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The Roman Catholic Diocese of Gallup, N.M., on Tuesday won court approval of its plan to compensate clergy sexual abuse victims, paving the way for it to exit bankruptcy, the Wall Street Journal reported today. Following a hearing at the U.S. Bankruptcy Court in Albuquerque, N.M., Bankruptcy Judge David Thuma signed off on the $25 million plan, which is largely funded by contributions from the diocese, insurance carriers, parishes and sales of the diocese’s property. The bulk of the funds will be used to compensate victims, according to Susan Boswell, the diocese’s lawyer. Fifty-seven victims filed claims against the diocese, though not all will receive a payout because of prior settlements. In return for victim compensation, the plan provides legal protections for the diocese and the other contributors that will shield them from future lawsuits tied to past abuse.

Bankruptcy Judge Benjamin Goldgar allowed the casino operating unit of Caesars Entertainment Corp. to begin seeking creditor votes for a plan to exit its long and contentious $18 billion bankruptcy, Reuters reported yesterday. A confirmation hearing will begin on January 17, 2017, two years after the company filed for chapter 11 protection. The bankruptcy of Caesars Entertainment Operating Co. (CEOC) has been rocked by creditor accusations that the nonbankrupt Caesars parent looted its operating unit of choice hotel and casino assets before the latter's January 2015 filing for chapter 11 protection. Caesars has denied wrongdoing. It offered to contribute roughly $4 billion to CEOC's bankruptcy plan to settle the allegations after an independent examiner said it could be on the hook for up to $5.1 billion. Following intense negotiations with creditors, CEOC lawyers said yesterday that they have made "significant progress" in obtaining pledges of support for the reorganization plan, which will slash $10 billion of debt and split the unit into a new operating company and a real estate investment trust.

Lawyers for Hulk Hogan say creditors of Gawker Media Group, not new owners of the online publishing operation, should have the right to sue suppliers in Gawker’s bankruptcy case, the Wall Street Journal reported today. The former professional wrestler, whose real name is Terry Bollea, filed a challenge to Gawker’s plan to sell itself to Ziff Davis or a higher bidder at a bankruptcy auction on the grounds the sale unfairly trades away potentially valuable rights. Bollea won a $140 million judgment against Gawker and its CEO Nick Denton due to the release of a sex tape, pushing the company to file for chapter 11 protection. Ziff Davis has offered to buy the Gawker publications, which publish “news, scandal and entertainment” under such banners as Gizmodo, Jalopnik and Jezebel. The $90 million offer will be tested at a bankruptcy auction under rules to be established by a New York bankruptcy judge later this month. Money from the sale will go to pay off Gawker’s creditors, including Bollea, the company’s largest creditor. Bollea’s lawyers filed papers on Monday protesting Gawker’s “stalking horse” deal with Ziff, which will serve as the starting bid for the bankruptcy competition. The objection focused on the inclusion of “avoidance actions” as part of the package of assets being sold.

The Denver Broncos have the U.S. Bankruptcy Court’s permission to cancel their sponsorship contract with the bankrupt Sports Authority, the Denver Post reported today. Under the agreement, the exclusive “retail sporting goods” sponsor of the Broncos was granted a non-exclusive license to use the team’s trademarked logo in places such as websites, advertising and in-store signs; advertisements and signs. The deal also gave the retailer hospitality benefits such as box seats and Super Bowl tickets. Sports Authority’s sponsorship contract, which expires in 2035, is valued at more than $55.3 million, court records show. The company owes the Broncos $36 million. Separate from the sponsorship agreement, Sports Authority has a contract with the Denver Metropolitan Football Stadium District for the naming rights to Mile High Stadium, the Denver Broncos’ home field. Sports Authority is in the process of auctioning the naming-rights contract and has enlisted Hilco Streambank to find buyers for that agreement and for its intellectual property, including customer databases, private-label brands and domain names. But the stadium district filed a protest in bankruptcy court seeking first right of refusal if Sports Authority finds a new naming sponsor. Hilco Streambank has set a 3 p.m. June 27 deadline for bids on the intellectual property assets. The U.S. Bankruptcy Court in Wilmington, Del., has set an auction date of June 29 for some Sports Authority store leases and other remaining assets.

