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Apollo Global Management LLC is facing a new lawsuit over its prior ownership of Core Media Group Inc., the production company behind reality television competitions “American Idol” and “So You Think You Can Dance” that slipped into bankruptcy in 2016, WSJ Pro Bankruptcy reported. The lawsuit was filed on Friday in the U.S. Bankruptcy Court in New York by a trust representing Core Media creditors. The complaint expands the scope of existing litigation against Apollo, which was already facing a related lawsuit pending in New York State Court v. Apollo and three former directors of Core before the company’s bankruptcy are accused in the new lawsuit of devising a series of transactions beginning in 2014 that allowed the firm to cash out its investment at the expense of creditors. The trust also filed a separate lawsuit last week over distribution rights for the television game show “The Wall,” which Core also developed. The “American Idol” lawsuit is seeking to compensate the “debtors and their creditors, who were left unpaid hundreds of millions of dollars” for losses the trust alleges were caused by Apollo. The private-equity firm acquired the business through a leveraged buyout that was financed in part with a $360 million bridge loan, the lawsuit said.

Private equity firm Lantern Capital is nearing a deal to acquire the Weinstein Company, the TV and film studio whose former chairman Harvey Weinstein faces sexual assault claims, with a $310 million offer, Reuters reported. The Weinstein Company filed for bankruptcy in March with the offer from Lantern Capital in hand as the stalking-horse bidder. It had hoped to get better offers from other suitors, but no higher bid emerged by a deadline set in a bankruptcy auction for yesterday. The deal, which is subject to approval by a U.S. bankruptcy judge, would be the culmination of efforts by the Weinstein Company over several months to find a buyer. An offer for the studio from a group of investors led by former Obama administration official Maria Contreras-Sweet failed to produce a deal earlier this year, after New York Attorney General Eric Schneiderman filed a civil lawsuit against the company and demanded more compensation for Harvey Weinstein’s victims. Read more.

In related news, Ashley Judd sued Harvey Weinstein yesterday, opening a new legal battlefront for the disgraced film producer by claiming that her career withered because he spread lies about her in Hollywood after she rejected his sexual requests, the New York Times reported. Judd has an A-list director on her side: Peter Jackson, who came forward in December to say that he removed her from a casting list “as a direct result” of what he now thought was “false information” provided by Weinstein. Until then, according to the lawsuit, Judd did not know that “something unseen was holding her back from obtaining the work she wanted, and had been doing so for decades.” he suit, filed in Los Angeles Superior Court, involves Jackson’s “Lord of the Rings” films, the first of which was released in 2001. Jackson had wanted to cast Judd in a prominent role in the series. But Weinstein “torpedoed Ms. Judd’s incredible professional opportunity,” according to the complaint, by falsely telling Jackson that Judd was a “nightmare” who should be avoided “at all costs.” Read more. 

Gibson Brands Inc. filed for bankruptcy with a turnaround plan that will give some of the company’s lenders equity ownership of the iconic American business that’s supplied guitars to B.B. King, Elvis Presley and Pete Townshend, Bloomberg News reported. A restructuring support agreement with senior secured noteholders will help it repay bank loans while going through a "change of control" transaction, according to papers filed today with its chapter 11 bankruptcy in Delaware. The petition estimated up to $500 million in debt, and the lenders have agreed to an operating, or "debtor in possession," loan of up to $135 million to fund operations. The change in control will give noteholders equity in a new company, replacing current stockholders such as Chief Executive Officer Henry Juszkiewicz. According to court filings, current noteholders include Silver Point Capital, Melody Capital Partners LP, and funds affiliated with KKR Credit Advisors. The restructuring will also allow the instrument business to "unburden" itself of a consumer-electronics unit that Gibson blamed for its financial woes.

Toys “R” Us (Canada) Ltd said on Friday that it received U.S. and Canadian court approval to sell itself to Prem Watsa’s Fairfax Financial Holdings Limited, Reuters reported. The sale, which also includes Babies “R” Us stores in Canada, is expected to close this quarter, the company said.

