All items from Bankruptcy Beat

Mt. Gox founder Mark Karpelès said he would not come to the U.S. later this week to answer questions about the Japanese bitcoin exchange’s U.S. bankruptcy case, Mt. Gox lawyers told a federal judge on Monday. Read the DBR article in The Wall Street Journal.
 (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.”)
Hong Kong billionaire Richard Li may have lost in the bidding war for Fisker Automotive Inc., but he is going to make a sizable profit on the U.S. taxpayer-backed loan he bought last year. Read the Daily Bankruptcy Review article via WSJ.
Lawyers who represent Detroit’s retirees want to know what Michigan Gov. Rick Snyder has said during his talks with President Barack Obama and federal lawmakers, according to a new subpoena filing. Read the DBR story in WSJ.

Posted 3 days 9 hours ago

If Huey Shen Wu, a U.S. research scientist who stole corporate secrets from his ex-employer,  is operating true to form, he fled to China before Delaware’s Court of Chancery, in an unprecedented move, issued what amounts to a warrant for his arrest.
Or he may still be hanging around, in Newark, Del., his last known residence, or in California, where he is believed to have family. For all anyone knows, Dr. Wu could be in Biscayne Bay, where, as Steely Dan once noted, the Cuban gentlemen sleep all day.
“It is unprecedented for the Court of Chancery to have to go to these lengths to enforce its orders,” said Martin Lessner, one of the lawyers pursuing Mr. Wu on behalf of high-tech fabric developer W.L. Gore & Associates, Inc. “It just doesn’t come up.”
Two lawyers who have represented Dr. Wu in the last leg of his ten-year run from the corporate law didn’t respond to invitations to comment on the incarceration order signed last week by Vice Chancellor Donald Parsons, a long-time member of a tribunal considered one of the nation’s premier business courts. One lawyer said his firm had joined the string of firms that no longer represent Dr. Wu. Dr. Wu could not be reached for comment.

Posted 4 days 5 hours ago

“They play easily, evenly and in tune, but foremost, have a great ‘traditional’ sound.”

Legendary trumpeter Doc Severinsen performing with his S.E. Shires horn
Mark Wood

That’s what musician Stephen Shires told a judge about the trombones and trumpets made by the Hopedale, Mass., business that he founded in 1995 and put into bankruptcy last week.
In court papers, Mr. Shires told a bankruptcy judge that instrument maker S.E. Shires Inc. has a purchase offer worth more than $1 million from an Eastman Music Co. division that intends to keep the business operating. The 40-worker company filed for protection in U.S. Bankruptcy Court in Worcester, Mass., last week after tax collectors—in pursuit of unpaid debts—went after the company’s bank account.

Posted 4 days 6 hours ago

Robert Galbraith/Reuters

Hundreds of former Dewey & LeBoeuf employees last week took one step closer to recovering money from the remains of the bankrupt law firm.
In a Thursday ruling, Judge Martin Glenn of U.S. Bankruptcy Court in Manhattan concluded that Dewey did not give its employees adequate written notice of mass layoffs in the weeks before its May 2012 closure.
The decision keeps alive a class-action lawsuit brought on behalf of 430 former employees in New York and Washington, D.C., alleging Dewey violated the federal Worker Adjustment and Retraining Notification, or WARN, Act.
Under the law, companies with more than 100 employees must give 60 days’ written notice of impending layoffs. (Some states, including New York, have their own version of the law with a lower employee threshold or longer notice period.)

Posted 4 days 9 hours ago

Momentive Performance Materials Inc., a silicone and quartz producer owned by Apollo Global Management LLC, filed for Chapter 11 bankruptcy Sunday on the eve of a $60 million interest payment it couldn’t afford to make. Read the Daily Bankruptcy Review article via The Wall Street Journal.
(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.”)
According to Reuters, Brazilian businessman Eike Batisa is being investigator for alleged insider trading while leading his oil and shipbuilding companies that are in bankruptcy.
Bloomberg looks at the struggle ahead for Mary Barra, the chief executive of General Motors Co., which failed to respond to auto-safety complaints for more than a decade.

