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A U.S. bankruptcy judge yesterday ordered an independent examiner to investigate transactions by the operating unit of Caesars Entertainment Corp, which filed for chapter 11 this year, Reuters reported yesterday. Bankruptcy Judge Benjamin Goldgar directed the examiner to investigate "any apparent self-dealing or conflicts of interest involving the debtors or their affiliates." Creditors have alleged that the operating unit is unable to pay its debts because the parent company looted it for the benefit of its controlling private-equity backers, Apollo Global Management and TPG Capital Management. Court papers said that the examiner, to be appointed by the U.S. Trustee, will be tasked with analyzing the propriety of a number of intercompany deals that are at the heart of the bankruptcy of Caesars Entertainment Operating Co. As the operating company struggled to overhaul its operations prior to filing for bankruptcy, it transferred a number of its most valuable properties and casinos to affiliates of the parent company. Creditors have alleged that the moves were illegal efforts by the parent company to put the assets beyond the reach of creditors.

Managers of Waco-based Life Partners Holdings have been ousted, and a bankruptcy judge has called for the appointment of a chapter 11 trustee, Bloomberg News reported yesterday. The Securities and Exchange Commission and the U.S. Trustee’s Office both sought the move. The SEC said that the bankrupt life-settlement firm’s management “lacks the judgment necessary to guide the company through the Chapter 11 process.” Bankruptcy Judge Russell Nelms held seven hearings beginning in February, culminating in an order on Tuesday directing the U.S. Trustee to select a chapter 11 trustee. Life Partners buys life-insurance policies for less than the death benefit and collects when the insured person dies. The company filed a chapter 11 petition on Jan. 20 to stop the SEC from having a receiver appointed in a suit in which the government won a $47 million judgment against the firm and two officers for faulty revenue recognition. Ruling in that case, U.S. District Judge James R. Nowlin called Life Partners CEO Brian Pardo a “repeat offender who shows no signs that he has learned his lesson.”

LightSquared Inc. got an offer from hedge fund Solus Alternative Asset Management LP to buy $500 million of a loan held by Dish Network Corp. Chairman Charles Ergen, who is opposing the bankrupt broadband wireless venture’s reorganization plan, Bloomberg News reported yesterday. Solus, which earlier put forth a rival bankruptcy plan for LightSquared, said that it was encouraged instead to suggest improvements to the company’s own proposal, its fifth effort to exit court protection. The hedge fund said that it would pay Ergen in cash and invest another $89.5 million in LightSquared, taking 34.3 percent of its stock.

Aereo Inc., the online-TV service brought down by a U.S. Supreme Court copyright ruling, accused Walt Disney Co.’s ABC and other broadcasters of derailing the company’s bankruptcy auction in a bid to stifle competition, Bloomberg News reported yesterday. Aereo on Feb. 24 sold its patents, hardware and other assets piecemeal for less than $2 million -- a fraction of what it sought -- after a key bidder backed out, the company said in a lawsuit filed on Monday bankruptcy court. The potential buyer, which Aereo didn’t name, was scared off by a suggestion by Disney and other broadcasters that it may be liable for Aereo’s past copyright violations, for which the group is seeking almost $95 million in damages.

Energy Future Holdings Corp. has won court permission to pay down as much as $750 million of a $2.15 billion bond issue, a move that will save $66 million in interest this year, the Wall Street Journal reported today. Energy Future’s request for an early partial payoff was approved after a brief discussion at a bankruptcy court hearing yesterday. The money’s going to one of more than half a dozen camps of creditors battling over the value in the big energy company, which has everything from mines to get coal out of the ground to a big stake in a transmissions business that’s operated under the watchful eye of Texas regulators, Oncor. Dallas-based Energy Future had an exit strategy in mind last year when it filed for chapter 11 protection. That strategy fell by the wayside after the Oncor stake became a takeover target. The Oncor stake is going up for auction, and the rest of Energy Future is up for grabs in bankruptcy. The company is trying to round up a consensus for a restructuring plan that will allow it to divide its businesses while avoiding a big tax bill.

A lawyer for LightSquared yesterday said that the company will set aside $400 million to give certain bankruptcy lenders, including Dish Network Corp. Chairman Charles Ergen, the option to take a portion of their repayments in cash instead of notes, Reuters reported yesterday. The bankrupt wireless venture, opening a week-long trial seeking a judge's approval of its debt restructuring plan, is looking to end one of the most litigious bankruptcies of recent years. LightSquared, owned by Phil Falcone's Harbinger Capital Partners, was planning to build a massive wireless network when it was forced to file for bankruptcy in May 2012, after the Federal Communications Commission revoked its spectrum license over potential GPS interference. Since then, no fewer than seven restructuring proposals have failed amid creditor fights over the treatment of debt and the underlying value of LightSquared's spectrum. To end its bankruptcy, LightSquared must convince Bankruptcy Judge Shelley Chapman that its latest plan treats creditors fairly. The plan would let Harbinger retain some equity but cede operational control, transfer a chunk of equity to lenders Fortress Investment Group and Centerbridge Partners, and repay other lenders, including Ergen, via notes.

Dune Energy Inc., a Houston-based oil and gas explorer with operations in Texas and Louisiana, has sought chapter 11 protection following a failed merger, making the company the latest victim of falling oil prices, Bloomberg News reported yesterday. The bankruptcy filing was triggered when revenue dropped and a deal to merge with competitor Eos Petro Inc. fell through, according to court filings yesterday in Austin, Texas. Eos backed out of the deal on March 4, Dune said. The company will seek court approval to sell its assets at an auction June 9 in Houston, according to its filings. Dune, which said no bids have been made in advance, listed assets of $229.5 million against debt of $144.2 million. It asked the court to approve a loan of as much as $10 million to finance operations in bankruptcy, with Bank of Montreal and CIT Capital Securities LLC as lenders. http://www.bloomberg.com/news/articles/2015-03-09/dune-energy-falls-to-oil-price-drop-in-texas-bankruptcy-filing

Make sure to read the March ABI Journal feature article that predicts a tough year for oil and gas producers. http://www.abi.org/journal/new-energy-crisis-too-much-good-thing-debt

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. http://www.abi.org/books/when-gushers-go-dry-essentials-oil-gas-bankruptcy

The bankruptcy liquidation case of Douglas Battery Manufacturing Co. is over after more than three years with only secured creditor claims of two family members being paid, the Winston-Salem (N.C.) Journal reported on Saturday. Lexington Road, owner of Douglas Battery Manufacturing, filed for chapter 11 protection in January 2012, and the bankruptcy was converted voluntarily to chapter 7 in June 2012. Nearly $6.67 million in priority secured and unsecured claims will go unpaid. The bankruptcy estate gained about $1.32 million in gross receipts from the sale of assets and properties, 70 percent of which went to administrative and other legal costs. Thomas S. Douglas III will receive $250,000 for his secured claim on the sale of company real estate, while Thomas S. Douglas will receive $77,986 for his secured claim from the sale of personal property and intangibles.

NII Holdings Inc. reached a new restructuring deal supported by its major creditors, with new money that will keep the Latin American Nextel carrier afloat as it awaits approval of a $1.88 billion sale of its Mexico unit to AT&T Inc., Dow Jones Daily Bankruptcy Review reported today. In a Thursday filing in bankruptcy court, NII provided details of a plan that puts NII in the hands of senior creditors and values the company at $2.81 billion. That is nearly $400 million more than a prior deal, which was made before AT&T agreed to buy the Mexico unit, a deal that is up for bankruptcy court approval later in March.