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The Securities and Exchange Commission has sued Robert Shapiro, accusing the former chief executive of Woodbridge Group of operating a Ponzi scheme that raised more than $1 billion from individual investors for the now-bankrupt real estate operation, WSJ Pro Bankruptcy reported. Shapiro is accused of lying to investors, signing falsified documents and making “Ponzi payments to investors,” as well as using investor funds for his own personal enjoyment, among other wrongs, according to papers unsealed yesterday in a Florida federal court. A lawyer for Shapiro says the former chief executive denies the SEC’s allegations. “Mr. Shapiro is cooperating with the bankruptcy to protect the assets held for the benefit of Woodbridge’s stakeholders,” said Ryan O’Quinn, a lawyer for Shapiro. “He denies any allegation of wrongdoing and looks forward to his opportunity to defend himself in a court of law.” Woodbridge and some of its affiliates filed for chapter 11 bankruptcy protection Dec. 4, a year into an SEC probe of its fundraising activities.

People with injuries or economic damage from Takata Corp.-made air bags will get a fraction of a penny for each dollar they are owed, under a U.S. chapter 11 bankruptcy plan unveiled this week, WSJ Pro Bankruptcy reported. The bankruptcy payment plan for Takata’s U.S. unit sets out a system for distributing the beleaguered company’s assets, including a share of cash from the $1.6 billion sale of the non-air bag businesses to Key Safety Systems Inc. Money from the Key sale won’t go far to address the billions of dollars of damages stemming from Takata’s potentially defective air bags, court papers indicate. Takata U.S.’s chapter 11 plan estimates personal-injury and wrongful-death damages alone will top $1 billion. Add to that economic losses such as the cost of renting vehicles while air bags are replaced, and the money spent by car makers cleaning up after Takata’s defective parts, and the bankruptcy payout falls billions of dollars short of covering the damage from the defective parts. An official overseeing a massive recall of the dangerous safety devices, John Buretta, reported in November that the “words ‘grenade’ and ‘ticking time bomb’ accurately convey the lethal potential” of Takata air bags installed in millions of vehicles around the world.

A committee of unsecured creditors in the bankruptcy of the Roman Catholic Diocese of Great Falls-Billings is suing the church, alleging that more than $70 million in real property and other assets are part of the church’s estate and should be available for creditors and survivors of sex abuse by church officials, the Billings (Mont.) Gazette reported. The adversarial complaint, filed on Monday in U.S. Bankruptcy Court, said that getting the disputed assets issue resolved “is critical” to the church’s estate because it will “determine the magnitude of distributions to its creditors, including survivors of the childhood sex abuse enabled by (the diocese) or whether (the diocese) can continue to avoid being held accountable to the survivors.” Attorney James Stang, of Los Angeles, Calif., who represents the unsecured creditors committee, said yesterday that the committee's goal is to reach a negotiated settlement and that the complaint is "part of the process." The committee represents eight sex abuse survivors, Stang said.

Polara Golf, the maker of one of the most controversial products in the modern history of golf, has filed for chapter 11 protection, the Washington Business Journal reported. The company — whose legal name is Aero-X Golf Inc. — has less than $1 million in assets and nearly $3 million in liabilities, according to a chapter 11 petition filed Dec. 13 in U.S. Bankruptcy Court for the Eastern District of Virginia. Polara makes unusually dimpled golf balls the company says will help correct a golfer’s slice by as much as 50 percent. It makes no bones about it: The company’s brand of “ultimate straight” balls are printed with an arrow showing players how to line up the ball for the maximum chance of a perfectly straight drive. Polara's inventors patented their first version in 1974 and began selling the ball in 1977. The U.S. Golf Association wouldn’t approve the ball for use in tournaments, however, prompting Polara to sue the association. The case stretched on for seven years, until the USGA settled the case and agreed to pay Polara $1.4 million to remove it from the market. The bankruptcy case is related to a dispute with one of the company’s former executives. The largest claim is a $1.3 million judgment owed to David Felker, who was listed as the chief executive of Polara in articles about its products from 2011 through 2013.

A District Court judge has upheld a bankruptcy court judge’s order dismissing an involuntary bankruptcy case filed by the state of Montana seeking $219,258 in taxes from Yellowstone Club co-founder Tim Blixseth but will allow the state to amend its case should new information arise, the Great Falls (Mont.) Tribune reported. U.S. District Court Judge Jennifer A. Dorsey ruled Dec. 15 that there were no longer three “qualified creditors” as mandated in the 2011 involuntary bankruptcy filing against Blixseth and disagreed with Montana’s assertion that a bankruptcy court erred when it determined that claims by Idaho were part of a good faith, or bona fide, dispute. And that the bankruptcy court was right to determine that claims by the Yellowstone Club did not meet involuntary bankruptcy standards. Judge Dorsey granted Montana’s motion to file for “supplemental authorities that were filed after the parties briefs were filed in this case.”

For further analysis of the decision and case, be sure to read this column from the Rochelle Daily Wire.