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Health Diagnostic Laboratory Inc. is looking for additional financing, a buyer or a business partner to help the company stay on its feet and make a turnaround under bankruptcy court protection, the Richmond Times-Dispatch reported today. The clinical laboratory company filed for chapter 11 protection on Sunday after a tumultuous year that included a now-settled federal investigation, the resignation of its top executive, and ongoing legal battles with its former sales contractor and two health insurers. Bankruptcy Judge Kevin R. Huennekens yesterday granted 13 first-day motions to help the company continue to operate during the bankruptcy proceedings, including a motion allowing the company to maintain wages, salaries and benefits for employees.

Tumbling oil prices have helped put asset-based senior lenders in the driver’s seat when it comes to restructuring distressed energy companies, Bloomberg News reported on Friday. A slew of energy bonds have lost value as crude tumbled 44 percent in the past year. Since senior lenders are most likely the first creditors that would see losses on the debt, that has given them a leading role in driving the bankruptcy process to potentially own the distressed businesses, said panelists at the 31st Annual Bankruptcy & Restructuring Conference of the Association of Insolvency and Restructuring Advisors in Philadelphia on Friday. “We are seeing many asset-based loans are bigger than the value of the assets,” said Jonathan M. Landers, a restructuring attorney at New York-based Scarola Malone & Zubatov LLP. “That gives a secured lender a much better shot to drive the restructuring process, because the junior creditors don’t really have practical interest anymore.”

Barclays Plc on Friday settled a long-running lawsuit by the trustee liquidating Lehman Brothers Holdings Inc.’s brokerage unit, which arose from the bank's purchase of much of that unit at the height of the 2008 global financial crisis, Reuters reported. Trustee James Giddens said that the unit, Lehman Brothers Inc., will pay Barclays about $1.28 billion, largely representing the value of margin assets not previously paid to the British bank, plus interest. As a result, Barclays said that it will have recouped all but $80 million still in dispute, plus $255 million tied to derivative investments that it expects to receive from third parties. The settlement would end six years of litigation by Giddens to recoup various assets he said totaled more than $7.6 billion.

Former Apple Inc. supplier GT Advanced Technologies Inc. wants more time in chapter 11, Dow Jones Daily Bankruptcy Review reported today. This week, GT asked a court to push back until Sept. 30 the deadline by which it's to file a chapter 11 plan setting out how it will pay creditors. Talks to resolve an intercreditor dispute "have been fruitful," GT said in papers filed in the U.S. Bankruptcy Court in New Hampshire. Time officially ran out Wednesday for GT to file its chapter 11 plan. However, the company filed papers that automatically extended the chapter 11 plan filing deadline until a judge can review the issue.

Caesars Entertainment Operating Co.’s restructuring chief said yesterday that he thinks the company has “set the table” for a successful reorganization, but lawsuits against the casino giant’s parent could hamper the progress made in the company’s bankruptcy case, the Wall Street Journal reported today. Testifying at day two of a trial to decide whether lawsuits filed against CEOC’s non-bankrupt parent, Caesars Entertainment Corp., can move forward, Randall S. Eisenberg said the market would gain confidence if it knew CEC wasn’t potentially on the hook — at least immediately — for billions of dollars related to prebankruptcy asset transfers between itself and CEOC. A $1.5 billion contribution by CEC is a lynchpin of CEOC’s current restructuring plan, and it wouldn’t have that money if it lost the suits, both Caesars entities have said. Read more. (Subscription required.) 

In related news, prepetition lender Salus Capital Partners LLC wants to convert the bankruptcy case of RadioShack Corp. to chapter 7 to preserve any remaining value of the estate, The Deal reported today. Salus on June 2 filed a motion in the U.S. Bankruptcy Court for the District of Delaware in Wilmington to convert the proceedings from chapter 11, asserting the company no longer has a viable business to reorganize. Salus also said there is no advantage to liquidating the debtor's remaining assets, which primarily consist of potential litigation claims, in chapter 11. Bankruptcy Judge Brendan Linehan Shannon has scheduled a hearing on the motion for June 25. Read more.

