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Bankruptcy Judge Refuses to Halt Weinstein Co. Plan

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The Delaware judge presiding over the Weinstein Co. bankruptcy has rejected a request by four women who have accused disgraced film mogul Harvey Weinstein of sexual misconduct to put her approval of the company’s bankruptcy plan on hold, the Associated Press reported. The judge issued a one-page order on Wednesday denying the request for an emergency stay while the women challenge approval of the plan in federal district court in Delaware. Attorneys for the four women responded on Friday by asking the district court to put the plan confirmation on hold while it considers their appeal. According to a bankruptcy court filing, the plan has been “substantially consummated,” with an effective date of Thursday. The plan is being challenged by producer Alexandra Canosa and actresses Wedil David and Dominique Huett, who have accused Weinstein of sexual assault, and a former Weinstein Co. employee who claims she was subjected to a hostile work environment. Attorneys for the objectors say the plan includes overly broad releases from liability for third parties such as insurance companies and former Weinstein Co. officers and directors. They also argue that it contains a provision that unfairly prevents non-consenting sexual misconduct claimants from pursuing their claims. The bankruptcy plan provides about $35 million for creditors. That’s about $11.5 million less than under a previous plan, which was scrapped after a federal judge in New York refused to approve a proposed $19 million settlement between Weinstein and some of his accusers. The settlement in that purported class-action lawsuit was a key component of the initial bankruptcy plan.

Developer of Unfinished Coachella Hotel Spars With Lender in Bankruptcy

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The developer of an unfinished luxury hotel that sought to capitalize on the popularity of the Coachella Valley Music and Arts Festival is fighting in bankruptcy with a lender that has said the project was grossly mismanaged, WSJ Pro Bankruptcy reported. Glenroy Coachella LLC, the company behind the half-built hotel, said in court papers Friday that it filed an emergency bankruptcy to prevent lender Calmwater Asset Management LLC from moving forward with a foreclosure sale of the project’s land in Coachella, Calif. Monday’s chapter 11 filing in the U.S. Bankruptcy Court in Los Angeles marked the latest twist in litigation embroiling the project, pitched as “an upscale and modern oasis in the heart of the Coachella valley.” Operating under the Hotel Indigo banner, the finished hotel would include a 10,000 square-foot pool, retail stores, spa and other luxury amenities. An investment fund managed by Calmwater has accused Stuart Rubin, a real-estate investor and manager of Glenroy Coachella, of using a false budget to obtain a $24.4 million construction loan. Calmwater has accused Mr. Rubin of underreporting the true cost of building the hotel by about $20 million. Rubin and lawyers for Glenroy Coachella and Calmwater didn’t immediately return messages Friday seeking comment. Rubin has disputed Calmwater’s allegations. Project investor Gary Stiffelman has also accused Mr. Rubin of mismanaging the project, saying he diverted project funds for his personal use, including to cover the cost of a Bentley lease, according to court papers.

Uber, Judge Skeptical of Levandowski's Tactics to Protect Wealth from Creditors

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Despite a last-minute pardon by former President Donald Trump in his criminal case, tech pioneer Anthony Levandowski's legal woes continue after he was forced to file for bankruptcy protection on the same day he was ordered to pay Google $179 million in a contract dispute last year, FreightWaves reported. Uber Technologies, Inc. is now taking issue with the proposed terms of his bankruptcy, claiming he used "legally dubious techniques to shelter his wealth from creditors," according to an Ars Technica article published earlier Thursday. "I continue to view many of the transactions in which Levandowski engaged immediately prior to the filing of this bankruptcy case with an incredibly jaundiced eye," U.S. Bankruptcy Judge Hannah Blumenstiel said on a phone conference last week, the news outlet reported. Levandowski filed for chapter 11 bankruptcy protection on March 4, 2020, in the U.S. Bankruptcy Court for the Northern District of California. Levandowski's attorney, Neel Chatterjee of Goodwin Proctor LLP, told FreightWaves at the time. He listed $50 million to $100 million in assets, compared with $100 million to $500 million in liabilities, according to the filing. Between 2016 and 2017, Levandowski received $127 million for his work on autonomous vehicle technology at Google. Uber claims in court filings that he "immediately put in motion an elaborate scheme to shield his assets from creditors."

