All items from WSJ.com: Bankruptcy Beat

Associated Press

The financial advisory firm that guided an Arkansas vegetable-canning company through bankruptcy to survival may have to return the money it earned—and tens of millions of dollars more—because of an obscure federal law that protects farmers.
The turnaround firm Alvarez & Marsal was sued last week for $24.8 million by lawyers for Allens Inc., which was sold out of bankruptcy earlier this year and renamed Sager Creek Vegetable Co.
Shortly before the company filed for bankruptcy in October 2013, produce farmers had shipped more than $36 million worth of fresh crops to the company, which is one of the country’s largest private canning companies with brands like Veg-All, Popeye canned spinach and Sugary Sam sweet potatoes. The lawsuit argues that the farmers’ bills must be repaid before nearly all of Allens’ other debts—including money already paid to bankruptcy advisers—under the 1930 Perishable Agricultural Commodities Act.



Posted 6 hours 40 min ago

“Anna Nicole,” the New York City Opera’s last performance (if they are not able to raise the money by the end of September) at Brooklyn Academy of Music on Sept. 28, 2013.
Getty Images

Monday in Manhattan, New York City Opera Inc. will ask a judge to approve bidding procedures for an auction of the company, with a lead offer from an investor group led by Michael Capasso, general director of the Dicapo Opera Theatre.
The offer, which is likely to be challenged, is for $10,000 in cash plus the settling of $500,000 in debts and assumption of some liabilities.
Roy Niederhoffer, a former City Opera board member, would return as chairman and former board member Jeffrey Laikind, would assume the role of president.
The low price reflects how little is left of the opera company, which filed for bankruptcy protection in October 2013 after years of growing deficits and costly missteps with its endowment.
When it closed, City Opera owed millions of dollars to New York City Ballet—with which it once shared a theater—and to ticket holders, musicians, former employees and others.



Posted 7 hours 23 min ago

Binder & Binder, one of the nation’s largest Social Security disability firms, filed for bankruptcy protection Thursday night amid shrinking demand for its services as government scrutiny of disability claims tightens. The Wall Street Journal has the Daily Bankruptcy Review article here.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)
The union representing more than 1,000 workers at the Trump Taj Mahal casino on Thursday accused billionaire Carl Icahn of backing out of a deal that would have saved the endangered Atlantic City gambling hall. Read the DBR article in WSJ.
DBR reports in WSJ that a $1 billion pact between Nortel Networks Corp.’s U.S. unit and bondholders won court approval Thursday over the protests of the one-time Canadian technology giant.



Posted 7 hours 53 min ago

Nearly $600 million worth of settlements to benefit victims of Bernard Madoff’s massive Ponzi scheme on Wednesday won the blessing of a bankruptcy judge. The Wall Street Journal has the Daily Bankruptcy Review article here.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)
Fourteen people involved with the pharmacy connected to a meningitis outbreak, the New England Compounding Center, had charges announced against them, WSJ reports.
WSJ reports that four executives at Freedom Industries, the West Virginia company behind a massive chemical spill, were charged in the chemical leak.



Posted 1 day 7 hours ago

A fifth DBSI Inc. official will do time for his role in the fraud-driven collapse of the Idaho real-estate firm.
Gary W. Bringhurst, 47 years old, this week was sentenced to five years of probation—including 60 days of intermittent imprisonment—according to federal prosecutors. Last year, he pleaded guilty to conspiracy to commit securities fraud.
Mr. Bringhurst joins former DBSI President Douglas L. Swenson and three other former officials in receiving sentences for their roles in the fraud that brought DBSI several years ago.
Prosecutors say Mr. Swenson and others publicly held the unprofitable DBSI out as profitable to try to lure investors, essentially operating the company like a Ponzi scheme by relying on funds from new investors to pay old investors. DBSI entered bankruptcy proceedings in November 2008.
In August, Mr. Swenson was sentenced to 20 years in prison after being convicted of 44 counts of securities fraud and 34 counts of wire fraud. Mark Ellison, DBSI’s former general counsel, received a five-year sentence. Mr. Swenson’s sons—David Swenson and Jeremy Swenson, both assistant secretaries—received three-year sentences. Mr. Ellison and the Swenson brothers were also convicted of 44 counts of securities fraud, but all four men have appealed their convictions.



Posted 2 days 6 hours ago

In this Jan. 21 file photo, Freedom Industries President Gary Southern leaves the company’s bankruptcy hearing in Charleston, W.Va.
Daily Mail/Associated Press

The former leader of Freedom Industries Inc., the company behind a massive chemical spill, wants to disqualify the federal lawyers prosecuting him for fraud on the grounds that they also suffered from the spill. Read the Daily Bankruptcy Review article here.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)



Posted 2 days 7 hours ago

Beauty treatment chain American Laser Skincare abruptly shut its doors last month. Now, some customers say they’re being asked to pay for treatments they never received, while others who say they paid in advance want their money back.
“How do I get my money back from the package I just bought? Why did you guys let me buy a new package for services you knew you were not going to honor. Filing bankruptcy is unfortunate, but known months, years in advance. You took my money. This is fraud,” wrote one consumer on the shuttered company’s Facebook page.
American Laser’s owner, Philadelphia private equity firm Versa Capital Management, has said it won’t respond to Facebook posts. The firm, which bought the operation from its prior bankruptcy in 2012, said it had already provided “substantial funding to aid the company with its performance.”
Chapter 7 trustee Alfred Giuliano did not respond to requests for information about the state of affairs at American Laser, which said in its bankruptcy petition it owes more than $50 million and expects no return to unsecured creditors. As trustee, Mr. Giuliano is responsible for tracking down money to pay American Laser’s creditors.



Posted 3 days 4 hours ago

The new Apple Watch is pictured during an Apple event at the Flint Center for the Performing Arts in Cupertino, California, in this Sept. 9, 2014 file photo. REUTERS/Stephen Lam/Files (UNITED STATES – Tags: BUSINESS SCIENCE TECHNOLOGY)
Reuters

GT Advanced Technologies Inc . on Monday won bankruptcy court approval of a settlement with Apple Inc. that wards off the threat of litigation over a failed effort to produce large quantities of scratch- and shatter-resistant smartphone screen materials. The Wall Street Journal has the Daily Bankruptcy Review article here.



Posted 3 days 7 hours ago

“Anna Nicole,” as performed by the New York City Opera’s last performance at Brooklyn Academy of Music on Sept. 28, 2013.
Getty Images

When New York City Opera shut its doors last year, patrons who had already bought tickets for the upcoming season not only lost a source of entertainment, but they also failed to get any refunds.
Now, an investor group that hopes to revive City Opera has a deal to offer those scorned ticketholders.
According to documents filed in U.S. Bankruptcy Court in Manhattan, former subscribers owed more than $500 will get a 25% discount on a subscription to City Opera’s six-show revival season. Subscribers owed $500 or less, meanwhile, can get 25% off a single ticket in the first season.
Anyone wishing to cash in on the deals must promise to drop their claims against the bankruptcy estate, the filings show.



Posted 4 days 1 hour ago

Mel Evans/Associated Press

A bankruptcy judge on Friday scrapped a $110 million deal to sell Atlantic City, N.J.’s closed Revel Casino Hotel to a Canadian private-equity firm. The Wall Street Journal has the Daily Bankruptcy Review article here.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)
DBR reports via WSJ that Binder & Binder, one of the nation’s largest Social Security disability firms, is preparing for a possible Chapter 11 bankruptcy filing as soon as this week.



Posted 4 days 7 hours ago