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Seven related companies based in Miami filed chapter 11 reorganization to halt a foreclosure lawsuit against their retail properties in the Little Haiti neighborhood of Miami, the South Florida Business Journal reported. Real estate investor Mallory Kauderer is the managing member of the seven companies that filed chapter 11 on Jan. 18 in U.S. Bankruptcy Court in Miami: 6200 NE 2nd Avenue LLC; 5911 NE 2nd Avenue LLC; 5901 NE 2nd Avenue LLC; 5900 NE 2nd Avenue LLC; 5700 NE 2nd Avenue LLC; 175 NE 55th Street LLC and 5524 NE 2nd Avenue LLC. The cases are being jointly managed. The debtors have yet to file a full accounting of their assets and debts. Miami-based attorney Steven Beiley, who represents the debtors, said they filed chapter 11 because they wanted to reorganize their debt after a single creditor won a foreclosure judgment and the auction date was coming up. In October, Chemtov Mortgage Group Corp. won a $7.5 million foreclosure judgment, based on $6 million in principal plus interest and fees, against the seven LLCs, Kauderer individually and Little Haiti Development Partners as guarantor. The foreclosure auction regarding 17 parcels was slated for Jan. 19. The filing of the chapter 11 automatically put the foreclosure on hold.

After more than a dozen years of motions, objections, petitions and appeals, the multibillion-dollar civil fraud case against five banks that provided financial services to Ponzi scheme perpetrator R. Allen Stanford and his investment firm will finally go to trial later this year and the trial will take place in Houston, the Houston Chronicle reported. A federal judge, who has overseen the massive litigation brought by thousands of investors who claim they were defrauded more than $5 billion in hard money by Stanford and the Stanford Financial Group between 1999 and 2008, said the biggest and final of all the lawsuits is ready to be sent back to Houston to be decided by a judge and jury in the town were the scheme took place. U.S. District Judge David Godbey of Dallas, who was appointed in 2009 to handle all civil litigation stemming from the Stanford fraud, ruled on Thursday that “the proper time to remand the case to the Southern District of Texas has arrived.” Lawyers involved in the litigation said the case could go to trial as early as this summer or fall and would be the largest in terms of civil damages to go to trial since a Houston jury awarded more than $10 billion to Pennzoil in its tortious interference case against Texaco 37 years ago. Judge Godbey, at the request of the U.S. Securities and Exchange Commission, which brought fraud charges against Stanford and his Stanford Financial Group in 2009, appointed Dallas lawyer Ralph Janvey to recover as much money as possible to return to the victims. To date, the receiver has collected $1.1 billion.

Seadrill New Finance has emerged from the chapter 11 process and is to become Paratus Energy Services after completing its restructuring under the reorganization plan, Splash247.com reported. A unit of offshore driller Seadrill filed a fast-tracked reorganisation plan in Houston bankruptcy court on January 12 this year. The approval will see secured noteholders take over most of the equity in Seadrill New Finance, with Seadrill retaining the remaining 35%, effecting a separation of Seadrill New Finance and its subsidiaries, including the Seabras Sapura assets and SeaMex, from the consolidated Seadrill group. A new board of directors of Paratus Energy Services has been appointed, consisting of Mei Mei Chow, Jim LaChance, Matt Lyne, and James Ayers, with Sergio Delgado, who will initially act as an observer. The plan called for between three and five members, up to four of which would be appointed by the noteholders, with the remaining director to be appointed by Seadrill. The move is not expected to impact the recoveries existing shareholders will receive under the Seadrill Limited plan. Moving forward, Seadrill or its subsidiaries will continue to provide certain management services to Paratus Energy Services.

Triple Crown Kitchen and Bath LLC recently filed a voluntary bankruptcy petition in U.S. Bankruptcy Court, Western District of Kentucky, Louisville Division, Louisville Business First reported. Triple Crown Kitchen and Bath, solely owned by Michael Gaines, reported a revenue of nearly $921,000 in 2021, but only $3,700 in total assets. It has no physical office space in Louisville. According to the bankruptcy filing, the company has 26 creditors, the vast majority of which are individual Louisville residents. Those individual claims range from $200 to nearly $24,000. Three claims were tied to businesses, including Louisville Glass Experts ($852), HomeAdvisor ($2,400) and Hatch ($499). In total, the claims against Triple Crown Kitchen and Bath add up to $163,500. The company indicated all of the claims are contingent and disputed.

