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Power-plant operator GenOn Energy Inc. claimed victory yesterday in a high-stakes fight that had clouded its plan to separate from NRG Energy Inc. and exit bankruptcy, the Wall Street Journal reported. Judge David Jones assigned a zero dollar value to the claims that owners of Maryland power plants have been pressing against GenOn and its parent NRG. The ruling eases the way for GenOn to gain court-approval of its chapter 11 plan on Monday in the U.S. Bankruptcy Court in Houston, Texas. GenOn filed for chapter 11 protection in June, and the company has the support of most of its creditors for a restructuring that will swap debt for equity. NRG isn’t in bankruptcy, but it is undergoing a transformation that involves cutting ties with its subsidiary. The company acquired GenOn, an operator of 32 power plants in eight states, in December 2012. Flat demand, falling prices and new competition have strained GenOn’s finances. GenOn’s dispute with the owners of two power plants in Maryland arose before the bankruptcy.

A Georgia-Pacific LLC unit is blaming “abuses in the tort system” for the skyrocketing number of lawsuits that forced it to file for chapter 11 protection on Thursday, Texas Lawyer reported today. Bestwall LLC, which was created in July to manage Georgia-Pacific’s asbestos docket, is the latest firm to file for bankruptcy due to rising numbers of lawsuits brought by plaintiffs who claim they or their family members got mesothelioma from exposure to asbestos in their products. But, in a refrain popular among tort reformers, Bestwall alleges that plaintiffs lawyers aren’t being truthful about all the products their clients were exposed to that might have contained asbestos. “The breadth and magnitude of the asbestos litigation pending against Bestwall are wildly disproportionate to any legal liability Bestwall could possibly have,” wrote Garland Cassada, an attorney for Bestwall, in an information brief filed in bankruptcy court. Cassada, of Robinson, Bradshaw & Hinson, is working alongside Bestwall’s lead bankruptcy counsel, Greg Gordon, a partner in Jones Day’s Dallas office. “The massive increase in the number of claims against, and the size of the plaintiffs’ settlement demands to, Bestwall have been driven by various interrelated shortcomings of and abuses in the tort system.”

A $620 million court fight that could upset GenOn Energy Inc.’s plan to separate from NRG Energy Inc. will wrap up next week, with a ruling as early as today, WSJ Pro Bankruptcy reported. Bankruptcy Judge David Jones said at a hearing on Friday in Houston that he expects to rule from the bench on a dispute between GenOn and owners of power plants in Maryland. Final arguments are set to start this afternoon in the U.S. Bankruptcy Court for the Southern District of Texas. Owners of the Maryland plant accuse GenOn of draining cash from GenMa, leaving them with a financially unstable tenant. GenOn denies the allegations, and says plant owners have no claim to press in its bankruptcy.

The adviser in charge of liquidating Gawker Media LLC is putting up for sale potential legal claims the former blog publisher may have against Peter Thiel, the billionaire venture capitalist who secretly financed litigation that drove the company into bankruptcy, the Wall Street Journal reported today. The decision expands a marketing process already under way for Gawker Media’s flagship site, Gawker.com, which ceased operation in August 2016. Parties have subsequently expressed interest in Gawker Media’s potential causes of action against Thiel, prompting the decision to include them in the sale process, said William Holden, a managing director at Dacarba LLC who is overseeing the sale. Thiel financed Hulk Hogan’s successful lawsuit against Gawker Media, the ruling on which resulted in a $140 million judgment and forced the company and founder Nick Denton into chapter 11. The case concerned publication on Gawker.com of excerpts from a sex tape featuring Terry Bollea, Hogan’s real name.

A chapter 11 trustee representing a Tri-State area coal entrepreneur has filed suit against an Ohio-based bank and an affiliated insurance agency alleging the bank withheld information about the true value of the companies in an alleged effort to bamboozle him into a financial agreement that bankrupted the producer, the Huntington (W. Va.) Herald-Dispatch reported today. On behalf of Dennis Ray Johnson II, the former owner of nine coal companies, the trustee filed a federal lawsuit in the Southern District of West Virginia against Peoples Bank, Peoples Insurance Agency, Great American Insurance Company of New York and bankruptcy receiver Zachary B. Burkons. Johnson's companies, which were based in West Virginia and Kentucky, included DJWV, Southern Marine Services, Southern Marine Terminal, Redbud Dock, Green Coal, Appalachian Mining & Reclamation, Producer's Land, Producer's Coal and Joint Venture Development. Trustee Thomas Fluharty alleges through a long-standing relationship between Johnson and a former Peoples Bank employee, the bank convinced the coal group to enter into a forbearance agreement in 2015 to prevent foreclosure. The bank and Johnson had started their loan relationship in 2011, which resulted in about $19 million of loans.

The potential sale of a bankrupt Eden hospital’s assets faces an objection from the lien holder of two hospital properties, the Winston-Salem (N.C.) Journal reported. The filing by First Citizens BancShares Inc., submitted yesterday, comes two days after the board of directors for Morehead Hospital accepted the bid of Miami for-profit company Empower iHCC Inc. for the assets. Judge Benjamin Kahn, with the U.S. Bankruptcy Court for the Middle District of N.C., could say at a hearing on Monday in Greensboro whether he approves of the board’s choice. The hospital filed for chapter 11 bankruptcy protection July 10. First Citizens has a $1.34 million lien on the Dayspring and Thomson Street buildings. The bank was among seven qualified bidders for the assets. It submitted a credit bid of $1.34 million for the real property collateral of the buildings. Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore.