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JPMorgan Chase & Co. said that senior management of Lehman Brothers Holdings Inc. is to blame for the investment bank's "disastrous" high-risk strategy that resulted in a series of fraudulent transactions and led to the bank's demise and the largest bankruptcy filing in the nation's history, Dow Jones Daily Bankruptcy Review reported yesterday. Lehman's managers made large bets using the company's own balance sheet, JPMorgan said in a recent filing in the failed investment bank's $8.6 billion lawsuit against JPMorgan, and "regularly and deliberately ignored, overrode, manipulated or otherwise failed to adhere to its own internal risk policies and procedures."

Solar panel maker NovaSolar Inc. will have to prove that it deserves to remain in chapter 11 after allegedly failing to file certain documents, the Deal Pipeline reported yesterday. Bankruptcy Judge Charles Novack is scheduled on Aug. 2 to consider dismissing or converting the case to a chapter 7 liquidation. The court's clerk, Gloria L. Franklin, on July 10 moved the court to issue an order forcing NovaSolar to show cause why it should remain in chapter 11. In her report, Franklin said that the debtor has failed to file the requisite documents, including certain schedules. Judge Novack approved the motion on July 11.

The trustee who is winding down Howrey LLP is taking his first step toward staking a claim in the profits from continuing work that the defunct law firm's former partners took with them to their new firms, the Wall Street Journal reported today. Bankruptcy trustee Allan B. Diamond has won a federal judge's permission to subpoena, if necessary, the 70 law firms to which more than 200 Howrey partners jumped ship as the Washington, D.C., firm that specialized in corporate litigation collapsed last year. The order issued last week by Bankruptcy Judge Dennis Montali marks the opening of an investigation into the amount of compensation Howrey's creditors may be entitled to from the unfinished business that the partners started at Howrey and took to their new firms.

After getting out of prison in 2007 for stealing $43 million from Merrill Lynch, Daniel Gordon quickly was back in business, loaning hundreds of thousands of dollars to pro athletes at interest rates topping 75 percent per year and on his way to making multimillion-dollar business deals, court records show, the Associated Press reported yesterday. However, Gordon is faced several lawsuits over his business dealings and remains mired in a chapter 7 bankruptcy case he filed nearly three years ago that includes allegations of theft and fraud against him made by his ex-wife, Laura Gordon, and pro basketball player Eddy Curry. After prison, Gordon "wasted no time resuming his fraudulent behavior," according to a document filed in the bankruptcy case by Laura Gordon. She accused Gordon of illegally drawing $3.5 million from her home equity line of credit on her Manhattan apartment beginning in February 2008, only four months after being released from prison. A court ordered Gordon to pay back the money. The bankruptcy trustee has also accused Gordon of hiding more than $7 million in assets from creditors through fraudulent transfers.

A $50 million insurance policy is emerging as a key factor in efforts to resolve the bankruptcy of defunct law firm Dewey & LeBoeuf and avoid years of costly litigation, Reuters reported on Friday. The policy, taken out by Dewey in October 2011, covers claims of misconduct against former chairman Steven Davis and a handful of other former top executives at the firm, according to three former Dewey partners. As bankruptcy negotiations proceed, the estate, former partners and creditors are sorting out how the policy affects their different interests. In a proposal put forward last week by the firm's estate, former partners were asked to contribute between $25,000 and $3 million each toward a $103.6 settlement pot and to forfeit any legal claims against the defunct firm and its officers. In exchange, the partners would be released from liability for the firm's $315 million debt.

The official winding down Howrey LLP is taking his first step toward staking a claim in the profits from ongoing work that the defunct firm's former partners brought with them to their new firms, Dow Jones DBR Small Cap reported today. Bankruptcy trustee Allan B. Diamond this week won a judge's permission to subpoena 70 law firms that hired more than 200 Howrey partners and to start investigating the transfer of Howrey clients to those firms as well as the compensation the firms received for representing those clients.

Administrators who run the state pension fund for public workers of the Northern Mariana Islands—a fund that made a 44-day attempt at chapter 11 protection to avoid running out of money in 2014—ran up a $750,937.82 legal bill before a bankruptcy judge could rule that the entity did not qualify for protection under the Bankruptcy Code, the Wall Street Journal reported today. Government leaders who are in charge of the Pacific Ocean territory and who also opposed the pension fund administrator's request for bankruptcy protection in a long-running power struggle between the two are now protesting the bill from the Brown Rudnick law firm, whose Boston-based attorneys put the fund into bankruptcy on April 17. Specifically, the government’s attorneys want an 85 percent discount from Brown Rudnick, a figure it arrived at based on the 15 percent chance that the fund would actually be eligible for protection. (It did not explain in its court-filed request how it arrived at that estimate.) Government officials said that the Brown Rudnick attorneys should not have run up the clock on legal work when they knew the case had such a high risk of getting dismissed.

Sixteen months after Howrey dissolved, the firm's bankrupt estate has finally turned its attention to former partners and the firms that now employ them in hopes of raising revenue to help repay creditors, American Lawyer Daily reported today. In a court filing submitted on Monday, Howrey trustee Allan Diamond requested Bankruptcy Judge Dennis Montali's approval to subpoena 70 law firms for information related to how much work they received when they collectively hired at least 211 Howrey partners in the months before and after the firm's demise. The list of those being targeted includes several partners who launched their own practices, as well as those who were part of larger group moves to Baker Botts, Baker & Hostetler, Jones Day, Pillsbury Winthrop Shaw Pittman, Winston & Strawn, and other firms.

California Attorney General Kamala Harris' $270 million lawsuit against an alleged beneficiary of Bernard Madoff's Ponzi scheme is set for a court hearing today in New York, soon after a similar action went unchallenged, Bloomberg News reported today. Madoff trustee Irving Picard asked a federal judge to stop Harris' suit against Stanley Chais' estate, saying that only the trustee can collect money for Madoff's Ponzi victims. Harris, like New York Attorney General Eric Schneiderman in asserting a right to pursue local wrongdoing, contends that her suit can proceed because she is using her state policing power to protect consumers from fraud.

The machinists' union said yesterday that it filed court papers challenging efforts by bankrupt jet maker Hawker Beechcraft to sell itself to a Chinese company, alleging that the move could cost jobs and threaten U.S. national security, Reuters reported yesterday. The International Association of Machinists and Aerospace Workers said that the sale deserved scrutiny from federal regulators, state officials and the community of Wichita, Kansas, where Hawker Beechcraft is based. Hawker Beechcraft, owned by Goldman Sachs and Onex Corp, disclosed last week it was in talks regarding a $1.8 billion sale of the company with Superior Aviation Beijing Co., a 60-40 joint venture between privately owned Beijing Superior Aviation Technology Co and government-backed Beijing E-Tong International Investment & Development Co.