Women's clothing and accessories retailer Coldwater Creek Inc. on Friday reached an accord with its landlords, many of whom had objected to the terms of a deal the company struck with two liquidators, Dow Jones Daily Bankruptcy Review reported today. To satisfy the landlords, which lease retail shopping center space to Coldwater, the deal was modified so the landlords are not precluded from filing objections later in the case. Though a ruling on the company's proposed bid rules was delayed by Judge Brendan Shannon, the agreement represents a significant step toward an approval. A new hearing to consider the bid rules was scheduled for April 29, at which point Judge Shannon will make a decision on an objection from a newly formed creditors' committee.
General Motors Co.’s request for court protection from car-owner suits seeking compensation for recalled autos with defective ignition switches was attacked as legally “unsupportable,” Bloomberg News reported yesterday. Car owners challenged GM’s position that it may compensate accident victims but not them, claiming in a court filing yesterday that GM committed fraud by not revealing the defects, allegedly known since 2001, or listing either group as creditors in its 2009 bankruptcy. In the reorganization, Bankruptcy Judge Robert Gerber freed GM from most liabilities, leaving intact some warranty obligations and accident responsibility. Bankruptcy lawyers said that it will be hard for car owners to reopen the case, which is good news for GM. Fitch Ratings said last month the automaker faced more risk from recall suits than the cost of fixing millions of cars or fines stemming from a federal regulatory probe. http://www.bloomberg.com/news/print/2014-04-23/gm-car-owners-attack-aut…
For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel tomorrow at ABI's Annual Spring Meeting. This panel will discuss the General Motors bankruptcy case with an in-depth discussion about the issuance of public units in a major bankruptcy. The session will also include the challenges addressed by the trust such as liability claims. For more information or to register, please click here: http://www.abiworld.org/ASM14/
Lawyers pressing cases against General Motors say that the automaker concealed the controversial ignition defect when it "took billions of dollars in taxpayer money" during its government-sponsored bankruptcy in 2009, CNNMoney.com reported yesterday. The claim, made by plaintiffs attorneys seeking court approval to bring class action suits against GM, came in court documents filed in federal bankruptcy court on Monday. GM also filed court papers on Monday seeking to protect itself from suits related to the ignition switch recall, which the company has tied to at least 13 deaths. The plaintiffs' lawyers argue that GM should not be able to use its bankruptcy reorganization as a shield against liability in cases stemming from the faulty ignition switch.
For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel at this week's Annual Spring Meeting. This panel will discuss the General Motors bankruptcy case with an in-depth discussion about the issuance of public units in a major bankruptcy. The session will also include the challenges addressed by the trust such as liability claims. For more information or to register, please click here: http://www.abiworld.org/ASM14/
The Supreme Court yesterday declined to hear a dispute from the AMR Corp. bankruptcy over whether the former American Airlines parent owes its bondholders a penalty fee in connection with the prepayment of more than $1.3 billion in debt, Dow Jones Daily Bankruptcy Review reported today. The high court's decision not to take the case means a controversial topic in corporate restructurings, so-called make-whole payments, won't get its day in court. However, restructuring experts have said that the case is very specific to AMR's bankruptcy and likely wouldn't have invited a ruling on the general allowance of make-whole payments.
General Motors Co filed a motion in a U.S. bankruptcy court to enforce a bar on lawsuits related to ignition defects in cars sold before its 2009 bankruptcy as it fights a class action lawsuit that seeks to set aside the restriction, Reuters reported today. The plaintiffs also filed a class action lawsuit yesterday, seeking an order declaring that GM cannot use the bankruptcy protection to absolve itself from liabilities. The faulty ignition switch has been linked to at least 13 deaths and the recall of 2.6 million GM vehicles. GM emerged from a government-assisted chapter 11 filing in 2009 as a different legal entity than the so-called old GM. Under those terms, the "new GM" shed liability for incidents predating its exit from bankruptcy, and any lawsuit related to pre-bankruptcy issues must be brought against what remains of old GM. "New GM's recall covenant does not create a basis for the plaintiffs to sue new GM for economic damages relating to a vehicle or part sold by old GM," the company argued in a court filing yesterday. http://www.reuters.com/article/2014/04/22/gm-recall-lawsuit-idUSL3N0NE2…
For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel at this week's Annual Spring Meeting. This panel will discuss the General Motors bankruptcy case with an in-depth discussion about the issuance of public units in a major bankruptcy. The session will also include the challenges addressed by the trust such as liability claims. For more information or to register, please click here: http://www.abiworld.org/ASM14/
The question at oral argument in the case of Republic of Argentina v. NML Capital Ltd. before the Supreme Court yesterday was whether federal courts in the U.S. may issue subpoenas to banks to help creditors who have won judgments against Argentina find assets around the world, the New York Times reported today. Several justices seemed prepared to allow subpoenas for some information, though some of them suggested the creditors’ requests had been too sweeping. Theodore B. Olson, a lawyer for the bondholders in both cases, said that they were entitled to detailed information because Argentina had been disguising and hiding its assets. “If it’s an airline that says Argentine Air Force on the side of it,” he said, “it still could be commercial property. We need to know what those assets are.” Chief Justice John G. Roberts Jr. said that request went too far. “Doesn’t that seem pretty extraordinary?” he asked, adding: “That’s pretty intrusive at a sovereign level to say you can find out how many jet fighters Argentina happens to have.” Jonathan I. Blackman, a lawyer for Argentina, said the information sought would also intrude on other matters protected by foreign sovereign immunity.
