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Credit Suisse Group AG was ruled by a judge to be liable for all damages that could be awarded to noteholders suing the bank over fraud at National Century Financial Enterprises Inc., a figure investors’ lawyers put at more than $2 billion, Bloomberg News reported on Saturday. U.S. District Judge James Graham said on Friday that because New York law governs apportionment of fault in the case, Credit Suisse will be liable for 100 percent of former Chief Executive Officer Lance Poulsen’s share of damages. “If the jury finds at trial that Credit Suisse and Poulsen each committed fraud that caused plaintiff’s losses, then under New York law Credit Suisse will be liable, as to plaintiffs, for 100 percent of Poulsen’s share,” judge Graham said. Noteholders claim the bank, the placement agent, knew or should have known of a $2.9 billion fraud that led to National Century’s collapse in 2002. Ten executives of the Dublin, Ohio- based health-care financer were convicted of crimes, including Poulsen, who is serving 30 years in prison.

US Airways Group Inc. and American Airlines parent AMR Corp. are in the final stages of negotiating a merger, with the final price and management structure still to be resolved, Reuters reported on Friday. The two airlines, as well as AMR's creditors and its bondholders, have focused their efforts in recent weeks on reaching a merger agreement, and a deal could come in the next two weeks. AMR's board, which has not made a final decision and still considers its own restructuring plan as a viable one to revive the airline, plans to meet on January 28 and January 29 to discuss the latest developments in the negotiations.

The Archdiocese of Milwaukee said in court documents that it is hemorrhaging money on legal and professional fees as a result of its bankruptcy and will be unable to pay its monthly operating expenses beginning in April unless the judge suspends those payments, the Milwaukee Journal Sentinel reported on Friday. The archdiocese filed a motion asking Bankruptcy Judge Susan V. Kelley to allow it to suspend all payments to attorneys and consultants, except $125,000 for work on its plan of reorganization. And it would continue to pay its own attorneys to challenge sex-abuse claims with proceeds from its insurance carriers. James Stang, lead attorney for the bankruptcy creditors committee, said that he had not had a chance to discuss the motion with his colleagues, but he blamed the cost of the bankruptcy - nearly $9 million in fees paid to date - on the archdiocese's aggressive efforts to throw out hundreds of sex abuse claims.

Bankruptcy Judge Martin Glenn on Friday approved a plan by bankrupt law firm Dewey & LeBoeuf to foot some of the cost of destroying old client files, a bill that could ultimately reach almost $1.4 million, Reuters reported on Friday. In a written order, Judge Glenn approved Dewey's plan to chip in about $4 per box to help destroy an estimated 345,000 boxes of old records, some dating back to the 1930s. Dewey, now liquidating, filed the largest-ever bankruptcy by a U.S. law firm in May. In October it reached a $71.5 million settlement with former partners to help pay back about $260 million owed to secured creditors. The question of how to destroy files that go unclaimed by former clients has framed a difficult legal issue, pitting Dewey's fiduciary responsibility to creditors against its ethical duty to clients.

Hostess Brands Inc. plans to submit an agreement next week to sell its Drake's cake business as part of its bankruptcy reorganization, Reuters reported on Friday. Heather Lennox, an attorney for Hostess, told a bankruptcy court that Hostess was also in advanced discussions with a number of parties for the remainder of its snack business, which includes Twinkies. Lennox also told the court that Hostess expects to file an agreement for the other brands in the near term. It was not immediately clear who the agreements would be with, but private equity firm C. Dean Metropoulos said earlier this week that it was working on a deal for some Hostess brands.

New England Compounding Pharmacy Inc. executives lost control of the administration of its chapter 11 case when a bankruptcy court judge on Thursday appointed a trustee to represent the pharmacy for the remainder of the case, Dow Jones DBR Small Cap reported today. The court's decision comes in the days following revelations that the company's four executives and shareholders were paid $16.43 million last year and transferred an additional $4.84 million to three affiliated companies that they also owned.

Kansas plane maker Hawker Beechcraft said on Friday that its key creditors overwhelmingly backed a proposed reorganization plan in a vote that moves the company closer to emerging from bankruptcy protection as early as next month, the Associated Press reported on Friday. The Wichita, Kansas-based company said that it will seek court approval to exit bankruptcy at a hearing on Thursday and expects to emerge from chapter 11 in the second half of February, if the bankruptcy judge approves the plan. It also has secured an underwriting commitment for $600 million in exit financing consisting of a term loan and revolving line of credit from JPMorgan Chase Bank and Credit Suisse.

Medical laser manufacturer Biolitec Inc. has filed for chapter 11 protection as it continues to appeal a $23.2 million judgment awarded to a distributor of its products, Dow Jones DBR Small Cap reported today.
AngioDynamics Inc . in November was awarded a "final partial judgment" by the U.S. District Court against Biolitec. AngioDynamics settled the lawsuits for $7 million and $6.75 million each, according to court documents, and sued Biolitec for breach of contract.

Hostess Brands Inc., the bankrupt maker of Twinkies and Wonder Bread, asked a judge to set March 21 as the cutoff date for workers to file back-pay claims and said that it has no obligation to bargain with its former unions, Bloomberg News reported yesterday. Hostess, previously subject to 372 collective-bargaining agreements, said in court papers filed yesterday that it now has “no continuing duty to bargain with” unions objecting to sale procedures. The company said its staff has been reduced to 255 people, including 20 union members.

Creditors of bankrupt telecoms company Nortel Networks failed to reach a deal to split $9 billion among U.S., Canadian and European insolvency and bankruptcy proceedings, Reuters reported yesterday. The mediator, Warren Winkler, the Chief Justice of Ontario, said in a brief statement that he concluded further efforts at mediation are no longer worthwhile. Retirees in Canada and the United Kingdom have been fighting for a larger portion of the cash against the company's bondholders.