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General Motors Co. sought a rehearing of an appeals court ruling that exposes it to hundreds of potential lawsuits and some $10 billion in liabilities from faulty ignition switches, the Wall Street Journal reported today. Lawyers for the nation’s largest auto maker on Wednesday said that the court made two “fundamental errors” when it last month ruled against the company’s efforts to use its 2009 bankruptcy to shield itself from the litigation over the ignition switches. GM said the court’s decision, if not reversed, would permanently damage the bankruptcy process that saved it from collapse in 2009. The U.S. Court of Appeals for the Second Circuit last month denied GM’s attempt to use its bankruptcy to block lawsuits seeking potential claims over the defective ignition switches, which have been linked to 124 deaths. The ruling overturned a bankruptcy judge’s earlier decision to bar claims that arose before its chapter 11 filing. Read more. (Subscription required.) 

Don’t miss the Great Debate at ABI’s Views from the Bench conference on Oct. 7, as Judge Robert Gerber (ret.) & Goodwin Procter's William Weintraub debate whether §363 sales should lawfully be free and clear of successor-liability claims. Click here to register! 

Lenders owed more than $700 million have called for an independent trustee to take over a bankruptcy liquidation of China Fishery Group, which they have accused of stalling efforts to repay them, the Wall Street Journal reported yesterday. In court papers filed on Monday with the U.S. Bankruptcy Court in Manhattan, lawyers for the lender group said they see “grave risk” in allowing the family that founded and controls the company — the Ng family — to remain in charge. “The need for transparency and independent oversight has been a substantial concern of the [lenders] for some time,” they said. “The stakeholders have lost all faith in the Ng family properly using chapter 11 to best serve creditors’ interests.” Ng Puay Yee, the company’s chief executive officer, has hinted that lenders may try to wrest control of the company away from its current management. In court papers filed in June when China Fishery sought chapter 11 protection, Ng said his business was “in jeopardy as a result of the aggressive and improper acts by certain lenders.”

A Schenectady, N.Y., asbestos removal company has filed for chapter 11 protection, the Albany Times Union reported today. Precision Environmental Solutions appears to have been extremely successful in years past, with more than $7 million in revenue between 2014 and 2015. However, documents filed this week in U.S. Bankruptcy Court in Albany show that the company earned only $175,000 this year. The company appears to have vacated space at the Rotterdam Industrial Park back in April, which may be the reason why it is a defendant in a breach of lease lawsuit filed against it by Rotterdam Ventures, a subsidiary of the Galesi Group that owns the industrial park. Precision Environmental Solutions also lists legal action against it involving SUNY Plattsburgh and the U.S. Environmental Protection Agency, although no details were given.

International authorities are participating in investigations into Miami-based Providence Financial Investments and its affiliates, which took in the life savings of hundreds of U.S. investors in an investment scheme involving Brazilian “factoring,” the Miami Herald reported today. The company filed for U.S. bankruptcy protection last week following actions by the U.S. Securities and Exchange Commission to shut it down. On Monday, the Royal Court of Guernsey ordered the appointment of “administrative managers” for Providence Investment Funds and its manager company, Providence Investment Management International Limited. Guernsey, a resort area and financial center, is one of the British Channel Islands where Providence operations were based and where it was actively soliciting investors until late July. The court was acting on the “urgent” request of the Guernsey Financial Services Commission, Guernsey’s regulatory body, and followed the fund’s suspension and resignations of Providence’s directors there on Aug. 4 and 5, less than a week after the company’s U.S. Miami-based unit declared bankruptcy. Read more. 

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

The owner of the restaurant chains Fox & Hound, Bailey’s Sports Grille and Champps Kitchen filed for bankruptcy protection yesterday, the Wall Street Journal. Last Call Guarantor LLC sought chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., listing debts between $100 million and $500 million. Bankruptcy Judge Kevin Gross will oversee the proceedings. The Dallas-based holding company operates 48 Fox & Hound restaurants, 23 Champps locations and nine Bailey’s restaurants in 25 states. It employs 4,700 full- and part-time employees. This marks the second time that the operator of the restaurants has sought bankruptcy protection since late 2013. At the time, the company blamed its bankruptcy filing on declining sales and rising costs during the economic downturn, which caused consumers to spend less on dining out.

