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General Motors Co. will be in court today fighting to maintain a bankruptcy shield blocking legal claims from customers seeking compensation for declining resale values and injuries stemming from a defective ignition switch, the Wall Street Journal reported today. The switch has been tied to at least 56 deaths and stems from a safety lapse that Chief Executive Mary Barra has said arose from a “pattern of incompetence and neglect.” But today’s legal battle, with plaintiffs seeking billions of dollars in damages, is also largely the result of a significant concession GM made more than five years ago to expedite its emergence from bankruptcy proceedings. The automaker finds itself back in Bankruptcy Judge Robert Gerber’s courtroom because that deal weakened the very bankruptcy shield that GM is now trying to keep. Judge Gerber presided over GM’s government-backed restructuring and is essentially revisiting details of the case to decide whether plaintiffs can sue for losses associated with vehicles made before the company’s restructuring. The plaintiffs want GM stripped of its bankruptcy shield. GM for more than a decade failed to recall vehicles equipped with switches prone to jostling out of the run position and cutting power to air bags and other safety features.

A lawyer who represented Apollo Global Management LLC in the Momentive Performance Materials Inc. bankruptcy said the judge’s ruling in that case will let private-equity firms negotiate more aggressively with creditors, Bloomberg News reported yesterday. Apollo, which owned Momentive, was allowed to impose a reorganization plan on the chemical company’s senior secured creditors that gave them new notes for the full amount of their debt at lower-than-market interest rates. Bankruptcy Judge Robert D. Drain also denied them their make-whole payments, which compensate bondholders for early redemption of their notes. The precedent will allow private-equity owners to push secured creditors to accept less favorable terms than they might otherwise seek, using the threat of the cramdown ruling, said Ira Dizengoff, a partner at Akin Gump Strauss Hauer & Feld LLP.

Missouri Attorney General Chris Koster said that the state will receive $43.9 million as part of a $5.15 billion bankruptcy settlement involving Anadarko Petroleum Corporation, Legal Newsline reported yesterday. A portion of the money will go toward helping the state clean up two sites in Missouri. Each clean-up project will receive approximately $19 million, with another $5 million going to Missouri’s Natural Resource Damages program. The two sites in Missouri were used for creosote wood treatment by energy company Kerr-McGee. The sites now have contaminated soil and groundwater. Tronox, a spin-off of Kerr-McGee, inherited the environmental liabilities after Kerr-McGee was sold to Anadarko, Koster says. After Tronox filed for bankruptcy, Anadarko was found to be responsible for the debt. "This case is the largest environmental bankruptcy settlement in U.S. history," Koster said. "Missouri's share of the settlement will cover the cost of remediation at the former Kerr-McGee sites in our state and result in millions more for reclamation of other damaged sites for public use." Read more: http://legalnewsline.com/news/254908-missouri-getting-44m-from-anadarko-petroleum-bankruptcy

Such environmental cleanups are commonly funded through liquidation trusts. To learn more about such trusts, including a detailed analysis of the Tronox case, order your copy of ABI’s A Practitioner's Guide to Liquidation and Litigation Trusts available for pre-order in the ABI Bookstore.

Bankrupt electronics retailer RadioShack Corp. kicked off a process to auction leases of about 1,700 stores to avoid paying an estimated $7 million in rent next month, Reuters reported yesterday. The company, which filed for bankruptcy protections last week, filed a motion yesterday in bankruptcy court to approve the procedures for the sale of the leases. RadioShack had a tentative deal to sell as many as 2,400 of its 4,100 stores to an affiliate of hedge fund Standard General, one of its lenders and largest shareholders. But that agreement is subject to higher bids. As part of that deal, Sprint Corp. is working with Standard General to sell mobile devices as well as RadioShack products, services and accessories in at least 1,750 of those stores. RadioShack had received court approval on Monday to borrow $10 million to support operations until it opens the bidding for its best-performing stores.

The sale of Atlantic City's shuttered Revel Hotel and Casino was hanging by the thinnest of threads on Wednesday after a U.S. bankruptcy judge denied a move to extend the closing date but left in limbo a motion to terminate the deal, Reuters reported yesterday. Bankruptcy Judge Gloria Burns put off ruling on whether Revel AC could terminate its deal with Florida developer Glenn Straub, who made a $95.4 million bid for the casino, which has never turned a profit since it opened in 2012 with a $2.4 billion price tag. Judge Burns will hear arguments on Feb. 17 about whether Revel can solicit a new buyer and keep Straub's $10 million deposit.

