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Bankruptcy
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March 15, 2024
Kwok Daughter Says Ch. 11 Judge Can't Hear RICO Suit
The daughter of Chinese exile Ho Wan Kwok has implored a Connecticut bankruptcy judge to punt to the district court the civil Racketeer Influenced and Corrupt Organizations claims that a Chapter 11 trustee for her father leveled, contending they raise "significant issues involving non-bankruptcy federal law."
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March 15, 2024
Judge Voids Boy Scouts Ch. 11 Ballots For Likely Forgery
Three Chapter 11 plan ballots that opted for a quicker but smaller settlement payout in the Boy Scouts of America's bankruptcy should be tossed, a Delaware bankruptcy judge has ruled, finding they were likely forged.
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March 15, 2024
Cybersecurity Co. Co-Founder Must Face SEC Fraud Claims
A New York federal judge determined that the U.S. Securities and Exchange Commission has sufficiently alleged that the co-founder of a now-bankrupt cybersecurity company raked in over $6.2 million in ill-gotten gains by participating in a fraudulent securities scheme that defrauded investors of over $100 million.
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March 15, 2024
Camden Diocese Gets OK For Ch. 11 Plan On 4th Attempt
The Roman Catholic Diocese of Camden has won approval from a New Jersey bankruptcy judge for its plan to settle sexual abuse claims for $87.5 million after three prior versions of the plan were rejected over insurance carrier objections.
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March 15, 2024
Feds Say Bankman-Fried Deserves 40 To 50 Years In Prison
Sam Bankman-Fried should spend 40 to 50 years in prison for engaging in a massive fraud that sank his FTX crypto exchange, Manhattan federal prosecutors argued Friday, pushing back against a request by defense counsel for a sentence of roughly six years.
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March 14, 2024
Lehman Brothers Can't Undo Trial Loss Over Crisis-Era CDS
A New York appeals court on Thursday affirmed a bench trial loss Lehman Brothers' bankrupt European unit suffered last year in a suit attempting to claw back nearly half a billion dollars from Assured Guaranty over losses on credit default swaps tied to the 2008 financial crisis.
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March 14, 2024
72-Year Weil Alum, 'True Visionary' Corporate Atty Dies At 97
Ira M. Millstein, the legendary Weil Gotshal & Manges LLP senior partner who helped save New York City from bankruptcy in the 1970s and used his bipartisan connections to help smooth Ruth Bader Ginsburg's path to the federal judiciary, has died, the firm said Thursday.
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March 14, 2024
PE Firm Riverspan Agrees To Pay $32M For Barretts' Assets
Barretts Minerals Inc. told a Texas bankruptcy court Thursday that a unit of private equity firm Riverspan Partners had won an auction for its assets with a $32 million cash offer, money that the talc-mining company intends to use to fund a settlement trust for alleged victims of asbestos exposure.
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March 14, 2024
Near Intelligence's Ch. 11 Plan Gets Court's Approval
A Delaware bankruptcy judge on Thursday confirmed consumer data platform Near Intelligence's Chapter 11 plan, which went through without objection after negotiations resolved outstanding concerns.
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March 14, 2024
Ex-Real Estate Exec Accused Of $77M WeWork Stock Fraud
Manhattan federal prosecutors announced Thursday that the former CEO of real estate investment firm ArciTerra was indicted, alleging he issued a bogus $77 million offer for WeWork shares in an ultimately failed attempt to cash in on call options after juicing the stock price.
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March 14, 2024
US Trustee Knocks Plan To Shield Swiss Firm In Kwok Ch. 11
The Office of the U.S. Trustee has criticized the planned terms of appointment for Prager Dreifuss AG as Swiss counsel to the Chapter 11 trustee overseeing the bankruptcy of Chinese exile Ho Wan Kwok, saying the proposed limitations on the firm's liability and expense reimbursement process are not up to snuff.
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March 14, 2024
Wash. Real Estate Co.'s Ch 11 Plan OK'd After Judgment Slashed
Washington state-based commercial and residential real estate company High Valley Investments LLC 's Chapter 11 plan received a Delaware bankruptcy judge's blessing Thursday after a settlement agreement slashed a $47.4 million judgment against it to an $18 million claim.
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March 14, 2024
Camshaft Facing Daily Fine, Manager's Arrest In Byju's Ch. 11
A Delaware bankruptcy judge hit hedge fund Camshaft Capital Fund with $10,000 in daily fines Thursday until it discloses information about the whereabouts of $533 million transferred out of bankrupt tech company Byju's, and ordered the arrest of Camshaft's sole officer for not appearing in court as directed.
