controversial, given the concern that directors might be inclined to engage in high-risk strategies while creditors bear the risk of failure. A recent Chancery Court decision highlights this concern, say attorneys with Fried Frank Harris Shriver & Jacobson LLP.

  • Information Governance: A Missed Opportunity For Lawyers

    Ann Snyder

    Today, information intersects every practice area, making all lawyers effectively information governance practitioners in one way or another. The issue is whether you will consciously embrace this emerging discipline — and capitalize on it to the benefit of your clients and your practice, says Ann Snyder of the Information Governance Initiative.

  • Escaping Taxes In Bankruptcy Through S Corporations

    Chad C. Coombs

    Shareholders of financially troubled S corporations may now be able to avoid the flow-through of taxes when the S corporation or its subsidiary files bankruptcy, thanks to a Third Circuit ruling in the Chapter 11 case of Majestic Star Casino LLC. The losers are the corporation’s unsecured creditors, says Chad Coombs of Greenberg Glusker Fields Claman & Machtinger LLP.

  • Clarifying TruPS Holders’ Exercise Of Remedial Rights

    Andrew I. Silfen

    Given a recent bankruptcy court decision in the case of FMB Bancshares Inc., bank-holding companies should be aware that trust-preferred securities holders may have some support for a further or direct power in their efforts to realize a return on their investment, say attorneys with Arent Fox LLP.

  • A Primer On 'Bad Faith' In Federal Removal Jurisdiction

    Ugo Colella

    The Federal Courts Jurisdiction and Venue Clarification Act grants a federal district court discretion to permit removal after the one-year period if it finds a plaintiff has “acted in bad faith” to prevent removal, but it didn’t come with a clear definition of "bad faith." Recent case law offers some minimal guidance on how the exception should be interpreted, say Ugo Colella and Todd Seaman of Thompson Hine LLP.

  • Spotlight On Make-Whole Provisions In Bankruptcy

    Michael J. Venditto

    In the current low interest rate environment, the enforceability of make-whole provisions in bankruptcy has been the subject of litigation, which has recently produced several decisions regarding the lender's entitlement to early-termination premiums, say Michael Venditto and Sarah Kam of Reed Smith LLP.