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Bankruptcy
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February 27, 2024
Hospital Groups Allege Opioid Crisis Damaged Their Finances
More than 20 hospitals and related companies have joined multidistrict litigation over the opioid epidemic, alleging in a massive new complaint that pharmacies, drug distributors and others contributed to a crisis that damaged hospitals' finances and strained their ability to help patients.
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February 27, 2024
Jackson Walker, Kirkland Again Sued Over Judge's Romance
Jackson Walker and Kirkland & Ellis LLP have been hit with another lawsuit alleging they were aware of a former Texas bankruptcy judge's relationship with a onetime partner of the former firm and failed to disclose it during proceedings worth millions of dollars.
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February 27, 2024
Trial Over Ch. 11 Trustee In Eletson Bankruptcy Set For April
A New York bankruptcy judge scheduled an April trial to determine whether to appoint a Chapter 11 trustee in the bankruptcy of Eletson Holdings, while directing the tanker company and its unsecured creditors to continue mediation.
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February 27, 2024
Katten Can't Drop Madoff Ch. 7 Clawback Client, Court Rules
Katten Muchin Rosenman LLP must keep representing French investment fund Access International Advisors in a $2 billion lawsuit filed by the Chapter 7 trustee for Bernard L. Madoff Investment Securities, a New York bankruptcy judge has ruled, explaining that the potential fallout from dropping AIA ahead of discovery in the case overshadows Katten's concerns that it won't be paid.
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February 27, 2024
NH Power Plant Gets OK On Purchaser Settlement In Ch. 11
Bankrupt New Hampshire power plant Burgess Biopower LLC will receive a $3.35 million payment from a power purchaser that allegedly withheld money it owed last year, reaching a settlement agreement between the parties that won a Delaware federal judge's blessing on Tuesday.
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February 27, 2024
Careismatic Creditors Lash Out At DIP Proposal
Prepetition lien lenders for bankrupt medical scrubs distributor Careismatic Brands LLC are using an agreement aimed at funding the company's Chapter 11 case to swipe potential recoveries from unsecured creditors, those unsecured creditors have told a New Jersey bankruptcy court.
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February 26, 2024
Latham, Jackson Walker Avoid Sanctions Over Sorrento Venue
A Texas bankruptcy judge declined to level sanctions against Latham & Watkins LLP and Jackson Walker LLP for trying to establish Texas jurisdiction for California-based Sorrento Therapeutics Inc. in its Chapter 11 bankruptcy, finding that their conduct did not amount to bankruptcy fraud.
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February 26, 2024
AmEx Fights To Arbitrate Merchant's Girardi-Linked Suit
An attorney for American Express Co. urged a California federal judge on Monday to reconsider his tentative ruling declining to force a costume merchant to arbitrate malicious prosecution claims over charges disputed by Erika Girardi, saying the agreement in question applies to the merchant and not just his company.
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February 26, 2024
Genesis Creditors, Owners Allege Cash Grab At Plan Hearing
Customers and the equity owners of cryptocurrency lender Genesis on Monday accused each other of trying to rob them of assets they deserve, as the debtor began a confirmation hearing for its Chapter 11 plan in New York bankruptcy court.
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February 26, 2024
11th Circ. Says Bankruptcy Fraud Threat Can't Tank Deal
The Eleventh Circuit ruled Monday that coupon marketing agency Valpak's alleged threat to report a franchisee for bankruptcy fraud was not extortion and refused to set aside the settlement that ended the franchisee's suit accusing Valpak of wrongfully terminating their agreement.
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February 26, 2024
Bally Sports Parent Gets OK For $495M Settlement, $450M DIP
A Houston bankruptcy judge on Monday approved a $495 million settlement and a $450 million debtor-in-possession financing package for Bally Sports Network's parent company, loading the bases for the broadcaster to file a Chapter 11 plan in the coming weeks.
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February 26, 2024
Stimwave Prosecutors Accused Of Brady Violation Mid-Trial
The former CEO of Stimwave Technologies has alleged in the middle of her criminal fraud trial that the Manhattan U.S. Attorney's Office withheld key evidence about proffer meetings, teeing up a potential Brady fight before a skeptical judge.
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February 26, 2024
Prosecutors Ask NC Justices To Enforce Ban On MV Realty
Prosecutors told the North Carolina Supreme Court on Monday that MV Realty is trying to dodge the state's efforts to put it out of business, first with a bankruptcy filing and then by asking the court last week to overturn a decision blocking the company's operations in the state.
