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The co-founder of Apollo Global Management, Marc Rowan, resigned from the board of Caesars Entertainment Corp.’s operating unit after an investigation found that he had led a deal that was undervalued and shortchanged the now-bankrupt unit, Reuters reported yesterday. The disclosure was made in court documents filed on Monday in bankruptcy court in Chicago. The documents did not say why the billionaire investor resigned. The bankrupt unit is negotiating a settlement over several deals, including the one led by Rowan, that creditors allege stripped the unit's best casinos and left behind unsustainable debt. Rowan remains on the board of the parent, which may have to contribute billions of dollars to a restructuring plan to avoid litigation over the deals. Read more. 

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A federal judge in Delaware is scheduled to hear arguments over how to split up some $7 billion Nortel raised from the sale of its patents and other assets, which has pitted U.S. bondholders against creditors of the Canadian parent company and U.K. pensioners who say they’re owed $3 billion to shore up their underfunded plans, Forbes.com reported today. The multinational bankruptcy proceedings will have amassed nearly $2 billion in legal fees to date. British law firm Herbert Smith Freehills appears to be the biggest winner, billing for some $400 million to advise Ernst & Young on the administration of Nortel’s European bankruptcy estate. Ernst & Young comes in second at around $335 million. The high fees reflect the vexing complexity of Nortel’s bankruptcy, which is taking place across three countries and two continents and features the increasingly common clash of bondholders against pensioners. In Nortel’s case the big unsecured creditor is the company’s U.K. pension plan, which administrators there claim is underfunded to the tune of $3 billion. Unfortunately for those pensioners, Nortel’s U.K. operations were dwarfed, in terms of revenue and earnings, by its U.S. business. According to one analysis the U.S. operation held 70 percent of Nortel’s patents — a key measure in a company whose assets are mostly intellectual property — and would get 73 percent of the bankruptcy assets on a pure revenue basis. The U.S. divisions also issued more than half of Nortel’s debt.

A federal bankruptcy judge has ruled that Bernard Madoff can be questioned by lawyers for some former customers who lost money when the imprisoned swindler's firm collapsed in December 2008, Reuters reported yesterday. Bankruptcy Judge Stuart Bernstein authorized a deposition of Madoff at a March 23 hearing, and yesterday’s filing proposed a formal order that it be scheduled. A hearing on that request is scheduled for Wednesday. Questions would be limited to the meaning of more than 91,000 transactions recorded as "profit withdrawal" on the books of the former Bernard L. Madoff Investment Securities LLC, court papers showed. Some former customers believe that Irving Picard, the court-appointed trustee liquidating Madoff's firm, has undervalued their claims. They have argued that only Madoff would know how to properly account for profit withdrawals, and that what he might say could strengthen their hand in litigation. 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. 

Northwest Territorial Mint LLC put its coin-and-medallion-making operations into bankruptcy on Friday, facing a demand to pay part of a $38.3 million defamation award — one of the country’s largest Internet defamation verdicts — to a Los Angeles businessman and his real-estate firm, the Wall Street Journal reported on Saturday. Officials for the mint, located near Seattle, listed the judgment owed to Bradley S. Cohen and to Cohen Asset Management Inc. as a “disputed” debt in bankruptcy court documents. The 200-worker company, based in the town of Federal Way south of Seattle, on its website calls itself the country’s largest private mint with other minting facilities in Texas and Nevada and die-cutting and sculpting facility in Green Bay, Wis.Northwest Territorial Mint LLC put its coin-and-medallion-making operations into bankruptcy on Friday, facing a demand to pay part of a $38.3 million defamation award — one of the country’s largest Internet defamation verdicts — to a Los Angeles businessman and his real estate firm.

The federal judge who presided over some of the complex legal battles that arose following the collapse of Bernard Madoff’s Ponzi scheme got a new messy dispute to untangle — bondholders versus Caesars Entertainment, the Wall Street Journal reported on Saturday. Judge Jed Rakoff has been reassigned the four bondholder lawsuits now pending against Caesars in a Manhattan district court, court records show. The reassignment follows the news that Judge Shira A. Scheindlin, who had previously overseen the litigation, will retire April 29, just days before a trial on two of the suits was scheduled to begin.

The cost of the Caesars Entertainment Operating Co. bankruptcy investigation that dug up as much as $5.1 billion in potential legal claims has topped $40 million and is still climbing, the Wall Street Journal reported today. New bankruptcy court filings show examiner Richard J. Davis and his team charged nearly $25 million for work performed as the probe into CEOC’s dealings with its parent company heated up. The new round of bills brings the total cost of the investigation, launched in March 2015, up to $41.8 million. The cost of the court-ordered probe, borne by CEOC, is expected to climb further, as the latest bills only cover work performed between Oct. 1 and Jan. 31. A report on the investigation’s findings was released on March 15. That report concluded that Caesars Entertainment Corp. and its private-equity owners engineered a series of deals that hurt the company’s now-bankrupt operating unit and its creditors, resulting in potential damages of $3.6 billion to $5.1 billion.

Swift Energy Co.’s reorganization plan won approval from a bankruptcy judge on Wednesday, paving the way for the oil and gas driller to exit chapter 11 under the control of its bondholders, the Wall Street Journal reported today. Bankruptcy Judge Mary Walrath signed off on the plan, which will swap $905 million in bond debt for most of the new equity in the restructured Swift. It also will allocate a 4 percent equity stake in the postbankruptcy company to existing shareholders, as well as fully repay about $46 million in unsecured claims. Judge Walrath’s approval came after Swift Energy’s attorneys listed numerous modifications made to the plan to resolve objections and concerns from the likes of the U.S. Department of the Interior, unsecured creditors and the Internal Revenue Service. The reorganization plan was put to a creditor vote in mid-February and was approved by 91 percent of the senior note holders.