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U.S. energy regulators sided with pipeline operator Energy Transfer in a challenge to bankrupt oil and gas producer Chesapeake Energy’s request to cancel a nearly $300 million contract, court filings show, Reuters reported. Chesapeake ignited a fight when it asked the U.S. Bankruptcy Court in Houston to approve breaking pipeline contracts, including with Energy Transfer and Crestwood Equity Partners. The Federal Energy Regulatory Commission (FERC) in a filing this week argued that it should have equal say with the bankruptcy court over regulated pipeline contracts. FERC recently sought to have its voice included in contract disputes including with bankrupt utility PG&E Corp. “[A]ny court that decides the debtors’ (Chesapeake’s) motion to reject will have to consider the intersection of the bankruptcy code and non-bankruptcy federal law,” said U.S. Attorney Ryan Patrick, who is representing FERC in the case. Energy Transfer wants to keep its contract, insisting it is more complex than many canceled in bankruptcy courts in the past. It also has won Trump administration support for its fight to continue its Dakota Access crude oil pipeline. Company chief Kelsey Warren has been a donor to the president. Chesapeake, the largest oil and gas producer to file for protection from creditors in at least five years, wants to rid itself of $7 billion in debt and expenses including the pipeline contracts. 

Neiman Marcus Group Ltd. is suing Marble Ridge Capital LP after a bankruptcy watchdog said the hedge fund’s founder illegally pressured an investment bank to drop its bid on a lucrative piece of the department-store chain’s business so he could buy it himself, WSJ Pro Bankruptcy reported. In the suit filed on Wednesday in U.S. Bankruptcy Court in Houston, Neiman is seeking more than $60 million in damages from the hedge fund. The retailer is also asking a judge to subordinate Marble Ridge’s claims against Neiman during its bankruptcy proceedings. Because unsecured creditors aren’t being paid in full, ranking the hedge fund’s claim below the other creditors would essentially wipe out its Neiman holdings. Marble Ridge, created by Daniel Kamensky, is liquidating after a bankruptcy watchdog said that the hedge-fund founder suppressed a bid for shares in Neiman’s valuable MyTheresa e-commerce unit from investment bank Jefferies LLC. Marble Ridge had already offered to acquire the shares at a discount and Jefferies was prepared to pay more. Because of Marble Ridge’s illegal actions, the lawsuit says, Neiman’s creditors lost out on the opportunity to cash out their MyTheresa shares for $42 million to $54 million. The Neiman lawsuit is part of a long-running dispute between the hedge fund and the department-store chain’s owners over the MyTheresa business.

A judge overseeing the bankruptcy of Remington Outdoor Co., the maker of the weapon used to kill 26 people, mostly children, at Sandy Hook Elementary School in 2012, barred lawyers for victims’ families from probing the company’s finances, WSJ Pro Bankruptcy reported. Judge Clifton Jessup rejected inquiries from lawyers for the families of nine Sandy Hook victims at a hearing Thursday in U.S. Bankruptcy Court in Decatur, Ala. Lawyers for the families said that they wanted to see the company’s finances to verify whether Remington took refuge in chapter 11 for proper purposes, as it claims, or to dodge their lawsuit, which seeks to pry open the weapons industry’s marketing practices. Remington denies liability for the Sandy Hook shooting in Newtown, Conn. “Just because we filed for bankruptcy doesn’t give them the right to walk around and snoop around our business,” said Gary Svirsky, lawyer for Remington. Judge Jessup sided with the company and declined requests for information that would show whether Remington is in dire financial shape. The firearms maker returned to bankruptcy in July, a few years after shedding hundreds of millions of dollars in debt during an earlier trip through chapter 11. Remington’s latest bankruptcy filing came after the company exhausted its appeals of legal challenges that sought information about its sales practices. Sandy Hook families were on the point of obtaining documents and answers about how military-style weapons were marketed to young people, said Joshua Koskoff, a lawyer for the families.

Attorneys for the Boy Scouts of America are asking a federal judge in Delaware to take action to protect survivors of child sexual abuse from being misled or confused by advertisements from law firms about their ability to file claims in the organization’s bankruptcy case, the Associated Press reported. The Boy Scouts of America, based in Irving, Texas, sought bankruptcy protection in February in an effort to halt hundreds of individual lawsuits and create a huge compensation fund for men who were molested as youngsters decades ago by scoutmasters or other leaders. The bankruptcy judge earlier this year established a Nov. 16 deadline for victims of child sex abuse to file claims in the bankruptcy case. She also approved processes for potential victims to be notified and submit their claims. The notification process includes a nationwide paid media campaign of print, television, radio and online advertisements that is scheduled to begin Monday and run through Oct. 17. The Boy Scouts have said the notification program is expected to reach more than 100 million people, including more than 95 percent of the primary target audience of men age 50 and older. An expert for the Boy Scouts estimated that men in that age group account for more than half of former Boy Scouts and at least 71 percent of abuse survivors with pending claims against the BSA. But in a court filing this week, attorneys for the Boy Scouts said several law firms — including firms that represent either members of the official bankruptcy committee for abuse victims or a group called the Coalition of Abused Scouts for Justice, which is also involved in the bankruptcy case — have engaged in their own advertising campaigns to try to solicit sexual abuse victims. A lawyer for the Boy Scouts sent a cease-and-desist letter Aug. 10 to attorneys for the committee and the coalition, asking that they distribute the letter to the law firms representing their members and to other firms they knew were engaged in the advertising. But the misleading ads have continued, according to the court filing.

