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A judge yesterday approved a payout to MF Global's unsecured creditors, who have waited nearly three years as customers of the collapsed brokerage already had their money returned, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Martin Glenn said James W. Giddens, the trustee in charge of winding down the brokerage, could pay the unsecured creditors about $295 million. A lawyer for Giddens said that distributions to the unsecured creditors could begin as soon as the order is final, which typically takes two weeks. He also said settlements of unresolved claims could soon result in "very substantial" creditor distributions beyond the one approved yesterday.

Trump Entertainment Resorts Inc., the Atlantic City, N.J., casino operator, said that it will soon file a reorganization plan for secured lenders to convert some of their $286 million in old debt into equity and new debt not requiring cash interest payments, Bloomberg News reported yesterday. If approved, the lenders will provide $100 million in new capital, the casino operator said. First-lien lenders, including Icahn Partners LP and affiliated funds, were owed approximately $285.6 million plus $6.6 million in interest when the chapter 11 reorganization began this month. The proposal depends on concessions from the union, New Jersey and Atlantic City. The company filed papers on Sept 26 in U.S. Bankruptcy Court in Delaware seeking permission to modify the existing union contract. Meanwhile, Donald Trump last week asked the judge to take his name off the company’s properties: the Trump Plaza Hotel and Casino and the Trump Taj Mahal Casino Resort. The 906-room Trump Plaza closed this month. The Taj Mahal, with more than 2,000 rooms, previously told workers it will close around Nov. 13 absent labor concessions.

The Florida developer who entered the first bid in an auction for Atlantic City, New Jersey's Revel Casino Hotel, which closed its doors this month, said yesterday that he plans to challenge the results if he loses, because the process lacked transparency, Reuters reported yesterday. The comments, by Glenn Straub, come as the auction for Revel, Atlantic City's newest casino complex, is scheduled to resume today. The auction started last week with a $90 million cash bid by Straub but adjourned for the Jewish Rosh Hashanah holiday. Straub complained the bidding lacked transparency and he did not even know how many qualified at last week's bid deadline, or how their proposals were being valued. Revel's attorney, John Cunningham with White & Case, called the allegations "entirely false."

The Roman Catholic Diocese of Gallup, N.M., which filed for bankruptcy protection late last year as a result of mounting litigation tied to sexual-abuse claims, has chosen a mediator to oversee negotiations with more than 100 claimants, Dow Jones Daily Bankruptcy Review reported today. At a bankruptcy court hearing convened last week, lawyers for the diocese and a committee representing the abuse claimants said that they had selected retired Judge Randall Newsome to serve as mediator and to try to guide the two sides toward a settlement.

As Crumbs Bake Shop Inc. began its final descent into bankruptcy late last year, the cupcake maker’s newly appointed chief executive, Ed Slezak, implemented a new strategy to help boost the company’s revenue: Sell Crumbs-branded products at everyday stores like Target and BJ’s Wholesale Club, the Wall Street Journal reported today. Crumbs collaborated with companies to create mass-market cupcakes and bake-at-home Crumbs mixes, but the new ventures had only been rolling a few months when Crumbs abruptly closed all its stores and sought Chapter 11 protection in July. Now, with the majority of Crumbs’ assets sold to a partnership between CNBC reality show host Marcus Lemonis and Dippin’ Dots owner Fischer Enterprises that plans to relaunch Crumbs stores, the companies that struck those licensing agreements questioned how to go forward during the bankruptcy proceeding. A bankruptcy judge in New Jersey considered that question yesterday in response to an urgent request from Houston-based Coastal Foods Baking, a commercial bakery that said the Lemonis-Fischer group sent it a cease-and-desist letter Sept. 23 to prevent it from fulfilling new orders for Crumbs-branded baked goods. With hundreds of cupcakes already in the process of being made at the time the letter came, Coastal Foods President and Chief Executive William Evans said in a court filing that it will “have to destroy the food product” and eat $45,850 in costs if Lemonis-Fischer doesn’t back down. Bankruptcy Judge Michael Kaplan told Coastal Foods during a contentious hearing yesterday that it could fill the two new cupcake orders, though any further production must wait until the parties determine whether Coastal Foods still has any rights under the licensing agreement and whether the licensing agreements were included in the bankruptcy sale.

