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Joel Sanders, the former chief financial officer at now-defunct Dewey & LeBoeuf, avoided a prison term yesterday when a New York State Supreme Court justice instead ordered him to pay a $1 million fine and perform 750 hours of community service, the New York Law Journal reported yesterday. The Manhattan District Attorney’s Office had urged for the maximum sentence under his May 2017 conviction: One-and-a-third to four years in prison. Sanders was convicted in May of two Class E felonies and one misdemeanor, first-degree scheme to defraud and securities fraud under the Martin Act, as well as fifth-degree conspiracy. The no-prison sentence imposed by Manhattan Supreme Court Justice Robert Stolz is a remarkable outcome for a criminal case that began in 2014, when prosecutors filed more than 100 charges against four former Dewey & LeBoeuf figures, including the firm’s top three executives. Prosecutors alleged the executives hid the firm's precarious finances from investors and lenders before Dewey & LeBoeuf's May 2012 bankruptcy, in what remains the largest law firm failure in U.S. history.

Judge Martin Glenn yesterday approved a bankruptcy-exit plan proposed by CGG Group, a French oil-services company, and required the company to improve the transparency of its executive compensation, the Wall Street Journal reported today. Following a hearing yesterday at the U.S. Bankruptcy Court in New York, Judge Glenn signed off on the plan, part of a multinational restructuring that aims to shave about $2 billion in debt from the company’s books. However, a fight over the CGG’s transparency and disclosure practices—fundamental components of the bankruptcy system that are required by law—took up much of an otherwise routine hearing. The U.S. Trustee lodged a last-minute objection to CGG’s bankruptcy plan, demanding more information about the identities and compensation of top executives and others who will stay with the company when it eventually emerges from chapter 11 protection. Andrea Schwartz, a lawyer for the U.S. Trustee, said extensive negotiations with CGG’s attorneys had failed to produce acceptable disclosures. Judge Glenn largely agreed. During yesterday’s hearing, he criticized the company’s disclosures, likening the information supplied in a complex web of earlier public documents to a “Where’s Waldo” search. The judge ruled that all officers and directors of CGG’s U.S. affiliates must be named and that CGG must also provide a range or some other description of their total compensation. Other than the U.S. trustee’s objection, CGG’s debt restructuring has been largely consensual, with creditors voting overwhelmingly in favor of the plan.

Seadrill Ltd’s unsecured creditors’ committee said that it has hired an investment banker and is looking into transactions made by the global offshore drilling contractor before it filed for chapter 11 protection in Texas last month, Reuters reported yesterday. “We are looking at numerous pre-petition transactions that were described at least in part” in Chapter 11 filings by Seadrill on Sept. 12, the committee’s lawyer, Douglas Mannal, of Kramer Levin Naftalis & Frankel LLP said at a hearing yesterday in Houston. While it was unclear which transactions the committee was studying, Seadrill made some amendments to secured credit facilities before filing for creditor protection. In one instance, Seadrill said on Aug. 17 that it had amended three secured credit facilities related to rigs purchased by New York-listed Seadrill Partners LLC to insulate the U.S. affiliate from events of default related to the chapter 11 proceedings by removing it as a borrower or guarantor. In a Sept. 13 court filing, Seadrill said it had successfully ring-fenced its non-consolidated affiliates, including Seadrill Partners LLC, SeaMex Ltd and Archer Ltd.

Privately-held DuraFiber Technologies Operations and 11 affiliated debtors filed for chapter 7 protection with the U.S. Bankruptcy Court for the District of Delaware, BankruptcyData.com reported today. The company, which supplies industrial textile products, is represented by Domenic E. Pacitti of Klehr Harrison Harvey Branzburg. In July 2017, DuraFiber announced that it was preparing its production facilities in Salisbury, N.C., Shelby, N.C. and Winnsboro, S.C. to be idled if a buyer was not identified by September 11, 2017. A corporate release notes that these actions were taken following “a series of initiatives to lower production costs in response to increased competition in the textile industry, as well as a thorough review of strategic alternatives, including potential asset sales.” DuraFiber’s chapter 7 petition indicates assets greater than $100 million.