Joe Femenia, the head of distressed-debt trading at Jefferies Financial Group Inc., set in motion one of the most astonishing falls-from-grace to captivate the world of hedge funds, Bloomberg News reported. The 43-year-old former Navy SEAL is the unidentified executive outlined in court filings last week, whose taped conversation led to the swift downfall of Dan Kamensky’s Marble Ridge Capital. Kamensky allegedly tried pushing Femenia to abstain from submitting a rival bid for part of bankrupt retailer Neiman Marcus. But instead, Femenia raised alarms, providing enough details on the incident to a U.S. trustee to threaten Kamensky’s standing in the industry. By the end of last week, Kamensky had acknowledged he committed a “grave mistake” and his firm told investors it’s shutting down. Kamensky told the U.S. Trustee that his messages were “motivated by panic” that the Jefferies bid would interfere with his own proposal for the shares.

The New York Attorney General’s Office yesterday sued the Trump Organization, President Donald Trump’s son Eric Trump and two lawyers who have worked with the Trump Organization, asking a New York County Supreme Court judge to compel the defendants to comply with subpoenas, the National Law Journal reported. Attorney General Letitia James is investigating “whether the Trump Organization and Donald J. Trump … improperly inflated the value of Mr. Trump’s assets on annual financial statements in order to secure loans and obtain economic and tax benefits,” according to court documents. Land-use attorney Charles Martabano, tax attorney Sheri Dillon and Dillon’s firm Morgan, Lewis & Bockius are also named as defendants in the suit. Martabano and Dillon each worked on matters related to Seven Springs, a Westchester County estate. One focus of the investigation is whether the Trump Organization and its agents improperly inflated the value of Seven Springs, according to court documents. “Valuations of Seven Springs were used to claim an apparent $21.1 million tax deduction for donating a conservation easement on the property in tax year 2015, and in submissions to financial institutions as a component of Mr. Trump’s net worth,” wrote Matthew Colangelo, chief counsel for federal initiatives in the AG’s office. A number of other Trump properties, including Trump National Golf Club – Los Angeles, Trump International Hotel and Tower Chicago and the Manhattan office tower at 40 Wall Street are also part of the investigation, according to court filings.

A bankruptcy judge in Texas raised the question of whether the findings of an investigation into Marble Ridge founder Dan Kamensky should be referred to federal prosecutors to determine whether the investment manager committed a crime, Bloomberg Law reported. At the end of a court hearing on Friday, U.S. Bankruptcy Judge David R. Jones asked lawyers for the Office of the U.S. Trustee, an arm of the Department of Justice that deals with bankruptcy matters, whether they had given the results of their probe into Kamensky to federal prosecutors. The Trustee’s office said on Wednesday that the hedge fund manager had improperly tried to stop another bidder from buying some of Neiman Marcus Group Inc.’s best assets in the department store’s bankruptcy case. When told by a lawyer for the Office of the U.S. Trustee that it wasn’t clear whether prosecutors are involved, Judge Jones said that he will set a further court hearing on the matter. Kamensky declined to comment.

In related news, Marble Ridge Capital LP, a hedge-fund firm known for investing in distressed companies, is shutting down after a government inquiry found that founder Dan Kamensky tried to suppress bidding for a piece of bankrupt retailer Neiman Marcus Group Ltd, WSJ Pro Bankruptcy reported. A spokesman for Marble Ridge said on Friday that it is “winding down.” The decision marks a stunning fall for Kamensky, who built a reputation sifting through the subprime mortgage meltdown, founded Marble Ridge in 2015 and grew it to a firm with roughly $1 billion in assets under management. Since 2018, Kamensky has waged a legal campaign against Neiman’s private-equity backers, helping snare a big settlement that became his undoing. On Wednesday, watchdogs from the Justice Department concluded that Kamensky had secretly coerced a major investment bank not to bid for shares in Neiman’s e-commerce business, MyTheresa, that are part of that deal. Read more.

Disgraced Hollywood film mogul and convicted rapist Harvey Weinstein is asking a bankruptcy judge in Delaware to allow him to pursue arbitration in New York over what he claims is his wrongful termination from the company he co-founded, the Associated Press reported. An attorney for Weinstein submitted a court filing last week asking the judge who is presiding over The Weinstein Co. bankruptcy to lift the automatic stay that halts outside legal proceedings involving chapter 11 debtors so he can pursue the arbitration case he filed in 2017. “Newly discovered information and facts, gleaned during the course of investigation and discovery in collateral matters, have yielded evidence that corroborates the wrongful termination claim that is subject of the arbitration,” Weinstein attorney Julia Klein wrote. Klein also said there has been no willful delay in seeking to lift the bankruptcy stay in order to proceed with the arbitration. According to Wednesday’s court filing, Weinstein in 2015 entered into an employment agreement with The Weinstein Co. that includes a provision requiring binding arbitration in New York for any dispute between the parties, including claims for discrimination and for violation of any federal, state or local law. The company fired Weinstein in October 2017 just days after The New York Times published a story detailing decades of sexual harassment allegations made against him by actresses and employees. Weinstein filed an arbitration demand two weeks later, asserting violations of the employment agreement and related state law claims.