Billionaire Ira Rennert has settled a lawsuit in which a U.S. government agency accused his holding company Renco Group Inc. of trying to evade $70 million of pension obligations for its bankrupt RG Steel unit, Reuters reported yesterday. In a letter filed yesterday in Manhattan federal court, lawyers for Rennert and the Pension Benefit Guaranty Corp. said that they reached an agreement in principle to end the three-year-old case. Terms were not disclosed, and the lawyers said they plan to work out a settlement agreement by Feb. 19.
Impatient for their money, the woman who won $7 million from rapper 50 Cent in a sex-tape dispute and partners in a failed headphone deal have teamed up to take his personal bankruptcy into their own hands, the Wall Street Journal Bankruptcy Beat blog reported on Friday. In court papers filed Thursday, the unpaid groups asked a bankruptcy judge to put a Connecticut lawyer named Richard M. Coan in charge of the 40-year-old entertainer’s business affairs, giving him the power to pay off the debts over the next five years. With the title of trustee, Coan would sell off property owned by 50 Cent, whose real name is Curtis James Jackson III, and oversee the entertainer’s recording contracts, endorsement deals and other pursuits, according to documents filed in U.S. Bankruptcy Court in Hartford, Conn. The 37-page repayment proposal didn’t say how much Lastonia Leviston, the woman behind the sex-tape dispute, or the headphone partners would ultimately collect from Jackson over the repayment period. Jackson filed for chapter 11 protection on July 13, shortly before jurors were scheduled to determine whether he should pay additional damages in the sex-tape lawsuit filed in 2010 by Leviston, rapper Rick Ross’s ex-girlfriend.
Parties seeking a chunk of the $7 billion raised from the liquidation of former telecommunications giant Nortel Networks started talks yesterday aimed at ending one of the most complex and costly legal disputes in history, Reuters reported yesterday. The money has been sitting in a New York bank account since Nortel Networks global businesses were sold piecemeal after the Ontario-based company filed for bankruptcy exactly seven years ago. The talks on yesterday in New York include representatives from former Nortel operations in the United States, Canada and Europe, according to two sources who declined to be identified because the mediation was confidential. The parties had presented dramatically differing proposals to a judge in Ontario and a U.S. Bankruptcy judge in Delaware during a novel, joint trial in 2014 aimed at dividing the cash. The judges issued coordinated opinions in May that rejected the proposals from the various Nortel estates and ruled that every creditor would receive roughly 71 cents on the dollar, a position backed by some creditors. That sparked appeals. If the current talks can reach a settlement to divide the cash, it would end the appeals process. One of the big fears among the parties is that parallel appeals in the United States and Canada could result in conflicting rulings that further complicate the dispute. "It's a Charles Dickens novel," said Melissa Jacoby, a law professor and resident scholar at the American Bankruptcy Institute.
American Apparel Inc.’s board of directors rejected the latest takeover offer involving the company founder and fired Chief Executive Officer Dov Charney, Bloomberg News reported yesterday. The vote means an offer valued at $300 million from three investment funds who’ve aligned with Charney must be further sweetened to win over the company, or they must convince a judge next week to throw out a competing proposal backed by American Apparel’s lenders. The company is open to a revised offer from the funds. Hagan Capital Group and Silver Creek Capital Partners have offered to buy the company and bring back Charney, who was fired in 2014 when the board accused him of misusing corporate funds and violating the sexual-harassment policy. Time is almost up for the funds and Charney. On Jan. 20, the company will be in court seeking approval of its reorganization plan, which would cut about $200 million of debt. The company would be taken over by a group of senior lenders, including Monarch Alternative Capital LP.
A former Switzerland-based investment manager who put money into funds tied to Bernard Madoff’s fraud and blamed losses on the collapse of MF Global Holdings Ltd. is liable for almost $500 million in fines and restitution, Bloomberg News reported yesterday. A U.S. judge in Chicago rendered the award on Jan. 11, more than three years after the U.S. Commodity Futures Trading Commission sued Nikolai Battoo and his businesses, accusing them of fraud. A former Florida resident, Battoo never contested the regulator’s lawsuit filed in September 2012, nor did he fight a parallel lawsuit filed in the same court on the same day by the U.S. Securities and Exchange Commission. Battoo ran a group of investment businesses under the common banner of BC Capital Group. Through his firms, he persuaded about 250 “pool participants” to invest at least $140 million in his Private International Wealth Management portfolios, according to U.S. District Judge Edmond Chang. “The defendants committed fraud in 2008 by failing to disclose the PIWM pools’ significant exposure to the Bernard Madoff ponzi scheme as well as trading losses suffered by other of Battoo’s hedge funds in which the PIWM pools were invested,” the CFTC said yesterday. Read more.
Arch Coal Inc.’s chapter 11 filing on Monday has left some citizens groups concerned about the company’s ability to clean up pollution at its Wyoming mines, the Wall Street Journal reported yesterday. Coal miners such as Arch must, under state and federal law, post reclamation bonds to show their ability to clean up the land and treat the water at their mining sites. Some states allow what is called self-bonding, in which the bonds aren’t backed by any insurance. While self-bonds can save companies money, questions arise about their ability to fulfill the bonds when they run into financial trouble. If a company can’t pay for cleaning up the polluted land and water at a mine, the bill could be passed on to taxpayers. In Arch’s case, its lenders have agreed to cover up to $75 million in cleanup and other regulatory obligations in connection with a proposed $275 million bankruptcy loan. But that falls short of the $485 million in self bonds that court papers show Arch has posted for its Wyoming mining operations.
Nortel Networks Corp.’s warring creditors will meet in New York today seeking to end a standoff that has kept pensioners and bondholders waiting to divvy up $7.3 billion in the defunct telecommunications company’s seven-year bankruptcy, Bloomberg News reported yesterday. The goal is to resolve court appeals in the U.S. and Canada so the money, most of which was raised in one of the most successful patent auctions in the U.S., can be distributed. Nortel retirees in Canada and the U.K. have been fighting with U.S. bondholders over how to divide the cash, raised when Nortel’s U.S. unit sold a bundle of patents in 2011 to a group that included Microsoft Corp., Apple Inc. and Sony Corp. In May, judges in the U.S. and Canada ruled that the money should be split on a proportional basis once claims against the Canadian company are resolved.
