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LightSquared is proposing a new bankruptcy exit plan with financing from Fortress Investment Group and other backers, as the U.S. wireless communications company seeks to avoid a sale to highest bidder Dish Network Corp., Reuters reported yesterday. LightSquared would receive $2.75 billion in fresh loans and at least $1.25 billion in equity investment from private-equity firms Fortress and Melody Capital Advisors LLC, as well as JPMorgan Chase & Co and Harbinger Capital Partners, court documents filed on Tuesday show. The plan replaces one based on an auction of the company's assets earlier this year. LightSquared scrapped that sale after Dish emerged as the only qualified bidder, with a $2.2 billion offer and terms that LightSquared found unappealing.

Ambulance operator Rural/Metro Corp., which is poised to emerge from chapter 11 protection in the coming weeks, has agreed to pay $2.8 million to the federal government to settle civil allegations of Medicare fraud, Dow Jones Daily Bankruptcy Review reported today. John S. Leonardo, the U.S. Attorney for Arizona, said yesterday that his office has agreed to a deal with Rural/Metro to settle allegations that the company violated the federal False Claims Act by submitting false bills to Medicare between 2007 and 2011. The settlement resolves allegations that various ambulance companies owned by Rural/Metro billed Medicare for transporting patients from one hospital to another on an emergency basis when, in fact, the calls were not emergencies.

Loehmann's Holdings Inc.’s top executive is in line to collect a bonus from the discount retailer, which filed for bankruptcy and plans to begin shutting down its 39 stores next month, Dow Jones Newswires reported yesterday. The Bronx, N.Y.-based company has proposed to pay Chief Operating Officer William Thayer and another employee up to $650,000 in bonuses, according to court papers filed Monday in U.S. Bankruptcy Court in New York. In court papers, bankruptcy lawyers said that Thayer has been "working the equivalent of three jobs" as the company prepares to hold a Jan. 3 auction for the right to liquidate Loehmann's stores, which employs about 1,600 people. The company has already received $19 million bid from a team of three liquidators: SB Capital Group LLC, Tiger Capital Group LLC and A&G Realty Partners LLC. Under the proposed bonus pay-out plan, the amount that Thayer collects would grow with the amount of money that the liquidation sales bring in. In addition, he would be required to provide "transition services," according to court papers.

Owners and insurers of a now-bankrupt Massachusetts pharmacy linked to a deadly meningitis outbreak have agreed to pay more than $100 million to compensate victims, families of victims and creditors, Reuters reported today. The preliminary settlement announced yesterday, which requires court approval, would resolve many claims arising from tainted steroid injections linked to New England Compounding Pharmacy Inc. of Framingham, Mass. According to the Centers for Disease Control and Prevention, at least 64 people died and 751 were sickened in 20 U.S. states by injections of methylprednisolone acetate, a drug typically used to ease back pain. The outbreak occurred after the company shipped tainted vials of the steroid to medical facilities throughout the U.S. New England Compounding Pharmacy filed for bankruptcy protection on Dec. 21, 2012, two months after shutting down as the outbreak began.

W.R. Grace & Co said that it has settled the only remaining appeal for its chapter 11 plan with a group of bank lenders, paving the way for the U.S. chemicals maker to emerge out of bankruptcy protection after 12 years, Reuters reported today. The company reached a settlement with holders of its pre-petition bank debt, who have been demanding a higher interest rate on their loans, according to a court filing yesterday. Grace will pay the lender group $1.1 billion, comprising $971 million of principal and undisputed interest through Dec. 31, and $129 million in settlements, removing the last remaining obstacle to its emergence out of bankruptcy protection. Grace filed for chapter 11 protection in 2001, making it one of the longest bankruptcies in U.S. history, after an asbestos leak at one of its mines led to a slew of lawsuits.

Advantage Rent a Car won bankruptcy court approval to settle a battle with former owner Hertz Global Holdings Inc. over leased vehicles and is now seeking to borrow more than $100 million to help build its own fleet of rental cars, the Wall Street Journal reported today. Bankruptcy Judge Edward Ellington on Thursday signed off on the settlement with Hertz, which removes a significant obstacle to Advantage's future operations and will help pave the way for its proposed sale to a Canadian private-equity firm. Federal regulators ordered Hertz to spin off Advantage in connection with its $2.3 billion acquisition of Dollar Thrifty Automotive Group Inc. Under the spinoff, Hertz agreed to lease 24,000 vehicles to Advantage but disputes arose over the agreement, prompting Advantage to seek chapter 11 protection in November, shortly after the divestiture was finalized.

YRC Worldwide Inc. said yesterday that it has reached an agreement to raise funds that will allow the trucking company to reduce its debt by about $300 million, Dow Jones Daily Bankruptcy Review reported today. The company, which was trying to persuade employees to extend their labor contracts for five years, said that the financing comprises $250 million in equity and $50 million in debt that is committed to become equity. YRC is separately seeking to push back the due date on $124 million of debt due in March 2015.

Atlantic Club Casino will be shut down by next month after a judge approves its piecemeal sale to rivals Caesars and Tropicana, the Wall Street Journal reported today. Bankruptcy Judge Gloria M. Burns approved the sale agreement, which calls for Caesars Entertainment Corp. to pay $15 million for the casino property and fixtures, and Tropicana Entertainment Inc. to pay $8.4 million for Atlantic Club’s slot machines and other gambling equipment. Judge Burns overruled an objection from Sobe Holdings LLC, which tried to buy both the property and the gambling equipment but lost out at the auction.

A bankruptcy judge approved Michigan honey supplier Groeb Farms Inc.’s restructuring plan, paving the way for the company to emerge from chapter 11 protection under the ownership of a private equity firm, the Wall Street Journal reported on Saturday. Bankruptcy Judge Walter Shapero signed off on the plan on Thursday following a confirmation hearing. Texas investment firm Peak Rock Capital will take control of Groeb Farms after extending a $30 million bankruptcy loan to the 76-worker company, which filed for bankruptcy protection after regulators caught it illegally buying Chinese honey through other countries to avoid antidumping tariffs.

China's Suntech Power Holdings Co. and a group of bondholders will have to wait a little longer before a court showdown over an involuntary bankruptcy petition filed in U.S. federal court against the solar panel maker, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Stewart M. Bernstein said that he would push back a hearing to consider Suntech's bid to dismiss the involuntary bankruptcy petition to Jan. 23 from Jan. 7.