Perfumania Holdings Inc.’s reorganization plan, expected to become effective on Wednesday, has been accepted by the U.S. Bankruptcy Court for the District of Delaware, Newsday reported today. The Bellport, N.Y.,-based seller of celebrity and designer fragrances said that it “expects to pay vendors and suppliers in full in the ordinary course of business” under the pre-packaged bankruptcy plan. The chapter 11 plan calls for all outstanding shares of Perfumania common stock to be canceled, though “shareholders will be given the opportunity” to receive $2 per share in exchange for completing a shareholder release form. The retailer’s stock was delisted from the Nasdaq Stock Market in September after the company failed to make mandatory government filings. Read more. 

What does the future hold for retail bankruptcies? Be sure to attend ABI’s Bankruptcy 2017: Views from the Bench on October 17. 

Sempra Energy shares tumbled after saying it would issue more equity instead of bringing in outside investors to help fund its $9.45 billion takeover of Oncor Electric Delivery Co., in an attempt to appease Texas regulators, Bloomberg News reported yesterday. Shares fell as much as 2.9 percent, the most since December 2016, after Sempra said on Wednesday that it would buy all of Energy Future Holdings Corp., the parent of Texas power-line utility Oncor. The revised terms will eliminate $3 billion of debt at Energy Future. Sempra yesterday was in the process of filing for approval from the Public Utility Commission of Texas, a key step in getting the deal cleared. Texas regulators have quashed earlier takeover bids from NextEra Energy Inc. and a group led by Hunt Consolidated Inc. The sale is key to ending the bankruptcy of Energy Future, which has been restructuring nearly $50 billion of debt for more than three years.

Bankrupt nuclear firm Westinghouse Electric Co. is seeking up to $8.4 million in bonuses for top executives and select employees in order to convince them to stay at the company over the next year, the Pittsburgh Post-Gazette reported today. The Cranberry, Pa.-based firm filed documents with U.S. Bankruptcy Court of the Southern District of New York on Wednesday outlining a “key employee incentive program” that would be largely tied to the company hitting certain earnings targets within the next eight months. Twenty-six employees — 10 senior executives and 16 non-executives — would be eligible to receive between $4.2 million and $8.4 million in bonuses. In addition, the company is seeking to bump up the base salary of CEO Jose Emeterio Gutierrez from $627,000 to $1 million, and that of acting CFO Dan Sumner from $234,000 to $375,000. According to the consultant that Westinghouse hired in July to evaluate compensation, both executives get paid well below their peers at other companies.

Caesars Entertainment Corp. has an eye on expanding its Caesars, Harrah’s and Horseshoe brands in the United States and abroad after its casino operating unit emerges from nearly three years of bankruptcy as soon as today with $10 billion less in debt, Reuters reported. Industry analysts said it may be too late to catch up with rivals like MGM Resorts International, Wynn Resorts Ltd and Las Vegas Sands Corp that have spent years investing in high-growth Asian markets like Macau as U.S. gambling has cooled. Caesars has spent years struggling to manage more than $25 billion in debt, much of it taken on in 2008 when Apollo Global Management and TPG Capital led a leveraged buyout of the company. The operating unit filed for bankruptcy in early 2015. Caesars emerges from chapter 11 with a simplified structure by merging with Caesars Acquisition Corp. and other affiliates, and former creditors will hold a majority of the stock.

Creditors to Sears Canada have set a deadline of Oct. 7 for the retail chain to enter liquidation agreements for all its assets, leaving the company with just days to reach a deal to continue operations, Reuters reported. That tight deadline presents a challenge and could potentially derail negotiations with the executive chairman Brandon Stranzl, who stepped away from day-to-day operations of Sears Canada to come up with a proposal to keep the 65-year-old company running. Stranzl submitted a revised proposal, lawyers for Stranzl said. Stranzl’s bid presents “significant closing risk and uncertain recovery,” FTI consulting the court-appointed monitor said in a report on its website this week. Sears Canada has steadily lost market and struggled to remain relevant to shoppers who have switched to stores that keep up with fast-changing fashion trends. Sears Canada’s sales have fallen every quarter since it was spun off from Sears Holdings in 2012. Sears must agree to liquidate all its assets by Oct. 7 to receive payments from its creditors to ease a growing liquidity crunch, according to the latest amendment to an agreement between the company and its creditors.