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Bankruptcy Judge Kevin R. Huennekens yesterday gave final approval to Health Diagnostic Laboratory Inc.’s debtor-in-possession financing deal, the Richmond (Va.) Times-Dispatch reported today. The financing arrangement with CVF Beadsea LLC, an affiliate of the Greenwich, Conn.-based investment firm Credit Value Partners, gives Richmond-based HDL access to a revolving loan of up $12 million, which the company can use to support its business operations while it tries to sell itself under chapter 11 protection. The ruling by Judge Huennekens enables HDL, a blood-testing company with a laboratory and office in downtown Richmond, to access the full loan amount despite objections raised by the company’s primary lender, BB&T Bank. BB&T has questioned the terms of the financing deal, which the bank argues inappropriately put its claims on HDL’s assets in a subordinate position to the new lender. Late Friday, the U.S. District Court in Richmond denied an appeal by BB&T that sought to overturn Judge Huennekens’ preliminary approval of the financing arrangements on Aug. 4.

An affiliate of Paul Singer’s Elliott Management has asked a bankruptcy judge to push back a hearing on Relativity Media LLC’s proposed sale by a few days, saying that anything less would amount to a “trial by ambush,” the Wall Street Journal reported today. In bankruptcy court papers filed yesterday, the affiliate, Manchester Securities Corp., said that Relativity waited until the 11th hour to send new and conflicting information to its creditors, violating “basic notions of due process and fundamental fairness.” Manchester asked Bankruptcy Judge Michael Wiles to delay a key hearing scheduled for today until Friday, saying that the postponement would have no negative consequences for Relativity or other creditors. The new information disclosed late Friday — some of it under seal — includes essential facts and figures related to the company’s plan to hand its assets to a group of lenders, some of whom have also agreed to provide $45 million in financing to fund Relativity’s operations while in bankruptcy.

Bankruptcy Judge Robert Drain said yesterday that Great Atlantic & Pacific Tea Co. could sell pharmacy assets at 12 of its in-store pharmacies to Rite Aid Corp. for $8.1 million, the Wall Street Journal reported today. The approval by Judge Drain means the closings of the pharmacies will begin today and last through the beginning weeks of September. Rite Aid is buying inventory and customer-prescription information from pharmacies at 12 of the 25 A&P supermarkets that are closing. As part of the deal, Rite Aid will notify customers in writing that their prescription information is being moved, a recommendation made by Elise S. Frejka, a consumer privacy ombudsman appointed in the case. A&P said in court papers last week that it received seven bids for pharmacy assets at 22 of the 25 stores it is immediately closing, and the Rite Aid deal was the only one that exceeded the $5 million threshold that requires Judge Drain’s approval.

The Roman Catholic Archdiocese of Milwaukee yesterday filed its bankruptcy reorganization plan, formalizing a recent settlement deal that will divvy up $21 million among more than 300 victims of clergy sex abuse, the Associated Press reported yesterday. The archdiocese filed for chapter 11 protection in 2011 to address its sex abuse lawsuit liabilities. The bankruptcy plan is scheduled for review in November, and church officials are "hopeful this is approved by the judge," archdiocese spokesman Jerry Topczewski said. The creditors' committee, which comprises five abuse victims, is expected to endorse the deal, committee chairman Charles Linneman said. Victims' advocates have criticized several aspects of the agreement, and Peter Isely, Midwest director of Survivors Network of those Abused by Priests, said that he and others will work to address key issues, including getting more claims included in the settlement, before Bankruptcy Judge Susan Kelley reviews the case. Read more.

“Diocese and Religious Order Bankruptcies” will be a featured session at this year’s Winter Leadership Conference, happening December 3-5 at the Arizona Biltmore in Phoenix, Arizona. For more information and to register, click here.

