All items from WSJ.com: Bankruptcy Beat

Momentive Performance Materials Inc. won two key lawsuits Tuesday, but the company fell short of securing court approval for its restructuring plan. 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.”)
MF Global Inc. wants court approval to pay $295 million owed to its creditors, now that it has paid back most of its customers. Read the DBR article via WSJ.
Crumbs Bake Shop Inc . won court approval on Tuesday to begin reopening stores as soon as next month under a new ownership team that plans to expand the chain beyond its signature cupcakes., DBR reports via WSJ.



Posted 3 weeks 3 hours ago

A bankruptcy trustee’s allegedly aggressive questioning of a debtor’s English-speaking skills is the subject of a complaint on file with a federal bankruptcy watchdog, a legal publication has reported.
The New York Law Journal Monday reported that consumer bankruptcy attorney William Ward Saxton filed a complaint against bankruptcy trustee John S. Pereira, accusing him of berating a debtor about her ability to understand English at a meeting in her bankruptcy case last month.
The NYLJ (subscription required) describes the letter thusly:
According to Saxton’s letter, when the debtor’s attorney during the July 16 hearing requested an interpreter for the client, a U.S. citizen, Pereira demanded to know how the debtor was able to pass an American citizenship exam if she did not understand English.
He also demanded to know how the debtor was able to communicate with her attorney and understand and sign a bankruptcy petition in English, the letter said. A friend of the debtor told Pereira that she explained everything to the debtor in Spanish.
Saxton wrote that Pereira moved to adjourn the case. But Saxton, who was awaiting his client’s case to be called, stood up and told Pereira that he could not adjourn and that he violated the debtor’s civil rights.
The NYLJ further quotes Mr. Saxton’s letter:



Posted 3 weeks 1 day ago

Mercator Minerals Ltd.’s Mineral Park Inc. unit filed for Chapter 11 bankruptcy protection Monday, seeking a buyer for assets that include a producing copper-molybdenum mine near Kingman, Ariz. Ready 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.”)
Some of the country’s largest financial institutions say Lehman Brothers Holdings Inc. needs to set aside $12.14 billion to settle claims over certain soured mortgage loans, DBR reports via The Wall Street Journal.



Posted 3 weeks 1 day ago

One of the groups of plaintiffs trying to sue General Motors Co. over economic losses relating to the massive recall tied to faulty ignition switches is asking the bankruptcy judge to allow its lawsuit to proceed. Read the Daily Bankruptcy Review story 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.”)
Less than two years removed from bankruptcy Dynegy Inc . will nearly double its power-generating capacity when it buys 21 plants for $6.25 billion from Duke Energy Corp.  and Energy Capital Partners, another milestone in the power company’s resurgence, WSJ reports.



Posted 3 weeks 2 days ago

Pedestrians pass by a closed Crumbs Bake Shop Inc. store in New York on July 8.
Bloomberg News

Crumbs Bake Shop next Tuesday will seek bankruptcy-court approval to sell its assets to television personality Marcus Lemonis and Dippin’ Dots owner Fischer Enterprises, who together plan to relaunch the shuttered cupcake chain.
Crumbs abruptly closed its doors in July and soon sought Chapter 11 protection. But within days Mr. Lemonis expressed interest in investing and reopening some stores. Although the company planned an auction, the offer from Mr. Lemonis and Fischer Enterprises—$6.5 million in debt-forgiveness—remained the only qualified bid.
Although the investors plan to relaunch the chain, the no-cash offer provides little in the way of recovery for unsecured creditors. But Crumbs lawyers said they’re trying to negotiate another form of recovery for this group.



Posted 3 weeks 5 days ago

The Federal Deposit Insurance Corp. and Bank of America Corp. have settled their long-running battle over who is ultimately responsible for losses tied to the sale of mortgage securities to more than two dozen failed banks. Read the Daily Bankruptcy Review story 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.”)
An attempt by television personality Marcus Lemonis and Dippin’ Dots owner Fischer Enterprises LLC to reopen Crumbs Bake Shop Inc. stores moved closer to reality after a deadline to trump the pair’s $6.5 million offer for the chain passed with no other bidders emerging. Read Sara Randazzo’s story in WSJ.



Posted 3 weeks 5 days ago

The Pittsburgh Riverhounds soccer team has a plan to get out of bankruptcy with a new owner: a local businessman who has already extended several million dollars to keep the team kicking.
In court papers, officials asked a judge to approve two bankruptcy-exit plans—one for the team and one for its 3,500-seat stadium on Pittsburgh’s South Side—that would allow Terrance “Tuffy” Shallenberger Jr. to become their sole owner. Right now, Mr. Shallenberger owns a 51% stake in the two partnerships that own the team and the stadium.
The partnerships filed for Chapter 11 bankruptcy on March 26 (several days before the team’s season opener) blaming the larger-than-expected construction costs of Highmark Stadium. Before the stadium opened last year, the team played at local high schools.



Posted 3 weeks 5 days ago

Capmark Financial Group reached a settlement with its former head honcho over the nearly $17 million he received when he left the commercial real estate lender the year before its bankruptcy, but one key detail is under wraps—how much the individual will pay.
The proposed settlement would end Capmark’s effort to claw back the $16.7 million paid to former Chief Executive William F. Aldinger III and a family trust on his way out the door. Mr. Aldinger, who is also a former chairman and chief executive officer of HSBC Finance Corp., left Capmark in December 2008. The company filed for bankruptcy protection in October 2009, joining a long list of real-estate lenders toppled by the global financial crisis.
However, the deal aims to keep secret the amount of money Mr. Aldinger will return to Capmark to settle the litigation. To explain why it’s necessary to hide the amount, Capmark noted that Mr. Aldinger is retired and doesn’t need the publicity that will certainly attend the news of the settlement.



Posted 3 weeks 5 days ago

Lehman Brothers Holdings Inc.’s brokerage is asking a U.S. court to reconsider its ruling affirming Barclays PLC’s right to billions of dollars in disputed assets, saying the decision throws into question the integrity of bankruptcy sales. Read the Daily Bankruptcy Review story 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.”)
The team winding down Lehman Brothers’ U.K. business will pay more than $300 million to the unit’s pensioners, the biggest win ever for the U.K.’s pension authorities. Read the DBR story in The Journal.
A years-long attempt by the estate of deceased Playboy model Anna Nicole Smith to collect millions of dollars from her late husband’s family came to a close this week, at least in federal court. Read the DBR story on WSJ’s Law Blog.



Posted 3 weeks 6 days ago

With the closure of Bryman College and sister school BioHealth College, programs to protect its more than 300 students sprang into action, helping them obtain tuition refunds and loan forgiveness.
But for the colleges’ 85 employees—who were laid off without payment of wages they were owed or severance—there’s no safety net.
Former employees of the California campuses have told Bankruptcy Beat that no one received paychecks on Aug. 1, the payday following the July 25 shutdown, and that many July 16 paychecks bounced. Left jobless and frustrated, the employees are navigating the bankruptcy system to recover their wages and are finding their odds of payment to be grim.
A lawyer representing Bryman and BioHealth in their bankruptcy case declined to comment on the employees’ situation Tuesday.
The schools’ parent company, which filed for Chapter 11 bankruptcy in July and shut down days later, lists the employees as unsecured priority creditors (a group in bankruptcy cases that often receives only partial payment) owed $96,597.30, according to recently filed court documents. This doesn’t include the $121,590 Chief Executive Sam Shirazi says he’s owed.



Posted 3 weeks 6 days ago