%1

The Maine-based railroad responsible for a fiery derailment that killed 47 people in Quebec in July is getting a new name, the Associated Press reported on Saturday. The company buying the railroad plans to change the name of Montreal, Maine and Atlantic Railway to Central Maine and Quebec Railway. Railroad Acquisition Holdings, a subsidiary of New York-based Fortress Investment Group, had the winning bid for the bankrupt railroad, which owns about 500 miles of track in Maine, Vermont and Canada. The deal is on course to close by the end of next month, said chapter 11 trustee Robert Keach. Montreal, Maine and Atlantic Railway filed for bankruptcy after an unattended train with 72 oil tankers derailed and exploded in Lac-Mégantic, Quebec, in July, destroying 40 buildings, including a busy bar where many of the victims perished. The railroad blamed a worker for failing to set enough brakes, allowing the train to begin rolling toward the lakeside town of 6,000.

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.

When Howrey trustee Allan Diamond struck a $41 million settlement with Baker & Hostetler last year to claim a chunk of the fees tied to a pair of contingency cases that Howrey partners took with them amid the firm's 2011 collapse, the deal handed the defunct firm's bankruptcy estate some much-needed cash to help pay off its largest secured creditor, Citibank, AmericanLawyer.com reported on Friday. But that wasn't the settlement's only effect as the financial infusion it yielded will come back to haunt former Howrey partners this year in the form of a hefty tax bill — and some of them don't believe that's fair. Under provisions of partnership and tax laws, former Howrey partners are obligated to pay taxes on the $41 million the estate took in related to the Baker & Hostetler settlement, as well as recoveries from other lingering contingency fee cases. That money will appear as "phantom income" on those attorneys' tax filings this year, with each of them liable to cover a portion of what could be a sizable tax obligation. Three former Howrey partners — all of whom joined the firm in July 2009 when Howrey absorbed intellectual property boutique Day Casebeer Madrid & Batchelder — asked bankruptcy judge last week to rule that they are not obliged to pay taxes on the estate's settlement-related income.

A Gordon Brothers Group division has offered to purchase women's clothing retailer Dots at a bankruptcy auction next week, saying that it is prepared to begin shutting down roughly 360 stores on March 1, Dow Jones Daily Bankruptcy Review reported today. At a court hearing held on Friday, Bankruptcy Judge Donald Steckroth characterized the bid from Gordon Brothers as a "liquidating bid" and denied the bidder's request for special fees as a reward for stepping out with a lead offer.

Exide Technologies Inc. and its creditors are vying for the right to launch a probe into suspected metal price-fixing, with an eye toward collecting damages if it turns out the battery-maker was victimized, the Wall Street Journal reported today. Suspicions that warehouse owners and the London Metal Exchange conspired to inflate metals prices (and warehouse rents) by stockpiling the commodities in “shadow warehouses” surfaced last year, triggering questions from the Commodity Futures Trading Commission and Department of Justice as well as a wave of lawsuits. If proven, the claims of anticompetitive behavior could mean money for Exide, a lead-acid battery maker that filed for chapter 11 protection in June 2013. The chapter 11 case is Exide’s second in less than a dozen years, and the company is under pressure to produce a restructuring plan that will win the approval of its creditors and the court. The chance to collect damages due to alleged anticompetitive behavior would be a valuable asset to put on the table in plan negotiations, according to court papers filed by Exide’s unsecured creditors' committee.

An entity created by the investor group would receive a $1 million breakup fee and be reimbursed for up to $1.75 million of its costs if the bankruptcy court selects another buyer for First Mariner Bank, according to a filing in the chapter 11 case of the bank’s parent company, First Mariner Bancorp, the Baltimore Business Journal reported today. A group of investors led by Baltimore native and New York hedge fund manager Howard Feinglass has a deal to buy First Mariner Bank and recapitalize it with $85 million to $100 million. The chapter 11 filing affects only First Mariner Bancorp, not First Mariner Bank or its customers. RKJS Bank, an entity the investor group created, will serve as the stalking-horse bidder in the bankruptcy auction.

Women's clothing retailer Dots is preparing to sell its roughly 370 stores at a Feb. 26 auction, the Wall Street Journal reported today. According to court papers, the struggling chain got permission from bankruptcy Judge Donald H. Steckroth to set a Feb. 25 bid deadline for potential buyers. Dots officials haven't named a lead bidder for the auction. The Ohio-based chain, which employs more than 3,500 people, filed for chapter 11 protection on Jan. 20 after losing shoppers when the quality of the chain's merchandise declined under prior management. In earlier court papers, former Chief Executive Lisa Rhodes said that the company has new leaders and fresh merchandise that will enable the company to "thrive as a profitable player in the retail market."

Saint Francis Hospital in New York's Hudson Valley got permission from Bankruptcy Judge Cecelia Morris on Wednesday to be taken over by Westchester Country Health Care Corp., which offered more than $30 million for the struggling 333-bed facility, Dow Jones Daily Bankruptcy Review reported today. Saint Francis Hospital officials picked that bid over an earlier $24 million offer from another health-care provider called Health Quest Systems Inc., which has ties to the nearby Vassar Brothers Hospital.

Long Island, N.Y.-based Long Beach Medical Center filed for chapter 11 protection on Wednesday to sell what remains of its assets after Hurricane Sandy devastated the hospital a little more than a year ago, the Wall Street Journal reported today. South Nassau Communities Hospital has offered $21 million for the assets, a bid that will be tested at auction. The funding for the purchase came from a $22 million grant that the state of New York provided to execute the sale and build an urgent-care facility on the hospital grounds. The Dormitory Authority of the State of New York is providing an additional $6 million grant to South Nassau Communities. South Nassau Communities is lending that money to Long Beach Medical to fund the chapter 11 case and help it continue operating. Long Beach Medical received $1.5 million of the funding before the bankruptcy filing and is requesting $4.5 million in the form of bankruptcy financing, which will require bankruptcy-court approval.

Atlantic Express Transportation Corp. has asked a bankruptcy judge to approve National Express Corp.'s $11.75 million bid for its Philadelphia school district busing operations, Dow Jones Daily Bankruptcy Review reported today. Following a Feb. 11 auction, National Express emerged with the highest offer for the Philadelphia-based assets, which include 364 buses. Should Bankruptcy Judge Sean H. Lane consent to the sale, Atlantic Express would receive $8.75 million in addition to about $3 million in assumed liabilities.