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March 14, 2024
Podcast Network Hits Ch. 11 With Millions In Creator Claims
Podcast network Kast Media has filed for Chapter 11 protection in California bankruptcy court with nearly $6.4 million in debt and more than $3 million in claims from its podcasters.
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March 14, 2024
Court Urged To Give Sullivan & Cromwell $31M For FTX Work
A Delaware bankruptcy judge should give Sullivan & Cromwell LLP about $31 million in fees for its work in FTX Trading Ltd.'s case from August through October 2023, the Chapter 11 fee examiner said.
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March 13, 2024
Genesis, Gemini Can't Ax SEC Suit Over Crypto Loan Program
A New York federal judge refused Wednesday to toss the U.S. Securities and Exchange Commission's allegations that crypto exchange Gemini Trust Co. and bankrupt crypto lender Genesis Global Capital LLC violated securities laws by running the now-defunct investment program Gemini Earn that sold alleged unregistered securities.
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March 13, 2024
Hospital Operator Defends Releases In Ch. 11 Plan
California-based hospital operator Alecto Healthcare Services LLC asked a Delaware bankruptcy judge Wednesday to approve its small business Chapter 11 reorganization, saying it is not leaving money on the table by releasing potential clawback claims.
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March 13, 2024
Judge Says Air Purifier Co. Risks $13M Claim Without Counsel
A Florida bankruptcy judge on Wednesday told an Israel-based maker of air purification systems that it has three weeks to hire a new attorney and comply with discovery demands or its $12.8 million claim against the bankrupt Molekule Inc. will be stricken.
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March 13, 2024
NYC Condo Developer's Ch. 11 Liquidation Plan Gets OK
A Delaware bankruptcy judge on Wednesday approved the Chapter 11 liquidation plan of 540 West 21st St. Holdings LLC, the developer of a scrapped luxury condo project in New York City's West Chelsea neighborhood, overruling an objection from the managers of a neighboring building.
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March 13, 2024
Patriots Owner Flags $2M Lien On 'Useless' Skydiving Facility
The real estate business of New England Patriots owner Bob Kraft asked a Massachusetts judge to discharge a $2 million mechanic's lien on a defunct indoor wind tunnel and skydiving attraction at a shopping center next to the football team's stadium.
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March 13, 2024
Wood Pellet Maker Enviva Hits Ch. 11 With Over $1B Debt
Enviva, the world's largest producer of industrial wood pellets, has filed for Chapter 11 protection in Virginia bankruptcy court with a plan to cut its debt load by $1 billion, months after it reported hundreds of millions in losses after a faulty bet on future prices of the energy source.
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March 12, 2024
Terraform Can Retain Dentons In Ch. 11, Firm Will Return $48M
Terraform Labs can hire Dentons US LLP as its special counsel in its Chapter 11 case, a Delaware federal bankruptcy judge ruled Tuesday, with the firm agreeing to return $48 million of a $70 million retainer that was hit with objections.
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March 12, 2024
Retired Judge, 2 Trustees To Handle Conn. Clergy Abuse Claims
A Connecticut bankruptcy judge has appointed Salvatore C. Agati, a retired Connecticut Superior Court judge and current partner at Carmody Torrance Sandak & Hennessey LLP, one of the Constitution State's largest law firms, to review abuse claims against the bankrupt Norwich Roman Catholic Diocesan Corp. of eastern Connecticut.
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March 12, 2024
Breast Implant Co.'s $90M DIP OK'd With Creditor Protections
Bankrupt breast implant maker Sientra Inc. received final court approval in Delaware bankruptcy court for its $90 million debtor-in-possession financing after adding in lien challenge protections for unsecured creditors.
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March 12, 2024
Sorrento Ch. 11 Will Stay In Texas
A Texas bankruptcy judge Tuesday denied requests to transfer the Chapter 11 case of drug developer Sorrento Therapeutics Inc. out of the Lone Star State for having insufficient ties to the venue.
Expert Analysis
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The State Of Student Loan Debt In Bankruptcy
With student loan debt in the spotlight following the U.S. Supreme Court's recent decision to block President Joe Biden's forgiveness plan, it's an apt time to review how student loans are treated in bankruptcy and why very few are discharged, say Daniel Lowenthal and Kimberly Black at Patterson Belknap.
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SVB Bankruptcy Case Raises Asset Control Questions
The initial disputes in Silicon Valley Bank's bankruptcy case between the Federal Deposit Insurance Corp. and the debtor over tax refunds and deposits are likely to signal the rekindling of old battles for limited assets last fought during the Great Recession, say Jeffrey Rothleder and Maura McIntyre at Squire Patton.
