BankruptcyProf Blog

Bondholder group files new Lehman repayment plan

" *Three competing plans to go before bankruptcy judge

Bondholders fighting for control of Lehman Brothers Holdings Inc's (LEHMQ.PK) repayment plan have amended a proposal for the company's restructuring that would provide them a slightly higher recovery.

The bondholder group, led by hedge fund Paulson & Co and the California Public Employees Retirement System, filed the plan late on Wednesday in U.S. Bankruptcy Court in Manhattan.

The updated filing, which would allow 25.4 percent recovery for unsecured creditors, follows an initial proposal in December that called for recoupment of about 24.5 percent."

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Circor's unit emerges from bankruptcy protection

"Industrial machinery maker Circor International Inc said its valve manufacturing subsidiary, Leslie Controls Inc, has emerged from bankruptcy protection.

It had filed for bankruptcy protection in July in a bid to isolate and resolve asbestos-related personal injury claims as the claims had exceeded the unit's profit. [ID:nSGE66B0F6]

Circor said in July, that a trust would been formed to handle such litigation claims, with a fund of about $75 million.

Asbestos, once widely used in manufacturing, has been partially banned by the U.S. government after it was proven to cause cancer, often in people who were exposed by breathing in asbestos particles.

The company, which has a market value of about $784.8 million, said Circor and its unit Leslie Controls have funded trusts that will repay asbestos claims."

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Lehman strikes $144 mln settlement with NY state

"Cash-strapped New York state would receive about $144 million from Lehman Brothers Holdings Inc under a proposed settlement resolving tax claims against the defunct financial giant.

The payment of corporate back tax and interest would settle claims that initially sought $1.17 billion, according to a motion filed on Tuesday in U.S. Bankruptcy Court in Manhattan."

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Vallejo Municipal-Bankruptcy Morass Prompts U.S. States to Prevent Filings

"Soon after Indiana state Senator Ed Charbonneau introduced legislation in January to bolster cash- strapped cities on the verge of bankruptcy, he got an unexpected phone call.

It was Bill Cooper, city manager of Hamtramck, Michigan, whose own state has refused permission for the Detroit suburb to file for reorganization. Cooper urged sending state help to cities before they reach a crisis, Charbonneau said.

'We’re putting a process in place with the intent of avoiding the need for bankruptcy,” Charbonneau, a Valparaiso Republican, said in a telephone interview April 19. “The whole purpose of it is to try to get fiscal help to distressed local units of government so they can correct their situation before any need for bankruptcy would arise.' "

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Tuscaloosa attorney charged with bankruptcy fraud

"BIRMINGHAM, Ala. (AP) — Federal prosecutors have charged a Tuscaloosa attorney with bankruptcy fraud.

Authorities say 60-year-old Donald Dionne is charged with making a false oath or account.

Prosecutors say that between December 2008 and August 2010, Dionne included false information in five bankruptcy petitions in order to have those cases assigned to divisions they would not have been assigned to had the correct information been included.

In a plea agreement filed Tuesday, Dionne agreed not to practice law if on probation or supervised release. The maximum penalty for the charge is 5 years in prison and a $250,000 fine."

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Star Chef, Facing a Suit, Files for Bankruptcy

"GEOFFREY ZAKARIAN has made all the right moves for a celebrity chef. He is a fixture on four Food Network programs, including “Chopped.” Over the years, he has operated a number of high-profile restaurants, three of which have won three stars from The New York Times. He now has two places in fashionable New York hotels and a hand in hotels in Miami Beach and Atlantic City.

But his latest step doesn’t follow the script.

He has filed for personal bankruptcy, a move that could help fend off more than $1 million in legal claims from his kitchen staff at Country in the Carlton Hotel, along with a former partner in the restaurant, which closed nearly three years ago.

Of the 179 creditors listed in the Chapter 7 bankruptcy petition he filed on April 6 in federal court in Bridgeport, Conn., 152 are former cooks at Country. They are part of a class action lawsuit against Mr. Zakarian and his management firm that claims that when he was an owner of the restaurant and its chef, he failed to pay the workers time and a half for overtime, falsified pay records to shortchange them and deducted from their paychecks for staff meals they were not given. They are seeking $1 million in damages and $250,000 in penalties."

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Fed Seeks Comment on Bankruptcy Of Financial Firms

David P. Goch: "Yesterday, the Federal Reserve Board indicated it, in conjunction with
the Administrative Office of the United States Courts, will seek comment
on two Dodd-Frank required bankruptcy-related studies to determine
whether bankruptcy laws should be modified in light of potential
financial firm failures.

