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Union leaders won a battle against Wasco Inc., one of the country's largest commercial masonry companies, after a federal judge ruled that the Nashville-based company can't get out of paying millions of dollars in worker pensions using bankruptcy, Dow Jones Daily Bankruptcy Review reported today. In an opinion that rejected Wasco's debt-payment plan, U.S. District Court Judge Todd J. Campbell said that Wasco executives who paid out nearly $300,000 in bonuses as the company prepared to file for bankruptcy made financial decisions that were "inappropriate and troubling at best." At the time of the bonus payments, Wasco officials weren't making monthly payments into a pension fund that was owed, fund administrators' estimate, $6.3 million after the company cut ties with the International Union of Bricklayers and Allied Craftworkers in 2011. Under Wasco's bankruptcy-exit plan, the company would pay about $1 million into the pension fund instead. In response, Wasco officials said they disagree with Judge Campbell's Dec. 23 ruling and have appealed the decision to the Sixth U.S. Circuit Court of Appeals.

It had an app, it rang up more than 48,000 Facebook “likes,” and it had a vision: WeedHire was to be the “Monster.com of Marijuana,” the virtual employment agency for the legal cannabis industry, the Wall Street Journal reported yesterday. On New Year’s Eve, however, WeedHire revealed that it had turned to a Florida firm for help paying the bills. Turnaround Strategies now controls WeedHire’s assets, and is tasked with making the most of them to take care of creditors the company can’t pay, according to papers filed in Delaware’s Court of Chancery. An assignment for the benefit of creditors is a form of state court-supervised bankruptcy, and WeedHire is a Delaware corporation. It is also publicly traded, although not much. In its most recent report to the Securities and Exchange Commission, for the quarter ended March 2015, the company lamented the lack of an active trading market for its stock. WeedHire also reported doubts about its ability to continue as a going concern, with debts hovering around the $2 million mark, and sales slipping. Read more. (Subscription required.) 

Explore the intersection of the pot business and bankruptcy law with this ABI podcast. 

For more on the assignment for the benefit of creditors, be sure to pick up a copy of ABI’s General Assignments for the Benefit of Creditors: The ABCs of ABCs, Third Edition. 

Gun maker Colt Defense LLC's emergence from bankruptcy has been thrown into turmoil by a default on a $15 million funding commitment by private-equity owner Sciens Capital Management, Dow Jones Newswires reported yesterday. After Sciens missed a December deadline to come up with the money bondholders scrambled to find more cash to cover most of the shortfall and ensure the deals designed to usher Colt out of bankruptcy stay in place. The Connecticut firearms manufacturer said in court papers that it is on track to emerge from chapter 11, but the role of its long-time owner remains to be seen. Sciens principal Daniel J. Standen, who is also chairman of the governing board of the Colt parent company, said in a court filing yesterday that the delay in funding was due to the need to document the new Colt investment as part of Sciens's effort to enlist its investors in the deal. The firm raises money separately for each new investment, Standen said, and in order not to hold Colt in bankruptcy, it negotiated a delayed timeline for participating in the capital raise.

Swift Energy Co received U.S. bankruptcy court approval yesterday to borrow up to $15 million, giving the oil-and-gas exploration company time to negotiate a refinancing deal that is key to its turnaround, Reuters reported yesterday. Swift filed for chapter 11 on Dec. 31, joining about 40 other energy companies that entered bankruptcy in 2015 as oil prices plunged to less than $37 a barrel from more than $100 a barrel in June 2014. At Swift's first court hearing in Wilmington, Delaware on Tuesday, lawyers stressed the importance of moving the Houston-based company's reorganization quickly. Swift faces a looming deadline for refinancing a $330 million loan, the main obstacle to its plan to emerge from bankruptcy in about four months and shed nearly $1 billion in debt.

An invention company that accused a Mitsubishi affiliate of stealing one of its semiconductor designs more than a decade ago has filed for bankruptcy, saying its debts could top the amount the company agreed to pay in a recent settlement, Dow Jones Daily Bankruptcy Review reported today. The inventor, Grail Semiconductor Inc., said in bankruptcy-court documents that it has settled its 2007 lawsuit against Mitsubishi Electric & Electronics USA, Inc., over the semiconductor design but declined to state how much money it expects to receive. The two sides settled their long-running dispute in October on the eve of a trial to determine a damage amount, according to documents filed in U.S. Bankruptcy Court in Sacramento, Calif. In 2012, a jury awarded Grail Semiconductor nearly $124 million in damages, though a judge later called for a new trial to revisit that amount.

