BankruptcyProf Blog

Delaware Bankruptcy Capital Status May End With Proposed Law

"A bipartisan bill sponsored by leaders of the House Judiciary Committee may strip Delaware of its status as the premier venue for U.S. bankruptcy cases, costing the state’s economy an estimated $100 million a year.

Lamar Smith, the Texas Republican who chairs the Judiciary panel, introduced the bill with Michigan’s John Conyers, its ranking Democrat. The aim is to prevent court-shopping and make companies reorganize at home 'to ensure maximum input from all affected stakeholders,' Smith said in a statement. Delaware’s Congressional delegation disagreed, citing the Wilmington-based court’s expertise.

'When someone has a specific medical problem, they go to a specialist,' Representative John Carney, a Democrat, said by e- mail. 'Delaware’s courts are our nation’s bankruptcy specialists.' The state’s two U.S. senators, Democrats Thomas Carper and Chris Coons, also oppose the bill.

Under the measure, a corporation may file for Chapter 11 reorganization only in the federal district where its principal place of business or assets are located.

The Chapter 11 Bankruptcy Venue Reform Act of 2011 would thus rule out most of the 90 public companies that since 2006 have sought protection from creditors in U.S. Bankruptcy Court in Wilmington, Delaware, where they are incorporated."

Read more here.

Pennsylvania's Capital City Files for Bankruptcy

"Seeking to stave off a state takeover of its beleaguered budget, the city of Harrisburg, Pa., filed for a rare Chapter 9 municipal bankruptcy on Wednesday.

Harrisburg, the Pennsylvania capital that previously defaulted on its debt, cited a 'continued erosion of its finances,' in a resolution that was passed late Tuesday approving the bankruptcy."

Read more here.

Palmeiro asks for time to sell Grapevine property in bankruptcy

"Former Texas Rangers star Rafael Palmeiro has asked creditors in his real estate bankruptcy case for five years to sell nearly 200 acres of land in Grapevine near Grapevine Mills mall."

Read more here.

MLB withdraws motion to disqualify Dodgers' lawyers

"Los Angeles Dodgers will be allowed to continue to use its lawyers to represent it in its bankruptcy petition, a day after the Major League Baseball withdrew a motion to disqualify the team's lawyers.

In court papers filed with a bankruptcy court in Delaware, the league said it was withdrawing its motion on the suggestion of the court appointed mediator."

Read more here.

Innkeepers, Cerberus set for bankruptcy trial

"Innkeepers USA Trust will try to persuade a judge to force would-be buyers to proceed with their planned $1.12 billion acquisition of some of its hotels as a trial begins on Monday in a U.S. bankruptcy court.

Innkeepers, the bankrupt operator of 72 hotels under Hilton, Marriott and other brands, sued Cerberus Capital ManagementChatham Lodging Trust in August. Earlier that month, Cerberus and Chatham backed out of a joint venture agreement to buy 64 of Innkeepers' properties."

Read more here.

Dodgers' argument fails to move bankruptcy judge

"The Dodgers failed again Wednesday to convince U.S. Bankruptcy Judge Kevin Gross that they need documents about other Major League Baseball teams."

Read more here.

Chevys, El Torito owner files for bankruptcy

"The owner of Mexican restaurant chains Chevys Fresh Mex, El Torito and Acapulco filed for bankruptcy Tuesday, pressured by years of slipping sales and the country’s economic malaise, executives said.

Cypress-based RM Restaurant Holding Corp. said its revenue has fallen to $478 million last year from $553 in 2008. The company’s 178 restaurants are seeing fewer diners, according to the filing in U.S. Bankruptcy Court in Delaware."

Read more here.

Friendly's chain files for bankruptcy

"Friendly's, an ice cream parlor chain known for its Happy Ending sundaes, filed for bankruptcy on Wednesday as the sluggish economy and slow consumer spending claimed another casual dining operator."

Read more here.

The national organization of bankruptcy judges says reporters are welcome to cover Supreme Court Justice Elena Kagan’s talk at its convention in mid-October, if they pay $100.

"The national organization of bankruptcy judges says reporters are welcome to cover Supreme Court Justice Elena Kagan’s talk at its convention in mid-October, if they pay $100."

