%1

Hampshire Group, Ltd., announced that the company and two of its U.S. subsidiaries have filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court in Wilmington, Delaware in order to facilitate the orderly wind-down of their business operations, the ABL Advisor reported yesterday. Hampshire Group was unable to attract a financing source to provide adequate liquidity to fund the company’s ongoing strategic turnaround initiatives. As a result, the company’s Board of Directors determined that an orderly liquidation and wind-down of its licensed businesses would be the best way to maximize value for the benefit of the company’s creditors and stakeholders. Litigation efforts pursued by one unsecured creditor since July of this year have compelled the Hampshire Group and certain of its affiliates to seek chapter 11 protection in order to continue to pursue, and ultimately complete, the wind-down process without disruption. Hampshire Group, along with its wholly-owned subsidiary, Hampshire Brands, Inc. is a provider of fashion apparel across a broad range of product categories, channels of distribution and price points. In conjunction with its bankruptcy filings, the Hampshire Group has received a commitment from its senior secured creditor, Salus Capital Partners LLC, to allow the company to utilize cash collateral in accordance with a mutually agreed upon budget.

“Real Housewives of New Jersey" star Teresa Giudice agreed last month to split a potential legal windfall with her creditors, but now the bankruptcy attorney whom she is suing is opposing the proposed settlement, NJ.com reported on Wednesday. Giudice filed suit against her former bankruptcy attorney James Kridel last year for legal malpractice, claiming that the Clifton lawyer's bad advice and mistakes led to her conviction for bankruptcy fraud. Giudice, who lives in Montville Township, N.J., served nearly a year in prison after taking a plea deal for bankruptcy fraud and conspiracy to commit wire and mail fraud, the latter pertaining to a mortgage scheme that predated the bankruptcy. Her husband Joe is currently serving a 41-month sentence. After she filed suit, however, John Sywilok, the trustee who represented her creditors in the bankruptcy case, successfully reopened the bankruptcy, after claiming that any money the couple won in the Kridel case should go to their creditors. After a contentious mediation, Giudice's lawyers Anthony Rainone and Carlos Cuevas eventually settled with the trustee John Sywilok, agreeing that her creditors will get 45 percent of any winnings, and that Sywilock will join Giudice's malpractice case as a plaintiff. On Tuesday, Kridel's lawyer Carl Perri filed a motion in federal bankruptcy court objecting to the settlement on the grounds that Rainone and Cuevas have a conflict of interest with Sywilok and his attorney. Read more. 

What is it like to be at the helm of a celebrity bankruptcy? Practitioners to discuss on panel at ABI’s Winter Leadership Conference. 

A Hanjin Shipping attorney told a federal court last Tuesday that it has virtually no assets in the U.S. to compensate several retailers, logistics providers, insurance companies and other claimants who fear the loss of claim rights if the court recognizes the carriers’ South Korean bankruptcy case, JOC.com reported on Wednesday. The claimants, in papers filed in U.S. District Bankruptcy court in New Jersey fear that their rights will be impaired, or lost if the court approves Hanjin’s request for Chapter 15 status. Approval would mean U.S. bankruptcy courts recognize the Korean bankruptcy proceeding, enabling the carrier to take certain actions in the U.S. to assist the case overseas. But a hearing on Nov. 22, which was scheduled to hear the case, was adjourned after Hanjin attorneys said eight objections had been filed, more than expected, and they needed additional time to prepare for them. The objections will now be heard Dec. 13. Read more. (Subscription required.) 

Cover all aspects of the UNCITRAL Model Law on Cross-Border Insolvency as well as chapter 15 of the Bankruptcy Code with ABI’s Chapter 15 for Foreign Debtors. 

More wreckage from Anguilla’s offshore banking troubles has washed up in a U.S. bankruptcy court, with the filing of a chapter 11 proceeding for Caribbean Commercial Investment Bank Ltd., the Wall Street Journal reported on Wednesday. Tuesday’s chapter 11 filing in U.S. Bankruptcy Court in New York came from William Tacon, a court-appointed administrator of the Anguillan bank. Earlier this year Tacon also placed the offshore private bank and trust operation owned by the failed National Bank of Anguilla under bankruptcy protection in New York. Much of the legal action is taking place in Anguilla, where the fate of the homegrown banking system is a matter of great public interest. The money, however, is in New York, Tacon says, and that is why he’s using the investigatory powers of U.S. bankruptcy. In both bankruptcy proceedings, Tacon has taken issue with the handling of the troubled banks by local regulators. He is seeking U.S. court aid in tracking and reclaiming funds he says belong to depositors.

U.S. coal producer Peabody Energy Corp. said on Wednesday that it is closer to exiting bankruptcy, with a debt dispute between creditors fizzling as a recent increase in coal prices boosts their chances for recovery, Reuters reported. Peabody filed for chapter 11 protection in April, after a sharp decline in coal prices left it unable to service $10 billion of debt. A creditor fight launched by some of Wall Street's most litigious investment funds, Aurelius Capital Management and Elliott Management, put the reorganization on hold. Seven months later, prices for coal used to generate power and make steel have surged, particularly in Australia, where Peabody expanded with the $5.1 billion acquisition of Australia's Macarthur Coal in 2011. The surge means that secured lenders such as Citibank are now likely to recoup their investment, making a legal battle over how to treat long-term debt in calculating Peabody's assets largely irrelevant. On Wednesday, Peabody said the company was working to resolve the dispute that pitted its secured lenders against unsecured creditors, including distressed debt hedge funds Aurelius and Elliott, who were seeking a larger share of Peabody's assets in the reorganization.

A central Florida businessman who made a name for himself as a debt counselor during the Great Recession has filed for chapter 7 bankruptcy, listing more than $100 million in liabilities, the Orlando Sentinel reported today. Timothy McCallan, of Melbourne, Fla., was hit with a judgment in February for $107 million in an Alabama bankruptcy for a large debt settlement law firm — Allegro Law — that was shut down by a judge six years ago as a massive fraud. Now McCallan is telling a court in Florida that he needs protection from that claim and other claims, via his bankruptcy filing. Court investigators in the Allegro case have been pursuing McCallan, because his companies, Americorp and Seton Inc., provided record-keeping and data services to Allegro.

Big Apple Circus has received expressions of interest in buying the organization that is plying its way through bankruptcy proceedings, the Wall Street Journal reported today. Circus’s lawyer, Chris Updike, told a court yesterday that he has received letters of interest from potential buyers, and the circus is open to receiving offers that would allow the show to go on. Updike said that the nonprofit organization is looking to secure an auctioneer. At the hearing, Bankruptcy Judge Sean Lane expressed hope Big Apple Circus, which filed for chapter 11 this week after an emergency fundraising drive came up short, would be able to find a buyer. The judge said that Big Apple Circus could tap a zero-interest loan provided by Circus’s directors that would pay the bills while a team of professionals looks for a buyer for the organization’s intellectual property and equipment, including its big-top tent.

Defunct telecommunications company Nortel Networks Inc. won a victory in its fight with federal pension regulators when a bankruptcy judge rejected a briefing schedule proposed by the Pension Benefit Guaranty Corp. (PBGC), Bloomberg BNA reported yesterday. Nortel, which filed for bankruptcy in 2009, had clashed with the PBGC over how to value the company’s unfunded pension liabilities. The PBGC claimed in 2009 that Nortel owed $593 million in pension payments, but the agency upped that amount to $708 million in 2014, a move that Nortel said lacked factual support. The judge’s decision yesterday setting an evidentiary hearing for Jan. 9-11, 2017, is a win for Nortel, which argued that the PBGC should be forced to turn over documents relevant to its valuation process.