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Tangled up in the multi-million-dollar bankruptcy case of defunct retail giant Sports Authority is a pair of loans made to two former marketing executives, the Denver Business Journal reported yesterday. Englewood, Colo.-based Sports Authority, now known legally as TSA WD Holdings Inc., filed suit Jan. 17 against two of its former executives as part of the bankruptcy proceedings filed in U.S. Bankruptcy Court for the District of Delaware. One suit is against Jeff Schumacher, formerly Sports Authority's executive vice president and chief marketing officer, and Simon MacGibbon, also a former senior vice president at Sports Authority. Schumacher and MacGibbon had been with the company since 2009. Both left in 2011, long before it went bankrupt. The suit alleges that the two former executives were issued unvested shares in Slap Shot Holdings Corp., a subsidiary of Sports Authority. All Sports Authority's subsidiaries, including Slap Shot Holdings, closed along with Sports Authority.

Performance Sports Group Ltd. said today that it would seek approval from a U.S. bankruptcy court for the sale of its assets to Sagard Capital Partners LP and Fairfax Financial Holdings Ltd., after it failed to attract other bids, Reuters reported. Sagard, Performance's biggest shareholder, and Fairfax had agreed in October to act as stalking-horse bidders to buy most of the Bauer ice hockey gear maker's assets and its North American units for $575 million. The auction scheduled for Jan. 30 will not be held as no qualified bids were submitted by the deadline of Jan. 25, said Performance, which owns Mission Roller Hockey and Maverik Lacrosse brands.

A federal judge has blocked litigation that the trustee liquidating Bernard Madoff's firm said could undermine a $7.2 billion settlement meant to benefit the Ponzi schemer's former customers, Reuters reported yesterday. In a decision made public yesterday, U.S. District Judge Gregory Woods in Manhattan said that A&G Goldman Partnership and Pamela Goldman cannot pursue a Florida lawsuit to recover $11 billion from the estate of Jeffry Picower, who they say helped perpetuate Madoff's fraud. The decision is a victory for Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, whose settlement with Picower's estate is the largest since Madoff's fraud was uncovered in December 2008. Picard also won a permanent injunction in 2011 barring competing claims against the estate. Picower died in October 2009. In court papers, Picard said that letting the Goldman plaintiffs sue Picower's estate to recoup some $11 billion of customer losses, on top of the $7.2 billion, would create a "shadow" bankruptcy estate and undermine his authority to settle claims.

The financially troubled Cocoa (Fla.) Expo Sports Center has filed for chapter 11 protection, along with its CEO, Orlando businessman Jeff Unnerstall, the Orlando Sentinel reported yesterday. The sports center listed debts totaling $22.8 million on its bankruptcy court petition; that includes almost $11 million owed to Bank of Washington and $7.2 million owed to the Urban Development Fund of Chicago. The expo listed the loans as secured by its property, valued at around $10 million. Unnerstall also told the court he has ownership interest in Neptune Bay Apartments in St. Cloud, Fla., which is also pledged as collateral on the Bank of Washington loan.

A bankruptcy judge agreed on Monday to seal the financial settlement reached in the WARN Act compensation dispute between defunct Microfibres Inc. and plaintiffs certified for a class-action lawsuit, the Winston-Salem Journal reported yesterday. The reaching of a settlement was disclosed Jan. 13. The lead plaintiff is former Winston-Salem employee Cedric Williams. Microfibres, based in Pawtucket, R.I., filed for chapter 7 voluntary bankruptcy protection in January 2016 with plans to liquidate its assets — the same day it closed its plants in Winston-Salem and Pawtucket. The local workforce was at 270 employees in 2004. About 125 employees in Winston-Salem and 60 in Pawtucket were projected to be covered by federal Worker Adjustment and Retraining Notification, or WARN, protections. The plaintiffs asked for at least $1.5 million in damages and priority administrative claim status for the first $12,745 of each employee’s claim. Williams filed the sealed request with Judge Diane Finkle, with no objections from the bankruptcy trustee, Joseph DiOrio, who had asked the judge to dismiss the lawsuit.

Judges in Delaware and Canada yesterday approved a plan to pay more than $7 billion to creditors of Nortel Networks, ending years of litigation over the former telecommunications company that filed for bankruptcy in 2009, Reuters reported. The rulings by U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware and Frank Newbould of the Superior Court of Justice in Toronto ends one of the longest and most expensive chapter 11 cases, marked by battles over funds raised by the company's liquidation. The coordinated ruling yesterday will allow repayment of vendors, retirees in Canada, government agencies and investment funds later this year.

Peabody Energy Corp., the world's largest private sector coal producer, stood by its current bankruptcy exit plan, saying yesterday in court papers that alternative proposals threatened to send the company back into chapter 11, Reuters reported. Peabody's plan to slash $5 billion of debt has the support of the vast majority of its creditors but is opposed by Indiana, Missouri, environmental groups and certain former employees, creditors and shareholders. A small committee of objecting creditors has sent Peabody a series of alternative proposals to its own plan, which calls for the coal producer to emerge from bankruptcy in April with about $2 billion in debt. In a filing with the U.S. Bankruptcy Court in St. Louis, Lazard's Tyler Cowan, who has been advising Peabody on its restructuring, said the alternative plans contained "major flaws" in terms of valuation, debt capacity and feasibility. Given the "cyclical and volatile nature" of the coal industry, Cowan said that Peabody's debt should not exceed $2 billion given a long list of risks including China's coal policy, U.S. natural gas prices, and financing for environmental cleanup and retirement obligations.

A U.S. judge overseeing the bankruptcy of Linn Energy LLC said yesterday that he is prepared to confirm its restructuring plan with slight tweaks, backing the oil-and-gas producer's goal of shedding $5.5 billion in debt and splitting into two companies, Reuters reported. Bankruptcy Judge David Jones at the end of a hearing in Houston congratulated Linn's legal team and lawyers for working with its key stakeholders, noting that the company would have faced a hard time trying to restructure had they not agreed on the plan. Judge Jones added that he expects a final version of the plan to be filed with him by today. Linn filed for bankruptcy in May and had been negotiating with stakeholders in recent months on how best to split assets with its Berry Petroleum Co LLC subsidiary. In 2013, Linn acquired Berry for $4.3 billion, creating one of the largest independent energy producers. Under Linn's plan, Berry will become an independent company. Linn will shed nearly $4.3 billion of the roughly $6 billion in debt it had when it filed for bankruptcy. Berry will cut nearly $1.2 billion of its $1.7 billion in pre-petition debt. Read more. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

The events leading up to the collapse of Dewey & LeBoeuf, once one of New York’s most prominent law firms, are about to be relived for a second time in a Manhattan state courtroom, the New York Times DealBook blog reported yesterday. Prosecutors will again try to secure convictions of two former Dewey executives — Stephen DiCarmine and Joel Sanders — nearly 15 months after a state judge declared a mistrial in an earlier criminal case and almost five years since the law firm filed for bankruptcy. Jury selection began yesterday in New York State Supreme Court, and prosecutors have suggested that the second trial may not be much shorter than the earlier proceeding, which stretched out over five months. It ended with jurors unable to reach a unanimous verdict after 21 days of deliberations. Some jurors from the first trial said the length of the proceedings and the number of charges — over 100 counts against the three defendants — had made it difficult to reach a unanimous verdict. This time around, prosecutors are expected to introduce much of the same evidence and call the same witnesses. But at least jurors will have to consider fewer charges against DiCarmine, Dewey’s former executive director, and Sanders, the firm’s former chief financial officer.