%1

The U.S. Securities and Exchange Commission yesterday urged a federal judge to appoint a trustee to manage the Woodbridge Group of Companies, a bankrupt property developer the regulator accused of being a $1.2 billion Ponzi scheme, Reuters reported. The regulator has said investors are owed more than $961 million, and has alleged the company’s owner, Robert Shapiro, used at least $21 million for private jets, luxury cars, wine and political donations. Shapiro has denied the allegations. Larry Perkins, who was hired as a chief restructuring officer in October, said that the company is investigating the allegations.

Billionaires Paul Singer and Donald Sussman took a run this week at the quiet, powerful fee committee that has blessed hundreds of millions of dollars of spending in Energy Future Holdings Corp.’s bankruptcy, according to a WSJ Pro Bankruptcy commentary. With hundreds of millions more in legal and adviser bills expected to arrive before the big bankruptcy wraps up, Singer’s Elliott Management Corp. and Sussman’s Paloma Partners Management Co. said that it is time for the fee-review panel to open up its books to some fresh eyes. The result was a mixed victory, according to the commentary. Judge Christopher Sontchi agreed that creditors need an active, paid representative on the committee. He disagreed that Elliott and Paloma — the most significant creditors left standing in Energy Future’s long-running case — should get to choose and pay that representative.

Westinghouse Electric Co. says investors that bought their way into the company’s bankruptcy are now attempting to drive up the value of a $2 billion settlement purchased last year from the owners of an unfinished nuclear power plant in South Carolina, WSJ Pro Bankruptcy reported. The dispute stems from the sale of monetary claims asserted in Westinghouse’s ongoing chapter 11, a common development in large corporate bankruptcies that can affect negotiations between creditors and a company as it attempts to reorganize its business. The claims, among the largest to be resolved in the bankruptcy, concern the V.C. Summer power plant near Jenkinsville, South Carolina. Westinghouse said in a letter filed on Monday in the U.S. Bankruptcy Court in New York that the new owners of the power-plant claim, a group of investors represented in court by Citibank NA, are raising new negligence and misconduct allegations against the company that would push the value of their claim to $7.5 billion. In court papers, Westinghouse has said that amount is billions of dollars in excess of what they may be entitled to.

The judge overseeing the restructuring process of Brazilian telecom company Oi SA yesterday approved a massive debt restructuring plan and called a proposed shareholders meeting “absolutely unnecessary,” Reuters reported. In the decision, Judge Fernando Viana gave the official go-ahead to Latin America’s largest ever in-court debt reorganization. On Dec. 20, a majority of Oi creditors approved a plan to restructure 65 billion reais ($20.1 billion) of debt, putting an end to a year and a half of negotiations. The plan upset major shareholders, however, as it hands up to 75 percent of the company to creditors that include distressed debt funds, such as Aurelius Capital Management, and severely dilutes equity.

Takata Corp., the parts supplier that filed for bankruptcy after sparking the largest auto recall in history, called back 3.3 million air bags as part of a U.S. order that scheduled repairs of the potentially deadly devices over several years, Bloomberg News reported. The supplier identified at least 15 automakers that purchased the air bags, including Toyota Motor Corp., Honda Motor Co., General Motors Co., BMW AG and Tesla Inc. Takata said that it will work with the companies to develop a remedy for each of their vehicles, and urge consumers to get their air bags replaced. Defective Takata inflators can explode in a crash and spray vehicle occupants with metal shards. The parts have been linked to 13 deaths in the U.S. and hundreds of injuries, and mounting liabilities from the recalls pushed Takata to file for bankruptcy in June. Key Safety Systems Inc., a supplier owned by China’s Ningbo Joyson Electronic Corp., plans to acquire the company.

Owners of unsecured bonds in rig firm Seadrill have posted a cash deposit to back an alternative financial restructuring, paving the way for talks with the drilling operator over its future, Reuters reported. Seadrill, once the largest drilling rig operator by market value, filed for bankruptcy protection in a U.S. court on Sept. 12 after being hit hard by cutbacks in oil company investment following a steep drop in crude prices. The company’s main owner, Norwegian-born billionaire John Fredriksen, drew up Seadrill’s original $1.1 billion restructuring plan with Centerbridge Partners L.P. and a group of hedge funds in September. A U.S. bankruptcy court in Texas had been scheduled to hold a preliminary hearing on Fredriksen’s plan on Jan. 10, but this has been postponed until Feb. 1 after the payment of a deposit for a rival solution.