A group of Maine-based creditors has asked a Delaware court to move the bankruptcy case of Great Northern Paper Co. to Maine, where an attorney said 56 percent of the 1,159 creditors are located, the Bangor (Maine) Daily News reported yesterday. But Charles Stanziale, the trustee appointed in the bankruptcy case for GNP, plans to oppose that measure, arguing that he has administered bankruptcies from all over the country. That sets up a dispute with Portland-based attorney Jeremy Fischer, who represents three creditors and has been gathering support to bring the case to Maine from others with an interest in the the East Millinocket paper mill operator’s bankruptcy. Fischer filed a motion late Friday with the U.S. Bankruptcy Court in Delaware, stating that Maine’s attorney general, the towns of East Millinocket and Millinocket and the employees’ unions have indicated support for the change of venue before a scheduled meeting of creditors happens Oct. 15.

A bankruptcy trustee looking to recover money for those affected by a deadly 2013 train derailment has turned his attention to more than a dozen companies that may have played a role in the accident, Dow Jones Daily Bankruptcy Review reported today. In court filings on Thursday, Robert Keach, the trustee for train operator Montreal Maine & Atlantic Railway Ltd., said that he is seeking information from energy companies Shell Oil Co., ConocoPhillips, InCorr Energy Group and Enserco Energy Inc. to help him determine whether he can pursue legal action against the companies. Keach said that the four filings are "the tip of the iceberg" and that he is speaking with close to 20 companies that either leased tank cars to MM&A or produced the oil being transported.

The trial to consider claims by Maurice “Hank” Greenberg’s against the U.S. government in AIG’s 2008 bailout begins today as David Boies, Greenberg’s litigator, will question the architects of the bailout, including Ben Bernanke, Henry Paulson and Timothy Geithner, Bloomberg News reported today. According to Greenberg’s claims, the $182 billion taxpayer bailout that saved American International Group Inc. and perhaps all of Wall Street during the 2008 financial collapse was a government rip-off. Greenberg’s Starr International Co., AIG’s largest shareholder when the financial crisis struck, sued the government, calling its assumption of 80 percent of the insurer’s stock an unconstitutional “taking” of property that requires at least $25 billion in compensation. The complaint by Starr International, Greenberg’s Swiss-based investment company, doesn’t question the necessity of a rescue that began under Republican President George W. Bush and continued under Democrat Barack Obama. Rather, Starr claims AIG was singled out for punitive treatment that violated shareholders’ constitutional rights to due process and just compensation for their property.

Lehman Brothers Holdings Inc. is suing Raymond James Financial Inc. to recover more than $2 million it says it is owed related to an old swap agreement, the Wall Street Journal reported on Saturday. The lawsuit is part of an effort by the failed investment bank to recover funds lost when firms on the other end of complicated swap agreements terminated them in the wake of Lehman's September 2008 collapse. Lehman Brothers says that Raymond James took over Iowa Telecom's swap position in late 2008 and "took charge of the process…in order to gain a much larger financial advantage that would leave Iowa Telecom unaffected — but would directly deprive Lehman of the value of the terminated interest rate swap." Lehman Brothers says that ultimately, through a series of actions, the amount that Iowa Telecom should have paid it was instead paid to Raymond James. The lawsuit seeks to recover that amount, which is roughly $1.9 million plus interest and fees.

A bankruptcy judge Tuesday shut down an attempt by a former Dewey & LeBoeuf LLP executive to dismiss a lawsuit claiming he owes the defunct firm’s creditors $9.3 million, the Wall Street Journal reported today. Dewey’s bankruptcy trustee in March sued the executive, former Chief Operating Officer Dennis D’Alessandro, seeking the return of more than $9 million in salary, bonuses and other compensation that he received from 2008 until the firm’s 2012 collapse. In filing the suit, Dewey’s trustee, Alan Jacobs, said that the “astronomically generous” contract was atypical for the legal industry and “far above” the value of services he provided as COO. The suit seeks to recover the funds on the grounds that the payments were made while Dewey was unable to meet its other financial obligations.