Atlantic City, N.J.’s embattled Trump Taj Mahal casino has agreed to a settlement of federal findings that it violated anti-money-laundering requirements, the Wall Street Journal reported today. The Treasury Department’s financial crimes enforcement regulators in December told Trump Taj Mahal Associates LLC it had violated the Bank Secrecy Act’s “program, reporting and record-keeping requirements,” according to papers filed in the U.S. Bankruptcy Court in Wilmington, Del. Trump Entertainment Resorts, the casino unit’s parent company, noted in a statement that the civil consent order was reported in the chapter 11 plan voting materials that have been approved for creditor balloting. The company detailed the settlement on Tuesday in a motion seeking approval from a bankruptcy judge. Trump Taj Mahal has agreed to consent to the assessment of a $10 million civil penalty, and admits violations of the anti-money-laundering program requirements.

The Revel Casino Hotel in Atlantic City, N.J., asked a bankruptcy judge to end its agreement to sell the gambling complex to Florida developer Glenn Straub for $95.4 million, Reuters reported yesterday. The hotel's legal team also asked Judge Gloria Burns for permission to keep Straub's $10 million deposit. The sale to Straub became embroiled in disputes with owners of the casino's $160 million power plant, and with a group of restaurants and nightclubs that once operated in the casino, which closed in September. The restaurants feared that they could lose millions in construction costs if the sale to Straub proceeded and they were stripped of their leases. But under a stay of the sale issued by U.S. District Judge Jerome Simandle, it remained unclear if those businesses were included in the $95.4 million purchase price from Straub. The Revel asked Judge Burns to hold a hearing today to consider its requests.

Bondholders who extended roughly $50 million to bankrupt San Bernardino, Calif., are criticizing city leaders who plan to protect money for employee pensions but negotiate cuts on the city's other debts, Dow Jones Daily Bankruptcy Review reported today. In court papers, the Luxembourg bank that represents bondholders said the city's decision to make full payments to the state's employee pension fund "was not guided by any sort of strategic vision." Citing a recent ruling from another bankrupt California city, the bank's lawyers said that San Bernardino leaders need to make pension cut decisions at the same time that they redraw contracts with its police and firefighter unions. Since the city filed for bankruptcy on Aug. 1, 2012, San Bernardino leaders still haven't reached new money-saving union agreements for its police officers and firefighters as part of their effort to cut more than $20 million in labor costs from the city's budget.

Threatened with a creditor revolt, Energy Future Holdings Corp. said that it would be distributing a term sheet this week outlining a proposal for reshaping its $42 billion debt load and ending a contentious stay in bankruptcy, the Wall Street Journal reported today. The announcement that the Dallas energy company is preparing an outline of a proposed reorganization plan came at a court hearing where multiple creditors expressed frustration at the lack of progress in the big chapter 11 case, which began last year. When it filed for chapter 11 protection, Energy Future brought with it a partially agreed-to restructuring strategy, which it later abandoned. In the months that followed, Energy Future hasn't come up with a new way out of chapter 11. The company won bankruptcy court approval yesterday to hang on to exclusive rights to file a chapter 11 emergence plan until June 23, at a hearing where creditors clamored for action. Energy Future originally asked to cling to sole control of the case until Oct. 29 but dialed back the request after creditors protested.

The trustee handling Casey Anthony's bankruptcy says most of the $25,000 he has available to distribute should go to the trustee's attorneys, the Associated Press reported yesterday. Trustee Stephen Meininger said in a final report filed in bankruptcy court last month that $22,000 should be paid to attorney Allan Watkins. In an interview with the Associated Press on Monday, Meininger said that Watkins spent more money than he is receiving investigating false claims. Watkins says the $25,000 was loaned to Anthony by a friend so Anthony could buy back the rights to her life story. Meininger says those rights went to the trustee fund once Anthony filed for bankruptcy. Anthony was acquitted in 2011 of murdering her 2-year-old daughter.