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Laboratory Partners Inc. (MedLab), a clinical laboratory doing business in eight states and the District of Columbia, filed for bankruptcy on Oct. 25 with six subsidiaries, according to a press release. MedLab affirmed it will continue to operate its business and serve its customers on an uninterrupted basis through its existing facilities and employees, in all of the markets in which it operates, as it moves forward with its restructuring plan. In conjunction with the filing, MedLab has obtained a $5 million credit facility and line of debtor-in-possession financing from Marathon Special Opportunity Fund, an affiliate of its current senior secured lenders. MedLab intends to seek immediate permission from the bankruptcy court to pursue the sale of two of its divisions to potential purchasers. The company anticipates that, subject to court approval, a court-supervised auction for the Long Term Care division should occur in December 2013. The auction for the Terre Haute area laboratory business should be scheduled in January 2014. The closing of each transaction will occur shortly after each auction.

Allens Inc., a maker of canned and frozen vegetables in business since 1926, filed for bankruptcy, seeking to sell some divisions or reorganize as a new company, Bloomberg News reported yesterday. The company listed more than $100 million in debt and assets in its chapter 11 filing. The family-owned business began as Allen Canning Co. near Siloam Springs, Ark. Allens said it intends to keep operating its core canned-vegetables business while reorganizing. It has a commitment from lenders for a bankruptcy loan, and said it is going explore selling all or part of its business and the possibility of exiting bankruptcy as a standalone company.

Creditors said that American Airlines would have to start over in its effort to restructure in bankruptcy after two years if the U.S. succeeds in blocking the carrier’s planned merger with US Airways Group Inc., Bloomberg News reported yesterday. The bankruptcy would go back “to square one with likely disruption and disarray among numerous, financially unaligned stakeholders,” the committee representing American’s unsecured creditors said in a court filing yesterday. American parent AMR Corp., which filed for bankruptcy on Nov. 29, 2011, was set to exit court protection by merging with Tempe, Arizona-based US Airways when the U.S. Justice Department and a group of states sued the carriers in August. The government says the merger would reduce competition while the airlines defend the deal as benefiting consumers. The trial is set to begin Nov. 25 in Washington, D.C.

PricewaterhouseCoopers LLP is asking a federal judge to trim back the Federal Deposit Insurance Corp.'s $1 billion lawsuit that alleges the accounting firm failed to catch the massive fraud that brought down Colonial Bank, Dow Jones Daily Bankruptcy Review reported today. The auditor and fellow accounting firm Crowe Horwath LLP say that they're not accountable for the multibillion-dollar mortgage finance fraud involving the multiple sales of the same bad loans.

Green Field Energy Services Inc., an oil field service provider that defaulted on a loan last month, filed for bankruptcy, Bloomberg News reported yesterday. Green Field Energy, based in Lafayette, La., listed assets of as much as $500 million and the same amount in liabilities in its chapter 11. Green Field Energy defaulted on principal payment on a credit facility with an affiliate of Royal Dutch Shell Plc, triggering a cross default on $250 million of senior secured notes, Moody’s Investors Services said in a Sept. 9 report. Moody’s cut its rating on about $200 million of Green Field Energy’s secured debt to Ca from Caa2, according to the report, and said that the company didn’t have enough cash or cash flow to pay its obligations relating to interest expenses, mandatory debt amortization and capital spending.

While some analysts were wondering why General Motors shut down Pontiac amidst GM's bankruptcy in 2009, former GM Vice Chairman Bob Lutz said that GM killed the brand on government orders, Jalopnik.com reported on Saturday. "The Feds basically wanted to get GM down to Cadillac and Chevrolet," according to Lutz. "They said, 'You don't need all these brands. You need one prestige brand, and one mass-market brand.'" Lutz lamented the killing off of the Pontiac division, saying that despite decades of mismanagement, there were signs that it was on its way back before it was eliminated during GM's bankruptcy.

Three weeks into the bankruptcy of New York City Opera, there’s discussion in opera circles about how to reconstitute it under a different management to provide the country’s most populous city with an alternative to the Metropolitan Opera, Bloomberg News reported yesterday. “Many people are talking about the need for a second company, with a similar role New York City Opera had,” Gail Kruvand, chairwoman of City Opera’s orchestra committee, said in an interview on Saturday. “We continue to hope that will arise.” In one scenario, the new company would rehearse and perform about 30 miles north of New York City at Purchase College, State University of New York, founded by Governor Nelson Rockefeller. The campus has an active music program and hosts a new two-week summer residency for the National Youth Orchestra of the U.S., established by Carnegie Hall. Absent a miracle or merger, the current iteration of City Opera, founded in 1943, will be shutdown.

A U.S. bankruptcy judge yesterday cleared the way for hedge fund Elliott Management and King Street Capital Management L.P. to buy a multibillion-dollar bankruptcy claim owed to a Lehman Brothers U.K. subsidiary at a discount, the Wall Street Journal reported yesterday. Judge James Peck of the U.S. Bankruptcy Court in New York rejected a bid by a rival group of hedge funds to take a closer look at the deal, the details of which they argued were unfairly kept secret. Those funds, including such major distressed-debt investors as Paulson & Co. and Baupost Group, had argued that rival bidders had been shut out of the sale process. Lehman officially exited bankruptcy last year under a chapter 11 approved by its creditors, including the hedge funds involved in the dispute. Harvey Miller, a lawyer for Lehman’s post-bankruptcy overseers, said at yesterday’s hearing that the sale to Elliott and King Street is not simply a purchase of a claim, but reflects a complex web of claims and litigation involving two Lehman U.K. subsidiaries, which are being wound down under English law. The company’s liquidation is expected to continue for several more years as the team sells off Lehman’s still-considerable real-estate and private-equity holdings and unwinds its derivative positions.

Empire Die Casting Co. of Macedonia, Ohio, has filed for chapter 11 bankruptcy protection and hopes to be sold soon, Crain’s Cleveland Business reported yesterday. New Growth Capital Group LLC has submitted a letter of intent to acquire the assets of Empire Die Casting for $11.7 million in cash. New Growth Capital Group would be designated as a stalking-horse bidder for the auction, and Empire Die Casting would pay a break-up fee of $180,000 if New Growth Capital Group is out-bid. The company filed for bankruptcy on Oct. 16 in U.S. Bankruptcy Court in Akron, Ohio, listing assets of between $10,000,001 and $50 million and liabilities of between $1,000,001 and $10 million. The bid deadline is Dec. 16. Marc Merklin, a managing partner in the Akron office of law firm Brouse McDowell LPA, said that the court will hear the request for the bid procedures on Nov. 5. The main hurdle Empire Die Casting faces is a potential liability in its multiemployer pension plan; Merklin says that the pension plan has a multimillion-dollar liability and is “unworkable” as is.

A California bankruptcy judge has given preliminary approval to a $1 million settlement made with fired workers of Rhythm & Hues, the Academy Award-winning VFX firm that did the special effects for Life of Pi, among many other films, according to The Hollywood Reporter yesterday. Earlier this year, the company filed for chapter 11 protection and terminated 238 employees. Before the company was sold to an affiliate of Prana Studios for $1.2 million in cash and the assumption of liabilities, a class-action lawsuit was filed by one of the employees terminated, alleging violations of the Worker Adjustment and Retraining Act, including not being given the requisite 60 days of written notice before termination. Last month, a joint motion was filed in bankruptcy court that sought approval for a $1 million settlement for wages and benefits left outstanding. After a hearing last week, a judge gave preliminary approval and set a hearing for final approval on Dec. 13.