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Bankrupt gunmaker Colt Holdings received court approval on Friday for a new financing package that empowers its bondholders at the expense of its private equity owner, Reuters reported yesterday. Colt was cleared to borrow up to $75 million, although the company will only get $20 million in cash, with the remainder used to refinance existing loans. The package will incorporate two previously approved interim loans. Sales of the company's guns and sports rifles have dropped sharply in the past year. Once best known for the revolvers pioneered by 19th-century founder Samuel Colt, the company filed for bankruptcy in June without enough money to meet payroll. The loan was provided by an ad hoc committee of the company's bondholders over the objection of the private equity firm that controls Colt, Sciens Capital Management.

Dune Energy Inc. yesterday asked a Texas bankruptcy judge to overlook objections from its creditors and approve the sale of most of its assets to White Marlin Oil and Gas Co. and Trimont Energy LLC, Dow Jones Daily Bankruptcy Review reported today. But while Dune's unsecured creditors’ committee pressed the judge not to approve the sale, the company worked with a handful of other creditors who had objections, and resolved them. Exterran Energy Solutions L.P. withdrew its objection in exchange for a $100,000 payment from Trimont. Another objection, from Emerald Land Corporation, was also resolved prior to yesterday’s hearing.

Paulson & Co. is among the creditors closing in on a deal intended to salvage a bankruptcy plan that Caesars Entertainment Corp. is pushing to restructure its insolvent operating unit, Bloomberg News reported yesterday. The hedge-fund firm controlled by billionaire John Paulson along with other junior debt holders of Caesars Entertainment Operating Co. including Canyon Partners and Soros Fund Management are discussing the plan with the casino company. The deal would extract better terms for the creditors than a previous version that has failed to gather enough support. Caesars has tried for months to line up enough senior creditors to win approval of a proposal to cut lower-ranking debt, allow the parent to retain a stake in the operating unit and halt related lawsuits against its private-equity owners, Apollo Global Management and TPG Capital Management. The company, the largest owner of casinos in the U.S., pushed its biggest subsidiary into bankruptcy in January to restructure $19.9 billion of borrowings.

The U.S. government has agreed to take no near-term legal action against 40,000 former students of the bankrupt Corinthian Colleges Inc. who have defaulted on federal loans, Reuters reported yesterday. Corinthian abruptly closed its remaining 28 schools in April and left 16,000 students without classes, becoming the largest failure in for-profit higher education. The company operated more than 120 campuses at its peak. The company filed for bankruptcy in May and soon after the U.S. Department of Education announced a plan under which tens of thousands of former Corinthian students could seek relief from their federal student loans. However, a lawyer for the government told a court hearing on June 30 that fewer than 5,000 students had applied. Under Thursday's agreement, the Department of Education will suspend judicial debt collection efforts for 120 days against former Corinthian students who are in default, according to Scott Gautier, a lawyer for an official committee of students in the Corinthian bankruptcy.

An affiliate of Good Harbor Financial announced its plans to acquire beleaguered F-Squared Investments’ intellectual property yesterday, Barron’s reported. The announcement comes as F-Squared, recently the largest manager of exchange-traded fund portfolios, filed for chapter 11 protection. Wellesley, Mass.-based F-Squared agreed to pay $35 million last year to settle fraud charges related to false performance advertising in its flagship investment product. It’s been bleeding assets ever since, and was reportedly up for sale.

Bankruptcy Judge Ronald Pearson yesterday approved a West Virginia Department of Environmental Protection deal with Freedom Industries that sets aside $2.5 million to cover the costs of a yet-to-be-designed final cleanup plan for the site of the January 2014 chemical spill that contaminated drinking water supplies for hundreds of thousands of people across the Kanawha Valley and surrounding communities, the <em>Charleston Gazette</em> reported today. Judge Pearson entered a five-page order that approved the DEP-Freedom settlement, contingent upon the filing with the court of details of the hiring of a new consultant to handle remediation work at the company’s Etowah Terminal on the Elk River, just 1.5 miles upstream from West Virginia American Water’s regional drinking water intake. At the same time, officials have confirmed that Freedom chief restructuring officer Mark Welch’s plan to dispose of contaminated soil from the site at the Charleston city landfill has been approved by both DEP and by Waste Management Inc., which operates the landfill for the city.

Energy Future Holdings Corp., the biggest power company in Texas, won a ruling yesterday in a $431 million dispute with its noteholders that should bolster its plans for emerging from bankruptcy, Reuters reported yesterday. The ruling by Bankruptcy Judge Christopher Sontchi denied noteholders an avenue to collect a "make-whole" payment from a unit of Energy Future for redeeming securities early. Energy Future redeemed first-lien notes after it filed for bankruptcy in April 2014, and some noteholders sued for the make-whole payment. In his 39-page ruling, Judge Sontchi determined that the harm to noteholders in allowing them to pursue the make-whole payment did not outweigh the harm to Energy Future. He said a ruling in favor of the noteholders could have exposed the company to similar claims from other creditors and the cost could have run to approximately $900 million.

The Chinese construction company building the unfinished $3.5 billion Baha Mar resort in the Bahamas accused the developer of mismanaging the project's design and not securing adequate financing, Reuters reported yesterday. China Construction America (CCA) has been blamed for the delays that caused the Baha Mar project to file for bankruptcy protection late last month in a Delaware court. But CCA said that the developer of the project replaced the mega resort's principal architect after construction began and had more than 1,300 change orders for construction contractors. Developer Baha Mar Ltd is run by Sarkis Izmirlian, the son of an Armenian billionaire. Construction delays, funding squabbles, lagging inspections and faulty work at the Nassau resort have led to finger pointing among Izmirlian, CCA and China's export finance bank, which bankrolled most of the project with a $2.45 billion loan.

A bankruptcy judge yesterday granted a request from Fort Worth, Texas-based Quicksilver Resources seeking more time to complete its chapter 11 reorganization plan, the Fort Worth Star-Telegram reported today. U.S. District Judge Laurie Silverstein signed an order extending the deadline to Oct. 13 to allow Quicksilver officials more time to work out various issues, including how to handle leases on its downtown Fort Worth headquarters and other nonresidential properties. Silverstein also signed an order granting Quicksilver the authority to use its cash management system and to honor certain pre-bankruptcy petition obligations.

Lehman Brothers Holdings Inc. settled a multimillion-dollar derivatives dispute involving mutual-fund giant Putnam Investments, ending litigation over a series of swap agreements, Dow Jones Daily Bankruptcy Review reported today. Lehman said in a Monday bankruptcy court filing that a unit of U.S. Bancorp, the trustee for the Putnam swaps, would pay the failed investment bank an undisclosed sum to settle the matter. The dispute was over a series of swap agreements that defaulted when Lehman collapsed into bankruptcy nearly seven years ago.