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A federal appeals court on Monday upheld a decision rejecting claims of fraud by Harbinger Capital Partners, the equity owner of bankrupt wireless venture LightSquared, against Deere & Co. and other GPS firms, Reuters reported yesterday. Hedge fund Harbinger had accused Deere, Garmin International, Trimble Navigation Ltd., and a GPS industry group of misleading LightSquared about interference concerns and hastening the wireless spectrum's plunge into bankruptcy. But the U.S. Court of Appeals for the Second Circuit affirmed a ruling by the Manhattan federal court in February, saying that Harbinger's arguments were "without merit." LightSquared has separately brought claims against the parties, which are currently being litigated in the Southern District of New York. While the Second Circuit’s decision is a blow for Harbinger, it comes just three days after the Federal Communications Commission (FCC) approved LightSquared's request to transfer its valuable wireless spectrum into a newly-formed company.

Offshore drilling rig operator Paragon Offshore PLC is in talks with its bondholders aimed at reaching a deal to reduce its $2.6 billion debt load, the Wall Street Journal reported today. The Houston company recently started confidential discussions with bondholders including AllianceBernstein Holding LP and Loomis Sayles & Co. The debt restructuring could involve a swap of bonds for new debt, an ownership stake in the company or a cash payment. The bondholders are working with advisory firm Ducera Partners LLC while a separate group of Paragon’s senior lenders has tapped PJT Partners Inc. Paragon earlier this year said it tapped investment bank Lazard Ltd. and law firm Weil, Gotshal & Manges LLP for advice on fixing its capital structure. Read more. (Subscription required.) 

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Proposed changes to an obscure Depression-era law are causing a ruckus among the Wall Street investment funds that are battling over the debt restructuring at Caesars Entertainment and other companies, the New York Times DealBook blog reported yesterday. Tucked away in the omnibus spending bill in Washington, D.C., is an amendment to that law, the Trust Indenture Act of 1939, that critics say would hand a victory to Apollo Global Management, which owns the casino company, at the expense of some bondholders. Hedge funds and other bondholders have been at odds in the Caesars restructuring, which concerns about $10 billion in bond indentures. Six other restructurings could also be affected if the amendment is approved, including that of for-profit college operator Education Management Corporation, which is backed by the private equity giant Kohlberg Kravis Roberts & Company.

American Apparel Inc. founder Dov Charney is working with a small investment bank on a potential bid to buy the clothing retailer out of bankruptcy, Bloomberg News reported on Friday. Charney, who has been trying to regain control of American Apparel since being ousted last year, has engaged Cardinal Advisors LLC to evaluate options, according to a statement e-mailed to Bloomberg on Friday. Charney was fired last December from his dual roles of CEO and chairman following allegations of misconduct. He has since pushed for his return without success. The retailer was struggling with losses and debt under his leadership, and its results only worsened after his dismissal. That ultimately led the chain to file for bankruptcy protection in October.

Federal regulators on Friday approved LightSquared’s request to transfer its valuable spectrum licenses to a newly formed company, paving the way for the wireless venture to emerge from bankruptcy protection by the end of the year, the Wall Street Journal reported on Saturday. The Federal Communications Commission approved the company’s change-of-control application, allowing the transfer of its licenses to spectrum, the limited pockets of airwaves that mobile-phone and Internet companies use, to a “New LightSquared,” a condition of the plan to exit bankruptcy after more than 3 and a half years under court protection. Notably absent from the restructured wireless venture’s management group is hedge-fund manager Phil Falcone and his Harbinger Capital Partners, which lost control of the company during the bankruptcy case. Fortress Investment Group LLC, Centerbridge Partners and J.P. Morgan & Chase Co. share ownership in the reorganized company. Falcone, who lost nearly $2 billion on LightSquared, will maintain at least a 44 percent stake in the company, although the hedge-fund manager won’t have day-to-day say in the wireless spectrum venture’s operations.

Fuhu Holdings Inc., a maker of kid-friendly computer tablets, filed for chapter 11 protection, Reuters reported today. The El Segundo, Calif.-based startup, which Forbes called America's most promising company in 2014, said that it had assets and liabilities of $10 million to $50 million. Fuhu launched last week a monthly subscription service for children aged 3-14 with content from Walt Disney Records, DreamWorks Animation and National Geographic Kids.

Black Eyed Pea restaurants in Texas declared chapter 11 bankruptcy DallasVoice.com reported yesterday. The restaurant on Cedar Springs Road is the original Black Eyed Pea that has been in that location since 1975. Over the past two years, 15 Black Eyed Pea restaurants in Texas have closed. 

Agri-Fine Inc., which makes vegetable-oil-based ingredients used in livestock feed, filed for chapter 11 protection on Wednesday with plans to send its assets to the auction block, the Wall Street Journal reported yesterday. The family-owned business blamed its financial woes on a “perfect storm” of unfavorable market conditions, including a plunge in commodity prices and high transportation costs. A number of lawsuits, frozen by the company’s bankruptcy, have also hampered its finances. In court papers filed with the U.S. Bankruptcy Court in Chicago, the company’s vice president said it expects to seek court approval for the sale and is in the process of negotiating a deal with a potential lead bidder.

Axion International Holdings Inc. filed for chapter 11 bankruptcy protection yesterday with plans to sell its assets, the Wall Street Journal reported today. The Zanesville, Ohio-based company, which makes railroad ties, construction mats and other building materials, said in court papers that it has a bid lined up from one of its investors, which it aims to put to the test in an auction process. Investor Allen Kronstadt has agreed, through a credit bid, to forgive at least $3.2 million of the approximately $5.2 million he has lent Axion in exchange for its assets. The publicly traded company blamed its bankruptcy filing and need for a sale on liquidity issues and recurring operational losses. It has sought to right the ship by curtailing production, liquidating available inventory and seeking new investors, but these efforts have been “largely unsuccessful,” the company said in court papers.