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Bank of America Corp. cannot be sued by unified groups of homeowners in different states over its failure to modify mortgages, a federal judge in Boston ruled, Bloomberg Law reported today. Home-mortgage borrowers in 26 states claimed in lawsuits that Bank of America mismanaged loan requests under the Home Affordable Modification Program and sought class-action status to pursue their cases. Bank of America is one of many mortgage lenders participating in HAMP, which is designed to prevent mortgage foreclosures. The homeowners who sued claimed that they made all required trial payments under the plan to the bank and still didn’t receive permanent loan modifications or written denials of eligibility by a certain date. The case is In re Bank of America Home Affordable Modification Program Contract Litigation, 10-02193, U.S. District Court, District of Massachusetts (Boston).

Unsecured creditors yesterday lost a bid to propose a competing restructuring plan for Excel Maritime Carriers Ltd., setting the stage for a November court fight over the company's proposed chapter 11 plan that keeps the current owners in charge, Dow Jones Daily Bankruptcy Review reported today. Leading bondholders, led by Zazove Associates LLC and Fidelity Investments, sought permission to float a rival plan for the distressed shipping operation.

Philip Falcone’s LightSquared Inc. shouldn’t be allowed to run its own bankruptcy auction, a group of lenders said, citing depleted cash, a changing industry and a controlling shareholder who wants to block the sale, Bloomberg News reported yesterday. The lenders, a trustee or an independent committee should conduct the planned asset auction, the lenders said in a filing yesterday in court. Since the chapter 11 case began, LightSquared’s cash has dwindled by $125 million to about $61 million, Steve Zelin of financial adviser Blackstone Group LP said in support of the lenders.

Two and a half years after Howrey's March 2011 dissolution scattered the firm's partnership across the legal universe, some of those former colleagues have reunited to take aim at the defunct firm's chapter 11 bankruptcy trustee, Allan Diamond, the American Law Daily reported today. This week, six firms—including Pillsbury Winthrop Shaw Pittman; Ropes & Gray; Neal, Gerber & Eisenberg; and Shearman & Sterling—filed a joint defense motion in response to suits Diamond filed against each of them earlier this year in bankruptcy court. In the lawsuits, Diamond seeks the return of money from client matters that Howrey partners took with them to their new professional homes in the months prior to their former firm's collapse. Based on the hotly contested legal precedent established through the 1984 California case known as Jewel v. Boxer, the suits claim the Howrey estate has an ownership right over work started before the firm dissolved. In a 75-page memo filed on Monday supporting the group's motion to dismiss the suits, the firms—a group that also includes Kasowitz Benson Torres & Friedman and Kilpatrick Townsend & Stockton—argue that because nearly all of the ex-Howrey partners at the six firms in question left before the defunct firm voted to dissolve, "the unfinished business doctrine does not apply here."

As U.S. regulators spent the better part of six months preparing to sue to stop the American Airlines-US Airways Group Inc. merger, the carriers devised a plan to allay some antitrust concerns: an offer to cede flight slots at Washington’s Reagan National Airport, Bloomberg News reported yesterday. While the proposal fell flat, the talks show the stakes at an airport where a merged carrier would control 69 percent of the flights. The airlines’ overtures weren’t enough, and the Justice Department sued on Aug. 13 to block the deal. If there’s a way to settle the case, one element would almost certainly have to be a loosening of the airlines’ grip at National. JetBlue Airways Co. and Southwest Airlines Co. have said AMR Corp.’s American and US Airways should be forced to give up some slots, a step ordered in other mergers.

Pilgrim's Pride Corp., one of the world's largest chicken producers, persuaded a federal appeals court to overturn a damages award of more than $25 million to several dozen contract poultry growers that accused it of violating antitrust law by trying to manipulate poultry prices, Reuters reported yesterday. A panel of the U.S. Court of Appeals for the Fifth Circuit said yesterday that a federal magistrate judge erred in finding that Pilgrim's Pride's decision to idle a chicken processing plant in El Dorado, Arkansas, in May 2009 and end contracts with the growers was motivated by a desire to control prices. The two-judge panel said the closure was "neither illegitimate nor anti-competitive" given that Pilgrim's Pride had been driving down prices by producing too much, and "wisely" decided to stop flooding the market with unprofitable chicken. Pilgrim's Pride shut the plant five months after filing for bankruptcy protection in December 2008, amid rising feed costs and low meat prices. The Greeley, Colorado-based company emerged from Chapter 11 in December 2009, and is now majority-owned by Brazilian meat company JBS SA.

Overseas Shipholding Group Inc. said yesterday that it may owe $460 million or more to the Internal Revenue Service, a finding that is likely to upset its chapter 11 bankruptcy case, Dow Jones Newswires reported yesterday. Revised financial statements filed with the Securities and Exchange Commission said the shipping company's analysis and conversations with the IRS have led it to believe that the "actual amount of the tax" it will ultimately have to pay "will be significant and could be as high as $460,000,000 or potentially higher." The company intends to assert its available defenses "vigorously," according to the SEC filing. However, the filing may be bad news for bank lenders owed $1.5 billion and investors in the company's debt, who have been counting on Overseas Shipholding overcoming a $463 million claim the IRS filed in its chapter 11 case.

Bankruptcy Judge Paul G. Hyman said a major feeder fund to convicted Ponzi-scheme operator Tom Petters may move forward with a lawsuit to collect more than $4 billion in damages from General Electric Capital Corp., Dow Jones Daily Bankruptcy Review reported today. Judge Hyman on Friday ruled that Palm Beach Finance Partners LP may pursue a lawsuit accusing General Electric Capital Corp., of conspiracy to commit fraud.

U.S. regulators yesterday asked a federal court not to dismiss their lawsuit against a bank tied to the blow-up of brokerage Peregrine Financial, saying the bank helped bring about millions of dollars of losses for Peregrine customers, Reuters reported yesterday. At issue is a lawsuit filed by the U.S. Commodities Futures Trading Commission in June against U.S. Bank N.A., a unit of U.S. Bancorp, based in Minneapolis. The lawsuit accused the bank of letting Peregrine founder Russell Wasendorf Sr. secure loans against money that belonged to his brokerage's customers. The lawsuit was the first against a bank tied to the collapse of Peregrine, which filed for bankruptcy protection in July 2012 after Wasendorf confessed to bilking his clients of more than $100 million in a nearly 20-year-long fraud. Wasendorf began serving a 50-year sentence in February.

After an explosion, an evacuation of a small Louisiana town and a threatened eviction, military explosives-disassembler Explo Systems Inc. has filed for bankruptcy protection, the Wall Street Journal reported today. Company officials who put the small business into chapter 11 on Monday said in court papers that its has 15 million pounds of “energetic materials”—largely M6 propellant—at its location on the Louisiana National Guard’s Camp Minden. Operating under a military contract, Explo Systems workers had been dismantling unneeded explosives, according to media reports and federal court papers. The company resold explosive material “for reuse in commercial blasting operations” and the remaining scrap metal to recyclers, according to details in a federal lawsuit filed by its insurance company.