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February 26, 2024
H&M-Backed Fabric Recycler Files For Bankruptcy In Sweden
Swedish textile recycler Renewcell AB has declared bankruptcy in Stockholm District Court, saying it hasn't been able to secure sufficient financing to complete a strategic review with satisfactory results.
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February 26, 2024
Yellow Corp. Gets Nod On New Procedures For Injury Claims
Trucking company Yellow Corp. will use its insurance policies to deal with only certain claims from people alleging they were injured by its vehicles under new procedures a Delaware bankruptcy judge approved Monday, after the debtor resolved objections from parties who said its earlier plans would have violated their rights.
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February 26, 2024
Kirkland Nabs $14.6M Payout For Cyxtera's Ch. 11
A New Jersey bankruptcy judge on Monday approved $43.8 million in final fee and expense applications for professionals involved in Cyxtera Technologies Inc.'s Chapter 11 case, with almost half the money going to an investment banking firm and roughly $15 million to Kirkland & Ellis LLP.
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February 26, 2024
Catching Up With Delaware's Chancery Court
Delaware's Court of Chancery dropped two potentially far-reaching decisions last week: one about founder control at Moelis & Co. and another about TripAdvisor's planned move to Nevada. On top of that, there were new cases involving Citrix Systems, Alcoa Corp., BGC Partners Inc. and Cantor Fitzgerald LP.
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February 23, 2024
SVB's Cayman Unit Loses Ch. 15 Bid In NY
A bankruptcy judge in New York has dismissed a petition from the Cayman Islands branch of Silicon Valley Bank that sought U.S. recognition of its Cayman insolvency proceedings, finding that it is not eligible to file a Chapter 15 petition.
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February 23, 2024
MV Realty Asks NC Justices To Stay Injunction Pending Appeal
MV Realty is defending the enforceability of a series of agreements with more than 2,000 North Carolina homeowners — asking the state's Supreme Court to overturn a trial judge's injunction finding the company likely couldn't beat claims that the deals were truly predatory, high-interest loans.
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February 23, 2024
US Trustee Objects To Rite Aid Disclosure Statement
The U.S. Trustee's Office has flagged what it called "objectionable" proposals from Rite Aid to hold post-confirmation votes on some Chapter 11 plan releases, as well as shortening senior secured voting and preemptively deeming unsecured creditors as detractors.
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February 23, 2024
Bankrupt REIT Gets Ch. 11 Reorganization Plan Approved
A subsidiary of Silver Star Properties REIT Inc. received approval Friday for its Chapter 11 reorganization plan that will channel its remaining property assets into a Delaware subsidiary free and clear of all creditor claims.
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February 23, 2024
NH Plant Strikes Deal On Power Purchase Contract
A bankrupt New Hampshire power plant reached terms on a deal Friday with an entity whose contract to purchase the facility's power was rejected earlier this week, telling a Delaware federal judge the agreement will help quickly transition to a new purchaser and stave off a shutdown of the plant.
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February 23, 2024
FTX Settles $324M Ch. 11 Suit Over European Deal For $33M
Bankrupt cryptocurrency exchange FTX Trading Ltd. has asked a Delaware court to approve a plan to resolve a $323.5 million clawback action aimed at the co-founders of its European unit by selling the subsidiary back to the executives for $32.7 million.
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February 23, 2024
NRA, LaPierre Found Liable For Misconduct In $6M Verdict
A New York jury found Friday that the National Rifle Association, longtime CEO Wayne LaPierre and two other executives improperly used donor money, among other misconduct, ordering individual defendants to repay the gun rights group a total of $6.4 million.
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February 23, 2024
Citibank Looks To Dodge Ch. 7 Trustee's Fraud Claims
Citibank has urged a New York federal judge to ax claims that the financial institution assisted with a Ponzi scheme involving a now-defunct sports and concert ticket broker, saying the Chapter 7 Trustee for the troubled business who brought the claims was assigned them to subvert a rule that would otherwise bar his case.
Expert Analysis
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How Attys Can Avoid Exposing Their Firms To Cyberattacks
Attorneys are the weakest link in their firms' cyberdefenses because hackers often exploit the gap between individuals’ work and personal cybersecurity habits, but there are some steps lawyers can take to reduce the risks they create for their employers, say Mark Hurley and Carmine Cicalese at Digital Privacy & Protection.