Embattled brokerage firm RCS Capital Corp. plans to file for chapter 11 bankruptcy protection under a prearranged filing intended to allow RCS to focus on its retail advice unit Cetera Financial Group, the Wall Street Journal reported today. RCS said that its lenders have agreed in principle to invest $150 million in new working capital into Cetera. The company said that it expects debt reduction and the elimination of preferred stock will total more than $500 million. Just over a month ago, RCS said that it would wind down its wholesale distribution business as part of a $3 million settlement with Massachusetts securities regulators over its use of fake proxy votes. The company has been working to raise capital and sell assets in the wake of a collapsed deal for Apollo Global Management LLC to buy a controlling stake in a group of trusts and other funds with $19 billion in real-estate holdings from RCS founder Nicholas Schorsch.

Oil and gas company American Standard Energy Corp. is suing two of its former directors, saying they fraudulently transferred valuable assets out of the company before its slide into bankruptcy, Dow Jones Daily Bankruptcy Review reported today. The company says that the actions of the two — a father- and son-in-law team that were at one time its largest shareholder and CEO, respectively — have jeopardized a $20 million bankruptcy sale of the company and could result in a reduction of $7 million in the purchase price. American Standard filed a complaint against the men and a company they control, in conjunction with its bankruptcy case, in an attempt to recoup any resulting creditor losses. Read more. (Subscription required.) 

For further analysis of fraudulent transfers, be sure to pick up ABI’s Advanced Fraudulent Transfers: A Litigation Guide. 

The Roman Catholic Diocese of Duluth, Minn., which filed for bankruptcy last month following an $8.17 million clergy sexual-abuse verdict, has asked a judge to give victims until May to come forward with abuse allegations, the Wall Street Journal reported today. In bankruptcy court papers, the diocese asked Judge Robert Kressel to impose a May 25 deadline by which victims must file specially written — and highly detailed — claim forms in order to seek compensation. A hearing on the proposed claims deadline, also known as the bar date, is scheduled for Thursday. The requested deadline would give victims the full benefit of the Minnesota Child Victims Act, which expires May 25. The act, passed by the Minnesota legislature in 2013, lifted the statute of limitations for sexual-abuse cases in the state for three years, leading to the waves of abuse-related lawsuits.

The oil price collapse put Swift Energy Co. into bankruptcy in the last hours of 2015, with a deal to sell some assets and an agreement with some bondholders, but no guarantees either will be enough to see the company through tough times, Dow Jones Newswires reported yesterday. The Dec. 31 filing capped months of struggles to address a debt load that tops $1.2 billion in a climate that has lenders retreating from energy companies. It came as the grace period expired on a missed Dec. 1 interest payment with bondholders that had been engaged in talks with Swift, one of dozens of oil industry players trying to survive the oil price crush. Just before the bankruptcy filing, Swift reached a deal to sell some of its Louisiana holdings to Texegy LLC at a "favorable price," but the money won't be enough to get the company through, court papers say. As for the bankruptcy turnaround plan, it has backing from a committee representing holders of about half its bond debt, court papers say. Those papers reveal Swift and the bondholders still have to come to terms on how to pay off $330 million in top-ranking bank debt, court papers say. Read more. 

For background on oil and gas company bankruptcy proceedings, be sure to pick up a copy of ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. 

The defunct parent of Puerto Rico’s failed Doral Bank is asking a judge for more time to stay in control of its bankruptcy case as it works with its unsecured creditors on a reorganization plan, the Wall Street Journal reported today. This is the second time since November that Doral Financial Corp. is requesting an extension of its exclusivity period. Doral won approval in November from Bankruptcy Judge Shelley C. Chapman to have through Dec. 31, 2015, to file a plan to pay back its creditors. But on Thursday, the day of the deadline, Doral said that it needed more time for its liquidation and to file its plan, especially since it has been working with its creditors on preserving an annual $59 million tax benefit. The bank said in court papers that it anticipates filing a plan by the end of the month but is looking to keep control through Feb. 29.