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U.S. Customs and Border Protection is seeking assurances from a judge that Rupari Food Services Inc.’s bankruptcy won’t shield the company from a $2.8 million penalty tied to its alleged illegal importation of Chinese crawfish meat, the Wall Street Journal reported on Saturday. In court papers filed on Thursday, acting U.S. Attorney David Weiss said Rupari, a one-time barbecue ribs specialist that has since liquidated most of its assets in chapter 11, should have to face a trial over the incident, which took place more than 15 years ago. According to prosecutors, between 1997 and 1998, Rupari imported frozen crawfish meat from Thailand that it knew had originated in China, avoiding a 201.63 percent tariff but committing a fraud in the process. In 2011, U.S. Customs and Border Protection filed a lawsuit against Rupari with the U.S. Court of International Trade, seeking to enforce a fine now pegged at $2.8 million.

The bankrupt Archdiocese of St. Paul and Minneapolis says that the latest reorganization plan proposed for the church by creditors would strip it of all assets required to pursue the church's mission, Minnesota Public Radio reported on Saturday. The archdiocese filed its objections to the creditors' plan on Friday and urged acceptance of its own $156 million settlement. The Twin Cities archdiocese filed for chapter 11 bankruptcy in January 2015, motivated by hundreds of claims of sex abuse against archdiocesan priests. The archdiocese says that to fulfill the creditors' demands, assets would include all cash and the cash value of property, including religious vestments and relics. Also included would be the church's financial stake as landlord in the Cathedral of St. Paul and two high schools.

Bankruptcy Judge Shelley C. Chapman has issued an opinion that provides an important reminder for employees throughout the United States who participate in deferred-compensation plans, according to a commentary by Prof. Stephen J. Lubben in the New York Times DealBook blog. The opinion is from the long-running Lehman Brothers bankruptcy, but it applies to employees of all sorts of companies, according to Lubben. In short, the tax benefits you get from a deferred-compensation plan are not “free,” and by deferring compensation, you are taking on the credit risk of your employer. In this case, the employees — in agreeing to the subordination provision — had agreed to be paid after all other general unsecured creditors had been paid in full. Judge Chapman acknowledged that seemed a bit unfair — in her words “expected compensation for years of dedicated service disappeared in an instant in September 2008.” Nevertheless, this was the basic trade-off that employees had made decades ago: better tax treatment, in exchange for more risk.

The principals of bankrupt Tinley Park, Ill.-based Oak Park Avenue Realty face possible fines and arrest if they don't comply with a federal judge's order to turn over business records of the real estate management company, the Chicago Tribune reported on Sunday. The order on Thursday by U.S. District Court Judge Carol Doyle comes after the court-appointed trustee in Oak Park Avenue's bankruptcy case reported in a court filing that business records, computers and other equipment had been removed from the company's Tinley Park offices. The trustee, Ronald Peterson, an attorney with Jenner & Block, said he went to Oak Park Avenue's offices, 6800 Centennial Drive, on July 14 and discovered "substantial" portions of records were gone, and cables to the company's computer servers had been severed. The trustee noted he saw no evidence of a break-in, and notified Tinley Park police and the Cook County state's attorney's office.

A Chicago suburb’s convention center project corporation entered chapter 11 bankruptcy on Friday, starting a court-supervised process to settle a $183 million municipal default, the Wall Street Journal reported today. Lombard Public Facilities Corp., a public financing entity in the village of Lombard, Ill., entered court protection having already hammered out a restructuring deal with its largest creditors, municipal bond giants Nuveen Asset Management LLC and OppenheimerFunds Inc. The corporation’s $183 million in debt was issued to finance an 18-story building project that opened in 2007 with a Westin-branded hotel, convention space and restaurants. The catalyst for the bankruptcy was the village’s refusal, starting in late 2011, to appropriate funds to cover shortfalls between what the project generated in revenue and the scheduled payments due to bondholders. Reserve funds covered LPFC’s debt obligations until January 2014, when the municipal debt fell into default, trashing the credit ratings of both the village and the bond issuer. Counting accrued interest and principal, the outstanding balance has ballooned to $247 million, according to court documents.

The nuclear option of bankruptcy could give Toshiba a fresh start, The Wall Street Journal reported today. It’s a nice idea, but the embattled Japanese giant is more likely to choose to muddle through. A number of people involved in Toshiba’s restructuring are pushing for a bankruptcy filing as the best path to rebirth. Bankruptcy would give the Japanese company, which has more liabilities than assets because of losses in its nuclear operations, more breathing room as it restructures its debts with creditors. To plug its financial hole, Toshiba is currently trying to sell its memory-chip business. The sale, however, is being delayed by a legal challenge from its joint-venture partner, Western Digital. But even completing the sale would just bring Toshiba’s shareholders’ equity barely into positive territory. The company could still be hit by tons of other uncertain liabilities, in particular, a liquefied-natural-gas contract in the U.S. Toshiba signed a 20-year agreement in 2013 to liquefy natural gas in Freeport, Texas, starting from 2019. Since then, Asian LNG prices have plunged, making the company liable for billions of losses. And Toshiba, after selling its crown-jewel chip business, would be left with less profitable businesses to cover those losses. Instead of emerging anew from the nuclear mess, Toshiba will likely stay a radioactive zombie.