All items from WSJ.com: Bankruptcy Beat

A federal judge Friday declared a mistrial in a whistleblower lawsuit that questions the safety of thousands of highway guardrail end caps on the nation’s roads. The Wall Street Journal has the Daily Bankruptcy Review article here.
Energy Future Holdings Corp. is entertaining takeover overtures from NextEra Energy Inc. and others that have expressed an interest in a new deal for the troubled Texas power company, Edward Sassower, a lawyer for the company, said Friday. Click here for the DBR article.
(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.”)
Women often don’t have it easy in the restructuring industry, and a recent sex-discrimination lawsuit filed against restructuring firm AlixPartners LLP casts some of these difficulties in stark relief. The DBR article is available via WSJ.



Posted 5 weeks 2 days ago

The Indubitable Equivalents play at the House of Blues in Cleveland
Indubitable Euqivalents archives

For a few hours on Saturday night, Judge Steven Rhodes—the man in charge of Detroit’s bankruptcy—will put aside his law books and pick up his guitar.
For nearly a decade, Judge Rhodes has played with the Indubitable Equivalents, a band of bankruptcy pros that play classic rock warhorses like “Born to Be Wild,” “Honky Tonk Women” and “Running on Empty.”
The band—whose name means “something of equivalent value” in legalese—will hit the stage this weekend for the first in more than a year at an American Bankruptcy Institute conference in Vermont.
Judge Rhodes isn’t the type of rocker who’s going to be kicking over amplifiers, but one band member called him “totally un-judge like” for how well he listens and his lack of ego.
Lead singer Mitch Ryan said he relies on Judge Rhodes to play the starting key to the next song on his Taylor T5 guitar; his sheet music is always in order.
“If he’s not there, I’m kinda lost,” Mr. Ryan said.



Posted 5 weeks 5 days ago

On Tuesday in Manhattan, James River Coal Co., is scheduled to auction itself off at the offices of its bankruptcy counsel, Davis Polk & Wardwell LLP.
Originally scheduled to hold the auction on July 8, James River has been wavering among reorganizing, selling its assets or liquidating.
Even with the uncertainty, James River said in a filing last month that several “potential strategic and financial bidders” have shown interest in the company.
James River filed for bankruptcy in April in Richmond, Va., after skipping an interest payment on its debt amid mounting losses and tight liquidity. The coal industry, including James River, has experienced sharp declines as the cost of natural gas—a competing energy source—has fallen and as gas demand has risen in the U.S.
The company, which ships coal to electricity generators, industrial users and steel companies, entered bankruptcy with more than $800 million in overall debt.
Tuesday in Manhattan, LightSquared will update its bankruptcy judge on its newest reorganization plan.
Expected to be filed Monday, the proposal will include participation from Dish Network Corp. Chairman Charlie Ergen, LightSquared said at a hearing last week.



Posted 5 weeks 5 days ago

NextEra Energy Inc. is pitching the board of an Energy Future Holdings Corp. division on a takeover plan that it claims would mean higher recoveries for creditors of the Dallas power company, which is tackling some $42 billion in debt in Chapter 11 bankruptcy. 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.”)
Senators challenged General Motors Co.’s chief executive about how she would change the auto company’s corporate culture without getting rid of her top lawyer, WSJ reports.



Posted 5 weeks 5 days ago

Thomas Duignan and Jeffrey Rosenthal have joined the Otterbourg law firm as members of the banking and finance group. The two will coordinate with the workout, distressed debt and insolvency group. Mr. Rosenthal focuses on advising clients on workouts of existing loans and debtor-in-possession, or DIP, financing. Mr. Duignan focuses on asset-based lending, commercial lending and on representing people buying or selling financial assets. The two most recently were partners with law firm Troutman Sanders LLP.
Randall Reese and David Leamon have joined UpShot Services LLC to help expand the claims firm’s national presence. Mr. Reese founded Restructuring Concepts LLC, which develops and markets technology products that are designed for legal professionals. He will work in the Chicago office. Mr. Leamon, who started a legal firm in 2011, will work in the New York office.



Posted 5 weeks 6 days ago

The Archdiocese of Milwaukee has been running a tab when it comes to professionals working on its Chapter 11 bankruptcy case, and lawyers for unsecured creditors—chiefly survivors of sexual abuse—say it’s time to pay the bills.
Court records show the archdiocese has stacked up more cash than it projected back in January 2013, when it petitioned the bankruptcy court to suspend monthly professional fee payments on the grounds money was tight, according to papers filed by creditor lawyers led by James Stang. Mr. Stang represents the official committee of unsecured creditors in the Archdiocese of Milwaukee case. With a few exceptions, bankruptcy professionals have not been paid in 17 months, court papers say.
As of the end of June, the archdiocese reported it had run up $5.8 million worth of fees, court records show. Whyte Hirschboeck Dudek S.C., the lead lawyer for the archdiocese, is owed the most, $2.9 million. Lead creditor firm Pachulski Stang Ziehl & Jones is owed $1.9 million, court records show. Lawyers for survivors contend that the archdiocese has the money, and it should pay.



Posted 5 weeks 6 days ago

Teen-focused clothing retailer Love Culture Inc. sought Chapter 11 protection Wednesday, citing an overexpansion that left the chain with weakened finances. 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.”)
A bankruptcy judge put Crumbs Bake Shop Inc. on the path to a quick sale, giving the cupcake chain hope that it will reopen the doors at many locations. WSJ has the DBR article here.
Canadian steelmaker Essar Steel Algoma Inc. filed for Chapter 15 protection in the U.S. with more than $1 billion in debt, Bloomberg reports.



Posted 5 weeks 6 days ago

Melanie Cohen

Since emerging last week as Crumbs Bake Shop ’s would-be savior, investor Marcus Lemonis has vowed to relaunch the cupcake chain in some fashion and hire back laid off employees.
But as Crumbs’s bankruptcy kicks off this week, it’s already clear that many of the chain’s recently shuttered cupcake shops will remain dark for good.
In a request made Friday in U.S. Bankruptcy Court in New Jersey, Crumbs asks a court’s permission to reject 21 leases that it says “represent an unnecessary expense and contribute no value” to its bankruptcy estate. Through bankruptcy, companies are often allowed to ditch leases and other contracts to help lessen debts.



Posted 6 weeks 9 hours ago

Energy Future Holdings Corp. has dropped out of the bidding on Optim Energy’s Twin Oaks power plant. 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.”)
Bernard L. Madoff trustee Irving Picard filed an amended lawsuit against Mr. Madoff’s two sons, The Wall Street Journal reports.
According to WSJ, Portugal Telecom SGPS SA said it didn’t get a €847 million ($1.15 billion) debt repayment from a unit of Espírito Santo International SA.



Posted 6 weeks 13 hours ago

Dewey’s former chairman, Steven Davis, second from right, and former finance chief, Joel Sanders, third from right, arriving in court in March.
Reuters

The implosion of New York law firm Dewey & LeBoeuf LLP was not a result of intentional wrongdoing by firm management, say lawyers for three former Dewey executives seeking to dismiss criminal charges against their clients.
In court filings, lawyers for former Dewey chairman Steven Davis, former chief financial officer Joel Sanders and former executive director Stephen DiCarmine said their clients lacked both the financial know-how and the intent to perpetrate the alleged accounting fraud that led to their indictment.
The papers, filed on Friday in state supreme court in Manhattan, provide the first glimpse of a potential defense strategy for the three leaders, who Manhattan prosecutors say cooked the firm’s books in a scheme to conceal its deteriorating financial condition.



Posted 6 weeks 1 day ago