Bankruptcy

  • October 2, 2017

    McFarland's Fyre Fest Fraud Topped $20M, New Charges Say

    Fyre Festival founder Billy McFarland pled not guilty Monday in Manhattan federal court as prosecutors expanded their charges against him for a fraud they say scammed at least 70 investors out of more than $20 million.

  • October 2, 2017

    Justices Won't Hear 6 False Claims Act Appeals

    The U.S. Supreme Court on Monday turned down six petitions in False Claims Act cases, touching on issues including pleading standards, tolling of the statute of limitations for FCA relators and a potential jurisdictional bar on attorneys’ fee awards.

  • October 2, 2017

    Papermaker Appvion, $716M In Debt, Files For Ch. 11

    Wisconsin specialty papermaker Appvion Inc. on Sunday filed for bankruptcy in Delaware, saying that declining sales mean it needs Chapter 11-created breathing space to renegotiate its $716 million in debts.

  • September 29, 2017

    Some Claims To Advance In Schorsch, RCS Trustee Suit

    At least part of a tangled Delaware Chancery Court suit seeking damages for the alleged bankrupting of an affiliate of real estate investment trust mogul Nicholas S. Schorsch’s empire will continue moving toward trial, a vice chancellor and case attorneys acknowledged Friday.

  • September 29, 2017

    Even Split Of $20M Atty Fee Was Wrong, Judge Says

     A New York federal judge on Friday reversed a bankruptcy judge’s division of a $20 million attorneys’ fee award to four law firms into four equal parts, saying that in the decades-old asbestos-related insurer litigation, there was “no evidence” to support that the four intended an equal split.

  • September 29, 2017

    CST Creditors Say Stalking Horse Bid Lacks Key Info

    A committee of unsecured creditors objected late Thursday to the proposed bidding procedures of bankrupt storage tank maker CST Industries Holdings Inc., saying a stalking horse bid includes an unnecessary breakup fee and lacks key information, which could discourage other bidders.

  • September 29, 2017

    Puerto Rico Rejects $1B Loan From Power Utility Bondholders

    Puerto Rico’s beleaguered electric power company has rejected its bondholders’ offer of a $1 billion debtor-in-possession loan, calling it a cynical and “unsolicited” ploy to boost debt prices and leapfrog other creditors even as the island struggles to rebuild in the wake of Hurricane Maria’s devastation.

  • September 29, 2017

    Bankruptcy Trustee Wants Seadrill To Move Cash To US Banks

    The U.S. trustee in the Seadrill Ltd. bankruptcy on Wednesday objected to the oil rig operator’s proposed plan for managing its $1 billion in cash, saying it left too much of the money at risk in foreign banks.

  • September 28, 2017

    Bankruptcy Trustee Sues Crane Heyman Over WARN Failure

    The trustee for bankrupt World Marketing LLC sued former company counsel Crane Heyman Simon Welch & Clar in Illinois federal court Wednesday on claims the firm committed legal malpractice by failing to provide guidance before the company instituted mass layoffs following its sudden collapse in 2015.

  • September 28, 2017

    SunEdison Directed To Patch Up D&O Allocation Agreement

    SunEdison Inc. and its affiliated solar yieldcos must amend a pending agreement to allocate directors and officers insurance benefits to settle shareholder suits, a New York bankruptcy judge said Thursday, imploring them to add language that resolves the concerns of two former executives afraid of losing policy protections.

  • September 28, 2017

    3rd Circ. Shields Bankruptcy Trustee In Property Damage Row

    The bankruptcy trustee for a defunct real estate company acted within her mandate when she effectively locked out an uncooperative tenant in a bid to protect a building that was the debtor's largest asset, the Third Circuit affirmed Thursday, saying the trustee was protected by "qualified immunity."

  • September 28, 2017

    No Mention Of Gawker Ch. 11 Could Doom Deadspin Libel Suit

    The owner of sports commentary website Deadspin.com could avoid claims of defaming a famous Las Vegas sports betting analyst in a story published before Deadspin was sold by bankrupt former parent Gawker Media, as a New York bankruptcy judge said Thursday that the complaint omits key facts about the sale.

  • September 28, 2017

    US Trustee, IRS Take Aim At True Religion's Ch. 11 Plan

    True Religion's Chapter 11 plan was hit with objections Wednesday and Thursday from several federal agencies, including the U.S. trustee's office and the IRS, taking aim at liability releases in the restructuring strategy and arguing the apparel retailer hasn't filed tax returns for the past four years.

  • September 28, 2017

    Big Banks' Living Wills Extension Hints At Regulatory Easing

    Federal regulators Thursday gave JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp., Wells Fargo & Co. and other big banks another year to file plans for taking themselves apart, opening the door to a potentially more permanent change.

  • September 28, 2017

    San Juan Can't Stop Vote On Restructuring Bank's $4.1B Debt

    A New York federal judge on Wednesday denied a bid by Puerto Rico's capital, San Juan, to stall a vote on a restructuring plan for the $4.1 billion debt load of the territory’s investment bank, saying that the city had not shown it had a secured interest on funds in the bank.

