All items from WSJ.com: Bankruptcy Beat

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An auction to sell Atlantic City, N.J.’s Revel Casino Hotel will resume next week after no winner was chosen Wednesday afternoon. The Wall Street Journal has the Daily Bankruptcy Review article here.
The distribution of $7.3 billion raised in the international bankruptcy liquidation of Nortel Networks Corp. moved a step closer to fruition, but Justice Frank Newbould in Canada and Judge Kevin Gross in the U.S. will issue separate rulings. Read the DBR 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 3 weeks 4 days ago

Marc Dreier
Associated Press

Imprisoned ex-lawyer Marc Dreier is back to writing legal pleas, this time on his own behalf.
Mr. Dreier, who is serving a 20-year prison sentence after pleading guilty to cheating investors out of hundreds of millions of dollars, faces a demand to testify in person in connection with a bankruptcy trial involving one of his former investors and his eponymous law firm.
But the one-time owner of multiple homes, an Aston Martin and 123-foot yacht doesn’t want to leave the confines of the low-security federal prison in Minnesota where he’s doing time to testify in the New York-based trial.



Posted 3 weeks 5 days ago

The operator of the Indiana Toll Road’s fast-track restructuring is under way, with an October court date to secure approval of its plan to tackle some $6 billion in debt. 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.”)
Maine’s Great Northern Paper Co., once a giant of New England’s pulp-and-paper industry, is liquidating what remains of its assets in bankruptcy, DBR reports via WSJ.
The Securities and Exchange Commission charged Barclays Capital Inc. with compliance failure following its 2008 acquisition of Lehman Brothers’ advisory business, WSJ reports.



Posted 3 weeks 5 days ago

A bankruptcy judge Tuesday shut down an attempt by a former Dewey & LeBoeuf LLP executive to dismiss a lawsuit claiming he owes the defunct firm’s creditors $9.3 million.
Dewey’s bankruptcy trustee in March sued the executive, former Chief Operating Officer Dennis D’Alessandro, seeking the return of more than $9 million in salary, bonuses and other compensation that he received from 2008 until the firm’s 2012 collapse.
In filing the suit, Dewey’s trustee, Alan Jacobs, said the “astronomically generous” contract was atypical for the legal industry and “far above” the value of services he provided as COO. The suit seeks to recover the funds on the grounds that the payments were made while Dewey was unable to meet its other financial obligations.
Mr. D’Alessandro disagreed, arguing that the suit should be thrown out because he was not a so-called insider of the firm and that he was paid in the ordinary course of business in exchange for his services as a Dewey employee. He also argued that Dewey’s trustee can’t claw back payments from before 2010, based on previous statements from Dewey’s bankruptcy lawyers that it would be hard to prove the firm was insolvent in 2010.



Posted 3 weeks 6 days ago

Cal Poly fullback Akaninyene Umoh, front left, congratulates linebacker Johnny Millard after Cal Poly’s 42-14 victory over Northern Colorado in November 2013.
David Zalubowski/Associated Press

A bankruptcy trustee’s quest to recoup money for investors defrauded by a Ponzi scheme has left a major California university in an uncomfortable situation.
For five years, the scoreboard at California Polytechnic State University’s football stadium has prominently displayed the name of Moriarty Enterprises—a onetime financial services firm run by Al Moriarty, a former Cal Poly athlete and longtime supporter of the university.
Now, as the San Luis Obispo Tribune reported, Mr. Moriarty is serving out a five-year prison sentence after pleading no contest to seven felony fraud charges tied to an illegal scheme that prosecutors say cost investors millions of dollars.



Posted 3 weeks 6 days ago

MF Global’s creditors, who have waited nearly three years to get paid, will have to wait a little longer after a bankruptcy judge Monday held off approving its bid to repay them $295 million. Read the Daily Bankruptcy Review 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.”)
A federal judge’s recent ruling blocking Medicaid officials from cutting off a struggling nursing home could help troubled health-care facilities survive using bankruptcy, according to restructuring professionals. WSJ has the DBR article here.
The smooth ride for hedge funds holding certain claims tied to Lehman Brothers Holding Inc. hit a speed bump last month as a court ruling brought hedge funds their first losses, DBR reports via WSJ.



