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A lawsuit accusing hedge fund manager Philip A. Falcone and his Harbinger Capital Partners of misleading investors about the firm’s stake in LightSquared Inc. was dismissed by a U.S. judge, Bloomberg News reported yesterday. U.S. District Judge Alison Nathan in Manhattan today dismissed the remaining counts in the suit, after sharply narrowing it in a ruling in 2013. The investors claimed Harbinger acquired an interest in LightSquared, formerly known as SkyTerra Communications Inc., without adequately warning them of the risks. Harbinger ultimately owned 60 percent of LightSquared, which was developing a high-speed wireless broadband network before it filed for bankruptcy in 2012.

Exide Technologies faces more than $2.45 million in Texas penalties over violations at its now-closed plant in Frisco, the Dallas Morning News reported today. The penalties are part of a proposal that will be considered at the April 15 meeting of the Texas Commission on Environmental Quality. The six violations issued in 2013 relate to Exide’s handling and storage of hazardous waste at its site along Fifth Street. The state’s proposed agreed order is the latest step in the cleanup process in Frisco, where extensive contamination exists from the plant’s decades of operations. The order also calls for keeping the hazardous waste in the Class 2 landfill on site for long-term monitoring. State regulators say the other option — digging up the waste and transporting it to another permitted facility — is impractical and carries a risk to people and the environment. The state’s action comes on the heels of Friday’s bankruptcy court ruling in Delaware that confirms the company’s plan of reorganization. The confirmation allows the company to emerge from chapter 11 bankruptcy once it meets all of the conditions set out in the plan. Exide has already agreed to the terms in TCEQ’s proposal, including the $2,451,984 penalty.

A hearing on RadioShack Corp.’s plan to sell about 1,700 stores to its biggest shareholder is set to continue today, with the prospect of thousands of job losses if the deal falls through, Bloomberg News reported today. Standard General LP’s bid to take over the stores and run them in a co-branding arrangement with Sprint Corp. has met opposition from some creditors and been threatened by infighting among lender groups. Standard General said that jobs will be preserved if its plan is approved. Otherwise, the assets will be liquidated and stores closed. “There are over 7,000 jobs and very large business at stake,” Bankruptcy Judge Brendan Shannon said yesterday. A key issue in court is who shall be liable if lower-ranking creditors including Salus Capital Partners LLC successfully sue lenders for pre-bankruptcy actions. The unsecured creditors’ committee is investigating whether some RadioShack lenders could be held responsible for the electronics retailer’s bankruptcy.

Plastic-surgery chain Lifestyle Lift filed for Chapter 11 protection Friday, three-and-a-half weeks after abruptly shutting down its business and laying off its staff of nearly 400, the Wall Street Journal reported on Saturday. The bankruptcy court filing lists assets of less than $50,000 and liabilities of between $10 million and $50 million. Lifestyle Lift said that it is negotiating with a new management company to reopen most, if not all, of its roughly 50 surgery centers. The new company “is hoping to rehire the former employees at those centers, including doctors and medical staff.” The company, which filed for bankruptcy along with several related entities, owes money to vendors including Botox maker Allergan Inc.

Kanye West and Dame Dash may be coming to the rescue of Karmaloop, the online streetwear retailer that recently filed for bankruptcy restructuring, Billboard reported on Friday. The pair announced their intention to buy the company in a series of Instagram posts on Thursday following talks with Karmaloop founder Greg Selkoe. It was announced last week that the 15-year-old Karmaloop would be restructuring after filing for chapter 11 bankruptcy due to debt. In response to rumors of West and Dash's interest, Selkoe confirmed on Tuesday that the three were "talking" and on Thursday tweeted that it was "good speaking" with West. Following concern that he would be leaving the company he told one fan on Twitter that "I am here to stay no matter who we join forces [with]." While the Boston-based company's core business of online retail remains strong, it accumulated a "bunch of debt" from the launching of recent business startups, Selkoe told the Gearbottle website.

