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Bankruptcy Judge Tamara Mitchell granted approval for coal producer Walter Energy Inc. to reject its labor agreements and end retiree benefits, which the bankrupt U.S. company said was needed in order to sell off its operations, given the industry's dire straits, Reuters reported today. Judge Mitchell said in an opinion published on Monday that Walter's situation would go from bad to worse if it had to maintain its collective bargaining agreements and retiree benefits. "The court finds credible that no potential buyers have an interest in assuming such obligations, let alone assuming such obligations and investing such new capital," Judge Mitchell said in her opinion. The company has in place a purchase agreement with Coal Acquisition LLC, which is made up of Walter's lenders. An auction is scheduled for Jan. 5, and Mitchell will be asked to approve the auction results at a sale hearing on Jan. 6.

Siga Technologies Inc. is expected to say by today what its loss to PharmAthene Inc. in a long-running court fight means for its future, Dow Jones Daily Bankruptcy Review reported today. Last week, the Delaware Supreme Court upheld a $113 million damages award against Siga, which makes an antiviral drug that shows promise against smallpox. PharmAthene, which won the damages award, holds a seat on the official committee of unsecured creditors in Siga's chapter 11 case. Siga is supposed to file a report today with the bankruptcy court that explains its thinking on how to settle up with PharmAthene.

Multiple parties — including Black Diamond LifePlan Fund, Evergreen III LifePlan Fund, Pillar 5 Life Settlement Fund, Advanced Life Settlement Portfolio 2011-1 and Transparency Alliance — filed separate objections in bankruptcy court to Life Partners Holdings' disclosure statement, BankruptcyData.com reported today. "It fails to set forth even the most basic information (such as the estimated recovery for current position holders) about the proposed disposition of approximately $2.4 billion in highly-complex assets, and the fate of approximately 20,000 current position holders — parties who were initially victimized by an elaborate pre-petition fraud perpetrated by the debtors' former principals,” according to the Transparency Alliance. The alliance also filed a separate objection to the joint motion of Life Partners Holdings, its chapter 11 trustee and the unsecured creditors’ committee for entry of order approving the plan support agreement.

An attorney for alleged victims of sexual abuse by priests has declined to sign a letter listing financial terms of a settlement in the Diocese of Gallup, N.M., bankruptcy case because the agreement is “nonbinding,” according to an attorney in the case, and could allow insurers to walk away from the deal, the Albuquerque Journal reported on Thursday. “We want to know that the letter means something,” and that insurers and others are required to provide the amounts indicated in the letter, said James Stang, who represents 57 alleged victims of clerical abuse who have filed claims in the case. Bankruptcy Judge David T. Thuma said that he was not surprised that attorneys are having difficulty finalizing a settlement in the 2-year-old bankruptcy case and asked them to continue working toward resolution. He set a hearing for Jan. 6 to review any progress toward a deal.

MF Global Holdings Ltd. collapsed more than four years ago, but former New Jersey Gov. Jon Corzine and the U.S. Commodity Futures Trading Commission are still sparring in federal court over who is to blame, Dow Jones Daily Bankruptcy Review reported today. The brokerage firm collapsed in the fall of 2011 revealing a shortfall of more than $1 billion in customer accounts. In an exchange of court papers, lawyers for the CFTC and for Corzine argued whether Corzine is liable as the person in control when the brokerage tapped customer accounts to support its own proprietary operations. Sued by the CFTC, Corzine says that he is entitled to a pretrial ruling that the regulator has no case against him.

Bankruptcy Judge Kevin R. Huennekens approved a deal resolving a dispute between coal operator Alpha Natural Resources and West Virginia regulators over the company’s mine reclamation bonds, the Associated Press reported yesterday. Judge Huennekens’ order said that the agreement is fair and equitable, and represents “a sound exercise of the Debtors’ business judgment.” He overruled an objection filed by the Sierra Club, the West Virginia Highlands Conservancy and the Ohio Valley Environmental Coalition. Tuesday’s order, filed in U.S. Bankruptcy Court in Richmond, Virginia, authorized Alpha to enter into a consent order with the West Virginia Department of Environmental Protection. Under the consent order, Alpha agreed to reduce its self-bonding obligations and to continue reclaiming mining operations in the state. Alpha also will provide $39 million in financial commitments to back its remaining self-bonded obligations. The company has more than 500 mining permits for its operations in West Virginia.

An appellate court denied Caesars Entertainment Corp.'s request for a speedy appeal of an unfavorable decision in ongoing creditor litigation, which could heat up next year, Dow Jones Daily Bankruptcy Review reported today. Court papers show the U.S. Court of Appeals for the Second Circuit on Tuesday denied, for now, Caesars's request to appeal a preliminary ruling in litigation that seeks to hold Caesars to prior guarantees of billions of dollars of its bankrupt operating unit's debt. In August, Judge Shira A. Scheindlin of the U.S. District Court in Manhattan declined to quickly rule on whether a series of asset-shuffling deals last year constituted an out-of-court debt reorganization that harmed the holders of about $7 billion in bond debt issued by the Caesars unit. However, the judge's decision drew some conclusions that were unfavorable to Caesars, leading her to authorize the casino and hotel company to try to challenge those rulings at the appellate court while the bondholder lawsuits moved forward. But the Second Circuit declined to let Caesars's challenge to the decision move ahead now, finding it didn't persuade the court that there were "exceptional circumstances" present to justify a speedy appeal in ongoing litigation.

The former operator of an ethanol plant in Hopewell, Va., is now planning to pay its debts under chapter 11 protection after several of its creditors tried to force the company to liquidate, the Richmond Times-Dispatch reported today. Vireol Bio Energy LLC received approval on Dec. 14 from the U.S. Bankruptcy Court in Richmond to convert its case to a voluntary chapter 11. Several of the company’s creditors, including Dominion Virginia Power, had filed a petition with the court in November to force the company into an involuntary chapter 7 liquidation of its assets. Dominion and three other creditors said together they were owed just more than $2 million.

Trustees of the Lac-Megantic settlement have fully funded the accounts to the over $330-million level as directed in the agreement, WCSH6.com reported yesterday. Robert J. Keach of Bernstein Shur, the chapter 11 trustee for Montreal Maine & Atlantic Railway, Ltd., and Richter Advisory Group, Inc., the monitor in the CCAA case for Montreal Maine & Atlantic Canada, announced yesterday that the settlement fund has been fully funded. A press release said the trustee will transfer approximately $82-million to the trust for the benefit of the holders of wrongful death claims starting this week. $228-million will be distributed to the holders of personal injury, moral damage, and economic and property claims, as well as to the federal, provincial and local government claims, will be handled by the monitor and will also proceed in the New Year.

Bankruptcy Judge Judge Tamara O. Mitchell authorized a settlement that allows Walter Energy Inc. to avoid a showdown with unsecured creditors over the coal-mining company's looming sale, Dow Jones Daily Bankruptcy Review reported today. Judge Mitchell said yesterday that she would approve the deal among Walter, the official committee representing its unsecured creditors and the senior lenders angling to buy Walter's core Alabama mining operations. The deal pledges the unsecured creditors' support for the sale, in which lenders are offering to forgive $1.25 billion of the debt they hold in exchange for Walter's assets, subject to higher bids. The deal also ensures the unsecured creditors wouldn't challenge the claims that form the basis for the lenders' bid.