A lawsuit filed by the Catholic Diocese of Spokane against the lawyers who led it through a 2004 bankruptcy related to sex abuse lawsuits is set for a February trial, the Associated Press reported on Saturday. Bishop Blase Cupich stopped using the legal team at the Paine Hamblen law firm after he arrived in 2010. He has since pursued a malpractice complaint that accuses the firm of failing to use a strategy that could have saved the diocese millions of dollars and prevented a new round of priest sex-abuse claims. The Spokane Spokesman-Review reported Friday that the number of claims after the bankruptcy reached 230 in the past year. However, more than 150 of the 230 people who filed future claims had their cases rejected by a former federal judge tasked with reviewing them and awarding payouts.
A group of lenders to LodgeNet---a hotel Internet and technology provider that filed for chapter 11 bankruptcy last year and sped through the process in two months---are suing the reorganized company and other lenders, saying that a subsequent restructuring is "intended to eviscerate" their rights under the company's original bankruptcy-exit plan, Dow Jones Daily Bankruptcy Review reported today. Although the lawsuit was filed with the U.S. Bankruptcy Court in Manhattan as part of LodgeNet's original chapter 11 case, the bulk of the complaint involves an agreement that was negotiated months after LodgeNet exited bankruptcy in March 2013. Sonifi Solutions Inc., which is the name LodgeNet now uses, again encountered financial troubles after exiting bankruptcy and at the end of 2013 needed once more to restructure its debt, according to the complaint filed on Wednesday.
The Diocese of Stockton (Calif.) said that it has received 34 claims of sexual abuse since it notified the public of a deadline to file such claims imposed by a bankruptcy court, the Stockton Record reported today. The diocese also announced that no priest in active ministry was named in those claims. Diocese leaders filed for chapter 11 protection in January, saying that its finances have been drained by legal costs and settlements arising from claims of child sexual abuse by priests. Over the past two decades, those costs have mounted to $32 million for the diocese, which oversees parishes in San Joaquin, Calaveras, Stanislaus, Tuolomne, Alpine and Mono counties. Following the bankruptcy filing, the courts set Aug. 15 as the deadline for anyone thereafter to file such a claim.
A federal bankruptcy judge has rejected West Virginia American Water Company’s effort to block a class-action settlement between Freedom Industries and thousands of victims of January’s Elk River chemical spill, the Charleston (W.Va.) Gazette reported today. Bankruptcy Judge Ronald Pearson approved a proposal from Freedom Industries and lawyers for Kanawha Valley residents for the filing of a new class-action lawsuit that would provide a nearly $3 million settlement that would be used for health studies, water testing or other projects to benefit residents affected by the spill. The ruling by Pearson is the latest twist in the multiple court cases and investigations related to the January spill of a mixture of Crude MCHM and other chemicals from a Freedom Industries chemical tank located just 1.5 miles upstream from West Virginia American’s regional water plant. The plant serves about 300,000 people in Charleston and the surrounding communities. In July, lawyers for area residents and businesses filed court documents indicating that they had reached a proposed settlement with Freedom Industries for the company to turn over about $2.9 million that Freedom is likely to get from its insurance company.
The men accused of cooking the books at defunct law firm Dewey & LeBoeuf LLP were back in court this week as their lawyers argued that charges against them be dismissed, Dow Jones Daily Bankruptcy Review reported today. Once a 1,300-lawyer global firm, Dewey & LeBoeuf collapsed in 2012, leaving creditors on the hook for hundreds of millions of dollars in the largest law firm failure in history. At a hearing on Monday in Manhattan Supreme Court, defense attorneys for three former Dewey leaders told Justice Robert Stolz there was no evidence that their clients had intended to engage in accounting trickery or to "permanently" deprive Dewey's lenders and bondholders of their property. They asked the judge to release minutes from the grand jury, and said that the court should dismiss some of the charges if the evidence does not show larcenous intent on the part of former Dewey chairman Steven Davis, former executive director Stephen DiCarmine and the firm's former chief financial officer, Joel Sanders.
