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Bankruptcy
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February 29, 2024
Stolen Funds Render FTX Clawback Moot, Embed Parties Say
Parties associated with stock trading platform Embed Financial Technologies told a Delaware bankruptcy judge Thursday that defunct cryptocurrency exchange FTX Trading Ltd. can't claw back $240 million from a prepetition acquisition because the funds used to buy Embed were stolen from FTX customers.
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February 29, 2024
US Trustee Opposes Proterra Ch. 11 Plan's Future Exculpation
The Office of the U.S. Trustee objected Thursday to the Chapter 11 plan of electric bus maker Proterra Inc., saying it includes exculpation provisions that would cover actions after it emerges from bankruptcy, and interferes with the payment of required quarterly fees to the trustee's office.
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February 29, 2024
Yellow Corp. Gets Ch. 11 Control Extended To End Of July
Bankrupt Yellow Freight Corp. has secured an extra 90 days to hold onto the wheel of its Chapter 11 case in Delaware, after citing both the complexity of its case and the "tremendous" progress in selling off its assets.
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February 29, 2024
Amazon Seller Thrasio Seeks $360M DIP Facility In Ch. 11
Thrasio Holdings Inc., which aggregates third-party brands for sale on Amazon, has urged a New Jersey bankruptcy court to sign off on an agreement the company struck with lenders to finance the consumer goods business' Chapter 11 case to the tune of $360 million.
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February 29, 2024
Celsius Floats Fix For Customers' 'Devastating' Ballot Blunder
Hundreds of Celsius Network customers who mistakenly elected to receive a reduced payout for their cryptocurrency claims would get a chance to correct their "devastating" error under a plan filed by the crypto company in New York bankruptcy court.
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March 01, 2024
Inside BigLaw's 'Tremendous' Hunger For Restructuring Attys
Even as the economy appears poised to pick up steam in 2024, BigLaw firms are still aggressively adding restructuring capabilities, with a number of recent lateral hires reflecting the glut of work still to be found in the practice area.
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February 29, 2024
Bankruptcy Group Of The Year: Brown Rudnick
The bankruptcy department at Brown Rudnick LLP has coalesced into a powerful team able to fight for the rights of commercial and tort creditors in large Chapter 11 cases, including securing the dismissal of insolvency cases for Johnson & Johnson's talc unit — twice — and forging a resolution for the sprawling case of cryptocurrency player BlockFi Inc., earning it a spot among Law360's 2023 Bankruptcy Groups of the Year.
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February 29, 2024
Bankrupt Endo To Pay $465M To Resolve Opioid Claims
Drugmaker Endo International has agreed to pay as much as $465 million to resolve criminal and civil claims stemming from its sale and marketing of a powerful opioid, and will turn over its assets to a group of secured lenders who will operate the company under a new corporate structure.
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February 28, 2024
Fla. Judge OKs $43.5M Deutsche Bank Deal In Ch. 15 Case
A Florida bankruptcy judge on Wednesday approved a $43.5 million settlement between Deutsche Bank AG and liquidators for a group of Caribbean-based companies to resolve claims against the bank for its alleged role in a real estate Ponzi scheme targeting rich South Americans.
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February 28, 2024
Gemini To Pay $37M Fine, Vows To Make Customers Whole
Crypto exchange Gemini Trust Co. has committed to making users of its now-shuttered Earn product whole through the bankruptcy of its former partner Genesis Global under a new settlement with a New York regulator that included a $37 million fine for additional alleged compliance failures.
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February 28, 2024
Kwok Trustee Seeks Second Judge's Help With Clawbacks
Offering four high-profile bankruptcies as examples, the Chapter 11 trustee overseeing the $374 million case of Chinese exile Ho Wan Kwok has suggested that a second Connecticut bankruptcy judge could act as a mediator to help speed a deluge of 278 avoidance actions efficiently toward possible settlements.
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February 28, 2024
NY Bar Assoc. Building Owner Hits Ch. 11 Amid Lender Tiff
The company that controls the historic New York County Lawyers Association Building in Manhattan petitioned a New Jersey bankruptcy court for Chapter 11 protection Wednesday, estimating between $50 million and $100 million in debt, as it faces in New York a roughly $28 million lawsuit leveled by a mortgage lender.
