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U.S. Trustee Judy Robbins has filed an objection to the proposed bidding procedures for Patriot Coal, including the stalking-horse bid from Blackhawk Mining, saying they would “likely chill the bidding process,” Forbes.com reported yesterday. Robbins objected to the deal’s breakup fee and potential expense reimbursements for Blackhawk that could reach as high as $24 million, as well as the level of discretion and “unfettered ability” the procedures provide to the company to determine who would constitute a “qualified bidder,” determine what information to provide bidders, and alter the bidding procedures as they see fit, “all without any real oversight or consultation except for, in limited circumstances, in consultation with the DIP lenders.” With respect to the bid protections, Robbins said that they should be denied by the bankruptcy court because the amount is excessive; the bidding process contemplates Blackhawk being permitted to credit bid the amount of the protections in an overbid, thus creating an unleveled playing field for competing bids; and the protections are triggered by termination events other than an alternative transaction, such as a failure to close the transaction by the Sept. 25 milestone deadline. A hearing on the sale procedures is scheduled for June 23.

Robert Keach, the court-appointed trustee winding down Montreal Maine & Atlantic Railway Ltd., is suing Wheeling & Lake Erie Railway Co. to claw back millions of dollars paid to a company insider, Dow Jones Daily Bankruptcy Review reported today. Keach is seeking $2.7 million plus interest that went to Wheeling from the 2011 sale of MM&A rail lines to the state of Maine for $21 million. In a suit filed in bankruptcy court on Tuesday, lawyers for Keach said that the $2.7 million went to Wheeling, whose chief executive was Larry R. Parsons. Parsons was also a director of MM&A and Wheeling was one of MM&A's biggest lenders.

Veteran bankruptcy lawyer Richard Levin, who helped pen the U.S. federal Bankruptcy Code in the 1970s, is joining law firm Jenner & Block, Reuters reported yesterday. Levin, who had chaired Cravath Swaine & Moore's bankruptcy group since 2007, will become a member of Jenner's corporate reorganization practice effective May 18, Jenner said in a statement. Levin was facing mandatory retirement rules at Cravath, where he founded the bankruptcy practice and represented the Detroit Institute of Arts during Detroit's $18 billion bankruptcy. As assistant counsel to the House Judiciary Committee from 1975 to 1978, he played a key role in forming the law that still governs corporate bankruptcies today.

As the U.S. Supreme Court yesterday considered the case of a Massachusetts homeowner battling his mortgage lender over a bankruptcy plan, several justices focused their attention on his unlikely ally: Bank of America Corp., Reuters reported yesterday. Bank of America, one of the largest U.S. banks, filed a friend-of-the-court brief in support of Louis Bullard, who owes community bank Blue Hills Bancorp Inc. $387,000 for the mortgage on a property in the town of Randolph. During a one-hour oral argument on the technical issue of whether Bullard can appeal a bankruptcy judge's rejection of his proposed bankruptcy plan, some justices wondered why Bank of America, as a major creditor, would support a debtor. Bank of America's brief says that allowing appeals when bankruptcy plans are rejected would assist with "the orderly and uniform development of bankruptcy law," which would benefit creditors as well as homeowners like Bullard. The brief, along with the one by the U.S. government, could prove critical in swaying the court, with several justices probing lawyers on both sides about the practical consequences of a ruling in favor of Bullard. Justice Kagan noted that in parts of the country where such appeals are allowed, "it hasn't really led to the kinds of bad consequences we're all surmising about." Click here for a transcript of the oral argument in Bullard v. Hyde Park Savings Bank. 

The Supreme Court also heard oral argument in the case of Harris v. Viegelahn yesterday. Click here for the transcript.

For additional information on these cases and other bankruptcy cases before the Supreme Court, be sure to visit ABI's Supreme Court page.

The Supreme Court today will be considering Bullard v. Hyde Park Savings Bank and Harris v. Viegelahn today at oral argument. In Bullard, the Court will consider the issue of whether an order denying confirmation of a bankruptcy plan is appealable. The Court will also hear oral argument in Harris of whether, when a debtor in good faith converts a bankruptcy case to chapter 7 after confirmation of a chapter 13 plan, undistributed funds held by the chapter 13 trustee are refunded to the debtor (as the Third Circuit held in In re Michael), or distributed to creditors (as the Fifth Circuit held). For more on these cases and other bankruptcy cases before the Supreme Court, please click here.