According to the proposal <http://op.bna.com/bar.nsf/r?Open=cbre-8g5qw3>
, one study will focus on whether changes are needed to Chapters 7 and
11 of the Bankruptcy Code, the other will ask whether more international
coordination is needed when the matter involves interconnected firms
with operations around the globe.

Comments are due 30 days following the future publication of the
proposal in the Federal Register."

 
A copy of the proposal is attached.

Rhino head, snow leopard sold in US auction

"The mounted head of an endangered white rhinoceros and the stuffed remains of a highly endangered snow leopard, remnants of the fortune amassed and lost by an Alaska real-estate titan, have been auctioned off to pay some of his debts, officials said on Monday.

The wildlife trophies were part of the estate auctioned off in Anchorage to settle the bankruptcy case of Robert Kubick, a once-wealthy businessman and big-game hunter who was imprisoned after being convicted of defrauding his creditors."

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Maurice, Louisiana Couple Convicted of Perjury Charges Related to Bankruptcy Assets

"Thad Corey Theall, 52, and Theresa Theall, 51, both of Maurice, La., have been convicted by a federal jury in Lafayette, La., of perjury charges relating to bankruptcy assets, United States Attorney Stephanie A. Finley announced.

Thad and Theresa Theall were indicted in July of 2009, in a two-count indictment: count 1, concealment of bankruptcy assets false statement under penalty of perjury; and count 2, concealment of bankruptcy assets false oaths. Testimony during trial revealed that The Theall’s filed for bankruptcy on June 16, 2005, and in relation to that Bankruptcy Petition, failed to disclose information under the bankruptcy filings which were verified under penalty of perjury. This resulted in the concealment of proceeds of approximately $100,000.00 from the sale of property located on Ambassador Caffery Parkway. It was further revealed that while under oath during a meeting of creditors before the U.S. Trustee in August of 2005, The Theall’s provided false information regarding the sale of the Ambassador Caffery Parkway property to conceal the $100,000.00 proceeds. Thad Corey Theall was found guilty on both counts, and Theresa Theall was found guilty on count 1."

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May 18, 2011: The Pre-Workout Agreement: What It Is, Why You Want It, What’s in It

Program Information:
Some of the most serious lender liability problems arise in connection with a
lender’s actions and statements that are made in the course of a loan workout
and restructuring negotiation. Lenders may find themselves subject to a breach
of contract based on a borrower’s allegations that the lender orally agreed to
restructure the loan or orally waived a breach, and then reneged on such an
agreement or waiver.

A Pre-Workout Agreement can help mitigate these risks. This program will
discuss when to get the Pre-Workout Agreement and what it should contain.
This program will also cover commercial loan workout strategies and pre-bankruptcy
planning from the perspective of a secured commercial lender.

Speakers:
Robert A. Willner, Buchalter Nemer

Location:
Los Angeles County Bar Association
Wilshire Conference Room
1055 West 7th Street, 27th Floor
Los Angeles, CA 90017

Parking:
LACBA Parking Structure - $10 with validation

Times:
Registration: 11:30 AM
Meal/Reception: 12:00 PM
Program: 12:00-1:30 PM

Prices:
CLE+ Members (meal not included) FREE
CLE+ Plus Members with meal $25.00
Commercial Law and Bankruptcy Section Members with meal $55.00
LACBA Members with meal $65.00
All Others with meal $75.00
AT THE DOOR PAYMENT for All with meal $80.00

If you wish to register by Phone with Visa, MasterCard or American Express please
call our Member Services Department at (213) 896-6560 Mon-Fri, 9 a.m.- 4:30 p.m.
Member Services Department: msd@lacba.org
Registration Code: 011262

1 hr CLE Credit

Ex-developer loses appeal in bankruptcy fraud case

"Former Anchorage developer Robert Kubick, now serving time for bankruptcy and tax fraud in a federal prison in California, may have to pay up to half a million dollars in restitution to his creditors, according to a recent ruling by the federal appeals court in California.

Kubick received a five-year sentence in early 1998 after he pleaded guilty to felony charges in what prosecutors have called the biggest individual bankruptcy fraud case in state history. He was sentenced to five years in prison and ordered to pay $24,000 in restitution, according to federal prosecutors.

Kubick, 59, appealed his sentence. While the 9th U.S. Circuit Court of Appeals rejected all his claims, it overturned District Court Judge John Sedwick's ruling that Kubick had to pay only $24,000 in restitution when 40 creditors were owed more than $15 million, according to Assistant U.S. Attorney James Barkeley."

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U.S. judge to sanction LPS for lying to court

"A federal bankruptcy judge in New Orleans said she will impose sanctions on Lender Processing Services, after concluding that the mortgage servicing company deliberately committed fraud on the court in a foreclosure case, by giving false testimony and submitting a 'sham' affidavit."