Read more here.

I will in Tampa for the NCBJ -- can't wait!

-Roksana D. Moradi, Esq.

More MERS news

From: Bankruptcy law discussion list [mailto:BANKR-L@LISTSERV.ILLINOIS.EDU] On Behalf Of Stanley J. Kartchner
Sent: Wednesday, October 05, 2011 7:40 AM
To: BANKR-L@LISTSERV.ILLINOIS.EDU
Subject: More MERS news

For those keeping track, several lawsuits challenging the MERS system were dismissed by a Phoenix U.S. District Court judge: http://www.bloomberg.com/news/print/2011-10-04/mers-wins-dismissal-of-72-lawsuits-challenging-mortgage-registry.html The article also references a recent 9th Circuit decision upholding earlier dismissals of lawsuits against MERS by the same judge.

Stanley J. Kartchner
Chapter 7 Trustee
7090 N. Oracle Rd. #178-204
Tucson, AZ 85704
520-742-1210

Woman Who Won $9 Million Judgment Faces Battle Over Bankruptcy Fees

"Sixteen years ago, Michelle DiLieto's doctors told her she had cancer and removed her reproductive organs. Facing steep bills and ongoing medical complications, she filed for bankruptcy a year later.

As she struggled in bankruptcy, DiLieto was hit with more startling news: her cancer diagnosis was wrong.

She sued the doctors and Yale University in January of 1997 but the case bounced through the judicial system until finally ending up at the state Supreme Court in 2010, where a $9.2 million judgment in the North Branford woman's favor was upheld.

But Michelle DiLieto's legal tussles are far from over. She's now in an ugly court fight with her former bankruptcy trustee, a disbarred Farmington lawyer facing prison time who charges that DiLieto owes him $80,000 in legal fees.

In an unusual hearing before bankruptcy Judge Albert S. Dabrowski in U.S. District Court in Hartford, DiLieto is representing herself against Michael J. Daly, the former trustee in her 1996 bankruptcy case."

Read more here.

Hussey Copper files for bankruptcy protection

"Hussey Copper of Leetsdale has filed for bankruptcy and has a letter of intent with a potential buyer.

The action comes after the 163-year-old copper producer defaulted on a loan agreement with PNC Bank and other lenders and failed to find other backers to refinance its debt."

Read more here.

Friendly's Bankruptcy Filing Imminent, Says Report

"Friendly's is on the verge of bankruptcy, according to a report from the Wall Street Journal. The ice cream and casual dining chain will apparently file for Chapter 11 protection as early as next week. The Journal reports that the over 500 Friendly's location will likely remain open during bankruptcy proceedings, with the help of a $75 million financing deal with Wells Fargo bank."

Read more here.

Kodak Debt Swaps Soar as Camera Maker Said to Weigh Bankruptcy

"The cost to protect Eastman Kodak Co. (EK)’s debt from default jumped as the unprofitable 131-year-old camera maker is said to be weighing options including a bankruptcy filing.

Credit-default swaps linked to the Rochester, New York-based company rose 4 percentage points to 66.5 percent upfront, according to data provider CMA. That means investors would pay $6.65 million initially and $500,000 annually to protect $10 million of Kodak’s debt for five years.

Kodak may seek bankruptcy protection because of concerns raised by possible bidders for its patent portfolio, said three people with direct knowledge of the process. Some potential buyers of the patents are reluctant to proceed with bids because a purchase may amount to a so-called fraudulent transfer if Kodak becomes insolvent, said the people, who asked not to be named because the talks are private."

Read more here.

Dodgers Fans to McCourt: Show Us the Money In Bankruptcy Court!!

"Los Angeles Dodgers season ticket holders want to make sure Frank McCourt isn't screwing them over in the team's bankruptcy proceedings -- and they've filed a motion to make sure they're protected.

Attorneys representing a handful of season ticket holders filed docs with the bankruptcy court in Delaware ...seeking to establish a formal committee of more than 17,000 season ticket holders.