A number of state and federal agencies are objecting to the broad releases of liability in defunct for-profit college operator Corinthian Colleges Inc.'s chapter 11 liquidation plan ahead of a bankruptcy court hearing on Wednesday to consider approval of the proposal, Dow Jones Daily Bankruptcy Review reported today. Corinthian's proposed plan says that student creditors and general unsecured creditors are receiving payment "in full and final satisfaction and settlement" of their claims. The plan provides for the establishment of two trusts, each containing a piece of what's left of Corinthian's assets, to pay the two creditor groups. The U.S. Department of Education said in court documents on Friday that the plan language amounts to a release of liability for Corinthian Colleges, which is still facing lawsuits from state and federal agencies regarding the company's allegedly deceptive marketing practices to students, among other issues. Corinthian has denied wrongdoing in these lawsuits.

Billionaire investor Ira Rennert failed to persuade a federal judge to throw out a jury verdict finding him liable for looting his now-defunct magnesium company to build one of the country's most expensive homes, on the east end of Long Island, N.Y., Reuters reported yesterday. U.S. District Judge Alison Nathan yesterday upheld all but $1 million of a $214 million award against the mining mogul and his holding company Renco Group Inc., and in favor of the trustee for bankrupt Magnesium Corp of America. Rennert is worth $6.1 billion, according to Forbes magazine. A Manhattan jury in February found Rennert and Renco liable for $118 million to the bankruptcy estate of Magnesium Corp., known as MagCorp, which sought protection from creditors in 2001. Nathan later added $96 million of interest, calculated at 6 percent a year from 2001, court records show. In Thursday's decision, Judge Nathan rejected Rennert's argument that the jury rendered an improper "compromise" verdict that did not reflect the facts or law they were supposed to consider.

Creditors of Caesars Entertainment Corp.'s bankrupt operating unit want a stake in the parent company in exchange for supporting a plan to restructure the sprawling casino empire, according to documents posted yesterday on a bondholder website, Dow Jones Daily Bankruptcy Review reported today. Caesars rejected the proposal, a spokesman confirmed. But the demands demonstrate the potentially large cost to Caesars and its private-equity backers, Apollo Global Management LLC and TPG, as they try to persuade creditors to back the operating unit's restructuring plan and drop litigation against the parent.

United States Investigations Services Inc. (USIS), the private firm that vetted former National Security Agency contractor Edward Snowden, has agreed to a settlement worth at least $30 million, resolving U.S. claims connected to its background investigations, Reuters reported yesterday. The U.S. Justice Department said on Wednesday that the settlement with USIS and its parent company, Altegrity Inc., will resolve claims that the firm failed to perform quality control reviews in connection with its background investigations. The Justice Department said the settlement is part of a broader deal struck as part of the bankruptcy proceeding for Altegrity, which filed for chapter 11 in February. The deal resolves claims first asserted in a whistleblower lawsuit filed in 2011 that the Justice Department later joined. The case was separate from USIS's review of Snowden, who lives as a fugitive in Russia after leaking documents about the NSA's surveillance programs, or Aaron Alexis, the technology contractor who killed 12 people at the Washington Navy Yard in 2013.

A judge yesterday paved the way for nearly 100 percent recoveries for creditors of MF Global's brokerage, an outcome considered unthinkable when the firm collapsed less than four years ago, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Martin Glenn approved the brokerage's request to hand pending litigation against former Chief Executive Jon S. Corzine and other company leaders to its parent company, setting the stage for the nearly full recoveries for creditors. Unsecured creditors of the brokerage will get between 94 cents and 95 cents on the dollar, said James B. Kobak Jr., a lawyer for James W. Giddens, the trustee unwinding the MF Global brokerage.

A federal appeals court yesterday refused to undo a central component of Tribune Co.’s bankruptcy plan in a defeat for prominent hedge fund Aurelius Capital Management LP, which claimed it was short-changed by the reorganization, Reuters reported yesterday. By a 3-0 vote, the U.S. Court of Appeals for the Third Circuit said that letting Aurelius pursue an appeal related to more than $2.2 billion of bankruptcy claims would be unfair to Tribune and to creditors who overwhelmingly approved the media company's chapter 11 plan. Circuit Judge Thomas Ambro said that those parties deserve "finality" after Tribune's emergence from bankruptcy in December 2012, while Aurelius did not deserve "by judicial fiat what it could not achieve by consensus within chapter 11."