Maxus Energy Corp.'s deal with its corporate parent, YPF SA, over who is on the hook for the cleanup of New Jersey's contaminated Passaic River hit a hurdle on Monday in bankruptcy court, Dow Jones Newswires reported yesterday. Occidental Chemical Corp., Occidental Petroleum Corp.'s chemical subsidiary also known as OxyChem, is balking at Maxus's proposed environmental settlement with YPF and the subsequent bankruptcy filing. At issue is a deal that calls for YPF to provide Maxus with $130 million in return for Maxus dropping any "alter ego" claims it may have against its parent for cleaning up the river. Maxus filed for bankruptcy on Friday, days before OxyChem was slated to head to court in New Jersey over litigation seeking to put YPF on the hook for Maxus's environmental obligations. OxyChem purchased part of Maxus's business in 1986.

Paragon Offshore Plc’s reorganization proposal is so unrealistic that the oil-rig company will run out of cash in less than three years, dissident lenders said at the opening of a bankruptcy court hearing, Bloomberg News reported yesterday. Paragon is asking Bankruptcy Judge Christopher Sontchi to approve its plan to cut debt to $1.4 billion from $2.6 billion, to use its dwindling cash to pay two groups of favored creditors and to let the current owners retain a majority stake. The proposal is built on an assumption that the company can use its aging fleet of oil-drilling rigs to win contracts more quickly in the future than it has in the past, Madlyn Gleich Primoff, an attorney for lenders opposed to the plan, told the judge. There are hundreds of idled drilling rigs around the world and 100 more being built that Paragon will have to compete against, Primoff said, adding that Paragon’s rigs are so old, it will be harder for the Houston-based company to win new business. Read more. 

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The bankruptcy auction for assets of Pacific Sunwear of California Inc. in Anaheim has been canceled, with San Francisco-based private equity firm Golden Gate Capital now set to acquire all of the retailer’s assets, the Orange County Business Journal reported yesterday. The auction had been scheduled for June 22, but no bids were submitted by June 15 deadline, according to the documents filed with the U.S. Bankruptcy Court in Wilmington, Del. The 593-store chain filed for bankruptcy in April and was looking for “a higher and better offer than that contained in the currently-filed plan of reorganization” with Golden Gate Capital, which will write off $58 million in debt in exchange for a 100 percent stake in the company. The private equity firm is holding an additional $30 million in PacSun’s debt and has offered another $20 million upon its emergence from chapter 11 to “support its long-term growth objectives.” Wells Fargo Bank is providing $100 million in “debtor-in-possession” financing, which comes on top of $41 million PacSun already owes it. The retailer, meanwhile, is looking to reduce its costs on store leases, which currently total about $140 million a year.

U.K. sporting goods retailer Sports Direct International PLC is in talks with Modell’s Sporting Goods about a potential deal to acquire as many as 200 Sports Authority stores out of the retailer’s bankruptcy, the Wall Street Journal reported today. Sports Authority revealed in court papers filed on Friday that it is in advanced discussions regarding a potential sale of 100 to 200 of its stores. Bids for Sports Authority store leases are due on Thursday, and stores with leases that go unsold are in danger of going dark. With going-out-of-business sales in full swing at nearly 450 Sports Authority stores, the possible deal could be the last hope of saving anything of the ailing business. Sports Authority filed for chapter 11 bankruptcy in March and is expected to wrap up its liquidation by the end of July.

Zelenka Farms, a plant grower for big-box retailers including Lowe's Cos., Kmart, Shopko and Home Depot Inc., has filed for bankruptcy protection, blaming an unusually wet spring, Dow Jones Newswires reported yesterday. Lawyers who put Zelenka Farms into chapter 11 protection on Friday told a judge that they are looking for buyers to take over the Irving, Texas-based company's six farms, which employ 1,519 people located in Tennessee, Oregon and other states. During a court hearing on Monday, Zelenka Farms bankruptcy lawyer Holland O'Neil said the company's financial troubles began in 2014 but worsened dramatically after an unexpectedly rainy April and May, leaving it without enough money to pay down part of a loan before a June 3 deadline.

SFX Entertainment Inc.’s bondholder-supported restructuring agreement has fallen apart, a plan that looked to eliminate $300 million in debt and provide the electronic-music concert producer with a quick path out of bankruptcy, the Wall Street Journal reported today. The company announced on Friday that its agreement had terminated and added that the development allows it to pursue “more comprehensive negotiations with all of its constituents with the goal of developing a consensual Plan of Reorganization.” The supporting bondholder group will continue to work with SFX and the committee representing unsecured creditors, SFX said. Originally, SFX said it hoped to complete its chapter 11 case within six months. However, in its announcement Friday, it said there is no timeline for negotiations but that it hopes to work quickly. SFX filed for chapter 11 protection in February with a plan to eliminate $300 million in debt from its balance sheet.