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The U.S. government agreed to a mine clean-up deal that allows coal producer Alpha Natural Resources to exit bankruptcy, despite concerns that Alpha will be unable to fund $400 million in commitments, Reuters reported yesterday. The agreement stems from an industry subsidy that allows coal companies to self-insure the environmental costs of mining, called self-bonding, rather than set aside cash or other collateral. Alpha had about $676 million in self-bonded mine clean-up costs, mostly in Wyoming and West Virginia, when weak coal prices pushed the company into bankruptcy in August, according to securities filings. Yesterday’s agreement was meant to assure that Alpha has the finances to restore mines to their natural setting and clean up polluted streams. The Department of Interior said in a statement that the deal will eliminate self-bonds for Alpha’s reclamation obligations and shift toward third-party financial assurance. Alpha will contribute to the plan over a decade and government lawyer Alan Tenebaum acknowledged that "the environmental agencies have some concern if this plan will succeed in the long term." Bankruptcy Judge Kevin Huennekens yesterday agreed to confirm Alpha’s chapter 11 plan of reorganization.

Hulk Hogan, stymied by the bankruptcy filing of Gawker Media in the midst of a legal battle over a sex tape, is fighting back using the tools of chapter 11, Bloomberg News reported yesterday. Hogan, unable to collect a $140 million jury verdict against the media- and celebrity-focused site because of the bankruptcy petition it filed June 10, said in court papers filed on Tuesday that the company is improperly trying to protect its chief executive and founder, Nick Denton, who is liable for part of the judgment. He also claims Gawker or an affiliate made a $200,000 loan to Denton in the week leading up to the bankruptcy. Gawker’s strategy is to sell itself in a court-supervised auction while it pursues an appeal of the judgment, which Hogan won in a lawsuit over the posting of a tape of him having sex with a friend’s wife. If Gawker loses, sale proceeds would go to pay the claims of creditors including Hogan, a professional wrestler and entertainer whose real name is Terry Bollea. Hogan’s legal fight is bankrolled by billionaire investor Peter Thiel, with whom Gawker has a contentious history.

Alpha Natural Resources said yesterday that it expects to reach a deal with the U.S. government over responsibility for the cost of cleaning up mining sites, removing one of the most significant hurdles to the coal company's exiting bankruptcy, Reuters reported. Over the past few weeks, the fourth-largest U.S. coal miner and a slew of government agencies appeared to be heading for a showdown in court on Thursday, when Alpha is scheduled to ask a federal judge to approve its plan over objections. At issue is a program called self-bonding that has allowed leading coal companies to forego purchasing cleanup insurance on federal land by pledging to cover any such costs. Peabody Energy, Arch Coal and Alpha Natural Resources have all gone bankrupt in the last 11 months, leaving behind roughly $3.6 billion in self-bonding liabilities, according to securities filings. The government called Alpha's plan "fundamentally flawed" and said it was not prepared in good faith because it skirts environmental obligations, while the company has said the plan is the best way to benefit all parties. Alpha said yesterday that it anticipated reaching a deal by Thursday with the U.S. Department of Interior, Environmental Protection Agency and other agencies, according to a filing in the U.S. Bankruptcy Court in Richmond, Virginia. Alpha said a deal would include a "funding agreement" between Alpha, its lenders and a new company created to take over Alpha's best mining assets.

Boston Grand Prix, the local organizing entity of the since-canceled Seaport IndyCar race, is filing for bankruptcy, Boston.com reported today. The news comes amid the legal and financial mess resulting from the millions of dollars the group owes race ticket buyers and stakeholders. Boston Grand Prix said in its bankruptcy filing that it has less than $50,000 in assets, while listing liabilities of more than $1 million and between 1,000 and 5,000 creditors. Massachusetts Attorney General Maura Healey recently threatened and moved toward legal action against Boston Grand Prix in an effort to recoup ticket holders’ money.

Arch Coal Inc. has picked up the support of its unsecured creditors for a chapter 11 turnaround plan, ending the threat of litigation over the coal operator’s failed efforts to stay out of bankruptcy, the Wall Street Journal reported today. Talks aimed at reaching a deal have been under way for sometime. New terms sketched out on Friday outline settlements that could ease the company’s path out of chapter 11. Unsecured bondholders are being offered cash and stock under the amended plan, which is slated for preliminary review on Wednesday at a bankruptcy court in St. Louis. Court papers filed Friday show the new plan is the result of a compromise that will see senior lenders and senior management pitching in to the pool of assets to be distributed to unsecured creditors. Last year, Arch tried to cut its debt load outside of bankruptcy by way of an exchange offer with junior bondholders. Senior lenders blocked the deal, a move that pushed Arch into bankruptcy in January. The filing came as other coal producers also sought court protection to address too much debt and harsh industry conditions. Litigation stemming from the failed debt exchange, as well as the threat of other lawsuits, would be put to rest under Arch’s new chapter 11 plan, according to court papers. Funds managed by Blackstone Group’s GSO Capital Partners, which holds unsecured bond debt, will receive $5 million to settle a lawsuit it filed in May.

Liquidating retailer USA Discounters will offer debt relief to settle litigation accusing it of scamming its Colorado customers, including military service members, Dow Jones Newswires reported on Friday. The defunct retailer, accused in multiple states of unfair financing terms and improper debt-collection efforts, particularly against military members, is asking the U.S. Bankruptcy Court in Wilmington, Del., to authorize a settlement agreement with the state of Colorado. USA Discounters said that the settlement, negotiated "on the eve of trial," marks a significant step forward in its bid to wrap up its bankruptcy liquidation. Through its USA Living and Fletcher's Jewelers stores, USA Discounters sold furniture, appliances, electronics, jewelry and other products from stores located near military bases, often financing such purchases with its own credit program. The company's business practices with regard to its military customers have come under fire in the past few years, thanks to government actions — including a $50,000 fine and an order to pay $350,000 in restitution.

KaloBios Pharmaceuticals said on Friday that it has emerged from bankruptcy, USA Today reported on Saturday. The former Martin Shkreli-led company also said that it had acquired the rights to develop benznidazole from Savant Neglected Diseases for $3 million. Benznidazole is a drug that helps treat Chagas disease, an infectious disease that affects 6 million to 7 million people worldwide. It is mainly found in Latin America. KaloBios filed for bankruptcy last December shortly after Shkreli was fired as its CEO after being arrested for alleged fraud charges that were unrelated to his brief time at KaloBios. He has denied the allegations.

The Diocese of Duluth (Minn.) has filed a federal lawsuit against five insurance companies, seeking to force their participation in settlement discussions, the Duluth News Tribune reported today. The diocese, which filed for chapter 11 protection in December in the wake of a $4.9 million verdict in a child sexual abuse case, filed the suit on June 24. Mediation between the diocese and representatives of the 125 people who filed abuse claims in the bankruptcy process is set to begin on July 19. The suit names as defendants the Liberty Mutual Group, Catholic Mutual Relief Society of America, Fireman’s Fund Insurance Co., Church Mutual Insurance Co. and Continental Insurance Co. The lawsuit alleges that the companies have breached their contracts with the diocese because they have “failed to acknowledge their full coverage obligations” to cover any judgments or other legal expenses stemming from the abuse claims.