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February 28, 2024
Brazilian Airline Approved For Ch. 11 Loan Worth $1B
GOL Linhas Aereas Inteligentes SA received final bankruptcy court approval Wednesday for a debtor-in-possession financing package that has grown to $1 billion after achieving consensus with creditors that previously objected to the package.
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February 28, 2024
Bankrupt Coffee Co. Says Nicaraguan Asset Sale Unlikely
Coffee supplier Mercon Coffee Corp. Wednesday told a New York bankruptcy judge it no longer believes it will be able to win government cooperation for the sale of its Nicaraguan assets before it runs out of cash to fund its Chapter 11 case.
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February 28, 2024
Homeowners Urge Judge To Toss 'Tactical' MV Realty Ch. 11
A committee of homeowners who signed agreements with MV Realty told a Florida bankruptcy judge on Tuesday that the company filed for Chapter 11 as a maneuver to dodge a series of state actions seeking to void predatory deals with some 40,000 homeowners in 34 states.
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February 28, 2024
Erika Girardi Can't Shed Costume Merchant's Suit
A California federal judge has kept alive a costume merchant's malicious prosecution claim against singer and reality TV star Erika Girardi, saying the merchant showed evidence that Girardi had him wrongfully arrested and prosecuted on made-up fraud charges.
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February 28, 2024
US Trustee Taps Ex-Prosecutor To Be FTX Examiner
The U.S. Trustee's Office has urged a Delaware bankruptcy judge to allow Robert Cleary, a former U.S. attorney who is now with Patterson Belknap Webb & Tyler LLP, to investigate FTX's finances as an examiner in the defunct cryptocurrency company's Chapter 11 case.
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February 28, 2024
NuVasive Can Pierce Co. To Collect From Ex-Rep, Judge Says
NuVasive Inc. can pierce the corporate veil to collect a $617,000-plus arbitration judgment it won against a company operated by one of its former sales representatives who improperly cut ties with the medical device company and violated his noncompete agreement, a Boston federal judge has ruled.
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February 28, 2024
Major Amazon Seller Thrasio Enters Ch. 11 To Cut $500M Debt
Thrasio Holdings Inc., a consumer goods company that is one of Amazon's largest third-party sellers, announced Wednesday that it entered Chapter 11 bankruptcy in New Jersey with the aim of cutting nearly $500 million in debt while bringing in more capital.
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February 27, 2024
Bankman-Fried Urges No More Than 6.5 Years For FTX Fraud
FTX founder Sam Bankman-Fried asked a Manhattan federal judge late Tuesday for a sentence that releases him "promptly" after his conviction for stealing billions from customers of the now-collapsed crypto exchange, arguing that federal sentencing guidelines recommend no more than six-and-a-half years in prison.
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February 27, 2024
Ex-Girardi Keese Atty Settles With Actress Over Missing Cash
An actress alleging that Erika Girardi's entertainment company helped her husband's now-defunct law firm, Girardi Keese, hide his clients' stolen money, including $744,000 stolen from her, finalized a $6,000 settlement with one of the firm's attorneys on Tuesday when a California judge signed off on the deal.
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February 27, 2024
Atty Isn't Liable As Husband's Firm Partner, NJ Panel Says
A New Jersey appellate panel on Tuesday said retired attorney Gail Beran isn't liable for malpractice in connection with her husband's failure to file a bankruptcy on time, because his then-clients didn't rely on the idea that she was a partner when they decided to hire the firm.
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February 27, 2024
Ch. 11 Trustee Says Bank Fraud-Tied Jewelry CEO Hid Assets
The trustee for a bankrupt jewelry company allegedly tied to a $2 billion Indian bank fraud has filed a suit in New York bankruptcy court accusing the company's CEO of trying to hide a $7 million Manhattan apartment from creditors.
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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.
Expert Analysis
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Opinion
3 Ways Justices' Disclosure Defenses Miss The Ethical Point
The rule-bound interpretation of financial disclosures preferred by U.S. Supreme Court Justices Samuel Alito and Clarence Thomas — demonstrated in their respective statements defending their failure to disclose gifts from billionaires — show that they do not understand the ethical aspects of the public's concern, says Jim Moliterno at the Washington and Lee University School of Law.
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Subchapter V Eligibility Ruling Raises Uncertainty For Tenants
A Virginia bankruptcy court’s recent ruling in Macedon Consulting — that all remaining rent under a lease should be factored into a lessee's Subchapter V eligibility — raises the question, but does not address, how a court should calculate the amount of debt owed under a lease, creating significant risk for potential tenant debtors, says Sam Ashuraey at Ashuraey Law.
