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Response Genetics Inc. sought chapter 11 protection with plans to sell its cancer diagnostics business to a rival for $14 million, subject to higher bids at a court-overseen auction, Dow Jones Daily Bankruptcy Review reported today. The Los Angeles company on Sunday filed its chapter 11 petition in the U.S. Bankruptcy Court in Wilmington, Del., citing declining reimbursement rates for medical tests as being among the setbacks that contributed to its financial distress. Cancer Genetics Inc. would serve as stalking-horse bidder at an auction of nearly all of Response Genetics' assets, court papers show. Cancer Genetics is offering $7 million in cash and $7 million worth of its shares as part of its bid, in addition to its pledge to take on certain liabilities.

The owner of one time mail-order music giant Columbia House filed for chapter 11 bankruptcy protection yesterday, seeking to sell what remains of its business after almost two decades of declining revenue, Dow Jones Newswires reported yesterday. Filmed Entertainment Inc. filed for chapter 11 at the U.S. Bankruptcy Court in Manhattan, citing the advent of digital music and dramatic changes in technology that are threatening to render CDs and DVDs obsolete. Since peaking in 1996 at about $1.4 billion, revenue has declined almost every year since, according to FEI director Glenn Langberg. Last year, net revenue was just $17 million.

Lower-ranking creditors of Caesars Entertainment Operating Co. sued the company’s senior lenders, adding to the web of litigation that is tangling the gambling company’s efforts to reorganize and exit bankruptcy, Bloomberg News reported yesterday. The company’s lowest-ranking bondholders will benefit if the official committee of unsecured creditors succeeds in stripping senior lenders of some of their repayment guarantees. The committee claimed in a lawsuit filed Aug. 7 in Chicago that collateral pledges backing billions of dollars in loans and senior notes are flawed and should be overturned. Since filing for bankruptcy in January, Caesars has been trying to persuade bank lenders and lower-ranking creditors to join senior noteholders that signed a reorganization plan for the Las Vegas-based company. Under that plan, Caesars’ parent company would avoid bankruptcy, keep its assets and maintain a stake in the operating unit. The proposal has split creditors. Caesars and one of its main creditor opponents, which hold middle-tier debt known as second-lien notes, agreed last week to meet. Middle-tier creditors are suing Caesars’ parent, trying to undo restructuring actions it took before the operating company filed bankruptcy. That suit might force the parent into bankruptcy. The new lawsuit by unsecured creditors targets trustees representing Caesars’ senior creditors, including the middle-tier noteholders.

A group of companies that say they are owed millions from Miller Energy Resources Inc.’s Alaska subsidiary is trying to push the unit into bankruptcy after a securities regulator charged the company with accounting fraud, the Wall Street Journal reported today. Creditors of Miller’s Cook Inlet Energy LLC subsidiary, filed an involuntary chapter 11 petition on Thursday against the oil and gas company driller in U.S. Bankruptcy Court in Anchorage. The creditors — Baker Hughes Oilfield Operations, Inc., M-I LLC, Schlumberger Tech. Corp. — claim that the Alaska subsidiary owes them about $2.8 million, according to court papers. Executives at Miller plan to fight the request and restructure the company’s debt without bankruptcy, said Chief Executive Carl Giesler.

Texas-based utility Energy Future Holdings Corp. is looking to get out of bankruptcy by way of a $12.2 billion deal focused on its valuable Oncor electricity-transmission business, the Wall Street Journal reported today. The proposed transaction was made official yesterday in a revised chapter 11 exit plan filed with the U.S. Bankruptcy Court in Wilmington, Del. The new plan is expected to expedite the big bankruptcy case, with the first confirmation hearing moving up to October from January, as originally scheduled. The sale of Oncor, the key component of the new plan, would guarantee full payment to the creditors of the unit that owns it. Under the plan, Energy Future’s other unit — which comprises its electricity generating and retailing businesses — would be spun off into a separate company. The Dallas energy giant sought chapter 11 bankruptcy protection in April 2014, hoping a pre-packaged restructuring of its $42 billion debt load would gain sufficient support from creditors to carry the plan to court approval. The first plan fell apart, leaving Energy Future struggling to find a path out of bankruptcy that wouldn’t doom it to years of litigation. Among the chief backers of the new turnaround plan are creditors who were the most vocal opponents of Energy Future’s original restructuring strategy.

