%1

The Pennsylvania Department of Community and Economic Development intends to try to recover money Aquion Energy Inc. owes it, the Pittsburgh Tribune-Review reported on Saturday. Aquion, a once-promising Pittsburgh battery company with a manufacturing facility in Westmoreland County, Pa., filed for bankruptcy last week and lists the state as its top creditor. “DCED is prepared to take whatever steps are necessary and legal under the Bankruptcy Code to recover our loans,” spokeswoman Heidi Havens said. “Upon notification that the bankruptcy petition was filed, DCED commenced a comprehensive review of the project to include an evaluation of collateral.” The loans were secured by collateral, but Havens would not say what that collateral was. Aquion was current on all of its loan payments and made payments as recently as last week. Havens would not say how much was still owed. Aquion announced March 8 it had filed for Chapter 11 bankruptcy after it failed to raise enough money to keep it running.

Jon Corzine was summoned to the witness stand yesterday in MF Global Holdings Ltd.’s malpractice suit against the PricewaterhouseCoopers LLP accounting firm, Bloomberg News reported. It was a turn in market sentiment, and not his own flawed management, that led to the collapse of the trading firm he once ran, he told a Manhattan jury. “There was a loss of confidence and trust in the organization after our earnings were announced and credit agencies downgraded us in the last week of October 2011,” Corzine said. Corzine has served as governor of New Jersey, a U.S. senator and co-chairman of Goldman Sachs Group Inc., but it now falls to a New York jury to decide whether Corzine or PwC was responsible for MF Global’s failure. Corzine took the helm at MF Global in March 2010 and ran it for just more than 1 1/2 years before it collapsed. The PwC trial may be the last word on who’s to blame for the meltdown. Corzine hasn’t spoken publicly about the collapse since testifying before Congress in 2011. 

Four individual investors of Peabody Energy Corp are accusing the company, certain hedge funds and other parties involved in the coal producer's chapter 11 bankruptcy of breaching their fiduciary duties, according to a lawsuit filed yesterday, Reuters reported. The four investors, who hold senior unsecured bonds of Peabody, the largest U.S. coal miner, have alleged during the chapter 11 proceedings that they have been unfairly treated under the reorganization plan. In the lawsuit, filed with the U.S. Bankruptcy Court in St. Louis, the investors also named as defendants the trustees of their bonds and the chapter 11 committee that represents their interests. At the heart of their complaint is a plan to raise $1.5 billion by selling stock in a reorganized Peabody. The refinancing forms a key part of the company's plan to slash $5 billion of debt and exit chapter 11 protection. The stock is being offered to holders of the company's unsecured bonds, except individual investors, denying them potentially lucrative returns. This violates the basic promise of bankruptcy that creditors of equal standing receive equal treatment, they argue. Peabody has about $4.5 billion of bonds outstanding, and the lawsuit says individual investors hold up to 7 percent of those securities.

A federal appeals court said that billionaire Ira Rennert must pay a $213.2 million judgment after a jury found him liable for looting his now-defunct magnesium company to build one of the country's most expensive homes, a 21-bedroom mansion in New York's Hamptons, Reuters reported yesterday. The U.S. Court of Appeals for the Second Circuit yesterday let stand a jury verdict against the mining mogul and his holding company Renco Group Inc., and won by a trustee liquidating the bankrupt Magnesium Corp. of America, known as MagCorp. It rejected Rennert's argument that the jury rendered an "irrational" verdict by awarding damages despite believing MagCorp was solvent at all relevant times. Rennert belatedly challenged whether the verdict was internally inconsistent, and "cannot pursue a compromise-verdict claim because that would sneak a waived inconsistency claim in through the back door," the Manhattan-based appeals court said. The court also rejected Rennert's argument that the trustee was not entitled to a jury trial, and that the trial judge made multiple errors.

PricewaterhouseCoopers LLP is putting the blame on MF Global Holdings Ltd.’s former chairman Jon Corzine for the New York brokerage’s collapse in 2011, Bloomberg News reported yesterday. "Its bankruptcy was caused by its risky trading, its unprofitable business and other problems" James Cusick, a lawyer for PwC, told jurors yesterday in Manhattan at the start of a $3 billion trial over who’s to blame for MF Global’s failure. "Mr. Corzine was the mastermind and the driver of that strategy." The accounting firm is fending off accusations it contributed to MF Global’s meltdown. Cusick blamed the brokerage’s strategy of investing in European sovereign bonds for the firm’s bankruptcy. U.S. District Judge Victor Marrero delayed the case last month in hopes the parties would settle. The trial is projected to last four to five weeks and will likely feature Corzine on the witness stand.

A U.S. judge said Hanjin Shipping Co.’s creditors can foreclose on the South Korean company’s shipping containers and sell them, the Wall Street Journal reported today. Bankruptcy Judge John K. Sherwood of the U.S. Bankruptcy Court in Newark, N.J., on Friday gave the green light to Maher Terminals LLC, which runs one of the Port Authority of New York and New Jersey’s marine terminals, to foreclose on the container assets and sell them to pay off claims owed by Hanjin. In February, a Seoul court declared Hanjin would have to liquidate its assets — including its ships, stakes in seaport terminals and containers — marking the final chapter in its bankruptcy process and one of the ocean-shipping industry’s largest collapses ever. Maher and other creditors in late February asked the court for permission to sell the Hanjin containers taking up space on their docks, court papers show. Maher can foreclose on the 256 Hanjin containers stored at its facility, and has the right to use the proceeds to pay down their post-bankruptcy storage charges still owed to Maher by Hanjin, court papers show.