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A federal judge said yesterday that he will approve Revel AC Inc.’s liquidation plan after the former owner of the twice-bankrupt Atlantic City, N.J., casino reached several long-elusive settlements with its creditors, the Wall Street Journal reported today. Bankruptcy Judge Michael Kaplan said that the liquidation plan, which will bring Revel’s hard-fought chapter 11 case to a close, will start the process of rejuvenating Atlantic City. The plan divvies up proceeds from the sale of the 47-story boardwalk tower. Revel, which cost $2.4 billion to build, was sold to developer Glenn Straub for $82 million, leaving little behind to repay creditors.

A prominent Kentucky health-care company that once featured University of Kentucky basketball coach John Calipari in its TV ads filed for bankruptcy protection in the face of accusations from Medicare officials that it paid illegal kickbacks to doctors, Dow Jones Daily Bankruptcy Review reported today. Nurses' Registry and Home Health Corp. filed for bankruptcy on Friday in U.S. Bankruptcy Court in Lexington, Ky., demanding that Medicare officials release $1 million in payments for health-care services it provided. The 200-worker company, which provides skilled nursing, physical therapy and occupational therapy to roughly 1,350 patients, takes in nearly $1.3 million a month in Medicare payments, or about two-thirds of its revenue, according to documents filed in U.S. Bankruptcy Court in Lexington, Ky. Medicare officials suspended payments to Nurses Registry earlier this year after suing the company over alleged kickbacks and improper billing. Nurses Registry has denied wrongdoing. Read more. (Subscription required.)

For further insight into fraud and bankruptcy, be sure to pick up ABI’s newest title, Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.

Bankruptcy Judge Shelley C. Chapman yesterday approved a settlement in the long-running legal fight between Lehman Brothers Inc. and Barclays PLC, punctuating one of the more intriguing sagas of Lehman’s collapse and its aftermath, the Wall Street Journal reported today. Judge Chapman said yesterday that the deal, which calls for Lehman to pay Barclays $1.28 billion for so-called margin assets tied to Barclays’s purchase of Lehman’s brokerage business in 2008, was “fair and equitable.” The legal battle over the assets, which climaxed in a 34-day trial back in 2010, ends with both sides agreeing to drop all litigation against the other. More than $580 million cash will become available for Lehman creditors, because Lehman had set aside about $1.87 billion for the dispute. Both Barclays and James W. Giddens, the trustee unwinding Lehman’s brokerage, have said the payment is about $80 million less than what Giddens would have had to pay without a settlement.

A Memphis taxi cab company filed for bankruptcy as attorneys with Shelby County (Tenn.) Sheriff's deputies by their side were trying to seize its cars, MyFoxMemphis.com reported yesterday. Arrow Cab owes Melvin Barnes $1 million following an accident that left Barnes with life-changing injuries. Barnes has 36 screws and a plate in his leg after the 2009 accident. The Tennessee Supreme Court even upheld this settlement. Melvin Barnes has been waiting six years for the money awarded by the court.

A former Dewey & Leboeuf partner who advised the now-defunct firm on a $150 million bond offering five years ago testified yesterday that he was never in the loop about its finances and relied completely on assurances by the finance department that the 1,400-lawyer firm was on sound financial footing, American Lawyer reported today. Richard Shutran, a senior corporate and finance partner at predecessor firm Dewey Ballantine who became one of the highest-compensated lawyers at successor Dewey & LeBoeuf, where he co-chaired the latter’s corporate department, told jurors at a criminal trial of three former firm leaders that he served as in-house counsel on the 2010 private placement. As inside legal counsel on the bond offering and $150 million refinancing, Shutran said that he only really reviewed the legal terms in loan agreements with the finance team. Shutran said he subsequently learned about the full extent of Dewey & LeBoeuf’s financial problems in early 2012, when he became part of a team of five senior partners tasked with righting the troubled firm. Those efforts ultimately failed.

ProNerve LLC, a defunct maker of surgery-monitoring devices, is seeking bankruptcy court approval of chapter 11 plan that pays unsecured creditors about five cents on the dollar, Dow Jones Daily Bankruptcy Review reported today. The company on Wednesday filed a combined chapter 11 plan and disclosure statement with the U.S. Bankruptcy Court in Wilmington, Del. ProNerve sold its assets to SpecialtyCare IOM Services LLC in a $35 million debt-for-equity swap after failing to attract any other qualified offers. The purchase price took the form of a credit bid, meaning Specialty Care, which had bought more than $43 million in the company's debt at a discount, essentially forgave that amount. Read more. (Subscription required.)

For more on credit bidding and issues surrounding the strategy, be sure to pick up a copy of ABI’s Credit Bidding in Bankruptcy Sales: A Guide for Lenders, Creditors, and Distressed-Debt Investors. 

The children of craft store kingpins Charles and Sam Wyly say they shouldn’t suffer for their fathers’ transgressions, but the U.S. Securities & Exchange Commission says that they shouldn’t be allowed to spend the proceeds of the brothers’ fraud, the Dallas Morning News reported today. The Wyly brothers used gains from secret, illegal, offshore transactions “as their own personal piggybank,” the SEC had said ahead of appeals hearing yesterday, where the family sought to lift a judge-imposed freeze on its assets. U.S. District Judge Shira Scheindlin’s order against 16 people, including both men’s wives and 10 children, unfairly applies to “any asset that was acquired or commingled with funds received from the Wyly brothers at any time during the past 10 years,” the family said. The appeals panel, which also included judges Jose Cabranes and Christopher Droney, didn’t immediately rule. The SEC won the freeze on the family assets as it seeks to collect a $300 million penalty levied on the Wyly brothers after a trial in which a federal jury found they perpetrated an offshore stock-trading fraud for 13 years. The SEC said the fraud yielded them $550 million in illegal profits.

The U.S. Department of Education is opposing a request from the Corinthian Colleges Inc. student committee to freeze all student debt collection efforts during Corinthian's bankruptcy case, saying that the motion shouldn't apply to federal loans, Dow Jones Daily Bankruptcy Review reported today. Broadly, the federal agency argued that the halt requested by the student committee is beyond the scope of what the bankruptcy code can do. But more practically, the Education Department noted, there is already a process whereby students can halt collection efforts by the government.

Lehman Brothers Holdings Inc. says Stephen Ross's Related Cos. and Barclays Group PLC  were part of a group of swaps market players that "manipulated" the closeouts of derivatives contracts at the expense of Lehman and its creditors, MarketWatch.com reported yesterday. In an amended complaint filed on Tuesday with U.S. Bankruptcy Court in New York, Lehman said that after it collapsed in 2008, LCOR Alexandria LLC — a firm partially owned by Related — sought about $6.7 million from Lehman to close out a derivatives contract, even though Lehman was actually the one owed about $42 million. Lehman originally filed the suit against LCOR in November 2013, seeking about $83 million in principal and interest. The new suit, which also names a Related Cos. employee and other parties, seeks more than $15 million in some of the nine counts but an "amount to determined at trial" for some others. Lehman, which added Barclays to the suit in December 2014, said that the bank participated in the "scheme" by providing a below-market value "replacement" swap to LCOR. The complaint against Barclays alleges that  the bank aided and abetted a breach of fiduciary duty, as well as breaching its agreement to purchase the assets of Lehman's brokerage in 2008.