  • September 28, 2017

    Senate OKs Tweaked Bill To Up Bankruptcy Fees, Add Judges

    The Senate on Wednesday night passed a scaled-back version of a bill that would up bankruptcy fees for some filers, extend 14 bankruptcy judgeships and add four new ones, sending the measure back to the House.

  • September 28, 2017

    Scana Hit With Investor Suit Over Nuke Plant Statements

    Scana Corp. shareholders sued the company Wednesday over its public depiction of a recently junked $14 billion nuclear reactor project, saying they lost money as executives sat on reports of prodigious budget and execution issues.

  • September 27, 2017

    Energy Future Parties Will Stay Termination Fee Discovery

    Energy Future Holdings Corp., its creditors and a one-time bidder agreed Wednesday to halt discovery related to an adversary proceeding over a $275 million termination fee, owed to NextEra Inc. after its $18 billion acquisition of the debtor failed, while they await a formal ruling from the Delaware bankruptcy court on a decision to reconsider the fee.

  • September 27, 2017

    Puerto Rico Power Co. Bondholders Offer $1B DIP Loan

    A group of bondholders with interests in Puerto Rico’s insolvent and beleaguered electric power company are offering to lend the utility $1 billion in new cash to help address damage wrought by Hurricane Maria, potentially positioning themselves for an earlier payout in the public corporation’s restructuring.

  • September 27, 2017

    Minn. Judge Turns Down Bid To Scrap Petters Receivership

    A Minnesota federal judge on Wednesday denied a bid by Ritchie Capital Management and other intervenors to terminate the receivership over the assets of fraudster Thomas Petters, saying that scrapping the receivership now would threaten efforts to recover funds for all of the other victims and creditors who were caught up in Petters’ $3.7 billion Ponzi scheme.

Expert Analysis

  • 5 Questions To Ask Before Entering Joint-Representation AFA

    Natalie Hanlon Leh

    One growing trend is for clients to enter into alternative fee arrangements in which one law firm represents multiple parties who “share” fees and costs in a related matter. This way parties can more efficiently manage a matter and reduce their individual legal fees. But joint representation is not without its own risks and challenges, say attorneys with WilmerHale.

  • Legal Incubators Can Help New Lawyers And Society

    Martin Pritikin

    Legal incubators serve as an important bridge to practice and a crucial step toward aligning the incentives of new lawyers with the needs of their clients. They may even pose a threat to the traditional law school model itself, and that's not necessarily a bad thing, says Martin Pritikin, dean of Concord Law School at Kaplan University.

  • Puerto Rico Bondholders Share The Pain

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    Recent actions by Puerto Rico’s oversight board create a relatively broad band of recovery levels for bondholders. Investor uncertainty will likely persist for the near and medium terms, says Bradley Wendt of Charles River Associates.

  • Mineral Liens Can Be Contractually Waived In Texas

    Brian Mitchell

    The U.S. Bankruptcy Court for the Northern District of Texas recently held that an advance contractual waiver of mineral liens contained in a master service agreement between an oil and gas operator and multiple oilfield service companies was enforceable. The case is likely to influence future drafting and negotiation of master services agreements, say Brian Mitchell and Clark Donat of Bracewell LLP.

  • How To Prioritize Your Law Firm's Crisis Response Plan

    Michelle Samuels

    If the media is going to cover your law firm’s crisis, they are going to cover it with or without your firm’s input. But your involvement can help shape the story and improve your firm’s image in the public eye, says Michelle Samuels, vice president of public relations at Jaffe.

  • Time For Bankruptcy Auctions To Go Online

    Brad Miller

    Complex auctions under the Bankruptcy Code are still often conducted in the traditional manner — live and in person in law offices and courtrooms. An online auction that is designed specifically to meet the needs of all stakeholders is a better approach, say Brad Miller and Margarita Patria of Charles River Associates.

  • Weekly Column

    Innovating For Wise Juries: Closing Argument

    Stephen Susman

    In the final article in this series on proposed innovations to the American jury trial, Stephen Susman, Richard Lorren Jolly and Dr. Roy Futterman of the NYU School of Law Civil Jury Project sum up the improvements they believe the U.S. jury system desperately needs.

  • Oil Producers Cannot Recover From Downstream Purchasers

    Edward Ripley

    The Third Circuit recently affirmed that downstream purchasers took oil purchased from a bankrupt intermediary free and clear of the oil producers’ liens. The opinion is an important reminder that courts will look to the state lien laws and Uniform Commercial Code of a midstream company’s home state to determine whether the producers are secured, say attorneys with King & Spalding LLP.

  • 5 Questions All AFAs Should Answer Clearly

    Gregory Lantier

    While no particular form is required to establish a durable alternative fee arrangement, there are terms that should, for the benefit of both client and outside attorney, be expressly set forth in the agreement itself, but are often overlooked, say attorneys with WilmerHale.

  • Fiduciary Duty Claims In Bankruptcy: Mitigating The Risks

    Joseph Swanson

    In a bankruptcy, the trustee, shareholders, employees and other third parties frequently look to hold the directors and officers responsible through breach of fiduciary duty claims. Although defending these claims can be stressful, there are protections in place for defendants and strategies that can reduce their exposure, say Joseph Swanson and Donald Kirk of Carlton Fields Jorden Burt PA.