The hearing in a Richmond, Va., federal bankruptcy court was jammed. Alpha Natural Resources Inc., a coal producer, had filed for chapter 11 protection, and dozens of creditors were there to find out how the company’s assets would be divvied up. The company and its advisers, including the restructuring unit of McKinsey & Co., had devised a reorganization plan that would split the company in two, the Wall Street Journal reported. In exchange for their defaulted loans, secured lenders would receive ownership stakes in a new company that would own ANR’s most profitable mines. Unsecured creditors, including pensioners and environmental claimants, would share in revenue from ANR’s lesser remaining operations. Judge Kevin R. Huennekens approved the plan, which had the backing of creditors. At that July 2016 hearing, a lawyer for Citigroup Inc., one of the senior lenders, called the case “an example of how a chapter 11 truly should work.” The creditors, however, didn’t have all the facts about ANR adviser McKinsey when they voted to support the plan a month before the hearing. They didn’t know a McKinsey retirement plan had a $110 million investment in a hedge fund, run by Whitebox Advisors, which held a stake in ANR’s senior debt. That gave McKinsey a financial interest in the new company’s fate. Nor did they know that another senior lender, Barclays Bank PLC, was a McKinsey client. A Wall Street Journal analysis of disclosure filings in all 13 chapter 11 cases in which McKinsey’s restructuring unit, called McKinsey RTS, has participated shows the company routinely discloses far fewer names and descriptions of connections than other advisers. McKinsey initially identified by name a total of 59 connections to participating debtors, creditors, lawyers and accountants in those cases. The roughly 45 other bankruptcy professionals involved in those cases, including law firms, accounting firms and restructuring advisers, reported more than 15,000 named connections in total. On average, McKinsey reported five such relationships per case compared with the other firms’ disclosures of 171 connections each.

After six years of litigation and three attempts at mediation, victims of Catholic clergy sex abuse in Eastern Montana have reached a settlement with the church, the <em>Billings Gazette</em> reported. The tentative $20 million agreement with the Great Falls-Billings Diocese was announced Friday by the diocese and two law firms representing the victims. The bankruptcy judge and the victims still must approve the settlement. The claims cover allegations of sexual abuse between the 1940s and 1980s at ministries throughout the eastern half of the state, from the St. Labre Indian School on the Northern Cheyenne Reservation to the small town of Absarokee. A year ago the diocese filed for Chapter 11 bankruptcy protection to negotiate a settlement. In March, the diocese moved to dismiss its bankruptcy case, saying that negotiations had reached an impasse and continuing legal costs were draining the resources it had to fund a settlement. To fund the settlement, the church will use bishop assets and money from its insurance carrier, Catholic Mutual Insurance. The insurance coverage started in 1974 and covers just 22 of the claims.

Billionaire investor Peter Thiel has agreed to end his pursuit of Gawker.com to avoid a potential lawsuit over his secretly funding litigation that drove the news and gossip blog’s publisher out of business, WSJ Pro Bankruptcy. The agreement between Thiel, his firm Thiel Capital LLC and an adviser liquidating Gawker Media LLC was filed yesterday in the U.S. Bankruptcy Court in New York. The agreement concludes more than a year of legal wrangling over a possible lawsuit and clears the way for a sale of Gawker, which ceased publishing in 2016 but remains on the web. Thiel has agreed to withdraw from the sale process and to provide the eventual buyer a legal release for articles in the Gawker archive. The release also covers writers who wrote articles for the site before the blog shut down, according to the filing. Lawyers for Gawker Media have asked a judge to sign off on the agreement. The sparring with Thiel was one of the last open issues in Gawker Media’s nearly two-year-old bankruptcy. Thiel funded retired professional wrestler Hulk Hogan’s successful legal case against Gawker over its publishing excerpts from a surreptitiously recorded video of a sexual encounter with the wife of his former friend, radio show host Bubba the Love Sponge.

Harvey Weinstein borrowed $1 million from his company last year in the months before public revelations of his alleged sexual misconduct plunged the movie studio that bore his name into bankruptcy, WSJ Pro Bankruptcy reported. In all, Weinstein took home nearly $3 million during his last half year at the award-winning studio, new court papers say. Additionally, Weinstein Co. paid nearly $2 million to service a debt Weinstein personally guaranteed, which was owed to a company controlled by billionaire Len Blavatnik. Records filed yesterday in the bankruptcy case of Weinstein Co. detail what Mr. Weinstein, his brother and studio co-chief Bob Weinstein and other leaders received from the company before and after misconduct allegations against Harvey Weinstein were published in October.

Toys “R” Us Inc. is winding down its business, but the retailer still has a lot of moving parts to deal with before it closes its doors in the U.S. for good, WSJ Pro Bankruptcy reported. At a hearing in the U.S. Bankruptcy Court in Richmond, Va. on Tuesday, Toys “R” Us’s lawyers mapped out the end game for the company. The company’s recent focus has been on reaching a resolution with merchandise vendors, a group that stands to lose approximately $800 million as a result of Toys “R” Us’ rapid liquidation. The vendors are posing an obstacle to Toys “R” Us’ wind-down procedures, filing numerous objections as the likelihood of receiving payments remains unclear. Toys “R” Us attorney Joshua Sussberg said yesterday that it’s still unclear how these vendors will be paid, but the company has been in discussions with vendors, creditors and lenders in hopes of reaching a global resolution. Compromises have already been reached as the groups work toward a resolution, court papers show, although any deals are still subject to court approval. Among the compromises, the retailer has proposed that “at least some funds will be carved out and set aside” for the benefit of the post-bankruptcy merchandise vendors. In addition, the carve out — somewhere between $150 million to $160 million — comes without releases of past, present or future claims against the company, management, lenders or other interested parties.