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Plaintiffs suing General Motors Co. over faulty ignition switches and other alleged vehicle defects have reached a $1 billion settlement requiring the automaker to turn over that amount of stock, a lawyer for the plaintiffs said in a court hearing on Friday, Reuters reported. GM lawyer Richard Godfrey strongly criticized the agreement, telling U.S. District Judge Jesse Furman in Manhattan the Detroit-based company was given no say in the deal negotiated between the plaintiffs and a trust set up for creditors of “old GM,” which holds many liabilities predating the automaker's 2009 bankruptcy. Godfrey said that the settlement was a result of collusion between the plaintiffs and the trust, and "a complete surrender and sellout using new GM's money." The ignition switch litigation consolidated before Furman stems from GM's 2014 recall of 2.6 million vehicles with defective switches. One type of switch has been linked to nearly 400 injuries and 124 deaths. The claims have expanded to include a variety of alleged defects in millions of cars.

Avaya Inc.’s recent deal to exit bankruptcy has put some of the telecom company’s pensioners at ease, but a small group stands to lose a significant portion of their retirement income, the Wall Street Journal reported today. Under a deal announced on Monday to bring Avaya out of chapter 11, benefit payments to nearly 8,000 participants in a legacy pension plan for salaried workers will be taken over by the Pension Benefit Guarantee Corp., the federal government’s retirement guarantor. For those retirees, not much would change if the deal wins court approval — they would begin receiving their monthly checks from the PBGC, the largest single creditor in Avaya’s bankruptcy, instead of the company itself. The PBGC guarantees pensions up to a certain amount depending on age; for a 65-year-old pensioner, that cap is $64,432 a year. Early analysis by the PBGC shows that 100 percent of those 8,000 retirees’ benefits are guaranteed by the agency. And payments to another 6,900 people in a separate plan covering hourly employees will remain the company’s responsibility after it surfaces from bankruptcy.

Knight Energy Holdings LLC has filed for Chapter 11 bankruptcy, court records show, KATC.com reported. The petition, filed on Tuesday in federal court, indicates that the company has about $50 to $100 million in assets, compared to $100 to $500 million in debt. The company has been embroiled in controversy for several years. In 2015, Mark Knight, former Knight Oil Tools CEO, was indicted along with two former law enforcement officers on charges of drug racketeering. Knight, former Lafayette Parish Sheriff Deputy Jason Kinch and former Louisiana State Trooper Corey Jackson, are accused of conspiring to plant drugs in Bryan Knight's, Mark Knight's brother's, vehicle so he would be discredited during legal talks over the future of the company. Their trial is set for later this month. Last year a fourth man indicted in the case pleaded guilty. 

Three former executives at Transmar Commodity Group Ltd have been charged with defrauding banks to win a $400 million credit line for their now bankrupt New Jersey-based cocoa trading company, federal prosecutors said yesterday, Reuters reported. Peter G. Johnson, who was Transmar's chief executive; his son Peter B. Johnson, who oversaw Transmar's Euromar Commodities affiliate; and Thomas Reich, the former finance vice president, were each charged with bank fraud, wire fraud affecting a financial institution and conspiracy to commit fraud. Transmar, a Morristown, New Jersey-based unit of Transmar Group Ltd, had sold cocoa products to chocolate makers such as Hershey Co and Nestle SA prior to filing for chapter 11 protection last Dec. 31. Prosecutors accused the defendants of "lying repeatedly" from 2014 to December 2016 by giving banks false "borrowing base" reports that inflated the amount of collateral Transmar had to support its borrowings. Transmar owed the banks roughly $360 million at the time of the bankruptcy, prosecutors said.

Takata Corp.’s bankrupt U.S. business will ask a federal judge today to suspend lawsuits against automakers that have been brought by people injured by its faulty air bag inflators, something that opponents say is an abuse of the law, Reuters reported. Takata and TK Holdings Inc., the company's U.S. unit, filed for bankruptcy in June and said that they faced tens of billions of dollars in liabilities from its inflators, which are subject to the biggest recall in automotive history. Bankruptcy automatically stayed hundreds of lawsuits against TK Holdings for wrongful death, injuries, economic loss and breach of consumer protection laws. But in July the company sought a preliminary injunction to suspend lawsuits against automakers that use its inflators. Without the injunction, Takata said the litigation would distract management from completing the sale of the company's viable operations to Key Safety Systems for $1.6 billion and could threaten the supply of air bag inflators to replace recalled ones. Plaintiffs' lawyers called the requested injunction "an abuse of the bankruptcy laws for the benefit of all of the world's largest automobile manufacturers." They said that Takata's request would delay consideration of plaintiff's lawsuits for six months or more, which would be a very long time for the plaintiffs. The official bankruptcy committee that represents injured drivers said in court papers the injunction would have "human consequences" and prevent people from pursuing compensation.

Three days before a state deadline, Storm Cat Energy, a bankrupt coal bed methane company that owed Wyoming $10.8 million, received approval to unload hundreds of wells on another company for nearly nothing, the Casper (Wyo.) Star-Tribune reported today. Storm Cat went under after the price of natural gas plummeted. Large companies, seeing the writing on the wall for the market, stepped out of the coal bed methane game years ago. Smaller companies bought those wells and pits but were often financially weak, falling into bankruptcy as the price continued to decline. Since 2014, 4,681 wells have been left idle on state and private land. Using a tax on operators, Wyoming's Oil and Gas Conservation Commission has fewer than half of them.Wyoming could have seized Storm Cat's insufficient reclamation bonds. Its 2,432 idle wells would have become orphans, adding to a long list of such wells the state and federal agencies have to clean up.