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U.S. prosecutors charged a hedge-fund manager with fraud for suppressing a rival bid for a prized piece of bankrupt retailer Neiman Marcus Group Ltd., then trying to cover up the misconduct when it came to light, WSJ Pro Bankruptcy reported. Dan Kamensky, the founder of Marble Ridge Capital LP, was arrested yesterday and charged by federal prosecutors in New York with securities fraud, wire fraud, extortion and obstruction of justice in connection with his efforts to acquire shares in Neiman’s MyTheresa e-commerce business. Kamensky previously admitted to Justice Department bankruptcy watchdogs that he had used his pull with investment bank Jefferies LLC, where he was a client, to coerce it to scrap a competing offer for the MyTheresa shares so he could buy them himself for less. If convicted of all charges, Kamensky faces up to 50 years in prison. The Securities and Exchange Commission also sued Kamensky and Marble Ridge yesterday over his attempt to suppress competition for MyTheresa shares.

The Third Circuit ruled “that subordination agreements need not be strictly enforced for a court to confirm a cramdown plan,” according to an analysis in Rochelle’s Daily Wire today. The Third Circuit upheld rulings by the bankruptcy court and the district court in the mammoth reorganization of publisher Tribune Co. Senior noteholders, whose class voted against the chapter 11 plan, wanted the Third Circuit to enforce their contractual subordination rights to the letter. The appeals court declined the invitation. In his August 27 opinion, Circuit Judge Thomas L. Ambro said that the “unfair discrimination” provision in Section 1129(b)(1) is “rough justice.” It replaces “stringent requirements with more flexible tests that increase the likelihood that a plan can be negotiated and confirmed.”