Posted 4 days 9 hours ago

This week on the Broke and the Beautiful, Girls Gone Wild’s Joe Francis is going to be the father of twins (girls!), and Teresa and Joe Giudice are clearing their debts. Also, a former child actor wants to revive bitcoin exchange  Mt. Gox.

In this Sept. 7, 2012, file photo, Joe Francis attends the House of Hype Music Awards at the Beverly Hills Hotel in Beverly Hills, Calif.
Arnold Turner/Associated Press

Surprise; it’s twins! That’s what Girls Gone Wild founder Joe Francis learned when his longtime girlfriend, Abbey Wilson, announced she was pregnant with twin girls. According to Us Weekly, Mr. Francis, whose bankrupt company recently settled with a woman whose breasts were exposed without consent, is excited about fathering two girls. “I believe people will finally understand my love, respect and admiration for women,” he told Us. “I love girls.”

Posted 1 week 5 hours ago

A Coldwater Creek store in downtown Seattle.
Associated Press/Elaine Thompson

Coldwater Creek Inc., the women’s clothing retailer that’s going out of business, will honor gift cards and other promotional programs.
The retailer, which filed for bankruptcy in Delaware on Friday after failing to find a buyer, says it has some $6.5 million worth of unredeemed gift cards outstanding.
But if you have a Coldwater Creek card, you’d better use it now. The company plans to begin conducting going-out-of-business sales sooner rather than later.

Posted 1 week 5 hours ago

Next week in bankruptcy, two companies—Ashley Stewart and Quantum Foods—on Thursday will each place their assets on the auction block.
Retailer Ashley Stewart Holdings Inc.’s auction will be led by private equity firm Clearlake Capital Group, which is offering $18 million in cash, subject to an inventory adjustment.
The quick sale timeline is important, the company said, to assure others that Ashley Stewart isn’t going down the same path as other retailers that have liquidated recently.
Separately Thursday, Quantum Foods LLC is going to auction with an offer from Oaktree Capital. Oaktree’s bid consists of $54 million in cash and $30.3 million in assumed liabilities.
The company, with top-ranking debt of about $50 million, entered Chapter 11 with a $51 million offer from CTI, a so-called custom culinary company that supplies meat products, soups and side dishes. CTI, owned by Thomas H. Lee Partners and the private equity arm of Goldman Sachs Group Inc., could still bid.

Posted 1 week 5 hours ago

The apparent suicide of a Federal Bureau of Investigation agent testifying in the criminal trial of the president of a failed Idaho real-estate firm has created a difficult situation for the judge overseeing the case.
Following the death of FBI Special Agent Rebekah Morse, U.S. District Court Judge B. Lynn Winmill had to figure out how to instruct the jury that’s now deliberating whether to convict Douglas Swenson and others of fraud and conspiracy charges related to the now-bankrupt DBSI Inc.
Ms. Morse, the lead FBI investigator in the case, testified for the prosecution on March 18 and 19, court papers show. The second day, a juror told the court that while the judge was conferring with attorneys in the case, the juror had spotted Ms. Morse texting on the witness stand.
Judge Winmill said the juror’s comment couldn’t be ignored because it raised a “troubling possibility”—that jurors who had seen Ms. Morse texting on the stand might believe she was being coached during her testimony.

Posted 1 week 7 hours ago

Associated Press/Elaine Thompson

Coldwater Creek Inc. filed for Chapter 11 protection and will liquidate, The Wall Street Journal reports.
Glacial Energy Holdings Inc., an electric company that operates in more than 20 states, filed for bankruptcy protection Thursday with a plan to sell its business to Vantage Commodities Financial Services LLC, subject to higher bids at auction. Read the Daily Bankruptcy Review article via WSJ.
(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 1 week 10 hours ago