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The city of San Bernardino reached a settlement in its municipal bankruptcy on Tuesday that gives pension bondholders a 60 percent haircut, Reuters reported yesterday. The deal reduces the city's payments to pension bondholders by $45 million. The payments will be made over 30 years, starting one year after San Bernardino's chapter 9 plan is confirmed, according to the city. "The settlement will end the costly legal battles between the City and the settling creditors over confirmation of the City's Chapter 9 Plan of Adjustment, as well as how much the creditors are to be paid," City attorney Gary Saenz said in a statement. San Bernardino declared bankruptcy in 2012 with a $45 million deficit. Along with Detroit and Stockton, its bankruptcy has been closely watched by the $3.6 trillion U.S. municipal bond market.

The bankrupt city of Hillview, Ky., said it plans to raise taxes and borrow $5 million to pay off a newly reached settlement in a decade-old property dispute with a truck-driver training school, the Wall Street Journal reported today. Officials for the Louisville suburb said in court papers yesterday that they reached a deal to pay a portion of the $15 million judgment owed to Truck America Training LLC. The legal award, which grew by $3,759.54 a day in interest, prompted Hillview leaders to put the 9,000-resident city into bankruptcy proceedings in August. Under the deal, Hillview officials will make an up-front payment of $5 million that it plans to raise by issuing municipal bonds. City officials will also turn over 8.3 percent of its general fund revenue, minus a few deductions, to the training school for 20 years, according a copy of the settlement filed in U.S. Bankruptcy Court in Louisville. The deal still needs approval from Judge Alan C. Stout, who agreed to evaluate it at a hearing on today. Court approval would enable Hillview to drop its bankruptcy case.

A U.S. appeals court dismissed a closely watched creditor lawsuit yesterday that stemmed from the 2008 bankruptcy of Tribune Co., a day after it took the unusual step of withdrawing a nearly identical opinion because it had been published in error, Reuters reported yesterday. The U.S. Court of Appeals for the Second Circuit had ruled on Thursday that Tribune creditors could not claw back $8 billion paid to public shareholders nearly a decade ago in a buyout that was blamed for its bankruptcy. On Monday, the court issued a two-sentence order saying the opinion was published by mistake, and took the rare step of clawing back its clawback ruling. Yesterday’s opinion came to the same conclusion as the withdrawn ruling, and ran the same 53 pages. A side-by-side comparison revealed about five tweaks, such as replacing "transferred to" with "assumed by" in describing the arcane procedures for determining ownership of certain legal claims. The opinion also changed a "with" to a "without" in a comment attributed to a former securities regulator.

Holding companies for the nation’s second-largest independent financial adviser network, Cetera Financial Group, filed for chapter 11 protection Sunday, initiating the second phase of the restructuring of RCS Capital Corp., the Wall Street Journal reported today. Brokerage business RCS Capital filed for bankruptcy protection in January, initiating a prearranged workout that will allow lenders to take the retail business, Cetera, private. Saturday’s filing is a pre-packaged second-step, designed to minimize disruption to the retail business that will be the core of the post-bankruptcy operation. At the end of the process, Cetera Financial Group will operate as a privately owned business of RCS Capital, which will be owned by institutional investors. RCS said it expects the restructuring, which was detailed in a January announcement, will be completed by May.

Bondholders that have been at odds with rare-earths company Molycorp have agreed to a settlement that could ease approval of the company’s chapter 11 turnaround plan, the Wall Street Journal reported today. Molycorp, which filed for bankruptcy protection after the dive in prices for its products, is slated to emerge largely the property of Oaktree Capital Management, a secured lender that has been battling bondholders for control of the distressed business. A settlement unveiled on Friday recognizes the bondholders as the winning bidders on mineral rights at Molycorp’s mothballed Mountain Pass, Calif., mining facility, the sole U.S. source of elements used in consumer electronics. The ultimate fate of Mountain Pass won't be decided this week, when Molycorp asks a judge to sign off on its chapter 11 exit plan. Bondholders are trying to buy some of the assets but not the mine itself.

The parent of pipeline operator Southcross Energy Partners LP filed for bankruptcy Sunday after reaching a deal with its owners and the majority of its lenders that will erase $700 million in debt off the company’s books, the Wall Street Journal reported today. Parent company Southcross Holdings LP filed a pre-packaged chapter 11 plan after creditors voted to approve the company’s restructuring proposal. The plan calls for the holding company’s owners to pump up to $170 million into the pipeline operator in return for two-thirds of the equity in the reorganized company. Read more. (Subscription required.) 

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Television and radio station owner Casa Media Partners LLC is preparing to sell off some of its unused broadcasting airwaves at a government-run auction that begins next week after a bankruptcy judge approved that participation, the Wall Street Journal reported today. With his signature, Judge Robert Mark cleared Casa Media Partners to sell unused spectrum at the Federal Communications Commission’s multibillion-dollar auction that begins on March 29 and will likely take months to complete. During the sale, the government will buy broadcast television licenses, rearrange the airwaves and then sell licenses for cellular service, giving TV stations a way to cash out of an asset that is likely more valuable for wireless operators.

Delta Air Lines Inc. has agreed to settle a lawsuit that accused Republic Airways Holdings Inc. of breaching a contract to operate flights for Delta, Republic said yesterday, Reuters reported. As part of the agreement, Delta will continue to contract flights to Republic while entering into a credit agreement that gives the regional carrier $75 million and gradually relieves it of obligations to fly 50-seat jets, seen by airlines as uneconomical, according to the release. Republic, which filed for bankruptcy restructuring last month, said the agreement will provide "immediate improvements in profitability and cash flow." The agreement is subject to court approval, with a bankruptcy court hearing scheduled for April 14.

A bankruptcy judge on Thursday handed Sabine Oil & Gas Corp. a decisive victory over its creditors, blocking their bid to step into the company's shoes to sue over its failed merger with Forest Oil Corp., Dow Jones Daily Bankruptcy Review reported today. Junior creditors who alleged the merger was engineered to shortchange them failed to show that many of their potential claims against Sabine and others have a reasonable chance of success at trial, Bankruptcy Judge Shelley Chapman said junior creditors ruled. For other claims, which were deemed plausible, the judge said that the costs of the litigation would outweigh any benefits.