A bankruptcy court last week approved a plan that will let financially-strapped Morris Brown College emerge from bankruptcy, the chairman of the college’s board of trustees said, the Atlanta Journal-Constitution reported on Saturday. Morris Brown College Board Chairman Preston Williams said the action, approved at a Wednesday hearing and confirmed Thursday by a signed order by Judge Barbara Ellis-Monro, “will allow the college to exit bankruptcy and move forward to regain its accreditation.” The college filed for chapter 11 bankruptcy reorganization in August 2012. In a motion filed last week, the college spelled out a plan to resolve several remaining minor claims, including debts to ADT Security Service, the Robert W. Woodruff Library, a consulting firm and two individuals. A hearing on that motion has been scheduled for April 29.

The ranks of financially stressed companies have swelled to a four-and-a-half year high as the sharp drop in oil prices batters energy companies, the Wall Street Journal reported on Saturday. The number of companies with the worst below-investment-grade debt ratings rose to 184 in February, the highest count since November 2010, and remained at that level in March, according to Moody’s Investors Service. That is a 16 percent increase over March 2014. The 25 oil-and-gas and oil-services companies listed accounted for 13.6 percent of the total this month, their highest share ever. Moody’s tally of stressed companies includes only U.S. nonfinancial firms rated B3 with a negative outlook for future ratings changes or lower. The B3 rating is six notches into junk territory. “If this trend increases, we might see more defaults in the energy sector,” said Julia Chursin, an associate analyst at Moody’s. (Subscription required.) 

Looking for more information about the current distress in the oil industry? Read the feature article in the March edition of the ABI Journal, "The New Energy Crisis: Too Much of a Good Thing (Debt, That Is)." 

For more on oil and gas bankruptcies, be sure to pick up a copy of ABI's When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. Click here to order your copy. 

Battery maker Exide Technologies Inc. won bankruptcy court approval on Friday to implement a restructuring that cuts $600 million from its $1 billion in debt and puts the company under the ownership of senior lenders that have financed its stay under chapter 11 protection, the Wall Street Journal reported on Saturday. Bankruptcy Judge Kevin Carey signed off on the plan during a hearing on Friday, and approved the closure of Exide’s battery recycling plant in Vernon, Calif. Exide agreed to invest at least $50 million into the cleanup and demolition of the decades-old plant, which melted down lead from used car batteries to be used in the production of new batteries, as well as cleanup of the surrounding neighborhood. Exide is also in the process of cleaning up contaminated land, ground water and creeks near a lead recycling plant in Frisco, Texas that shut down in 2012.

An insurer that was required to help fund the $3 billion bankruptcy of Pittsburgh Corning has filed court papers seeking the case to be reopened, saying that “pervasive fraudulent conduct” by asbestos plaintiff lawyers tainted the proceedings, Forbes reported today. The filing by Everest Re and its Mt. McKinley Insurance unit follows the opening of millions of pages of documents in the Garlock Sealing Technologies bankruptcy, which revealed how lawyers representing asbestos plaintiffs deliberately delayed filing claims against bankrupt companies until they had completed cases against solvent ones, in order to avoid cluttering the record with potential evidence of exposure to other firms’ products. Everest is among the insurers ordered to pay $1.7 billion into the bankruptcy trust formed to settle claims against Pittsburgh Corning, a joint venture of PPG Industries PPG and Corning that made asbestos insulation widely used in ships, refineries and other industrial settings. A judge approved the bankruptcy plan in 2013 and last year a federal district court judge rejected Everest’s challenge to the plan.

A lender to bankrupt RadioShack Corp. told a U.S. judge on Friday it was prepared to present a new offer that was a "significant improvement" over a rival proposal that was selected as a winning bidder at an auction last week, Reuters reported on Friday. Anthony Clark, an attorney for Salus Capital Partners, said the lender was working on the bid and called it "a significant improvement over anything in front of the court right now." Clark's announcement came at the end of two days of hearings to consider the sale of the company to Standard General, a hedge fund. RadioShack's advisers declared that Standard General had outbid Salus, RadioShack's largest creditor, at a four-day auction that concluded on Thursday. Salus has challenged that, arguing that its bid included $271 million in cash, compared with just $16 million offered by Standard General. The hedge fund's proposal also included $112 million of debt forgiveness.