%1

Oi SA’s largest equity investor called for a shareholders meeting to decide whether to take legal action against the chief executive officer and the chief financial officer and to scrutinize parts of the Brazilian phone company’s restructuring plan, Bloomberg News reported. CEO Eurico Teles and CFO Carlos Brandao exceeded their authority by negotiating the plan with creditors without the board’s approval, and investors should decide whether to file a civil liability claim against them, Pharol SGPS SA said in a letter published on Friday in a filing. The bankruptcy court overseeing Oi’s restructuring gave Teles full authority to negotiate with creditors without requiring the board’s approval, but that hasn’t stopped the shareholders from threatening legal action to keep the deal from going forward. The plan’s installment of new board members and a capital increase also require shareholders’ approval, said Pharol, a publicly traded holding company based in Lisbon, Portugal.

Creditors of Woodbridge Group, the real-estate developer at the center of an alleged $1.2 billion Ponzi scheme, have moved to oust the turnaround management team selected by former chief executive Robert Shapiro, who is accused of masterminding the alleged fraud, WSJ Pro Bankruptcy reported. In an emergency court filing on Thursday, the official committee representing thousands of individual investors caught up in the alleged Woodbridge fraud called on a bankruptcy judge to put the company’s affairs in the hands of a trustee. Regardless of the fraud allegations, Woodbridge owns a portfolio of high-end real estate, creditors contend. With professional tending, the properties can generate cash for thousands of small investors who otherwise face financial hardship, their lawyers say.

A New York federal judge absolved financier Lynn Tilton of a $1 billion racketeering lawsuit brought by managers of the Zohar investment funds who want her ousted from some troubled companies she has been running, WSJ Pro Bankruptcy reported. The Friday ruling by U.S. District Judge William H. Pauley III in New York dispensed with part of a legal campaign being waged by the Zohar collateralized loan obligation funds and their manager Alvarez & Marsal against Tilton, their founder. The funds, dubbed Zohar I, II and III, accused Tilton of pillaging money from their investors and the underlying portfolio of distressed companies under her control. The judge’s decision found those allegations to be outside the scope of federal racketeering law, which he said doesn’t allow for claims surrounding the purchase or sale of securities.

PricewaterhouseCoopers LLP was negligent in connection with one of the biggest bank failures of the financial crisis, a federal judge has ruled, opening up the Big Four accounting firm to the potential of hundreds of millions of dollars in damages, the Wall Street Journal reported. PwC violated auditing rules and didn’t take steps that could have detected a $2 billion fraud scheme that contributed to the 2009 failure of Alabama’s Colonial Bank, the judge ruled. The ruling on Thursday came in a lawsuit brought against PwC by the Federal Deposit Insurance Corp. U.S. District Judge Barbara Jacobs Rothstein will now consider separately whether damages should be imposed on PwC, and how much. She dismissed other FDIC allegations against PwC, as well as allegations of negligence that Colonial’s bankruptcy trustee brought against the accounting firm.

An Indiana power utility is asking a bankruptcy court to allow it to continue to try to forcefully take over a piece of a sports complex’s property after it rejected eminent domain payments, WSJ Pro Bankruptcy reported. The unfinished 170-acre Catalyst Lifestyles Sport Resort LLC was on the verge of being sold at a foreclosure auction when it filed for bankruptcy in October. Northern Indiana Public Service Co. has been seeking access to some of the Catalyst land to start upgrading 29.5 miles of underground natural gas lines, a project that the utility said would provide safer and more reliable power. The gas company said it hired an accounting firm to do an appraisal and then offered $39,500 to Catalyst last July to get access. But Catalyst wasn’t interested in the offer, prompting Northern Indiana Public Service to try to condemn part of the Portage, Ind., property through a complaint filed in Indiana state court last September. A hearing on that case is scheduled for February.

An attorney for victims for clergy sex abuse said yesterday that a judge has ordered all sides back to mediation in the years-long bankruptcy case of the Archdiocese of St. Paul and Minneapolis, but he said the ruling will quicken the process of getting payments to victims, the Associated Press reported. The judge denied both the archdiocese's reorganization plan and a competing plan submitted by a creditors' committee before ordering all sides back into negotiations, St. Paul attorney Jeff Anderson said. The archdiocese filed for bankruptcy protection in 2015, as it faced an onslaught of new abuse allegations. The plan from the archdiocese included a fund of more than $155 million for abuse victims who filed claims in bankruptcy court. The bulk of that money comes from insurance payments. A plan by the survivors' committee calls for the archdiocese to increase its contributions to the victims' fund to at least $80 million.

A company that grows, packs and ships potatoes in Oregon’s Klamath basin has filed for chapter 11 protection, the Capital Press reported. In its bankruptcy filing, Wong Potatoes of Klamath Falls reports owing between $1 million and $10 million to fewer than 100 creditors. It reported assets between $1 million and $10 million. The company, which was founded in 1930, produces 16 varieties of organic potatoes as well as several cultivars of conventional potatoes on nearly 5,000 acres. It employs between 50 and 100 workers, depending on season. Bankruptcy Judge Thomas Renn has approved a motion for Wong Potatoes to use cash collateral and a meeting of creditors has been scheduled for Jan. 10 in Eugene, Ore.

Accessories retailer Charming Charlie LLC has outlined its reorganization plan, which would see the company taken over by its lenders, WSJ Pro Bankruptcy reported. Before seeking chapter 11 protection earlier this month, Charming Charlie had reached a restructuring pact with its lenders and backers, which include private-equity firms TSG Consumer Partners and Hancock Park Associates. Under the proposed plan, the lenders and backers would swap their debt for equity and control of the company. The plan not only includes “the significant reduction” in debt and interest payments, but also new liquidity, which includes a $20 million bankruptcy loan, $50 million exit term loan, and a $35 million exit asset-backed revolver, according to court papers.

Philip Falcone’s hedge fund said it was defrauded by Apollo Global Management LLC into pouring $2 billion into the ill-fated wireless venture formerly known as LightSquared Inc., WSJ Pro Bankruptcy reported. Falcone’s Harbinger Capital Partners filed a lawsuit in New York state court on Thursday accusing Apollo of concealing flaws in a planned telecommunications network that ran into regulatory roadblocks years later, driving LightSquared into a costly bankruptcy. In the lawsuit, Harbinger claimed to have found evidence from U.S. patent archives showing that Apollo’s directors “knew, or were reckless in not knowing” about a set of 2001 test results casting doubt on the wireless network technology.