Patriot Coal Corp. has lined up a deal to sell most of its operating mines to Blackhawk Mining LLC, in a debt-fueled transaction that leaves retirees and union contracts behind, Dow Jones Daily Bankruptcy Review reported today. In bankruptcy for the second time in recent years, Patriot's been struggling against declining demand for coal. It's racing to get a deal in place before it runs out of money and is forced to shut down but faces resistance from some creditors to the sale. Patriot returned to bankruptcy in May, less than 18 months after emerging from chapter 11. The West Virginia mining company said that it had a sale in the works that would help it tackle its debt load, which includes $791 million in loans and bond debt.

Caesars Entertainment Corp began a trial yesterday, hoping to convince a judge to put on hold lawsuits against the casino company that it said threatened plans to overhaul $18 billion in debt owed by its operating affiliate, Reuters reported. Groups of creditors have sued Caesars alleging that it must honor a guarantee of billions of dollars in the debt of its operating affiliate, Caesars Entertainment Operating Co. Inc., which filed for bankruptcy protection in January. The lawsuits also alleged the parent company transferred billions of dollars of choice properties and casinos from the operating unit in the years leading up the bankruptcy, which benefited the parent and its private equity backers. Caesars has said that its guarantees of the operating unit's debts were properly voided, and that the asset transfers were done for fair value. Read more.

For more on the issue of valuation, be sure to pick up a copy of ABI’s A Practical Guide to Bankruptcy Valuation. 

The collapse of Life Partners, which sold shares in life insurance policies on the elderly and the ill, doesn’t fit neatly under bankruptcy law, which requires a judge distribute assets equally among creditor classes, Bloomberg News reported yesterday. “How can someone wrap things up and bring it to a conclusion if there are still scores of policies outstanding because insureds have not passed away?” said Christopher Bebel, a former Securities and Exchange Commission attorney.  The investment vehicles, blandly labeled life settlements but known more bluntly as death bonds, first appeared in the late 1980s, when they were called viaticals. They became popular among AIDS patients who needed cash for medical expenses and elderly clients seeking money for end-of-life care. Life Partners, founded in 1991, sold stakes in policies with a face value of $2.4 billion. Its clients were individuals, but the $35 billion market has also attracted asset managers like Fortress Investment Group LLC and insurers such as American International Group Inc. Life Partners relied on an expert to estimate life expectancies, a key factor in the price investors would pay. The identity of the insured, or any other fractional investors in the policy, would usually remain secret. A Texas jury found that the company had low-balled mortality estimates in a lawsuit filed by the Securities and Exchange Commission. Unwilling to pay a $46 million judgment, the Waco-based company filed for bankruptcy Jan. 20.

Struggling oil-and-gas producer Samson Resources Corp. is weighing whether to slash its $4.2 billion debt load through a bankruptcy restructuring or take a rescue loan from a group of junior creditors, the Wall Street Journal reported today. Samson, based in Tulsa, Okla., said in March that a chapter 11 filing might offer the best route to restructure its heavy debt load, a legacy of a 2011 leveraged buyout led by private-equity firm KKR & Co. The company is now in talks with a pair of creditor groups on different debt-restructuring options, including one that would at least temporarily keep it out of bankruptcy court. Junior bondholders including GSO Capital Partners LP and Centerbridge Partners LP have offered to exchange their notes at a discount for higher-ranking debt. Meanwhile, a group of Samson lenders including Cerberus Capital Management LP has offered to exchange its debt for ownership in the company through a chapter 11 restructuring. That plan would wipe out Samson shareholders, including KKR, and junior creditors. Read more. (Subscription required.) 

For further analysis of oil and gas bankruptcies, be sure to pick up a copy of ABI’s When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. 

LightSquared Inc. won a judge’s approval for $1.75 billion in exit financing as it gets set to conclude a contentious three-year trip through bankruptcy, Bloomberg News reported yesterday. The wireless broadband venture, which has been locked in a battle with Dish Network Corp. Chairman Charles Ergen, also got permission to keep secret key data on fees to investment bankers and lenders led by Credit Suisse Group AG, Jefferies Group LLC and Morgan Stanley. Bankruptcy Judge Shelley Chapman approved the bankruptcy plan in a March 26 ruling that resolved most disputes between LightSquared and Ergen, and she approved the exit financing yesterday.