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LightSquared Inc. said that it will ask a judge not to count a “no” vote on its bankruptcy reorganization plan cast by a fund controlled by Dish Network Corp. Chairman Charles Ergen, saying that the fund acted in bad faith, Bloomberg News reported yesterday. The fund, SP Special Opportunities LLP, owns $1 billion of debt in LightSquared, the wireless broadband company controlled by Philip Falcone’s Harbinger Capital Partners LLC. LightSquared has accused Ergen of secretly accumulating the debt so he can buy the company’s airwaves for a below-market price through bankruptcy. Bankruptcy Judge Shelley Chapman on Feb. 24 approved the terms of a reorganization plan, which was then sent to creditors for a vote. The plan values LightSquared at $7.7 billion and doesn’t hinge on regulatory approval for airwaves that are its main asset. A denial of such approval pushed the company into bankruptcy in 2012.

A federal appeals court has upheld the dismissal of a claim in the Archdiocese of Milwaukee bankruptcy that was filed by a man who was molested by a priest at age 7 and who had signed a $100,000 settlement agreement with the church in 2007, the Milwaukee Journal Sentinel reported today. John Pilmaier had filed a claim in the bankruptcy asserting that the archdiocese lied to him to induce him to sign the agreement. The Seventh Circuit Court of Appeals has ruled that Pilmaier's attorneys "failed to show that the alleged misrepresentations were a substantial factor in his decision to accept the settlement." The ruling upholds earlier decisions by Bankruptcy Judge Susan V. Kelley and U.S. District Judge Rudolph T. Randa but applies a different legal standard. Pilmaier is one of about 90 individuals with prior settlements who filed claims in the bankruptcy alleging that they were misled by the archdiocese during their settlement talks. It was not immediately clear whether the appeals court decision in Pilmaier's case would affect other claims because of the narrow issues addressed by the court. The appellate decision focused not on whether the archdiocese misled Pilmaier, but whether he adequately stated what effect that alleged misrepresentation had on his decision to sign the settlement agreement.

Longview Power LLC won approval yesterday of a key settlement with affiliates of German engineering firm Foster Wheeler AG, which has agreed to fix the boiler that has kept Longview's power plant from operating at full capacity, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Brendan Shannon approved the pact over the protests of two other contractors involved in building the troubled plant: an affiliate of Norwegian construction company Kvaerner ASA and Siemens Energy Inc., a unit of Siemens AG.

Bankruptcy Judge Ronald G. Pearson authorized Freedom Industries Inc., the company behind the West Virginia chemical spill, to continue cooperating with a federal grand jury investigation of the spill, the Wall Street Journal reported today. Judge Pearson specifically authorized Freedom to hire a digital investigations firm to help it gather and preserve electronic records in connection with the probe, court papers show. In its request to hire Vestige Ltd., Freedom said that it has been “coordinating with the relevant government agencies in good faith to comply with all of the electronic document requests.” Hiring Vestige at the quoted cost of $42,555 would allow it to continue cooperating with the probe and avoid “further legal action and/or sanctions from the governmental agencies and/or this court,” Freedom said. In addition to the grand jury subpoena from the U.S. Department of Justice, Freedom disclosed it has also faced document requests from West Virginia’s attorney general, among others.

A coal supplier to Optim Energy LLC has accused the bankrupt company of maneuvering to benefit its owner — Microsoft co-founder Bill Gates's investment company — at the expense of other creditors, Dow Jones Daily Bankruptcy Review reported today. In court papers, lawyers for the coal supplier, an affiliate of Kiewit Corp., told Bankruptcy Judge Brendan Shannon that the fine print of Optim Energy's proposed $115 million bankruptcy loan, which would be extended by Gates's company, would give that lender an unfair amount of power in the bankruptcy.

Shareholders say they are entitled to a bigger piece of Overseas Shipholding Group than they are being offered as one of the world's largest tanker operators prepares to leave bankruptcy, and they have turned to the courts for help, Dow Jones Daily Bankruptcy Review reported today. Two groups of investors filed protests in court on Wednesday. According to shareholders, Overseas Shipholding is advancing a "flawed" restructuring strategy while ignoring shareholder-backed turnaround proposals.

Lehman Brothers Holdings Inc. has reached a deal with the lone holdout to a multibillion-dollar settlement with its former Swiss derivatives unit, freeing up another $1.8 billion for the failed investment bank's creditors, the Wall Street Journal reported today. Entities with ties to Klaus Tschira, the founder of German software company SAP AG, have agreed to drop their appeal of Lehman's settlement with its Swiss derivatives subsidiary, Lehman Brothers Finance AG, according to court papers filed on Wednesday. Tschira has been fighting for years with the Swiss subsidiary over derivatives contracts terminated after Lehman's 2008 collapse. His decision to drop his appeal brings to a close more than five years of highly contentious litigation between Lehman's New York-based holding company and the Swiss hub of its global equity derivatives business.

Freedom Industries Inc., the now-bankrupt company behind last month's West Virginia chemical spill, said that it is cooperating with the grand jury investigation of the spill and said it needs to hire a firm to help with gathering and preserving its electronic records, Dow Jones Daily Bankruptcy Review reported today. Along with the grand jury subpoena from the U.S. Justice Department, Freedom also said that the West Virginia Attorney General and several parties suing the company have asked for it to preserve its electronic records. Freedom filed for chapter 11 protection after being hit with about 20 lawsuits from individuals and business claiming damages from the environmental accident, in which about 10,000 gallons of a coal-treatment chemical spilled from a Freedom-owned site into the Elk River.

The official tasked with repaying customers of Peregrine Financial Group Inc. wants to have a talk with the defunct brokerage’s founder, who’s behind bars after pleading guilty to fraud, the Wall Street Journal reported on Saturday. Bankruptcy trustee Ira Bodenstein on Thursday filed papers asking the bankruptcy court to let him question Russell Wasendorf Sr. about Peregrine’s financial affairs, which the trustee says will help him in a months-long effort to repay Peregrine’s customers and other creditors. At the center of that effort is an investigation into various transactions related to the fraud that brought down the brokerage. “Given his significant role in the massive fraud that was perpetrated on PFG’s customers and creditors, Wasendorf is believed to have personal knowledge about many issues that are relevant to the trustee’s ongoing investigation of various matters relating to the debtor’s financial affairs and potential claims against third-parties,” Bodenstein said in a court filing.

Charlie Ergen, the largest creditor of bankrupt wireless venture LightSquared, on Friday objected to a framework of the company's restructuring plan that would pay him in the form of a note while giving other lenders cash payouts, Reuters reported on Friday. Ergen, through his investment vehicle SP Special Opportunities, filed court papers asking Bankruptcy Judge Shelley Chapman to rule that the plan is not financially feasible, and to do so before parties devote resources to obtaining creditor support for it. LightSquared's $33 million bankruptcy loan is set to run out around the end of March.