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Ch. 11 Ruling Sets New Standard For Using Reinstatement
A New York bankruptcy court’s recent ruling in Golden Seahorse, which concluded that Section 365(b)(2)(D) of the U.S. Bankruptcy Code only creates a cure exception for nonmonetary defaults, sets a high bar for challenging the requirement to pay default interest as a condition to reinstatement of a loan agreement under a Chapter 11 plan, says Debra Dandeneau at Baker McKenzie.
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Caregiver Flexibility Is Crucial For Atty Engagement, Retention
As the battle for top talent continues post-pandemic, many firms are attempting to attract employees with progressive hybrid working environments — and supporting caregivers before, during and after an extended leave is a critically important way to retain top talent, says Manar Morales at The Diversity & Flexibility Alliance.
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How A Union Fight Played A Key Role In Yellow's Bankruptcy
Finger-pointing between company and union representatives appears to be front and center at the early stages of trucking company Yellow’s bankruptcy case, highlighting the failed contract negotiations' role in the company's demise, says George Singer at Holland & Hart.
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The FTC May Be Expanding Its Monetary Relief Toolbox
The Federal Trade Commission's recent settlement with crypto exchange Celsius — which resolved a Gramm-Leach-Bliley Act pretexting count — reveals an attempt to significantly expand the FTC's authority to obtain monetary relief in ordinary matters regarding unfair or deceptive acts or practices, says Nikhil Singhvi at Covington.
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Bankruptcy Ruling Shows Section 363's Magic Has Its Limits
The Ninth Circuit Bankruptcy Appellate Panel's recent ruling in Groves demonstrates that Section 363 — which allows a debtor-in-possession to sell their property in order to generate cash — fails as a tool when it’s used to turn a nondebtor entities' property into property of a debtor's bankruptcy estate, says Brian Shaw at Cozen O'Connor.
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Serta Simmons Ch. 11 Expands Split On Credit Agreements
The recent confirmation of Serta Simmons' Chapter 11 plan by a Texas bankruptcy court judge furthers a split in case law between narrow interpretation of credit agreement provisions and a more holistic approach focused on the practical effect of the uptiering transaction on minority lender rights, say attorneys at Schulte Roth.
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How High Court Is Assessing Tribal Law Questions
The U.S. Supreme Court's four rulings on tribal issues from this term show that Justice Neil Gorsuch's extensive experience in federal Native American law brings helpful experience to the court but does not necessarily guarantee favorable outcomes for tribal interests, say attorneys at Dorsey & Whitney.
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In-Office Engagement Is Essential To Associate Development
As law firms develop return-to-office policies that allow hybrid work arrangements, they should incorporate the specific types of in-person engagement likely to help associates develop attributes common among successful firm leaders, says Liisa Thomas at Sheppard Mullin.
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Shifts In The CRE Landscape Demand Creative Loan Solutions
An increase in commercial real estate loan workouts makes it critical for borrowers, lenders and other CRE participants to examine all the available options and remedies, including mortgage and mezzanine foreclosures, bankruptcy filings and property short sales, say attorneys at Goulston & Storrs.
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Perspectives
A Judge's Pitch To Revive The Jury Trial
Ohio state Judge Pierre Bergeron explains how the decline of the jury trial threatens public confidence in the judiciary and even democracy as a whole, and he offers ideas to restore this sacred right.
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Opinion
Calif. Policymakers Should Aid Crashing Cannabis Market
As California’s cannabis sector nears the brink of financial collapse, it may be time for the state government to seriously consider potential bailout programs for the embattled industry — though the crisis also presents strategic buying opportunities for those with a high tolerance for uncertainty, says Michelle Mabugat at Greenberg Glusker.
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How To Recognize And Recover From Lawyer Loneliness
Law can be one of the loneliest professions, but there are practical steps that attorneys and their managers can take to help themselves and their peers improve their emotional health, strengthen their social bonds and protect their performance, says psychologist and attorney Traci Cipriano.
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A Smoother Process For CRE Receiverships In Conn.
A newly effective Connecticut law concerning distressed commercial real estate provides a number of opportunities and strategic considerations for creditors, and should be watched even by counsel in other states as adoption of the law could become more widespread, say John Loughnane and Steven Coury at White and Williams.