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What Purdue Ch. 11 Means For Future Of Third-Party Releases
The Second Circuit’s highly anticipated ruling approving Purdue Pharma’s bankruptcy plan establishes stringent factors that lower courts must consider before approving nonconsensual third-party releases, but the circuit split on the matter means the issue is far from resolved, say Gregory Hesse and Kollin Bender at Hunton.
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Virginia 'Rocket Docket' Slowdown Is Likely A Blip
After being the fastest or second-fastest federal civil trial court for 14 straight years, the Eastern District of Virginia has slid to 18th place, but the rocket docket’s statistical tumble doesn't mean the district no longer maintains a speedy civil docket, says Robert Tata at Hunton.
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An Investor's Road Map For Distressed Crypto Assets
For investors treasure hunting for distressed crypto assets, there are three key contexts in which these investments can be made, but there are procedures and potential pitfalls that can make or break success, say attorneys at Mayer Brown.
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5 Management Tips To Keep Law Firm Merger Talks Moving
Many law firm mergers that make solid business sense still fall apart due to the costs and frustrations of inefficient negotiations, but firm managers can increase the chance of success by effectively planning and executing merger discussions, say Lisa Smith and Kristin Stark at Fairfax Associates.
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How Wash. Bankruptcy Amendments Will Aid Debtors
Washington state’s recently updated bankruptcy exemptions — which provide greater protection for debtors’ assets, including cash, vehicles and personal injury proceeds — bring the state up to speed in terms of asset protection, and may result in an increase in Chapter 7 liquidation filings, says Richard Symmes at Symmes Law.
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2 Rulings Show How Electricity May Factor Into Bankruptcy
Recent rulings from an Oregon federal court and a New York bankruptcy court have evened a split over whether electricity is a good or a service under the Bankruptcy Code, illustrating the importance of relying on dictionary definitions and prior rulings when arguing that electricity is a good, says Shane Ramsey at Nelson Mullins.
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The Texas Two-Step May Be Losing Steam
The Texas Two-Step is a powerful bankruptcy strategy that has been used in recent high-profile cases, including Johnson & Johnson’s talc unit bankruptcy case, but ongoing debate and legal challenges raise the question of whether this maneuver is losing reliability, say Brendan Best and Justin Allen at Varnum.
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The Road Ahead For Rite Aid And Other Troubled Retailers
With corporate bankruptcies at their highest levels since 2010, familiar large retailers, like Rite Aid, may need to take the inevitable plunge, with a few patterns in metrics and behaviors tipping off potential insolvency issues, says Talin Keshishian at BG Law.
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Rethinking In-Office Attendance For Associate Retention
The hybrid office attendance model doesn't work for all employees, but it does for many — and balancing these two groups is important for associate retention and maintaining a BigLaw firm culture that supports all attorneys, says Summer Eberhard at Major Lindsey.
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Bittrex Bankruptcy Order Highlights Creative Crypto Financing
In a recent first, the Delaware bankruptcy court authorized Bittrex to obtain post-petition financing solely in bitcoin from the debtor-in-possession lender, an order that may serve as a catalyst for future debtors to explore creative mechanisms for crypto financing and payback, says Kyle Arendsen at Squire Patton.
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Opinion
Despite Its Plan Objections, UST Also Won In Purdue Ch. 11
The Second Circuit’s recent decision approving Purdue Pharma’s reorganization plan is a win even for the dissenting Office of the U.S. Trustee because the decision sets extremely stringent guidelines for future use of nonconsensual third-party releases, say Edward Neiger and Jennifer Christian at Ask.
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Murdaugh Trials Offer Law Firms Fraud Prevention Reminders
As the fraud case against Alex Murdaugh continues to play out, the evidence and narrative presented at his murder trial earlier this year may provide lessons for law firms on implementing robust internal controls that can detect and prevent similar kinds of fraud, say Travis Casner and Helga Zauner at Weaver and Tidwell.
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Post-Siegel Trustee Fee Rulings Further Debtor-Friendly Trend
One year after the U.S. Supreme Court’s bankruptcy ruling in Siegel v. Fitzgerald left the matter of trustee fee refunds open to lower courts, related rulings have sided with debtors, reminding practitioners of the importance of the constitutional backdrop to statutory law, say Daniel Lowenthal and Jonah Wacholder at Patterson Belknap.
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Firm Tips For Helping New Lawyers Succeed Post-Pandemic
Ten steps can help firms significantly enhance the experience of attorneys who started their careers in the coronavirus pandemic era, including facilitating opportunities for cross-firm connection, which can ultimately help build momentum for business development, says Lana Manganiello at Equinox Strategy Partners.