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The net keeps getter wider as the trustee overseeing the bankruptcy liquidation of Health Diagnostic Laboratory Inc. sues the company’s insiders and top executives along with a wide range of other players, VirginiaBusiness.com reported yesterday. In a 205-page lawsuit filed on Friday by trustee Richard Arrowsmith in federal bankruptcy court in Richmond, Arrowsmith says that he is seeking to recover losses to unsecured creditors that are estimated at more than $600 million. The lawsuit alleges 76 counts against 105 defendants — from HDL’s top officers, shareholders and directors on down to third-party sales contractors and others who benefitted from what the suit describes as “fraudulent business practices.” Heading the list are HDL co-founders Tonya Mallory, Joseph McConnell and Russell Warnick along with Robert Bradford Johnson and Floyd Calhoun Dent III, the executives at BlueWave Healthcare Consultants, HDL’s former sales contractor. Among the 76 counts against the various defendants are allegations of fraud, breach of fiduciary duty, conspiracy, corporate waste and unjust enrichment. Read more. 

For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case. 

Caesars Entertainment Corp. will now contribute more than $5 billion to its operating unit’s restructuring in its final settlement offer to disgruntled bondholders, the Wall Street Journal reported today. David Seligman, a lawyer for the bankrupt Caesars Entertainment Operating Co., or CEOC, unit, said in bankruptcy court that a prior pledge of about $4 billion has increased by about $1.2 billion, which he called the “best and final proposal” in long-running negotiations with CEOC creditors and Caesars. The increased value includes setting additional Caesars equity aside for CEOC’s creditors, the result of current Caesars backers Apollo Global Management and TPG agreeing to surrender their equity, valued at more than $950 million, in the company. Another $100 million will come from directors’ and officers’ insurance policies, Seligman said.

Duke University basketball legend Christian Laettner has reached a repayment deal that his lawyer said should bring a decade of financial troubles to a close, the Wall Street Journal reported today. The repayment deal reached by Laettner with investors in a North Carolina tobacco warehouse redevelopment project — including former teammates Johnnie Dawkins and Scottie Pippen — will enable him stay out of bankruptcy. Investors had tried to force him into chapter 7 liquidation earlier this year. In court papers filed on Monday, lawyers for Laettner said he had reached a deal on how to divide roughly $10 million in proceeds from Durham, N.C.,’s West Village project among investors including former Duke University teammate Dawkins and former 1992 Olympic “Dream Team” teammate Pippen.

SeaPort Airlines, an 8-year-old commuter carrier that tried to carve a niche serving subsidized routes to small regional airports, will ground its flights as it faces liquidation in bankruptcy, the <em>Oregonian</em> reported today. The airline's bid to reorganize collapsed this month after the airline learned it would lose a key contract and a line of credit helping keep it afloat. A judge yesterday ordered the airline's chapter 11 case to be converted to a chapter 7 liquidation effective at noon today. An attorney for the airline's creditors said that its fleet would be grounded yesterday.

Global Geophysical Services LLC won court approval for its reorganization plan less than two months after the company filed for bankruptcy protection, the Wall Street Journal reported today. Bankruptcy Judge David R. Jones signed off on the plan on Monday. Global Geophysical, a seismic-data provider for the oil industry, sought chapter 11 protection on Aug. 3, blaming the stubbornly low oil prices that affected many of its peers. As part of the bankruptcy plan, Global Geophysical will be split into two entities — the most valuable assets, including a seismic data library and real property, will be controlled by the first-lien lenders and turned into a new company. The remaining assets will be liquidated, and about 33 percent of the proceeds will be used to pay unsecured creditors and junior lenders. Court papers show the liquidation will yield up to $3.75 million.

The Diocese of Stockton, Calif., yesterday announced a plan that could result in its exit out of bankruptcy more than two years after legal costs stemming from dozens of child sexual-abuse lawsuits depleted its funds, the Stockton Record reported today. Bishop Stephen E. Blaire said that the diocese, which filed for bankruptcy in January 2014, negotiated with all the parties involved to reach a consensual plan, which includes:

- $15 million to survivors of sexual abuse and a trust for the benefit of survivors.

- Payment of at least 50 percent of what is owed to unsecured creditors.

- Restructuring of unsecured loans.

Funding from the plan will come from the Diocese of Stockton, settling insurance carriers and other entities associated with the diocese. The $15 million settlement agreed upon by the diocese, the plaintiffs' attorneys and insurance companies is to “provide for the healing of the survivors,” Blaire said. The diocese is responsible for $9.89 million of the total amount.

WakeMed Health and Hospitals will soon notify thousands of patients that their personal and medical information was disclosed in court filings over six years, the Charlotte (N.C.) News & Observer reported today. A federal bankruptcy court in Raleigh ordered the Raleigh hospital to send out the letters and to offer each patient one year of free credit monitoring. The court last month fined WakeMed $70,000 for disclosing Social Security numbers, birth dates and the full name of at least one minor in claims it had filed in federal bankruptcy courts to collect unpaid medical bills. WakeMed had disclosed the identifying patient information from 2007 to 2015. There is no evidence that anyone discovered the personal information in bankruptcy court dockets and used it to commit identity theft or some other abuse. However, U.S. Bankruptcy Judge Stephani Humrickhouse wrote in a court ruling that an organization like WakeMed that regularly participates in bankruptcy proceedings should have been a lot more careful.

NextEra Energy Inc. has boosted its offer for Energy Future Holdings Corp.’s Oncor electricity transmission business by $300 million, quieting creditor worries about the sale that will be the key to getting the Dallas company out of bankruptcy, the Wall Street Journal reported today. Over the weekend, NextEra agreed to increase the cash component of its deal to $4.4 billion from $4.1 billion. Additionally, NextEra is making other changes to the proposed Oncor buyout that will allow Energy Future creditors to receive $450 million more from the sale of the crown jewel business than previously planned. The changes were made in a 48-hour flurry of activity, Energy Future lawyer Chad Husnick told Judge Christopher Sontchi at a hearing Monday in the U.S. Bankruptcy Court in Wilmington, Del., to approve the deal. Judge Sontchi authorized Energy Future to move ahead on the NextEra deal after lawyers lined up to speak in favor of it.

A South Korean judge said today that all Hanjin Shipping Co Ltd. chartered vessels that have completed unloading their cargo have been told to cancel their charter agreements and return the ships to the shipowners, Reuters reported. Hanjin, the world's seventh-largest container line, filed for receivership last month, leaving more than 100 ships and their cargo at sea and threatening to snarl U.S. freight traffic as the year-end shopping season approaches. Dozens of Hanjin's ships have been blocked from docking with ports and lashing firms fearing they won't be paid. Some vessels have also been seized and some sold. The company had a total of 141 vessels, including 97 container ships as of early September. Out of the 97 container ships, 60 were chartered and 37 owned by Hanjin. The company returned three bulk carriers earlier this month, a Hanjin Shipping spokeswoman said today.