General Motors Co.’s move to freeze ignition-defect lawsuits in California and Texas has solid legal precedent behind it and could help slash customer demands for compensation by billions of dollars, Bloomberg News reported yesterday. GM asked federal judges in both states last week to delay litigation over the defect in several of its models until a U.S. bankruptcy judge in New York rules whether some accident victims’ claims can be brought without violating a sale order in its 2009 reorganization. The aggressive legal strategy runs the risk of further damaging GM’s image with lawmakers and the public. A win in bankruptcy court would allow GM to declare it’s not responsible for defect liabilities, said Chip Bowles, a bankruptcy lawyer at Bingham Greenebaum Doll LLP. Bankruptcy Judge Robert Gerber’s 2009 order let the current GM reject its predecessor’s liabilities, including claims for damages based on design defects, the automaker said in filings in San Francisco and Corpus Christi, Texas. Judge Gerber’s original ruling on liability is “quite clear,” said Prof. Stephen Lubben of Seton Hall University School of Law. “Having the court reaffirm its order could head off attempts to litigate the issue before some other court, which might not be as well-versed in bankruptcy and the broad reach of the bankruptcy code.” Read more. http://www.bloomberg.com/news/print/2014-04-16/gm-move-to-freeze-lawsui…
For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel at ABI's Annual Spring Meeting. This panel will discuss the General Motors bankruptcy case with an in-depth discussion about the issuance of public units in a major bankruptcy. The session will also include the challenges addressed by the trust such as liability claims. For more information or to register, please click here: http://www.abiworld.org/ASM14/
The Archdiocese of Milwaukee won a victory in its bankruptcy case yesterday when U.S. Bankruptcy Judge Susan V. Kelley agreed to move forward with a key document that, once approved, would put the local church one step closer to exiting its 3-year old chapter 11 proceedings, the Milwaukee Journal-Sentinel reported today. Judge Kelley stressed Thursday that she was not taking up the archdiocese's reorganization plan, only its accompanying disclosure statement. Attorneys for the creditors committee, which includes sex abuse survivors, had asked Kelley to delay acting on the statement. They argued that the judge should first decide a separate point of contention: whether the archdiocese had the right to include in the reorganization plan that a pending lawsuit over $60 million in archdiocesan cemetery funds would be settled. Judge Kelley denied those requests, saying that she was determined to move the case forward.
A federal judge yesterday said that a lawsuit filed by a former MF Global Holdings Ltd. futures customer against former Chief Executive Jon S.Corzine and other top officials could move forward but dismissed all claims against the failed brokerage's independent directors and investment firm J.C. Flowers, Dow Jones Daily Bankruptcy Review reported today. U.S. District Judge Victor Marrero said that former MF Global customer Sapere CTA Fund LP can pursue its lawsuit against Corzine and some of his others — including former No. 2 Bradley I. Abelow and ex-finance chief Henri J. Steenkamp — alleging that the firm's liquidity crisis was brought on by an ill-conceived trades devised by Corzine, a former governor of New Jersey. Sapere contended that it had millions of dollars in cash and United States Treasury bills in accounts at MF Global 's FCM subsidiary in late 2011, when MF Global filed for bankruptcy.
LightSquared says that it was right to keep Dish Network Corp. Chairman Charlie Ergen out of its restructuring plans, claiming it is "not required to negotiate with a competitor in its capital structure" even if that competitor owns nearly $1 billion of the company's debt, the Wall Street Journal reported today. In a Saturday filing with U.S. Bankruptcy Court in Manhattan, lawyers for Philip Falcone's wireless venture continued making their case that the reorganization plan is fair to Ergen, LightSquared's top secured lender. "There is simply no doubt that [Ergen] is receiving the indubitable equivalent of its claim," LightSquared said in a filing. Ergen has argued that LightSquared's proposal to pay back his nearly $1 billion in bank debt over seven years via a note, rather than in cash like a group of hedge funds that own the same type of debt, violates the Bankruptcy Code.