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Toni Braxton: On Bankruptcy, Beating Her Illnesses and the Braxton Family Values

"Your first bankruptcy occurred while you were signed to LaFace,but you weren’t able to talk about it. What went wrong?

No I couldn’t [talk about it] because I had a 10-year gag order. After TLC talked publicly about their bankruptcy [the label prohibited] other LaFace artists to talk, but now I can. I sold more than 40 million records, yet my royalties were less than $2000 dollars. People don’t understand that this issue went all the way to Congress about bankruptcy. All contracts are null and void except for a recording artist. Can you believe it? But the industry has changed now."

Read the article here.

Madoff judge orders bank employees' names unsealed

"The judge overseeing the liquidation of Bernard Madoff's investment firm on Tuesday rejected requests by banks to keep secret the names of current and former employees mentioned in lawsuits seeking to recover alleged improper profits tied to the imprisoned Ponzi schemer.

The public disclosure of names of workers affiliated with financial institutions including Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N) and UBS AG (UBSN.VX) was ordered by U.S. Bankruptcy Judge Burton Lifland."

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Station Casinos Affiliates Files Bankruptcy to Implement Green Valley Sale

"Station Casinos Inc. affiliates including Fiesta Station Inc. filed for bankruptcy protection to implement an asset sale that is part of the parent company’s reorganization plan.

Fiesta Station listed assets of as much as $500 million and debt of more than $1 billion in a Chapter 11 petition filed yesterday in U.S. Bankruptcy Court in Reno, Nevada. Green Valley Ranch Gaming LLC and 25 other related companies also sought court protection."

Read more here.

Claims Against Tribune Chairman Zell ‘Have Merit,' Bankruptcy Judge Says

"Tribune Co.’s bankruptcy judge said potential lawsuits against company Chairman Sam Zell related to the billionaire’s $8.2 billion buyout of the newspaper publisher “have merit.”

U.S. Bankruptcy Judge Kevin Carey didn’t immediately rule on a request by Zell, 69, to either prevent any lawsuits against him from going forward or require that an independent trustee pursue the litigation. In a lawsuit in November, creditors accused Zell of pushing forward with the buyout even though he and others involved knew the transaction would add too much debt on Tribune for the company to survive."

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Court Re-Seals Explosive David Bergstein Report After Details Made Public

"The federal bankruptcy court judge overseeing the saga of troubled film executive David Bergstein has re-sealed an explosive report by a court-appointed trustee about Bergstein’s financial dealings that was made public on Monday—but not before the report, obtained by The Hollywood Reporter, revealed what the trustee describes as a mass scheme of corruption, incompetence, perjury and a conscious effort to mislead the court.

Ronald Durkin, a forensic accountant and former FBI agent who for the past year has been serving as a court-appointed trustee in the Bergstein matter, issued a nearly 400-page report on April 5 detailing the affairs of Bergstein and his associate Ronald Tutor in the movie business. The report grew out of a rare involuntary bankruptcy case.

 

On Monday presiding judge Barry Russell allowed the report to be unsealed. An attorney for Bergstein, his wife and one of his companies then filed an emergency appeal with the court to try and overturn the ruling on the report, which Bergstein’s attorney claims was to remain private. "

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Tinker the teen T. rex to be released after lawsuit

"The fossilized remains of Tinker the teenage T. rex soon could be returning to the prospectors who unearthed them, after a recent ruling from a federal bankruptcy court.  

Most of the 65-million-year-old fossils have spent years in storage in Pennsylvania under the jurisdiction of a trustee, after the man hired to restore them filed for bankruptcy protection. The trustee wanted fossil hunters Ron Frithiof of Austin, Texas, and Kim Hollrah of Iowa to pay $75,000 for services from Barry James and his company, Prehistoric Journeys."

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Ex-administrator is accused of bankrupting a Santa Monica school by misusing $1 million

"The former director of a private Santa Monica high school is alleged to have misused more than $1 million in school funds, forcing the school into bankruptcy near the beginning of the term and blindsiding many families who had paid a full year's tuition, according to documents and interviews.

Many of the allegations are part of a civil lawsuit filed Friday in U.S. Bankruptcy Court by Concord International High School against former administrator Susan Packer Davis, her husband, Eric Hille, and her son, Alexander Davis."

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U.S. trustee objects to Borders' bonus plan

"The Office of the U.S. Trustee objected to a proposal by Borders Group Inc (BGPIQ.PK) to pay over $8 million in bonuses to high-level employees this early in its bankruptcy proceeding."

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