NRA Taps Kirkland as Special Litigation Counsel as Gun Rights Group Fights to Stay in Bankruptcy

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Kirkland & Ellis LLP is showing up in a special role in the National Rifle Association’s tangled bankruptcy case as the gun-rights group faces challenges over its decision to seek court protection, WSJ Pro Bankruptcy reported. The NRA on Wednesday filed court papers seeking permission to hire Kirkland as special litigation counsel after it said that lawsuits drove it to file for bankruptcy. New York has accused the NRA of allegedly misusing charitable funds, adding to a number of other legal fights over alleged mismanagement. Managing the litigation is the chief goal of the bankruptcy case, the NRA has said. Some Kirkland partners, including former U.S. Solicitor General Paul Clement, have handled Second Amendment matters for the NRA for years as part of its business with the gun rights organization. The bankruptcy rules being invoked to tap Kirkland as a special litigation counsel limit the purposes for which the law firm could work, and indicate it won’t be involved in restructuring the organization. The move to hire Kirkland as a special litigator in chapter 11 comes after federal bankruptcy watchdogs challenged the qualifications of the NRA’s longtime lead law firm, Brewer, Attorneys and Counselors, to serve as special counsel in the bankruptcy case for work on matters different than Kirkland would.

Insurers Question Claims Process in Boy Scouts Bankruptcy

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The judge presiding over the Boys Scout of America bankruptcy is weighing a request by insurance companies for permission to serve document requests on 1,400 people who have filed sexual abuse claims and to question scores of them under oath in an effort to determine whether there is widespread fraud in the claims process, the Associated Press reported. The insurance companies maintain that tens of thousands of sexual abuse claims that have been filed in the case appear to be barred by the passage of time based on statutes of limitation in many states. Thousands more lack essential information needed to determine their validity, such as identifying a connection with the Boy Scouts or the name of a perpetrator, according to the insurers. In addition to wanting to question alleged abuse survivors, the insurance companies on Wednesday requested permission to question and collect documents from 15 plaintiffs’ attorneys who personally signed hundreds of claims. Claim forms typically must be signed by the claimants themselves, but in the days leading up to the deadline last November, some attorneys signed several hundred claim forms a day. The insurers contend that a large percentage of attorney-signed claims are missing critical information, and that many appear to be submitted “machine-gun style,” with photocopied attorney signatures and signature pages generated before the proofs of claim were even created. Bankruptcy rules state that by signing a document submitted to the court, an attorney certifies that he or she has reviewed the contents to ensure it has evidentiary support.

Tyson Foods Reaches Partial Deal to Save the Beef at Bankrupt Easterday Ranches

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Tyson Foods Inc.’s meat-producing unit and bankrupt Easterday Ranches Inc. have a court-approved pact that will keep cattle moving toward the market while the ranch operation and Tyson try to settle their differences in bankruptcy court, WSJ Pro Bankruptcy reported. Tyson Fresh Meats Inc. has accused Easterday of a $200 million fraud involving allegedly phony billing by the ranching business that was supposed to be caring for its cattle. More than 50,000 head of cattle were left on Easterday’s Washington state property earlier this month when the family-run ranch business filed for chapter 11 protection. Tyson had sued, accusing Easterday of billing for feed and care for nonexistent cattle. At that session, Judge Whitman Holt approved the settlement, after hearing from Easterday Ranches that it had few options. With no long-term source of financing in sight, Easterday Ranches lawyer Maxim Litvak said the business had no choice but to allow Tyson to take some of its cattle away. Tyson is the ranch’s sole customer and the $1.4 million that Easterday will receive as part of the pact is the only ready cash coming in right now, the ranch’s lawyer said.

