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Global bitcoin exchange Kraken said yesterday that significant progress has been made in the investigation into claims of creditors of bankrupt exchange MtGox, Reuters reported. MtGox Co Ltd, a Tokyo-based bitcoin exchange, was forced to file for bankruptcy in 2014 after hackers stole an estimated $650 million worth of customer bitcoins. Kraken was appointed in November of that year to assist Tokyo district court-appointed trustee Nobuaki Kobayashi in the bankruptcy investigation of missing bitcoins, receiving claims and distributing remaining assets to creditors of MtGox. Kraken said in a statement, citing the Tokyo-based trustee, that out of the 9,863 persons who filed bitcoin-only claims through the Japanese trustee or through Kraken's online service, 7,952 claimants have been approved.

Creditors squabbling over Caesars Entertainment Operating Co.’s $20 billion reorganization asked Bankruptcy Judge Benjamin Goldgar to order them into mediation and to appoint either an active or retired bankruptcy jurist to supervise, but were refused, Bloomberg News reported yesterday. “You don’t need my permission,” Goldgar said yesterday. “Just click your heels together three times and say, ‘There is no place like mediation.’” Mediation is a great idea that is months overdue, Goldgar said. But last month, the local rules that gave federal judges power to order mediation in Northern Illinois were revoked. And there is no other legal authority to justify ordering everybody to sit down and negotiate, Goldgar said. The decision appeared to surprise the dozens of lawyers and other professionals who gathered in Chicago for the hearing. All the major bondholder groups and other lenders, who have been warring since the case was filed more than a year ago, had asked Goldgar for the mediation order. Without court-ordered mediation, creditors who feel left out of the company’s current reorganization proposal will be free to refuse to negotiate.

Arch Coal Inc.'s unsecured creditors have asked a judge to pare down a requested $275 million bankruptcy loan by more than half, saying the financing is both unnecessary and too expensive, Dow Jones Daily Bankruptcy Review reported today. In an objection filed on Tuesday, the creditors urged Judge Charles Rendlen III to reconsider an earlier interim order approving the loan, painting it as a gift to the company's lenders, who would take home substantial fees and interest. The creditors have asked the U.S. Bankruptcy Court in St. Louis to rethink its earlier order at a hearing next week, when Arch will present the loan for final approval. In court papers filed shortly after the company sought chapter 11 protection in January, Arch said that the loan is needed to fund its operations while in bankruptcy. Arch is continuing its mining activity and customer shipments throughout the reorganization process.

Bankruptcy Judge Stuart Bernstein ruled yesterday that victims of Bernard Madoff's fraud cannot pursue a Florida lawsuit to recover $11 billion from the estate of Jeffry Picower, who they say helped perpetuate the swindler's Ponzi scheme, Reuters reported. Judge Bernstein said that the lawsuit by A&G Goldman Partnership and Pamela Goldman, their third effort to sue in Florida, violated an injunction barring Madoff victims from pursuing claims belonging to Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC. Picard had in December 2010 won a $7.2 billion settlement with the estate of Picower, who died in October 2009. But a slew of litigation ensued from Madoff customers, including many who say the trustee undervalued their claims, against Picower and other alleged enablers of Madoff. Picard has estimated that Madoff's victims lost $17.5 billion in the fraud, which was uncovered in December 2008. 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. 

A former ​lower-level ​Dewey & LeBoeuf LLP employee ​charged in ​a financial fraud case alongside leaders of the defunct law firm has struck a deal with prosecutors to have the case against him dropped in a year, the Wall Street Journal reported today. Former Dewey client relations manager Zachary Warren had been scheduled to go to trial in March. A prosecutor with the Manhattan District Attorney’s Office told a judge yesterday that under a deferred prosecution agreement,​ Warren would no longer face criminal charges if he completes 350 hours of community service. Assistant District Attorney Peirce Moser said in court that prosecutors plan to focus their attention on a retrial slated for September against two of Dewey’s former executives, ex-chief financial officer Joel Sanders and former executive director Stephen DiCarmine.​ Sanders and DiCarmine have pleaded not guilty and have maintained their innocence.

A German insolvency administrator has asked a bankruptcy court in New York to shield the U.S. assets of Maple Bank GmbH while its affairs are sorted, the Wall Street Journal reported today. Michael C. Frege, who has been appointed Maple Bank’s insolvency administrator in Germany, filed a chapter 15 bankruptcy case on Monday in the U.S. Bankruptcy Court in New York. That followed a move by Canadian banking regulators to take control of Maple Bank’s assets in Canada to preserve them after an investigation in Germany found what the regulators believed to be tax-law violations, according to a statement from Canada’s Office of the Superintendent of Financial Institutions. Canada’s Office of the Superintendent of Financial Institutions took action after insolvency proceedings began in the courts of Germany.

The Diocese of Duluth, Minn., and attorneys representing child sexual abuse victims have agreed to enter mediation for victim claims, WDIO.com reported yesterday. The Diocese of Duluth filed for bankruptcy in December, saying that the move will allow them to protect assets and pay out what is due to victims. However, Judge Robert Kressel encouraged the Diocese and all parties involved to work with a mediator. Bankruptcy Judge Gregg Zive, who has experience in diocesan bankruptcy cases, is expected to be approved as mediator by Judge Kressel.

Student Aid Center Inc. filed for bankruptcy last week, claiming between $500,001 and $1 million in assets and between $1,000,001 and $10 million in estimated liabilities, MarketWatch.com reported on Friday. The company is part of a burgeoning industry of student debt-relief firms that regulators have accused of preying on borrowers desperate for help with their student loans. The companies use social media and other forms of advertising, often implying an affiliation with the Department of Education, to lure borrowers into paying high fees to enroll in government programs they could take advantage of for free, consumer advocates say. The Consumer Financial Protection Bureau and states attorneys general have filed lawsuits against some of these companies, accusing them of violating consumer protection laws. Student Aid Center’s bankruptcy comes several months after Minnesota Attorney General Lori Swanson filed a lawsuit against the company, accusing the firm of misrepresenting itself to borrowers by telling them it could help them qualify for loan forgiveness programs, that it would “take over” or pay borrowers’ loans and by lying about the amount that at loan would drop with the help of their services. In addition, the company charged between $500 and $1,500 to sign borrowers up with government programs they could otherwise access for free, Swanson’s suit claims. Read more. 

To read more about bankruptcy and student loan debt, be sure to pick up a copy of ABI’s Graduating with Debt: Student Loans under the Bankruptcy Code. 

Glenn Straub is “at it again,” according to lawyers for a handful of deserted restaurants trapped inside the shuttered Revel Casino Hotel in Atlantic City, N.J., the Wall Street Journal Bankruptcy Beat Blog reported yesterday. Bankruptcy court papers filed earlier this month show yet another dispute between the restaurants and the Florida-based developer has flared up, this time fueled by nearly a quarter million dollars of alcohol — beer, wine and liquor left behind in the darkened resort. Last spring, a bankruptcy judge approved an $82 million sale of Revel to Straub, ending nearly 10 months of courtroom struggles for control of the property. The purchase price amounted to more than a 96 percent discount from the $2.4 billion it cost to build Revel. Revel never turned a profit after opening its doors in 2012 and landed in chapter 11 twice in just two years. But the judge’s order left unresolved one of the stickiest aspects of the sale: whether former business tenants, including the restaurants, can remain at Revel when — and if — the property reopens. The issue remains tied up in litigation.