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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.

Creditors opposed to Momentive Performance Materials Inc.’s bankruptcy reorganization lost a bid to keep the plan from being implemented while they challenge it, Bloomberg News reported today. U.S. District Judge Vincent Briccetti yesterday denied the creditors’ request for a stay, and also refused to let the plan opponents take their case directly to the U.S. Court of Appeals in Manhattan. This month, Apollo Global Management LLC’s Momentive Performance, a maker of silicone and quartz products, won bankruptcy court approval of a plan that cuts debt to less than $1.3 billion from about $4 billion. Yesterday’s decision is another victory for Leon Black’s Apollo, which took over the Waterford, New York-based company for $3.8 billion in 2006. Bankruptcy Judge Robert Drain had said that groups of senior creditors that originally opposed the plan weren’t allowed to change their votes at the last minute, which would have allowed them to be paid in cash rather than new debt. They and a group of low-ranking creditors, who are to get nothing under the plan, sought to keep it from being carried out while they appealed Judge Drain’s decision. Briccetti refused to put the plan on hold, saying that the challengers didn’t show a likelihood that they would succeed on their appeal. He said Judge Drain was probably correct in his treatment of the senior creditors’ claims.

Three-and-a-half years after Howrey LLP shut its doors, another 31 former partners of the bankrupt law firm have agreed to chip in money to pay back Howrey’s creditors, the Wall Street Journal reported today. In settlement papers filed in bankruptcy court on Friday, Howrey trustee Allan Diamond says that he’s reached deals to bring in close to $1.5 million from the batch of onetime equity partners. That’s on top of a nearly identical settlement reached in May with 60 ex-partners that raised $4.2 million for creditors. The contributions, ranging from $3,532 to $200,000, claw back 16 percent of what partners earned between April 2010 and Howrey’s dissolution a year later — a period during which Diamond argues Howrey was insolvent. (Subscription required.)
http://blogs.wsj.com/bankruptcy/2014/09/22/former-howrey-partners-contr…

For more on law firm bankruptcies and “unfinished business” claims, be sure to read “Is the Unfinished-Business Rule Finished? Recent Decisions Could Close the Book on Hourly Matters” in the September edition of the ABI Journal.
http://journal.abi.org/content/is-the-unfinished-business-rule-finished…

A lawsuit filed by the Catholic Diocese of Spokane against the lawyers who led it through a 2004 bankruptcy related to sex abuse lawsuits is set for a February trial, the Associated Press reported on Saturday. Bishop Blase Cupich stopped using the legal team at the Paine Hamblen law firm after he arrived in 2010. He has since pursued a malpractice complaint that accuses the firm of failing to use a strategy that could have saved the diocese millions of dollars and prevented a new round of priest sex-abuse claims. The Spokane Spokesman-Review reported Friday that the number of claims after the bankruptcy reached 230 in the past year. However, more than 150 of the 230 people who filed future claims had their cases rejected by a former federal judge tasked with reviewing them and awarding payouts.

An examiner will be appointed to conduct an investigation into the bankruptcies of two affiliates of troubled Indianapolis-based developer HDG Mansur, the Indianapolis Business Journal reported today. HDGM Advisory Services LLC and HDG Mansur Investment Services Inc., which manage Shariah-compliant investment funds, filed petitions for chapter 11 protection in Indianapolis on May 21 to fend off a $5.8 million judgment from a lawsuit filed in New York federal district court in January 2013 by funds previously managed by the bankrupt companies. At a Sept. 16 hearing, a bankruptcy judge in Indianapolis denied a request to appoint a chapter 11 trustee or convert the case to a liquidation in chapter 7, according to court records. The request was made by KFH Capital Investment Co. and Kuwait Finance House Real Estate Co. The judge granted the KFH entities’ request for an examiner. He also scheduled a Sept. 22 hearing to consider renewed requests by another creditor to appoint a trustee or convert the case to chapter 7 liquidation, according to court records.