U.S. Bankruptcy Watchdog Says NRA Law Firm Has ‘Disqualifying Conflicts’

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The Justice Department’s bankruptcy monitor wants the National Rifle Association’s go-to lawyers barred from representing the gun-rights group in its chapter 11 case, citing “disqualifying conflicts” and previous allegations of billing improprieties, the Wall Street Journal reported. Brewer Attorneys & Counselors, a law firm that has represented the NRA in court and administrative proceedings across the country, isn’t suitable to be part of the crew of court-supervised lawyers handling the gun group’s bankruptcy, according to a Tuesday court filing by the U.S. Trustee, which oversees bankruptcy courts for the U.S. government. In addition to the NRA itself, the Brewer firm has also represented Wayne LaPierre, the group’s chief executive officer and a prime target of litigation brought by New York’s attorney general alleging rampant financial misdeeds. LaPierre is now separately represented, according to an NRA spokesman. But the prior relationship between LaPierre and the Brewer firm makes it “highly unlikely” that as the NRA’s counsel the Brewer firm would look into or advocate for any claims the group may have against him, the U.S. Trustee said. “The statements in this legal filing, like others, reflect a misinformed view of the Brewer firm, its billings and its advocacy for the NRA,” said Charles L. Cotton, first vice president of the NRA. “I, and all the officers, fully support the work the firm is doing, the results achieved, and the value of its services. As we have stated before, this relationship has been reviewed, vetted and approved,” he said.

Clergy Abuse Victims Lawyer Seeks Internal Report on Long Island Diocese’s Assets

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A committee of clergy-abuse victims is seeking a bankruptcy-court order to force the Diocese of Rockville Centre to hand over an internal report detailing the institution’s transfer of millions of dollars of assets within the past four years, WSJ Pro Bankruptcy reported. Lawyers for an official committee of abuse survivors filed papers on Friday seeking a report on a number of transactions carried out by the suburban Long Island diocese, including the transfer of cemeteries, real estate in Huntington, N.Y., and $3 million in cash to a number of affiliates. Abuse victims’ efforts to force the diocese to disclose details of the diocese-authorized inquiry signals potential coming fights over transfers it undertook that victims believe may have shielded valuable assets from those seeking compensation. Rockville Centre filed for bankruptcy in October, becoming the largest diocese to seek chapter 11 protection in response to lawsuits by victims of sexual abuse. Friday’s court filing concerns the Independent Advisory Committee, a body the diocese created in 2019 to investigate, litigate and settle any potential claims that the transfers were fraudulent and carried out to shift assets beyond the reach of abuse survivors.

Troubled Coachella Hotel Project Files Bankruptcy Amid Lawsuit

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The owner of a lavish hotel development near the site of Coachella, the famous California music festival, has filed for bankruptcy after lawsuits and delays stymied its plans, Bloomberg News reported. Glenroy Coachella LLC, which owns the Hotel Indigo development, sought chapter 11 protection yesterday in Los Angeles, according to a bankruptcy petition. The entity listed assets of $50 million to $100 million and liabilities of $10 million to $50 million. The bankruptcy filing comes after Stuart Rubin, manager of the project, faced a lawsuit from his business partner, Gary Stiffelman, for $50 million amid allegations of “incompetence and fraud,” according to the Palm Springs Desert Sun. The lawsuit alleged that the development spent two separate budgets of $25 million. Hotel Indigo, a division of InterContinental Hotels Group Plc, doesn’t list the Coachella location among its current properties. Construction on the project began in early 2017 under the guidance of Rubin’s son, Joseph, and was met with delays almost immediately, according to the Stiffelman lawsuit. The project was supposed to be completed in time for the 2018 edition of the Coachella Valley Music and Arts Festival, according to the lawsuit. Hotel Indigo Coachella was billed as a luxe, 35-acre resort close to the festival grounds, complete with a DJ stage, catwalk, 10,000-square-foot (3,049 square meter) pool, casitas and 250 guest rooms, according to a 2018 article from the Los Angeles Times.