The widow of “American Sniper” Chris Kyle is suing the Texas law-enforcement-training business he founded, saying that the company has been illegally using Kyle’s image to sell merchandise and training services, the Wall Street Journal reported today. In court papers, lawyers for Taya Kyle said that Craft International LLC continues to use the name of her dead husband — who claimed to be the most lethal sniper in U.S. military history — without her permission. Kyle said that she and her children “have the right to control the use of Chris Kyle’s name, likeness and image” after he was killed on Feb. 2, 2013, on a Texas gun range. Merchandise sales at Craft International, which filed for bankruptcy on May 30, soared after his death, according to documents filed in U.S. Bankruptcy Court in Dallas. Half of the company’s $900,000 in revenue last year came from apparel sales; only 13 percent of the company’s $655,000 in revenue came from ammunition and apparel in 2012.
Two affiliates of troubled Indianapolis-based developer HDG Mansur oppose requests to appoint a chapter 11 trustee or convert the case to a liquidation in chapter 7, saying that significant progress has been made toward a plan and global settlement of claims, the Indianapolis Business Journal reported today. HDGM Advisory Services LLC and HDG Mansur Investment Services Inc., which managed Shariah-compliant investment funds, filed court papers Sept. 11 opposing the requests. The requests were made by KFH Capital Investment Co. and Kuwait Finance House Real Estate Co., which sued Mansur Investment and owner Harold Garrison in the United Kingdom for breach of contract, fraud and negligent misrepresentation, according to court papers. The KFH entities aren’t eligible to seek such “drastic measures” because they’re not creditors of, nor do they have claims against, both debtors, according to the fund managers. They are motivated by “some other unstated purpose,” not their chapter 11 rights or distributions in the case, the fund managers said in the court filings.
U.S. Trustee Roberta DeAngelis said that a bankruptcy judge should reject a proposed sale of Education Training Corp.'s schools because the sale occurred prior to the company's chapter 11 filing and was designed to skirt federal regulations, Dow Jones Daily Bankruptcy Review reported today. Education Training — a for-profit school that operated post-secondary schools under the Anthem and Florida Career College brands — filed for chapter 11 protection in August, immediately following a quick sale of 14 of its campuses in an effort to keep them operational. Had Education Training still been the owner of the schools when it filed for bankruptcy, the U.S. Department of Education would have revoked those schools' ability to accept federal student loan dollars. Those dollars made up 90 percent of Education Training's revenue, meaning that action by the Education Department would have rendered the schools basically worthless.
A House committee investigating the National Highway Traffic Safety Administration has found that federal regulators had ample information to identify the dangerous ignition defect in General Motors’ Chevrolet Cobalt and other cars as early as 2007, the New York Times reported today. The House report details how investigators from the agency repeatedly discounted information that did not match their assumptions — at one point a staff member referred to their efforts as “beating a dead horse.” As a result, many of GM’s small cars, which had defective ignition switches that were prone to turn off and disable air bags, continued to crash, sometimes with fatal results. http://www.nytimes.com/2014/09/16/business/regulators-are-faulted-in-de…
In related news, a program established by General Motors to compensate the families of people killed and those severely injured in accidents caused by defective ignition switches installed in 2.6 million cars received 445 claims and approved 31 in its first six weeks of operation, the law firm running the program reported Monday, according to the Washington Post. The flow of claims has not been as fast as what was anticipated by the law firm of compensation specialist Kenneth R. Feinberg, which the automaker hired to design and administer the compensation program. Of the 31 claims approved, 19 involve deaths related to the crashes, the law firm reported. Four are to compensate people left with permanent conditions, including paralysis, severe burns and brain injuries. And eight are for physical injuries that required hospitalization or outpatient medical treatment within 48 hours of an accident involving an ignition switch. http://www.washingtonpost.com/business/economy/general-motors-compensat…
Giants Stadium LLC, an entity created by the New York football team to finance a new stadium during the financial crisis, sued Lehman Brothers Holdings Inc. seeking payment of a $301.8 million bankruptcy claim, Bloomberg News reported yesterday. The defunct lender and one of its affiliates breached a 2007 swap agreement tied to the stadium’s financing when Lehman failed to pay the owed amount on Oct. 2, 2008, about two weeks after the bank collapsed, Giants Stadium said in a filing yesterday in bankruptcy court. The claim was made in response to a lawsuit filed by Lehman against Giants Stadium in October seeking about $100 million for early termination of interest-rate swap transactions when the investment bank filed for bankruptcy. Each side says that the other defaulted on the deals, according to court papers.