A bankruptcy court judge on Tuesday gave preliminary approval to a financing plan that will help support Health Diagnostic Laboratory Inc.’s (HDL) business operations while the company tries to sell itself, the Richmond Times Dispatch reported yesterday. The Richmond-based blood-testing company obtained debtor-in-possession financing from CVF Beadsea LLC, an affiliate of the Greenwich, Conn.-based investment firm Credit Value Partners. The agreement will give HDL access to $6 million from a revolving credit facility on an interim basis, and $12 million if the financing is approved after a final hearing scheduled for Aug. 24. Bankruptcy Judge Kevin Huennekens approved the financing deal on an interim basis at an expedited hearing, but only after an exchange of arguments among the lawyers that exposed the tensions between HDL and its primary lender, BB&T Bank.

A law firm that at one time handled 40 percent of home foreclosures in New Jersey has filed for bankruptcy, blaming its mortgage-lender clients and tighter rules for its troubles, Dow Jones Daily Bankruptcy Review reported today. Zucker, Goldberg & Ackerman LLC (ZGA) sought chapter 11 protection on Monday, and is in the process of handing off 30,000 active foreclosure and insolvency cases in preparation for liquidation, court papers say. Dubbed "foreclosure mills" by their critics, high-volume law firms that worked for the banks in the foreclosure crisis took heavy fire from consumer advocates and government regulators in the backlash against the collapse of the mortgage industry. In 2012, five of nation's biggest banks agreed to a $25 billion national foreclosure pact to settle accusations of improper practices, such as "robo-signed" documents and otherwise flawed court papers. The aftermath of the industry cleanup has lenders allegedly asking more from law firms, but paying the same "very small" fees for the work, ZGA managing member Michael Ackerman said in court papers.

The Archdiocese of Milwaukee announced yesterday that it has agreed to pay $21 million to compensate victims of childhood sexual abuse — a deal that clears the way for it to emerge from its nearly 5-year-old bankruptcy, the Milwaukee Journal Sentinel reported today. Under the terms of the agreement, 330 of the estimated 570 men and women who filed sex abuse claims in the bankruptcy would receive financial settlements of varying amounts, to be determined by an administrator appointed by the bankruptcy court. The $21 million far exceeds the $4 million the archdiocese offered victims as part of its initial reorganization plan filed in February 2014. And it more than doubles the number of survivors who will be compensated. A revised reorganization plan is scheduled to be filed Aug. 24. Read more.

“Diocese and Religious Order Bankruptcies” will be a featured session at this year’s Winter Leadership Conference, happening December 3-5 at the Arizona Biltmore in Phoenix, Arizona. For more information and to register, click here.

Skymark Airlines Inc.’s creditors will vote tomorrow on competing rehabilitation plans that will determine whether the carrier will be backed by a Japanese airline or an American one in its return from bankruptcy, Bloomberg News reported today. Creditors will meet in Tokyo to choose between a plan from Skymark that envisions ANA Holdings Inc., owner of Japan’s biggest airline, as sponsor, or one from Skymark’s largest creditor that relies on the backing of Delta Air Lines Inc. To pass, a plan must be approved both by a majority of creditors and by creditors who hold more than 50 percent of Skymark’s debts. A plan that fulfills just one of the conditions will be rescheduled for another vote within two months.

The Texas company that sells the cancer-fighting Radiance 330 Proton Therapy System machines is scheduled to be auctioned off today after a short delay, Dow Jones Daily Bankruptcy Review reported today. In a new sale timeline signed on Friday, Judge Barbara Houser set an Aug. 20 sale hearing to look over the auction-winning offer for ProTom International Inc.'s struggling operations. The company's machines beam a stream of protons onto cancerous tumors more precisely than X-ray beams, but officials have struggled to finish their first U.S. project at a Michigan hospital. ProTom is up for sale after it filed for bankruptcy on May 12 while trying to finish the debut project for McLaren Health Care Corp., which operates a dozen hospitals in Michigan. The project, which was supposed to be ready to treat patients in December 2012, was only about 85 percent complete at the time of the filing, according to documents filed in the U.S. Bankruptcy Court in Dallas.