%1

Caesars Entertainment Corp. is lobbying to roll back a Depression-era creditor-protection law that could complicate the casino giant’s financial restructuring, the Wall Street Journal reported today. The Las Vegas company and its owner, Apollo Global Management LLC, have been working to support legislation that would amend the Trust Indenture Act of 1939. Some lawmakers, including Sen. Harry Reid (D-Nevada), have pushed to include the measure in a sweeping spending bill that Congress must pass by Friday to avoid a government shutdown. An amendment to the law could gut lawsuits against Caesars brought by bondholders of the company’s bankrupt operating division. The bondholders have filed a lawsuit arguing that transactions that took the Caesars parent company off the hook to guarantee their debt violated the Trust Indenture Act. The law protects creditors against transactions that impair their principal or interest payments.

Beginning this month, the Obama administration will forgive nearly $28 million in federal student loans for 1,312 former Corinthian Colleges students who say the defunct for-profit chain violated their rights, the Washington Post reported on Friday. The move marks the first major step the Education Department has taken in resolving thousands of defense-to-repayment claims, a petition for the government to discharge federal loans on the grounds that a school used illegal or deceptive tactics in violation of state law to persuade students to borrow. Advocates say the department is still taking too long to approve claims, while some policymakers worry that the government is on a path to losing billions of dollars in taxpayer money. On Thursday, the independent monitor appointed to oversee the process, Joseph A. Smith, said that his team focused on claims from people who attended Corinthian’s Heald Colleges, the heart of a $30 million fine the department levied against the company in April for falsifying job rates. The established evidence in Heald case made it easier to grant relief to Heald students, Smith said. The monitor reviewed 1,670 claims from Heald students, 358 of which remain under consideration.

The trustee liquidating Bernard Madoff's firm on Friday began distributing another $1.19 billion to victims of the swindler's Ponzi scheme, Reuters reported. Trustee Irving Picard said that the payout will boost distributions to more than $9.16 billion. Next week marks the seventh anniversary of the uncovering of Madoff's decades-long fraud. Madoff, 77, pleaded guilty in March 2009 and is serving a 150-year prison term. The latest payout will go to holders of 1,071 accounts at the former Bernard L. Madoff Investment Securities LLC. Picard said that he will make individual distributions ranging from $1,298 to $202 million. Once they are made, 1,269 of the 2,238 Madoff accounts with valid claims will have been fully satisfied, and everyone owed $1.16 million or less will have been paid in full, the trustee said.

Bankruptcy Judge Christopher Sontchi said yesterday that he would approve Energy Future Holdings Corp.’s plan of reorganization, clearing a major hurdle toward ending the contentious bankruptcy for Texas's biggest power company, Reuters reported yesterday. Under the plan, Energy Future will sell its Oncor power distribution business to a consortium led by Hunt Consolidated of Texas. That deal has been valued at $19 billion. Energy Future's power plants and retail utility will be spun off to senior creditors, which are owed $24 billion. The company has been slowly winning over creditors, and by the end of a weeks-long trial that ended in late November only a few objectors remained. Those included the U.S. Trustee, who objected to the payment of some legal fees, and a lawyer who represents people with asbestos injuries. Judge Sontchi overruled the objections, although he did require that some fee payments be reviewed for reasonableness.

Bankruptcy Judge Christopher Sontchi will announce today whether he will approve a chapter 11 exit plan for Energy Future Holdings Corp., Texas's biggest power company, Reuters reported today. Judge Sontchi must consider whether the plan by Energy Future is fair to creditors. Under the plan, Energy Future will sell its Oncor power distribution business to a consortium led by Hunt Consolidated. That deal has been valued at $19 billion. Energy Future's power plants and retail utility will be spun off to senior creditors, which are owed $24 billion.

The bankrupt operating unit of Caesars Entertainment Corp. (CEC) has appealed a ruling that would enforce payments of nearly $364 million in pension liabilities, Reuters reported on Friday. Caesars Entertainment Operating Corp. (CEOC) had asked the bankruptcy court to shield its parent from liability demands by the National Retirement Fund, a pension fund that covers thousands of employees across five affiliated Caesars companies. Bankruptcy Judge Benjamin Goldgar denied that request earlier this month, saying that CEOC's bankruptcy does not protect its parent. The dispute is one of many Caesars faces in its $18 billion chapter 11 case and it is not the first time that Judge Goldgar has denied a request to protect its parent from creditors' claims. In July, Judge Goldgar decided to allow lawsuits from hedge fund creditors against the parent to proceed. Caesars appealed the ruling but it was later upheld by U.S. District Judge Robert Gettleman. Caesars' lawyers have argued that claims against CEC could jeopardize the parent's ability to contribute cash to a reorganization plan to pull the casino group out of bankruptcy.