Peabody Energy Corp. said top lenders accepted its reorganization plan, a key milestone in the coal miner’s chapter 11 restructuring, Dow Jones Newswires reported yesterday. Peabody said yesterday that the lenders behind its $800 million bankruptcy financing package accepted its five-year business plan, disclosed in a filing with the U.S. Securities and Exchange Commission. The 2017-21 outlook will form the basis for a chapter 11 plan of reorganization that the coal giant hopes to submit to the bankruptcy court by the end of the year. The company faced a deadline of today to submit the reorganization plan for lenders’ approval or risk being declared in default of the loan.

Rincon Island LP, an oil and gas production company, has filed for bankruptcy protection to block the state of California from forcing the company to perform extensive remediation on its wells amid environmental concerns, the Wall Street Journal reported today. The company filed for chapter 11 protection on Monday with the U.S. Bankruptcy Court in Dallas as California’s Natural Resources Agency issued an emergency order mandating the environmental safety work on Rincon Island’s idle properties, including installing plugs and shut-off valves on certain wells. The order requires Rincon to pay for the extensive remediation. The report prompted a call from state Sen. Hannah-Beth Jackson urging California to close the facility completely. She cited the lack of progress Rincon Island has made to address safety troubles. “Despite being warned of this and other issues on Rincon Island on numerous occasions — including deteriorated wellheads and a lack of regular maintenance — RILP has consistently failed to meet milestones,” Sen. Jackson said in her letter. Rincon Island said in a statement that it filed for bankruptcy “in order to protect its key oil and gas leases from a wrongful attempted termination by the state of California. The partnership will be reorganized in order to ensure its long-term financial success.” Read more. (Subscription required.)

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Gawker Media LLC is in the "final stages” of settling a defamation suit brought by British tabloid The Daily Mail, the Wall Street Journal reported today. A lawyer for Gawker, Gregg Galardi, didn’t disclose the terms of the settlement, but such a deal could resolve one of a long list of defamation lawsuits Gawker is facing from subjects of its past articles. The acknowledgment of an expected deal with the Daily Mail comes amid preliminary settlement talks between Gawker and former professional wrestler Hulk Hogan to try to resolve the largest of the publisher’s legal woes. A $140 million invasion of privacy judgment stemming from a suit brought by Terry Bollea, Hogan’s real name, pushed Gawker into chapter 11 earlier this year. Nick Denton, Gawker’s founder and chief executive, is liable for $10 million of the judgment and jointly liable for another $115 million. He sought bankruptcy protection earlier this month.

A leading federal regulator said yesterday that states should force coal companies to set aside collateral to pay for future mine cleanups and protect taxpayers as the industry braces for further declines, Reuters reported. Three of the largest U.S. coal producers, Peabody Energy, Arch Coal and Alpha Natural Resources, have filed for bankruptcy in the past year in an industry shaken by cheap natural gas and falling demand from China. With coal production outstripping demand, the market is not likely to recover until at least 2021, Joe Pizarchik, who heads the Office of Surface Mining and Reclamation Enforcement, told Reuters. Pizarchik's forecast is based on recent data from the U.S. Energy Information Administration that shows continued declines in capacity for coal-fired power plants for the next five years. This has raised concerns because the three bankrupt coal producers have not set aside cash to pay for roughly $2 billion in projected mine cleanups. Instead, they used a federal subsidy known as "self-bonding," which essentially exempts healthy companies from posting bonds or other securities to cover the cost of returning mined land to its natural setting. "We're moving as quickly as we can to help the states do their best to protect the taxpayers," Pizarchik said. "We want to give them the tools to ensure that mined land is reclaimed."

SunEdison Inc. is seeking bankruptcy-court approval to sell a number of North American solar- and wind-power projects to NRG Energy Inc. for $144 million, subject to higher bids, Dow Jones Newswires reported yesterday. SunEdison yesterday filed papers in its chapter 11 case outlining plans to auction its ownership stakes in the companies that construct large-scale renewable-energy facilities and sell wind or solar power to utility and other customers. The projects up for sale are located in Utah, California, Maine, Hawaii, Texas and Washington, court papers say. The value of NRG's $144 million bid could ultimately climb to $188 million, as it includes the potential for SunEdison to collect up to $44 million after the sale closes depending upon the achievement of certain milestones related to the projects.