A federal appeals court revived a McKinsey & Co. critic’s lawsuit alleging the consulting giant concealed conflicts of interest to obtain lucrative appointments advising bankrupt companies at the expense of rival firms, WSJ Pro Bankruptcy reported. Yesterday’s ruling by the Second Circuit Court of Appeals in New York revived a racketeering lawsuit accusing McKinsey of submitting false and misleading statements in 13 bankruptcy cases to hide financial conflicts that could have disqualified the firm from being retained. Jay Alix, the retired founder of rival consultant AlixPartners LLP, should also be allowed to pursue allegations that McKinsey ran a pay-to-play scheme to rig the marketplace for bankruptcy assignments in its favor, according to the appeals court. The ruling reinstated Mr. Alix’s lawsuit after it was dismissed by a federal judge in 2019. A McKinsey representative said Wednesday that the decision “solely addresses technical pleading standards and not whether Mr. Alix’s claims are true.” He has waged a broader battle against McKinsey for years across multiple courts alleging the firm profited by misrepresenting conflicts of interest involving major clients. “To date, Mr. Alix has lost all six of his lawsuits against McKinsey, and we are confident the evidence will ultimately show that this lawsuit is similarly meritless,” McKinsey said Wednesday. Had McKinsey truthfully and timely disclosed its conflicts, the firm would have been disqualified from obtaining at least some of the assignments it received, according to Mr. Alix.

Johnson & Johnson won’t have to fight against two separate committees of victims who say they were harmed by the company’s baby-powder after a bankruptcy judge threw out one of the panels, Bloomberg News reported. Bankruptcy Judge Michael B. Kaplan ruled that the federal bankruptcy watchdog must abide by a court order issued last year that set up a single official committee to represent more than 38,000 people who claim J&J’s baby powder gave them cancer. Kaplan then threw out a December decision by the watchdog, known as the U.S. Trustee, to reorganize that committee and add a second panel. J&J has long denied that the talc in its baby powder and other products cause cancer. The ruling is a victory for J&J and the unit it created to resolve billions of dollars worth of baby-powder lawsuits the consumer products giant faces. J&J put that unit, LTL Management, into bankruptcy to seek court permission to establish a $2 billion trust fund to address all current and future suits. Lawyers for the U.S. Trustee argued that under bankruptcy code, no court has the power to second guess its decision to set up a committee to represent creditors like the people suing J&J. The two panels represented people who have the two main types of cancer allegedly caused by talc in baby powder.

Grupo Aeroméxico SA B de CV is close to clinching court approval for a proposed corporate reorganization about 18 months after filing for chapter 11, although some creditors argue the bankruptcy plan unfairly enriches certain shareholders and shouldn’t be confirmed, WSJ Pro Bankruptcy reported. Some of Aeroméxico’s unsecured creditors — including Invictus Global Management LLC, Corvid Peak Capital Management LLC and Hain Capital Group LLC — say the proposed reorganization, which would recapitalize the business and bring in new owners, unfairly rewards certain insiders and creditors poised to own significant stakes in the airline after it exits bankruptcy. Objecting creditors said in court papers Tuesday they weren’t offered the same opportunity to subscribe to a planned sale of Aeroméxico equity as others with equal standing under bankruptcy law. “No bankruptcy court has ever approved…a plan of reorganization in which certain select creditors received a recovery on account of an investment opportunity while all other creditors in the same class were entirely excluded at the time of solicitation,” the objecting creditors said in a court filing.

Enstrom Helicopter Corporation is closing its doors after 64 years in operation, WBAY.com reported. Enstrom’s owners directed the company to declare chapter 7 bankruptcy due to “several financial difficulties,” according to a news release. Multiple groups expressed interest in buying Enstrom’s assets out of bankruptcy and restarting the company, Enstrom President Matt Francour said. “I don’t know how, and I don’t know when, but I have a feeling we’ll be back.” The Menominee, Mich., facility will close on Friday, January 21. Technical support for Enstrom customers ceased Wednesday. The company says it delivered its last two helicopters last month — an order for Peru’s air force — and stopped taking new parts orders earlier this month.

Toys “R” Us board members and owners face new allegations of fraud and breach of duty over the company’s 2017 bankruptcy, Bloomberg News reported. Creditors claim in ongoing litigation that seven company directors have now said they knew they shouldn’t have approved executive bonuses and onerous bankruptcy loans at the outset of the case that put the retailer on the fast track to a sudden liquidation six months later. The additional debt served to keep Toys “R” Us in business during its restructuring, but cost it more than $500 million in fees and interest and came with strict terms, or covenants, court documents show. The costs were borne by trade creditors and employees who continued to work with the company on the promise of a successful turnaround, but went unpaid when it couldn’t comply with the debt terms and shut down. Meanwhile, the owners and directors who signed off on the ill-fated financing received immediate bonuses of as much as $2.8 million as part of the plan, according to the filings. The creditors allege the authorization of those bonuses violated federal criminal law.