Key Safety Systems has agreed to terms on the $1.6 billion purchase of assets of Takata Corp., stricken by a recall of its faulty vehicle air bags, and final documents will be signed in less than two weeks, a lawyer for Takata’s U.S. unit said on Monday, Reuters reported. Takata and its U.S. unit, TK Holdings Inc., filed for bankruptcy in June and the asset sale to Key Safety Systems, or KSS, is the cornerstone of its plan to raise funds to compensate automakers and drivers. <b>Marcia Goldstein</b>, a lawyer for TK Holdings, told a U.S. bankruptcy judge on Monday that a U.S. deal had been reached and was being reviewed by lawyers in Japan, Germany and elsewhere. The sale must be approved by the U.S. Bankruptcy Court in Delaware, as well as regulators.
Citigroup Inc. and the remnants of Lehman Brothers Holdings Inc. have resolved a fight over $2.1 billion that dates to the financial crisis, while quietly burying a key question about derivatives-trading practices, Bloomberg News reported. Citigroup agreed on Friday that it will give back $1.74 billion to the estate of the failed New York-based investment bank. Citigroup had kept about $2.1 billion that Lehman had on deposit with it for trades on everything from interest rates to corporate and sovereign debt at the time of the 2008 bankruptcy. That will be a boon for Lehman’s unsecured creditors in the 10-year-old bankruptcy case. The settlement came 40 days into an epic trial in New York that began last April, and was shedding new light on the frenzied weekend before Lehman’s bankruptcy filing on Sept. 15, 2008. Lehman brought up phone recordings and messages from Citigroup traders, saying comments like "ringing the register, homey” showed how the bank tried to feast on Lehman’s carcass. Citigroup said that it was following accepted standards on closing out trades.
The Hongkong and Shanghai Banking Corp. won a temporary reprieve from an investigation into its collection practices leading up to China Fishery Group Ltd.’s bankruptcy, the Wall Street Journal reported on Friday. During a hearing in New York on Thursday, U.S. Bankruptcy Judge James Garrity Jr. agreed to place the investigation, which he had authorized, on hold while lawyers for HSBC pursue an appeal. William Brandt Jr., a bankruptcy court-appointed trustee currently marketing China Fishery’s Peruvian fishing enterprise, won a court order from Judge Garrity in July allowing him to investigate the bank for aggressive collection efforts that Brandt says may have damaged China Fishery’s business. HSBC says it is being unlawfully burdened by having to litigate in a foreign jurisdiction. The bank says it has no connection to China Fishery in the U.S. and shouldn’t be subjected to a bankruptcy probe by a U.S. court.
New York City taxi mogul Evgeny Freidman is being sued for $12 million that he borrowed from dozens of his taxi companies that are now in bankruptcy, the Wall Street Journal reported. The trustee who filed the federal lawsuit is accusing Freidman of using “his position of ownership, domination and control of the [taxi companies] to strip and divert assets … for his personal benefit,” according to the complaint filed in U.S. Bankruptcy Court in Brooklyn. The legal action was brought by a chapter 7 trustee Greg Messer, who took over more than three dozen of Freidman’s taxis last year amid a dispute over a $34 million bank loan. The lawsuit, if successful, would recover money to pay the loan and other debts owed by the taxi companies.
Lynn Tilton, whose aggressive management style made her a success on male-dominated Wall Street, won a U.S. Securities and Exchange Commission trial she’d spent months fighting to avoid, Bloomberg News reported yesterday. SEC administrative law judge Carol Fox Foelak ruled in favor of Tilton over allegations that she and her firm, Patriarch Partners LLC, bilked investors out of more than $200 million. “It is concluded that the violations” alleged by the SEC are “unproven,” Foelak wrote in her ruling issued Wednesday. “Thus, the proceeding will be dismissed.” The decision follows a three-week trial that ended last November. Tilton, who repeatedly argued that the SEC’s internal legal process is unfair to defendants, went all the way to the U.S. Supreme Court in her unsuccessful efforts to have the case heard in federal court, rather than before an SEC administrative judge.
Gaming regulators in Louisiana and Missouri have granted the licenses and regulatory approvals necessary for the restructuring of Caesars Entertainment and Caesars Entertainment Operating Co., the Las Vegas Review-Journal reported today. The approvals in those two states were the last major hurdles for Caesars to clear to exit chapter 11 protection. The company expects to be operating under the restructured corporate governance in early October. The company won its final approvals in Nevada in August. Caesars filed for chapter 11 protection in January 2015, and after two years of contentious negotiations among creditors, Bankruptcy Judge Benjamin Goldgar of the Northern District of Illinois in Chicago approved the company’s bankruptcy plan in January 2017. Company shareholders overwhelmingly approved a merger of Caesars Entertainment in two separate votes in July.
