%1

New York City Opera, which filed for bankruptcy protection last month after years of management missteps, won court approval to auction some assets, including costumes, wigs, props and about 60 musical instruments, Bloomberg News reported yesterday. The public sale was approved on Tuesday by Bankruptcy Judge Sean Lane. The auctioneer, Tiger Remarketing Servicing LLC, will get 10 percent of the proceeds from the sale, which also includes the opera’s gift shop inventory of CDs and books and a harp at Lincoln Center in New York. Stock scenery, tools, stage curtains and prop fabric at the opera’s facility in New Windsor, New York, will be auctioned, as will computers and office furniture from the opera’s office on Broad Street in Manhattan, according to a Nov. 6 request to approve the sale.

Jon Corzine and other ex-managers of bankrupt MF Global Inc. are appealing a court ruling calling for 100 percent repayment of customers of the failed brokerage, Bloomberg News reported yesterday. A notice of appeal was filed in bankruptcy court on Tuesday by Corzine, the ex-New Jersey governor and onetime Goldman Sachs Group Inc. co-chairman, and by managers targeted in a lawsuit including senior executives Bradley Abelow and Henri Steenkamp. They are challenging a Nov. 5 ruling by Bankruptcy Judge Martin Glenn that would allow all missing customer funds to be returned by the end of the year. MF Global Holdings Ltd., the brokerage’s parent company, filed for bankruptcy on Oct. 31, 2011, after a failed $6.3 billion bet on bonds of some of Europe’s most indebted nations. The company listed assets of $41 billion and debts of $39.7 billion. More than $1.6 billion in customer funds that should have been segregated were missing.

The stage is set for a Dec. 17 auction for Atlantic Club Casino Hotel, one of the smallest gambling operations on the Atlantic City Boardwalk, Dow Jones Daily Bankruptcy Review reported today. While a stalking-horse bidder has not yet emerged, an affiliate of Northlight Capital Partners has something of a pole position as lender of bankruptcy financing that may run as high as $15 million. The casino, owned by Colony Capital LLC, filed for chapter 11 protection Nov. 6.

A bipartisan group of U.S. House and Senate members is seeking to make it easier for investment fraud victims to seek compensation, after investors in Allen Stanford's Ponzi scheme were deemed ineligible under current law to file claims, Reuters reported yesterday. The bill, introduced by Sens. David Vitter (R-La.), Charles Schumer (D-N.Y.), Reps. Scott Garrett (R-N.J.) and Carolyn Maloney (D-N.Y.), would bestow greater powers on U.S. securities regulators to oversee the process of determining whether customers of failed brokerages qualify for compensation. The legislative proposal comes as the Securities and Exchange Commission awaits a crucial decision from a U.S. appeals court over the fate of the Stanford victims. The SEC is trying to get the court to force an industry-backed fund that protects investors to start court proceedings so Stanford victims can file claims to recover a least a portion of the millions they lost. The Securities Investor Protection Corp., or SIPC, which administers the fund, has refused the SEC's request, saying Stanford investors do not meet the legal definition of "customer" under the federal law designed to protect investors if their brokerage collapses.

Residential Capital LLC, the defunct mortgage company, opened a weeklong bankruptcy trial in which it will fight hedge funds including Aurelius Capital Management LP over a liquidation plan that resolves more than $100 billion in claims, Bloomberg News reported yesterday. The company is asking Bankruptcy Judge Martin Glenn to approve a plan to distribute billions of dollars to creditors that ResCap raised by liquidating assets. The assets included a mortgage platform bought by Ocwen Loan Servicing LLC and Green Tree Servicing LLC for $3 billion. All the company’s big creditors voted for the bankruptcy plan except for a group of hedge funds holding about $1 billion in notes, ResCap’s lead attorney, Gary Lee, said today in court. ResCap, which is owned by Detroit-based Ally Financial Inc., filed for bankruptcy in May 2012 with plans to sell its mortgage unit and other assets. The company completed those sales this year, raising about $4.5 billion.

A bidding war has broken out over the rights to a pair of games created by shuttered videogame developer TimeGate Studios Inc., the Wall Street Journal reported today. Hedge fund CNH Partners, an affiliate of Greenwich, Conn.’s AQR Capital Partners, said that it made a higher offer for the rights to two of TimeGate first-person shooter titles — “Section 8” and the unreleased “Minimum.” According to court papers, CNH teamed with game developer Digital Tribe Games to offer $50,000 in cash plus a 25 percent royalty on the two games, topping a winning bid by France’s Atari SA. SouthPeak Interactive Corp., which won a multimillion-dollar arbitration award against TimeGate in their dispute over “Section 8,” also says its offer — $40,000 and a 50 percent royalty — is better than Atari’s, which tried to unload some of its U.S. assets in bankruptcy court earlier this year. The bankruptcy trustee winding down TimeGate has endorsed the Atari bid, but the hedge fund is asking a bankruptcy judge to reopen the sale process and to schedule a live auction.

Cengage Learning Inc.'s recently proposed bankruptcy-exit plan, meant to resolve a number of creditor protests, drew fire from unsecured creditors and junior bondholders, which insist that the plan is fatally flawed, Dow Jones Daily Bankruptcy Review reported today. The company's unsecured creditors' committee said that unless the company incorporates these changes it would seek to block approval of the disclosure statement. Although the text alterations will satisfy the creditors' committee in the short term, according to court documents, the committee is requesting major changes to the plan before Cengage receives final approval in February.

Fresh & Easy Neighborhood Market Inc., the U.S. grocery chain owned by Tesco Plc, canceled its proposed auction after receiving no offers to compete with a bid from an affiliate of billionaire Ron Burkle’s Yucaipa Cos., Bloomberg News reported yesterday. The company will seek bankruptcy court approval on Nov. 22 to sell virtually all of its assets to the affiliate of Los Angeles-based Yucaipa, according to court documents filed on Nov. 15. Under the proposed deal, a Tesco affiliate would lend the Yucaipa unit $120 million to help finance the acquisition, according to court papers. Tesco would get warrants to buy as much as 10 percent of the reorganized chain’s equity, while Fresh & Easy would get a 22.5 percent stake. Yucaipa has agreed to take over about 150 of the markets along with the production facility in Riverside, California, where the company produces meals under the Fresh & Easy brand. Fresh & Easy operates 167 stores in the western U.S.

A group of big contractors that has been battling Longview Power LLC said that they won't oppose a $150 million financial lifeline from the company's lenders intended to keep the West Virginia power plant online, Dow Jones Newswires reported yesterday. Subsidiaries of Norwegian construction company Kvaerner ASA, of Siemens AG, and of German engineering firm Foster Wheeler AG have agreed not to oppose the loan, which promises cash to fix the power plant and get Longview out of bankruptcy. The financing pact is up for bankruptcy court review tomorrow for Longview, which sought bankruptcy protection from creditors in August. With cash running short, the company lined up new financing that it says is enough to see it out of chapter 11. Agreement by the contractors not to get in the way of the new financing was crucial for Longview, because the trio claims rights on the assets that are superior to any new loans.

Overseas Shipholding Group yesterday sued its one-time law firm, Proskauer Rose LLP, for bad legal advice that forced the company to restate more than a decade's worth of financial results and ultimately file for bankruptcy protection, Dow Jones Daily Bankruptcy Review reported today. The company, one of the world's largest publicly traded shippers, filed a legal malpractice lawsuit against its former outside law firm in connection with advice the firm gave the company regarding its international tax liabilities. According to the suit, Overseas Shipholding Group relied on Proskauer's "faulty advice" to borrow hundreds of millions of dollars without incurring U.S. tax liabilities.