A Canadian court yesterday closed the door on legal challenges to a ruling that divvied up the $7.3 billion raised from the liquidation of Nortel Networks, a former Canada-based telecoms equipment maker that went bankrupt in 2009, Reuters reported. The decision barred U.S. parties from appealing a May 2015 ruling by the Ontario Superior Court of Justice, which issued an opinion that was coordinated with the U.S. Bankruptcy Court in Wilmington, Delaware. The two courts have been working in tandem to oversee the Nortel bankruptcy, and last year's simultaneous decision ruled that every creditor would receive roughly 71 cents on the dollar. That formula was advocated by representatives of Nortel's British pensioners, but opposed by the Nortel businesses in the United States and Canada.
Bankruptcy Judge Benjamin Goldgar ruled yesterday that creditors of the bankrupt operating unit of Caesars Entertainment Corp will have an additional 15 days to decide if they object to the casino company's bankruptcy exit plan, which still lacks key details, Reuters reported. "It's hard to shoot a moving target," Judge Goldgar said at an emergency hearing before postponing the deadline for creditor objections to May 17. He was responding to junior creditors' complaints in a court filing that the plan omits "virtually all of the information that creditors actually care about." Objections to the plan were initially due on yesterday. At the heart of the uncertainty is how much Caesars, backed by private equity groups Apollo Global Management LLC and TPG Capital Management, will contribute to its unit's reorganization. The reorganization plan envisions splitting the bankrupt unit into an operating company and a real estate investment trust. Creditors have accused the parent of stripping the operating unit of its best hotel and casino assets prior to a $18 billion bankruptcy filing in January 2015 and are demanding compensation. Caesars has denied the allegations. A court-appointed examiner found in March that Caesars could be on the hook for between $3.6 billion and $5.1 billion for pre-bankruptcy transactions.
A Wisconsin businessman indicted in an alleged scheme to fraudulently obtain bank loans has filed for bankruptcy protection, the Associated Press reported on Friday. Ronald Van Den Heuvel filed on behalf of Green Box NA Green Bay in the federal court’s Eastern District. One of the 21 creditors listed on the filing is the Wisconsin Economic Development Corp. Van Den Heuvel owes the state’s job creation agency more than $1.2 million. The agency made the loan in 2011-2012 for a project to turn waste paper into synthetic fuel and paper products. The court filing says Green Box has less than $50,000 in assets and owes between $10 million and $50 million. Van Den Heuvel is charged with 13 counts of federal bank fraud for an alleged scheme dating back to 2008 and 2009. Read more.
For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.
Workers who sued Eastman Kodak Co. in a 2012 class action after seeing their retirement savings dwindle as the value of their Kodak stock evaporated, have agreed to a $9.7 million settlement, the Rochester (N.Y.) Business Journal reported today. U.S. District Judge David Larimer yesterday handed down a ruling giving the settlement pact his preliminary stamp of approval. The pact’s terms call for what remains of the $9.7 million payout after administrative expenses are paid to be proportionately split among some 21,000 former participants in Kodak pension and employee stock-ownership plans. Kodak workers filed the class action in January 2012, roughly a week after Kodak filed a chapter 11 bankruptcy that would ultimately see the Kodak stock in their 401(k) accounts and employee stock-ownership portfolios become worthless. Kodak officials had been aware of the former camera giant’s mounting woes for at least the previous two years and should have protected workers against the likely devaluing of Kodak shares, the workers claimed.
Caesars Entertainment Corp. and its bankrupt operating unit have offered an olive branch to a group of bondholders in a bid to move the unit’s chapter 11 restructuring forward, the Wall Street Journal reported today. Caesars Entertainment Operating Co. says that it and its publicly traded parent, which isn’t in bankruptcy, have offered 85 cents on the dollar to the holders of $502 million in bond debt guaranteed by the CEOC unit’s subsidiaries, the casino companies said yesterday. The settlement offer, which isn’t binding and is subject to further negotiation, would settle a skirmish between the bondholder group and CEOC’s senior creditors. The settlement offer comes as CEOC works to achieve broad creditor support for its $18 billion restructuring, which has been marked by numerous creditor battles.
