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The U.S. Trustee’s office urged a group of Energy Future Holdings Corp.’s creditors to wait at least 30 days before asking a judge to approve a second committee to represent debt holders in the company’s $49.7 billion bankruptcy case, said the U.S. Trustee, Bloomberg News reported on Friday. “The appointment of a second creditors’ committee at this time is premature,” Richard L. Schepacarter, an attorney with the Office of the U.S. Trustee said in a court filing on Thursday. Last month, American Stock Transfer & Trust Company LLC asked the U.S. Trustee to appoint a second panel to represent lower ranking creditors of Energy Future. American Stock is the indenture trustee for investors holding the company’s so-called legacy notes and some debt related to the company’s 2007 leveraged buyout. Energy Future filed bankruptcy in April, listing $49.7 billion of debt. A plan negotiated with senior lenders to split the company in two and give each piece to a different group of creditors was abandoned last month in the face of opposition by lower-ranking debt holders.

The judge overseeing Nortel Networks Inc.’s bankruptcy said he may pressure creditors fighting over $7 billion to reach a deal in a closed-door meeting, Bloomberg News reported yesterday. Bankruptcy Judge Kevin Gross told U.S. bondholders and a monitor for Nortel’s Canadian parent in a court hearing on Friday that he wanted to meet with them for several hours and proposed an October date. Gross said that the meeting in his chambers won’t be a formal mediation session. “I am going to provide some direction and perhaps some pressure,” the judge told lawyers. The monitor for the bankrupt parent company and creditors in Canada and the U.K. have been fighting with U.S. bondholders and the bankrupt U.S. unit over how to split $7 billion in cash raised as Nortel liquidated its assets since filing bankruptcy in 2009. Judge Gross said that the meeting would be the night before a still unscheduled court fight between the bondholders and the Canadian monitor over a proposal to pay the bondholders as much as $1 billion in interest.

The Bill & Melinda Gates Foundation is looking to recover grant money from education technology company ConnectEDU, which sought bankruptcy protection in April, the Wall Street Journal reported today. In July 2013, the foundation awarded a nearly $500,000 grant to ConnectEDU to develop an interactive program to help students master literacy under the Common Core standards that many states use to guide how public school students are taught. The money came with some conditions, including a promise to only use the funds for the development of the new technology as well as a timeline requiring benchmarks to be met along the way. The grant, paid out in two installments, was set to expire this December. The project, however, got derailed earlier this year when ConnectEDU filed for chapter 11 protection, citing an estimated $33.7 million in liabilities and $17.7 million in assets. Since then, the Gates Foundation has tried to ensure that its grant money is kept in a separate account and that any unused portion will be returned to the organization, according to a court filing made this week.

The U.S. Circuit Court of Appeals for the Second Circuit ruled yesterday that Barclays Plc is entitled to about $6 billion of disputed assets as part of its hurried purchase of much of Lehman Brothers Holdings Inc.’s brokerage unit at the height of the 2008 financial crisis, Reuters reported yesterday. The decision is a setback for the brokerage's creditors, including Lehman affiliates and hedge funds, for whom the trustee James Giddens has been seeking to recoup money. Lehman had been Wall Street's fourth-largest investment bank. It had $639 billion of assets when it filed for chapter 11 protection on Sept. 15, 2008, making its bankruptcy by far the biggest in U.S. history. Barclays won court approval to buy much of Lehman's brokerage business at a Sept. 19, 2008 hearing overseen by U.S. Bankruptcy Judge James Peck in Manhattan. A dispute remained, however, over how to dispose of various "cash" assets of the brokerage. These included about $4 billion of margin assets held by third parties to support a Lehman exchange-traded derivatives business, and $1.9 billion of "clearance box" assets used to process securities trades.