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Who Owns Crypto Assets? Know The Bankruptcy Risks
Amid a wave of recent crypto custodian Chapter 11 filings, the legal character of customer deposits give rise to a deluge of questions, because in the absence of a concrete regulatory regime, the terms and conditions are likely going to be how the court determines legal rights, says Heidi Hockberger at Levenfeld Pearlstein.
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An In-Depth Look At FDIC Reform Options After Bank Failures
Anthony Pirraglia and Melissa Hall at Loeb & Loeb explain the three coverage options for reforming the deposit insurance system, which were proposed in a recent report from the Federal Deposit Insurance Corp. in the wake of the Silicon Valley Bank and Signature Bank failures.
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Ch. 11 Ruling Informs On Social Media Ownership Rights
Social media users now have useful guidance regarding account ownership rights following a federal bankruptcy court's recent ruling in the Vital Pharmaceuticals Chapter 11 case, which rejected the notion that advertised content alone could create a presumption of ownership for the advertised business, say Deborah Enea and Thomas Dockery at Troutman Pepper.
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Perspectives
Mallory Gives Plaintiffs A Better Shot At Justice
Critics of the U.S. Supreme Court's recent decision in Mallory v. Norfolk Southern claim it opens the door to litigation tourism, but the ruling simply gives plaintiffs more options — enabling them to seek justice against major corporations in the best possible court, say Rayna Kessler and Ethan Seidenberg at Robins Kaplan.
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Effectual Relief Questions Linger After Section 363 Ruling
In the months since the U.S. Supreme Court's ruling in MOAC Mall Holdings, courts and practitioners must grapple with the issue of what effectual relief courts may grant upon an appeal of an unstayed sale order, says Monique Jewett-Brewster at Hopkins Carley.
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Blockchain Utopia Dream Fades Following Gemini Fraud Suit
Cryptocurrency exchange Gemini’s recent filing of a fraud suit against Digital Currency Group, coupled with industrywide bankruptcy complications and regulatory scandals, may signal the end of the dream of a utopian, decentralized financial future, says Christopher Ott at Loeb & Loeb.
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Courts Can Overturn Deficient State Regulations, Too
While suits challenging federal regulations have become commonplace, such cases against state agencies are virtually nonexistent, but many states have provisions that allow litigants to bring suit for regulations with inadequate cost-benefit analyses, says Reeve Bull at the Virginia Office of Regulatory Management.
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Tales From The Trenches Of Remote Depositions
As practitioners continue to conduct depositions remotely in the post-pandemic world, these virtual environments are rife with opportunities for improper behavior such as witness coaching, scripted testimony and a general lack of civility — but there are methods to prevent and combat these behaviors, say Jennifer Gibbs and Bennett Moss at Zelle.
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Tide May Be Turning On Texas Two-Step Bankruptcy Strategy
Recent developments in several high-profile bankruptcy cases suggest that the use of the Texas Two-Step to shield solvent companies from tort claims may be falling out of favor, but until the U.S. Supreme Court hears one of these cases the strategy will remain divisive and the subject of increased scrutiny, say attorneys at Rivkin Radler.
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Vice Bankruptcy Ruling Shows Contract Assignment Issues
A New York bankruptcy court’s recent ruling in Vice Media’s Chapter 11 case is likely to have implications for other cases involving the assignment of contracts by corporate entities, and may signal that Showtime will still face an uphill battle in trying to prove that its contract constituted personal services, says Debra Dandeneau at Baker McKenzie.
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Level Up Lawyers' Business Development With Gamification
With employee engagement at a 10-year low in the U.S., there are several gamification techniques marketing and business development teams at law firms can use to make generating new clients and matters more appealing to lawyers, says Heather McCullough at Society 54.
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Mallory Ruling Leaves Personal Jurisdiction Deeply Unsettled
In Mallory v. Norfolk Southern Railway, a closely divided U.S. Supreme Court recently rolled back key aspects of its 2017 opinion in Daimler AG v. Bauman that limited personal jurisdiction, leaving as many questions for businesses as it answers, say John Cerreta and James Rotondo at Day Pitney.
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Despite Economic Ambiguity, Restructuring Still Strong In '23
Although the economy refuses to conform to any predictable script and public perception is middling at best, there's nothing confusing about restructuring activity in 2023, and it seems that restructurings will remain elevated at least through the end of the year and likely longer, says Michael Eisenband at FTI Consulting.