%1

The Commodity Futures Trading Commission (CFTC) staked a claim on Friday as a potential creditor of failed commodities brokerage MF Global Inc, in a sign that it may charge the bankrupt firm and seek monetary sanctions, Reuters reported on Friday. The CFTC said that it filed a claim as a "general creditor" in order to "preserve all possible options" to recover funds related to its investigation. The CFTC and other government agencies have been examining whether MF Global misused customer funds in its final, chaotic days. The commission said that it took action so that if its investigation results in an enforcement action, it could pursue a restitution award.

Dynegy Inc. on Friday won a U.S. bankruptcy judge's approval of a settlement with creditors, putting the power producer's Dynegy Holdings LLC unit one step closer to emerging from chapter 11 protection, Reuters reported on Friday. Chief Judge Cecelia Morris approved the settlement at a hearing as some creditors last week dropped their opposition to the accord. Under the settlement, Dynegy and Dynegy Holdings would be combined, the Houston-based company said. Dynegy Holdings' unsecured creditors, including holders of about $3.4 billion of senior notes, would receive a 99 percent equity stake in the combined company, while the Houston-based parent would receive the remaining 1 percent plus warrants.

Dewey & LeBoeuf LLP's estate is considering claims to recover profits from unfinished legal work that partners who were poached took to their new firms, the Wall Street Journal reported today. Once a 1,300-lawyer global enterprise that was among the largest law firms in New York, Dewey & LeBoeuf filed for chapter 11 protection last week and owes more than $315 million to banks, bondholders, landlords and vendors. The main source for repaying Dewey's creditors will be collecting an estimated $255 million in legal work for which the firm has not yet been paid.

Bankrupt New York law firm Dewey & LeBoeuf LLP received approval on Wednesday from Bankruptcy Judge Martin Glenn to use some cash that remains in the firm's accounts to pay for critical functions as it winds down its affairs, the Wall Street Journal reported yesterday. The firm now has approximately $13.4 million in cash on hand, according to an amended declaration by Joff Mitchell, the chief restructuring officer for the firm. However, lenders, who have a claim on the money as a result of amendments to loan agreements in the weeks leading up to Dewey’s bankruptcy filing, will have to wait until a June 13 hearing to see what they can get in exchange for fronting the firm the cash collateral.

Tanker owner and operator B+H Ocean Carriers Ltd. filed for chapter 11 protection on Wednesday to restructure its balance sheet as it tries to weather the challenges facing the global shipping industry, Dow Jones DBR Small Cap reported today. The Bermuda-based company, weighed down by $46.1 million in debt and only $4.5 million in assets, said that weak lending in the global shipping market combined with high freight rates and vessel values made a restructuring in chapter 11 its best option.

Residential Capital LLC's unsecured creditors may oppose plans by the bankrupt mortgage company to quickly sell most of its assets to Fortress Investment Group LLC (FIG), a lawyer for the creditors said in court, Bloomberg News reported yesterday. The company's unsecured creditors' committee will decide in the coming weeks whether it will oppose ResCap's request for a fast sale of $4 billion of assets, attorney Kenneth H. Eckstein said in court yesterday. The company is pushing to sell assets to Fortress and ResCap's parent, Ally Financial Inc., within 90 days, Eckstein said. ResCap is scheduled to seek approval of those sales from Bankruptcy Judge Martin Glenn next month.

Dewey & LeBoeuf LLP's unsecured creditors, meeting yesterday to form a committee to represent their interests, may find the defunct law firm has nothing left to pay them, Bloomberg News reported. Dewey's Memorial Day bankruptcy filing disclosed $225 million of secured loans from banks and bondholders to be paid mostly from $255 million of bills to the defunct law firm’s clients that analysts value at as little as 40 cents on the dollar. Topping a list of Dewey's unsecured creditors is the Pension Benefit Guaranty Corp., claiming $80 million for underfunded pensions. Second is Dewey's landlord, Paramount Group, claiming $3.8 million for property taxes and May rent, followed by Thomson Reuters Corp., owed $2.4 million for legal research.

RG Steel LLC filed for chapter 11 protection today, one week after the company said that it was running short of liquidity and set plans to idle three steelmaking plants, Reuters reported. Privately held RG Steel said a week ago it was suffering a liquidity crisis, looking for a buyer and would idle all three of its steel mills starting in June. The company and several affiliates filed for protection listing more than $1 billion in both assets and liabilities.

Nebraska Book Co., the operator of a chain of college bookstores, won court approval of a restructuring plan that eliminates about $270 million in debt, Bloomberg News reported yesterday. Bankruptcy Judge Peter Walsh approved the company's reorganization plan at a hearing yesterday saying that he would sign the order once it is finalized. Nebraska Book sought bankruptcy protection last June with a pre-arranged plan to exit court protection within a few months. That plan unraveled after credit markets tightened and the company was unable to obtain $250 million in exit financing. Under the new plan, senior secured noteholders owed about $200 million will get virtually all of the reorganized company's equity, plus $100 million in new notes and the right to participate in an $80 million exit loan. The noteholders are projected to recoup about 81 cents on the dollar.

Trustee Curtis R. Smith, who is responsible for distributing cash to Borders creditors, says that the company did its part to notify all of its creditors, including gift-card holders, of the June 1, 2011, deadline to file a claim in the chapter 11 case it launched in January 2011, the Wall Street Journal reported yesterday. Smith said that the gift-card holders got a second chance to redeem their cards in the nearly four months of between the claim deadline and the chain's closing. "The gift card holders had multiple opportunities to act and mitigate any loss by either redeeming their gift cards or timely filing proofs of claim," Smith said in court papers filed on Friday. The trustee also took issue with the surprise the gift-card holders expressed at Borders's demise. Not only was Borders's chapter 11 filing "widely publicized" in news articles that advised people to use their gift cards as soon as possible, but the chain's eventual liquidation also was the topic of "numerous" articles.