Posted 3 weeks 6 days ago

Three-and-a-half years after Howrey LLP shut its doors, another 31 former partners of the bankrupt law firm have agreed to chip in money to pay back Howrey’s creditors.
In settlement papers filed Friday in U.S. Bankruptcy Court in San Francisco, Howrey trustee Allan Diamond says he’s reached deals to bring in close to $1.5 million from the batch of onetime equity partners. That’s on top of a nearly identical settlement reached in May with 60 ex-partners that raised $4.2 million for creditors.
The contributions, ranging from $3,532 to $200,000, claw back 16% of what partners earned between April 2010 and Howrey’s dissolution a year later—a period during which Mr. Diamond argues Howrey was insolvent.
“This one really takes us dramatically far down the road with respect to the former partners,” Mr. Diamond, a name partner at Texas firm Diamond McCarthy LLP, told Bankruptcy Beat on Monday. Settlement talks continue, he said, with a large group of lawyers who landed at Jones Day, and a handful of “stragglers” are also out there. (A Jones Day rep didn’t immediately respond to a request for comment Monday).



Posted 4 weeks 5 hours ago

The debt-stricken operator of an Indiana Toll Road filed for bankruptcy protection Sunday with a plan to get restructure some $6 billion debt by selling its assets or, alternatively, reorganizing its business. 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.”)
Power-plant owner Entegra Power Group LLC won swift confirmation Friday of a Chapter 11 plan that chops $750 million worth of debt from its $1.5 billion balance sheet. Read the DBR article via The Wall Street Journal.
The bidding is now open on Energy Future Holdings Corp.’s rights to Oncor, a Texas transmission business that’s going up for grabs in bankruptcy, DBR reports via WSJ.



Posted 4 weeks 11 hours ago

Next week in bankruptcy, MF Global Inc. will ask a bankruptcy judge to authorize a $295 million payout to its creditors.
On Monday, Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan will hear the request.
Creditors have waited nearly three years as all but a few individual brokerage and commodity customers received 100% of payments owed.
The bulk of the money is earmarked for unsecured creditors, who would receive a first distribution of about 20% of what trustee James W. Giddens has agreed to pay.  Holders of secured, administrative and priority claims that have been resolved will get 100% of their money all at once.
Mr. Giddens has also asked for permission to create a reserve fund of more than $400 million for unresolved claims and to put a cap on their amounts.
On Wednesday, Atlantic City, N.J.’s Revel Casino Hotel will head to the auction block after closing its doors early this month after no buyers immediately stepped forward to save the newest addition to the city’s famed boardwalk from its second bankruptcy in as many years.
Revel, a glittering $2.4 billion resort that made its boardwalk debut in 2012, last week announced a deal with Florida real estate developer Glenn Straub. Mr. Straub has offered $90 million in cash, which is subject to rival offers at the auction.
The winning bid is also subject to approval from Judge Gloria Burns at a sale hearing currently scheduled for Sept. 30.



Posted 4 weeks 3 days ago

A new lawsuit seeks to hold M&I Bank, now owned by BMO Harris Bank, responsible for allegedly enabling Minnesota businessman Tom Petters to orchestrate a Ponzi scheme that cheated investors out of several billion dollars. 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.”)
Less than two months after entering Chapter 11 protection, Eagle Bulk Shipping Inc. won court approval Thursday morning of a bankruptcy-exit plan that cuts $975 million in debt from its balance sheet. WSJ has the DBR article here.
LightSquared blew through $81.4 million in August, and Philip Falcone’s wireless venture has now lost $1.6 billion since it filed for bankruptcy in May 2012, DBR reports via WSJ.



Posted 4 weeks 3 days ago