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A New Mexico diocese is a step closer to resolving its bankruptcy case after a federal judge rejected a claim that had stalled the proceedings, the Associated Press reported yesterday. The Gallup Independent reports that the Sisters of the Blessed Sacrament filed a claim against the Diocese of Gallup as it was concluding its chapter 11 reorganization case. Attorneys for the diocese say the claim wasn't filed in a timely matter. The Sisters' attorney says that the organization did not know of the diocese's bankruptcy case until December 2015, more than two years after its chapter 11 petition was filed, but the attorneys for the diocese say the Sisters were sent legal notices at the time the claim was filed. Bankruptcy Judge David T. Thuma concluded a Monday hearing by disallowing the claim by the Sisters.

General Motors Co. asked the U.S. Supreme Court to maintain a bankruptcy shield blocking some lawsuits over faulty ignition switches after a lower court ruled the Detroit auto giant’s failure to reveal the safety defect violated consumers’ legal rights, the Wall Street Journal reported today. GM appealed a lower court’s ruling earlier this year that undid a legal shield barring lawsuits stemming from alleged wrongdoing before the automaker’s 2009 government-brokered bankruptcy restructuring. The suits carry billions of dollars in potential claims. In a Supreme Court petition filed late yesterday, GM argued that a federal appeals court erred and upended settled bankruptcy law when ruling the cases could proceed. The Supreme Court isn’t expected to decide until next year whether to hear GM’s case. The lower-court ruling would stand without the Supreme Court’s intervention.

A federal judge next Thursday will consider millions of dollars more in payments to attorneys and other professionals working on the bankruptcy of the Archdiocese of St. Paul and Minneapolis, MPRNews.org reported yesterday. The latest requests for fees and expenses total $4.5 million. If the requests are granted, that would bring the tab for legal and related professional service costs for the bankruptcy to about $12 million. The archdiocese filed for bankruptcy nearly two years ago. The church's most recent reorganization plan would provide $130 million in compensation to clergy abuse victims. A hearing on bankruptcy reorganization plans will be held on Dec. 15.

A new legal dispute has stalled the final resolution of a bankruptcy case prompted by a sexual abuse case involving the Diocese of Gallup, lawyers say, the Associated Press reported yesterday. The dispute involves a new lawsuit filed by attorney Robert E. Pastor against the Sisters of the Blessed Sacrament, a religious order that founded St. Michael Indian School in Arizona. The suit claims a Navajo woman was sexually abused at the school by a Franciscan friar, <em>The Gallup Independent</em> reported. The Gallup Diocese, the Franciscans and St. Michael Mission Church have already reached a settlement agreement with another Navajo woman related to abuse. That settlement was part of the diocese’s bankruptcy case that was confirmed in June. As a result, the Diocese of Gallup, the Franciscans and St. Michael’s Church are protected parties and not named as defendants in Pastor’s lawsuit. 

The Roman Catholic Archdiocese of St. Paul and Minneapolis has offered to pay $132 million to settle hundreds of child sex abuse claims against its clergy under a revised bankruptcy reorganization plan filed in court on yesterday, Reuters reported. The archdiocese, one of 15 U.S. Catholic districts and religious orders driven to seek chapter 11 protection by the church's sex abuse scandal, said its plan would mark the second-largest such bankruptcy settlement of pedophile priest claims in America. The sum is more than double the $65 million previously offered by the archdiocese and rejected by plaintiffs. But lawyers representing the bulk of nearly 450 claims at stake in St. Paul-Minneapolis denounced the latest proposal as still far too small and accused church officials of trying to conceal their ability to pay much more. The San Diego diocese settled sex abuse claims in 2007 for a total of $198 million after filing for Chapter 11. The Los Angeles archdiocese, the nation's largest, reached a $660 million civil settlement the same year, though that was not part of a bankruptcy proceeding. Those agreements amounted to about $825,000 and $780,000 per victim, respectively, according to the watchdog website BishopAccountability.org. Spread evenly across the Twin Cities claims, each victim there stands to gain less than $300,000 under the archdiocese's amended plan, plaintiffs attorney Mike Finnegan said.

Gage County, Neb., has hired a law firm that offers bankruptcy services as the county struggles to deal with a $28.1 million judgment awarded to six people who were wrongfully convicted of murder, the Associated Press reported on Friday. County officials signed contracts Wednesday with Lincoln-based Woods & Aitken and two other law firms providing legal services. Bankruptcy has been among the scenarios county leaders have been forced to consider as they appeal the judgment won in July by the so-called Beatrice Six inmates, who spent a combined 77 years in prison in the 1985 death of 68-year-old Helen Wilson before DNA testing cleared them in 2008. The county’s current and former insurers have denied coverage, and Nebraska Attorney General Doug Peterson said last week that the state couldn’t lend the county money because the damages were awarded in a federal lawsuit. The county has appealed the judgment, arguing that there wasn’t enough evidence to find against the county and law enforcement officials and saying the award was too high. A federal judge rejected the appeal in September. The county has since appealed to the Eighth U.S. Circuit Court of Appeals.

U.S. President-elect Donald Trump has requested that a trial over a lawsuit by former students of his now-defunct Trump University be put on hold until after the presidential inauguration, according to a motion filed by his lawyer on Saturday, Reuters reported. A trial in federal court in San Diego over former Trump University students' claims that they were defrauded by a series of real-estate seminars is scheduled to begin on Nov. 28, but Trump lawyer Daniel Petrocelli said the president-elect needs to "devote all of his time and attention to the transition process." Trump is due to assume office on Jan. 20, 2017. "The 69 days until inauguration are critical and all-consuming," Petrocelli said in the filing, arguing that the president-elect should not be required to stand trial during that time. The lawsuit involves students who claim they were lured by false promises to pay up to $35,000 to learn Trump's real estate investing "secrets" from his "hand-picked" instructors. Trump owned 92 percent of Trump University and had control over all major decisions, the students' court papers say. The president-elect denies the allegations and has argued that he relied on others to manage the business.

As auto supplier Takata Corp. prepares for a possible U.S. bankruptcy filing, potential bidders are poring over a recent U.S. court ruling that could expose a buyer to liability for the company's defective air bags, sources have told Reuters. Takata faces potentially billions of dollars in costs from the world's largest automotive recall, stemming from millions of its air bags that were equipped with malfunctioning inflators. The Japanese company has said that it is seeking a financial backer. But interested bidders, if the parts maker goes up for sale, want Takata to put its U.S. business into bankruptcy first. General Motors filed for chapter 11 in 2009, selling its best assets to "new GM," scrubbed free of billions of dollars of debt, which enabled the company to withstand an economic crisis. In July, the U.S. Court of Appeals for the Second Circuit held that General Motors Co., the "new GM," could be sued over faulty ignition switches made by "old GM." "What that says to me: buyer beware," said Henry Jaffe of Pepper Hamilton in Wilmington, Del., who represents debtors and creditors. Jaffe, who took part in a special abiLIVE webinar with Greenberg Traurig, LLP’s John Hutton to examine the ruling, said that the Second Circuit’s decision could undercut what bidders are willing to pay for Takata. Read more. 

Click here to watch the abiLIVE webinar. http://cle.abi.org/product/no-cle-abi-live-2nd-circuit-decision-gm-incr…