According to the docs, the committee's goal is to make sure Dodger funds are going to what they consider the most important part of the 'fan experience' -- such as acquiring new players, meeting payroll, renovating the stadium, and operating concessions.

Interestingly, the motion makes no mention of stadium security -- which is what everyone's been talking about since the Opening Day beating of Giants fan Bryan Stow."

Read more here.

Deloitte sued for $7.6B in mortgage fraud case

"A pair of lawsuits filed Monday claim that Deloitte & Touche LLP, one of the nation's largest accounting firms, should pay $7.6 billion in damages for failing through years of audits to detect massive fraud at a now-defunct Florida mortgage company.

'They certainly did not do their job,' said attorney Steven Thomas, who represents those suing Deloitte. 'This is one of those cases where the red flags are staring you in the face, and you've got to do a lot, and they did not.'

Deloitte spokesman Jonathan Gandal responded that the company rejects the claims, calling them 'utterly without merit.'

The lawsuits were filed in Miami-Dade Circuit Court on behalf of the bankruptcy trustee for the fraudulent mortgage firm, Taylor Bean & Whitaker, and by Ocala Funding LLC, a company that purchased hundreds of millions of dollars' worth of mortgages from Taylor Bean. The bankruptcy trustee is attempting to recover money for Taylor Bean creditors."

Read more here.

Solyndra cleared for October 27 bankruptcy auction

"Solar panel maker Solyndra LLC, which filed for bankruptcy after borrowing $535 million from the U.S. government, on Tuesday was cleared to begin a quick sale process that some creditors criticized as 'rushed.'

U.S. Bankruptcy Judge Mary Walrath in Delaware approved the plan for an October 27 auction of the business, citing the support for the plan by the Department of Energy (DOE). She also directed the company to attend a major trade show next month to find a buyer for the business."

Read more here.

Dodgers fight MLB request for control of team

"The Los Angeles Dodgers fought back against Major League Baseball's attempt to wrest control of the bankrupt baseball team from Frank McCourt, asking a federal court to delay considering the league's requests to sell the team and throw out its lawyers.

The team, which filed for bankruptcy in June, wants to move forward with its own plans to hold an auction of its broadcast rights next month. The auction is expected to help refinance the team and allow McCourt to hold onto it after bankruptcy.

MLB has disputed the team's need for bankruptcy and questioned McCourt's personal interests and spending. The league filed documents with the court last week asking to present its own plan for the team, most likely a quick sale."

Read more here.

Deed of Trust Assignment and Sale Issues

From: Stanley J. Kartchner
Sender: Bankruptcy law discussion list
To: BANKR-L@LISTSERV.ILLINOIS.EDU
ReplyTo: Stanley J. Kartchner
Subject: deed of trust assignment and sale issues
Sent: Sep 23, 2011 7:51 AM

For those following developments in the area of deed of trust sales occurring without a recorded transfer of the beneficial interest, here is an article about the oral arguments yesterday before the Arizona Supreme Court (highest court in Arizona) addressing two related questions certified by bankruptcy judge Eileen Hollowell in adversary no. 4:10-ap-00727-EWH (Arizona). Although the questions deal with a specific Arizona statute, the court's ruling will certainly affect many foreclosures in Arizona and could have implications in other jurisdictions as well: http://azstarnet.com/article_64c6ed66-f336-5bfc-972e-65740509e6cd.html Stanley J. Kartchner Chapter 7 Trustee 7090 N. Oracle Rd. #178-204 Tucson, AZ 85704 520-742-1210 email: trustee@aztrustee.com

Chuck Greenberg interested in Stars bid, lawyer tells court

"Former Texas Rangers CEO Chuck Greenberg is interested in bidding for the bankrupt
Dallas Stars of the National Hockey League, a lawyer said in a Delaware court
Monday, according to a Bloomberg news report.
 
Greenberg is part of Texas Hockey Acquisition Co. and is interested in bidding,
said Greenberg's attorney, Jeffrey M. Schlerf of Fox Rothschild, LLP.
 
U.S. Bankruptcy Judge Peter Walsh agreed to speed up the usual process for
approving an auction, letting the team return to court Sept. 22 to seek auction
rule approval, according to the report."

Read more here.