A judge yesterday said that the trustee unwinding Lehman Brothers Inc. could create a $3 billion-plus fund to pay back unsecured creditors of the brokerage, Dow Jones Daily Bankruptcy Review reported today. A spokesman for James W. Giddens, the trustee in charge of the brokerage, said Bankruptcy Judge Shelley C. Chapman approved the creation of the fund at a hearing yesterday. Giddens said that he expects the distribution to begin in September, marking the first time he has put a timetable on it.

A a judge yesterday ordered the Archdiocese of Milwaukee must come up with $1.35 million to pay lawyers involved in its ongoing bankruptcy case, at least a portion of the many more millions they're owed, the Milwaukee Journal Sentinel reported today. The lawyers and other professionals involved haven't been paid since the archdiocese won a suspension of payments more than a year ago, saying that it barely had enough money to continue operations. Bankruptcy Judge Susan V. Kelley at a hearing yesterday also granted the archdiocese's request Tuesday to return the case to mediation for a possible consensual resolution to the long, complex and fractious proceeding. Judge Kelley gave the parties 28 days to submit statements for the mediator, who ideally would begin the process in early September. A prior mediation effort in 2012 failed to reach a settlement.

Efforts to cap the amount of interest due to U.S. bondholders of Nortel Networks Ltd. are a "blatant attempt" to "subvert" the priority of debtholders in bankruptcy cases, Nortel's U.S. bondholders argue in new legal filings, Dow Jones Daily Bankruptcy Review reported today. Canada's Globe and Mail reported an ad hoc group of U.S. bondholders and debenture trustees filed court submissions on Tuesday, arguing that they deserve to be paid the contractual amount of interest that has accrued on $4.1 billion (U.S.) of outstanding bonds since Nortel filed for bankruptcy protection in 2009 — an amount estimated to be worth $1.6 billion and climbing.

The Houston Rockets and the Houston Astros need a new owner for the struggling television channel that broadcasts their games, and they want to keep the names of potential purchasers a secret for now, the Wall Street Journal reported today. In a request filed in bankruptcy court, officials teams asked a bankruptcy judge for permission to withhold the identity of potential buyers for Comcast SportsNet Houston from several members of the channel's board of directors. Comcast SportsNet Houston broadcasts games for two Houston professional sports teams — Major League Baseball's Astros and the National Basketball Association's Rockets — to only about 40 percent of Houston households. The network is available to Comcast Corp. subscribers but has had trouble persuading competitors such as DirecTV and Dish Network Corp. to carry the network in exchange for subscriber fees, which some have said are too high. Before the network's bankruptcy in September, Astros owner Jim Crane blamed Comcast, which manages the network, for failing to bring new deals to the table. But when Judge Marvin Isgur gave Crane and Rockets officials several months to ink new deals themselves, they weren't able to sign any major partners.

Overseas Shipholding Group Inc. bondholders are digging in their heels over an estimated $2.2 million sum, a drop in the bucket in the ocean carrier's multibillion-dollar chapter 11 case, but one that investors say is worth the fight, Dow Jones Daily Bankruptcy Review reported today. Owners of Overseas Shipholding bonds claim that they are entitled to collect interest on the interest they didn't receive while the company worked through its financial problems. One of the world's largest operators of oil tankers, Overseas Shipholding says that it will pay investors everything they are owed when it comes out of bankruptcy, but the calculation doesn't include interest on interest.

Philip Falcone’s LightSquared Inc. settled a fight with Dish Network Corp. Chairman Charles Ergen over more than $1 billion in debt he holds in the bankrupt wireless broadband company, taking it one step closer to exiting court protection, Bloomberg News reported yesterday. Details of a new chapter 11 plan will be filed within a week, Joshua Sussberg, a lawyer for a special committee of LightSquared, told Bankruptcy Judge Shelley Chapman at a court hearing yesterday. A dispute between the company and Ergen, its one-time suitor, scuttled a prior plan to reorganize. The deal with Ergen, which has yet to be completed, “will alleviate a significant burden and execution risk around the plan,” Sussberg said.