A U.S. judge has agreed to halt U.S. creditor lawsuits against Abengoa SA, an international renewable energy company that has been waging a multi-layer battle for more than a year to avoid becoming Spain's largest ever corporate failure, Reuters reported yesterday. A ruling on a more contentious dispute involving the Seville-based company's bankrupt U.S. subsidiary and a failed power plant is still pending. The company put its U.S. subsidiaries in chapter 11 bankruptcy and filed for chapter 15 protection from creditors of non-U.S. businesses earlier this year while it thrashed out a $10 billion global debt restructuring deal in Spain. Last month Abengoa received shareholder and Spanish court approval for its high-stakes debt-for-equity deal, and on Thursday won backing for that plan and the halt to U.S. creditor lawsuits from the U.S. court in Delaware that is overseeing the U.S. bankruptcy proceedings. U.S. Bankruptcy Judge Kevin Carey must still rule on a plan to enable Abengoa's main subsidiary, Abeinsa Holding Inc., a construction and engineering business, to emerge from chapter 11.
Hip hop star 50 Cent has won a $14.5 million settlement against the lawyers who represented him in a deal with a headphone company that helped propel him into bankruptcy in July 2015, the Hartford Courant reported today. The failed deal with Sleek Audio resulted in an $18.4 million settlement against 50 Cent, whose real name is Curtis James Jackson III. Sleek Audio was Jackson's largest creditor in his chapter 11 petition and ultimately settled for $17.5 million. Jackson's bankruptcy reorganization was approved this summer. Any settlement from the law firm Garvey Schubert Barer was factored into 50 Cent's reorganization plan and the bulk of the $14.5 million, or $13.649 million, will go to creditors. The rest will go to the lawyers who represented Jackson in the claim against the law firm. Jackson has a date in U.S. Bankruptcy Court Dec. 15, where he'll seek Judge Ann M. Nevins’ approval of the settlement.
Bankruptcy Court Judge Stacey Meisel in Newark yesterday denied a motion opposing a proposed settlement in which "Real Housewives of New Jersey" star Teresa Giudice agrees to share potential winnings from her pending malpractice suit with her remaining creditors, NJ.com reported. The settlement itself still has not been ruled upon by Judge Meisel — though it does appear headed towards approval. The motion denied yesterday was made by James Kridel, the attorney Giudice is suing over his handling of her 2009 bankruptcy. The "Real Housewives" star charges that Kridel's bad advice and mistakes landed her in prison for bankruptcy fraud, a claim Kridel disputes. In the motion, Kridel challenged the proposed bankruptcy settlement, which would allow Giudice to keep 55 percent of any potential winnings in her lawsuit against Kridel, with the remaining 45 percent going to her creditors. Her lawyers Anthony Rainone and Carlos Cuevas would also represent the bankruptcy trustee as part of the malpractice lawsuit against Kridel.
A U.S. subsidiary of Spanish renewable energy firm Abengoa SA pressed a judge yesterday to approve its plan to exit bankruptcy over objections from a holdout creditor, who said that the plan violated U.S. law by favoring the company's foreign parent, Reuters reported. After more than three hours of testimony and arguments, Bankruptcy Judge Kevin Carey in Wilmington, Del., said he wanted additional written submissions from the parties. He did not say when he would rule. Abeinsa Holding Inc is one of dozens of global Abengoa subsidiaries that filed for chapter 11 and 15 bankruptcy this year while their Seville-based parent thrashed out a debt restructuring deal in Spain to avoid its own bankruptcy. The U.S. subsidiaries, which range from small ethanol plants to construction and engineering firms like Abeinsa, were guarantors of $10 billion of debt held by the parent.
The bank lenders of Caesars Entertainment Corp.’s operating unit said that they might walk away from a plan to bring the casino unit out of its $18 billion bankruptcy, potentially sending a high-stakes reorganization plan into disarray, Reuters reported yesterday. The committee of bank lenders, which includes Blackstone Group LP's GSO Capital Partners, has yet to resolve a dispute over the terms of their recovery, their lawyer Kristopher Hansen said at a hearing yesterday in U.S. Bankruptcy Court in Chicago. Hansen said that the lenders would inform the court on the status of a deal by Dec. 14, a month before a scheduled confirmation trial in Caesars Entertainment Operating Co Inc.’s long-running bankruptcy case. Without a deal, Hansen said the committee would terminate a restructuring support agreement, forcing the confirmation trial to be postponed beyond its scheduled Jan. 17 date.
The Supreme Court will hear arguments today in Czyzewski v. Jevic Holding Corporation, a case that could upend the common practice that ranks lenders, employees and other creditors in order of priority as they try to recover their money when a company files for bankruptcy, the New York Times reported. The case has attracted wide attention from academics, workers’ groups and state tax authorities. Jevic Transportation Company, a New Jersey trucking company, filed for bankruptcy in 2008, two years after a $77.4 million leveraged buyout by the private equity firm Sun Capital Partners, which former employees say heaped too much debt on its books. The bankruptcy put 1,785 drivers and staff members out of work, but they sued for wages under a federal law and state law that requires employers to give 60 days’ notice before mass layoffs. The drivers figured the company owed them approximately $8 million in pay because they were not warned that their jobs were ending. At the same time, the drivers and other creditors filed suit against Sun Capital and Jevic’s main lender, the CIT Group, saying that their buyout had fraudulently pushed Jevic into bankruptcy. Sun and CIT settled with the other unsecured creditors in their fraud case. In exchange for a $3.7 million payment to them, including the lawyers on the case, the creditors agreed to abandon their claim. The drivers were not part of that settlement and were left with nothing. If the Supreme Court sides with Jevic and its owner and chief lender, the decision could upend bankruptcy law by altering the rights and expectations of these various groups. Read more.
ABI’s Bill Rochelle will be covering the oral argument in Jevic today and will provide a video recap on ABI’s social media networks (Twitter, Facebook and Linked In) and a summary in the Rochelle Daily Wire. For more on the Jevic, please click here.