A group of lenders to LodgeNet---a hotel Internet and technology provider that filed for chapter 11 bankruptcy last year and sped through the process in two months---are suing the reorganized company and other lenders, saying that a subsequent restructuring is "intended to eviscerate" their rights under the company's original bankruptcy-exit plan, Dow Jones Daily Bankruptcy Review reported today. Although the lawsuit was filed with the U.S. Bankruptcy Court in Manhattan as part of LodgeNet's original chapter 11 case, the bulk of the complaint involves an agreement that was negotiated months after LodgeNet exited bankruptcy in March 2013. Sonifi Solutions Inc., which is the name LodgeNet now uses, again encountered financial troubles after exiting bankruptcy and at the end of 2013 needed once more to restructure its debt, according to the complaint filed on Wednesday.

As a secured lender who’s owed $285 million plus interest, Carl Icahn’s in a prime position in the Trump Entertainment Resorts Inc. Chapter 11 case. The case began on Tuesday and is speeding toward a possible shutdown of the two casinos on the Atlantic City Boardwalk still bearing the name of rival billionaire Donald J. Trump, the Wall Street Journal reported today. Trump Plaza closed on Tuesday, but there’s a chance Trump Taj Mahal, the larger and more successful of the two, can be saved. Court papers pin that hope on concessions from Unite Here Local 54, the union that represents thousands of Atlantic City casino workers.

A federal bankruptcy judge has rejected West Virginia American Water Company’s effort to block a class-action settlement between Freedom Industries and thousands of victims of January’s Elk River chemical spill, the Charleston (W.Va.) Gazette reported today. Bankruptcy Judge Ronald Pearson approved a proposal from Freedom Industries and lawyers for Kanawha Valley residents for the filing of a new class-action lawsuit that would provide a nearly $3 million settlement that would be used for health studies, water testing or other projects to benefit residents affected by the spill. The ruling by Pearson is the latest twist in the multiple court cases and investigations related to the January spill of a mixture of Crude MCHM and other chemicals from a Freedom Industries chemical tank located just 1.5 miles upstream from West Virginia American’s regional water plant. The plant serves about 300,000 people in Charleston and the surrounding communities. In July, lawyers for area residents and businesses filed court documents indicating that they had reached a proposed settlement with Freedom Industries for the company to turn over about $2.9 million that Freedom is likely to get from its insurance company.

The Diocese of Stockton (Calif.) said that it has received 34 claims of sexual abuse since it notified the public of a deadline to file such claims imposed by a bankruptcy court, the Stockton Record reported today. The diocese also announced that no priest in active ministry was named in those claims. Diocese leaders filed for chapter 11 protection in January, saying that its finances have been drained by legal costs and settlements arising from claims of child sexual abuse by priests. Over the past two decades, those costs have mounted to $32 million for the diocese, which oversees parishes in San Joaquin, Calaveras, Stanislaus, Tuolomne, Alpine and Mono counties. Following the bankruptcy filing, the courts set Aug. 15 as the deadline for anyone thereafter to file such a claim.

Two affiliates of troubled Indianapolis-based developer HDG Mansur oppose requests to appoint a chapter 11 trustee or convert the case to a liquidation in chapter 7, saying that significant progress has been made toward a plan and global settlement of claims, the Indianapolis Business Journal reported today. HDGM Advisory Services LLC and HDG Mansur Investment Services Inc., which managed Shariah-compliant investment funds, filed court papers Sept. 11 opposing the requests. The requests were made by KFH Capital Investment Co. and Kuwait Finance House Real Estate Co., which sued Mansur Investment and owner Harold Garrison in the United Kingdom for breach of contract, fraud and negligent misrepresentation, according to court papers. The KFH entities aren’t eligible to seek such “drastic measures” because they’re not creditors of, nor do they have claims against, both debtors, according to the fund managers. They are motivated by “some other unstated purpose,” not their chapter 11 rights or distributions in the case, the fund managers said in the court filings.