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Two professional athletes scored in bankruptcy court this week when a judge allowed them to continue chasing after their former financial adviser, a man they’ve accused of cheating them out of money, the Wall Street Journal reported today. Bankruptcy Judge Christopher B. Latham lifted the shield of bankruptcy that was protecting financial adviser Bill Clay Crafton Jr. from the arbitration proceedings that two of his former clients—retired NFL player Aaron Shea and current Philadelphia Phillies pitcher Cole Hamels—launched last year. The athletes say that they trusted Crafton to invest their funds wisely but claim he was instead reckless with their money, violating state and federal securities laws in the process and committing fraud. Crafton has sought to defend himself against the allegations, which other pro athletes have also brought. Crafton has blamed his bankruptcy filing on the “onslaught” of litigation he’s faced in recent months.

Bankrupt LightSquared on Friday sued leaders in the GPS industry, including Deere & Co. and Garmin International Inc., saying that they kept silent about interference concerns stemming from LightSquared's wireless network until the company had already pumped $4 billion into building it, Reuters reported on Friday. In a lawsuit filed in bankruptcy court, where LightSquared is fighting to keep control of its spectrum, the company alleged that farm equipment maker Deere, and GPS companies Garmin and Trimble Navigation Ltd. led it to believe its network would not interfere with global positioning system devices. The complaint comes on the heels of a similar lawsuit against the GPS industry by Phil Falcone's Harbinger Capital, LightSquared's controlling shareholder. Last month, LightSquared received permission from the bankruptcy judge overseeing its chapter 11 case to pause the Harbinger lawsuit so that LightSquared could decide whether it wanted to join the suit or bring claims of its own.

Chinese solar panel maker Suntech Power Holdings Co Ltd. said it intended to contest a bankruptcy petition filed against it in the U.S. by some bondholders, Reuters reported yesterday. A group of four U.S. bondholders, holding about $1.6 million of the debt-laden company's 3 percent convertible senior notes due 2013, made the filing under chapter 7 of the U.S. Bankruptcy Code. Suntech defaulted in March on a principal payment on its $541 million convertible bonds, prompting its main manufacturing unit, Wuxi Suntech, to file for bankruptcy protection in China five days later. Analysts have long warned that Suntech's overseas bondholders had slim chances of recovering their money, though the company has continued to enjoy government support while under bankruptcy proceedings in China.

An insurer of some of Residential Capital LLC's residential mortgage-backed securities says ResCap's reorganization plan could stop it from going after the trustees that oversee the securities trusts, Dow Jones Newswires reported yesterday. Syncora Guarantee Inc. said in a court filing on Monday that it should have a legal right to go after the RMBS trustees' claims but won't because of wording in the reorganization plan. "The provisions of the plan that propose to impair or eliminate such rights should not be approved, and as a condition of confirmation the plan should be modified to delete exculpation of the trustees of the Syncora trusts," Syncora said in the filing. Without the "exculpation," Syncora argues, it would be free to go after the claims on behalf of the RMBS trusts. As part of ResCap's larger reorganization plan, the company allowed a $7.3 billion claim for the trusts representing more than one million original mortgages. Syncora, which insures $2.5 billion worth of the RMBS, said that wording in the reorganization plan suggests that insurers — including itself — will be shut out of collecting money from the trusts, even if the trusts get payments from ResCap.

CarVal Investors LLC, the hedge-fund subsidiary of agribusiness company Cargill Inc., said it is offering 250 million British pounds ($398 million) more than two rival hedge funds that recently agreed to buy a multibillion-dollar Lehman Brothers bankruptcy claim at a discount, Dow Jones Newswires reported yesterday. Lawyers for CarVal said on Tuesday that it would pay GBP900 million ($1.4 billion) for the bankruptcy claim against Lehman Brothers International (Europe), the U.K. arm of the collapsed investment bank. That is 38 percent more than hedge funds Elliott Management and King Street Capital Management LP have agreed to pay for the claim. CarVal's lawyers said, however, that Lehman conducted a "closed" sale process and shut out the hedge fund from bidding on the claim.

Environmental group leaders yesterday urged Texas regulators to ensure that financially strapped Energy Future Holdings can cover the cost of cleaning up its coal mine operations in the state in the future, Reuters reported yesterday. Dallas-based Energy Future Holdings, the state's largest generator of electricity, is working to restructure about $40 billion in debt in the next few weeks. Environmental interests, Public Citizen and the Sierra Club, question whether EFH and its subsidiaries have set aside cash or assets with sufficient value to cover a potential $1 billion tab to clean up its mining operations as required by law should the company declare bankruptcy and plants are shuttered by new owners. The Texas Railroad Commission, which oversees mining activity in the state, has allowed Luminant Mining to "self-bond," or pledge company assets to meet the agency's financial requirements rather than put up a cash bond. Luminant operates mines in 11 Texas counties that supply the lignite, a low-quality coal, that is burned at five Luminant power plants and can generate more than 8,000 megawatts of electricity, enough to serve 4 million Texas homes on an average day.

The trustee liquidating Ponzi schemer Bernard Madoff’s firm has appealed to the U.S. Supreme Court, aiming to revive lawsuits that seek billions of dollars from banks including JPMorgan Chase & Co. and HSBC Holdings Plc., Bloomberg News reported yesterday. Trustee Irving Picard contends in his suits that the banks ignored Madoff’s fraud for the sake of millions of dollars in fees. A federal appeals court in New York threw out the suits in June. The fraud, the biggest Ponzi scheme in U.S. history, cost thousands of investors $17 billion in lost principal and billions more in imaginary profits. Picard argues in his Supreme Court appeal, filed yesterday in Washington, D.C., that the appeals court improperly limited the power of trustees and the protections for customers under the U.S. Securities Investor Protection Act. The banks “are as responsible as Madoff for the enormous magnitude of customer losses,” Picard argued in court papers. High court review would potentially give defrauded investors a bigger pot from which to recover their claims. The case is Picard v. JPMorgan Chase & Co., 13-448.

Deloitte & Touche LLP settled lawsuits by Taylor, Bean & Whitaker Mortgage Corp.’s bankruptcy trustee and Deutsche Bank AG over $7.6 billion in losses associated with the collapse of the mortgage lender, Bloomberg News reported yesterday. Bankruptcy trustee Neil Luria and Taylor Bean’s Ocala Funding unit sued Deloitte in September 2011 over claims the accounting firm failed to detect a fraud that led to losses at the defunct lender. Deutsche Bank, which filed its complaint in December 2011, invested in asset-backed notes issued by Ocala based on Deloitte’s audits of Taylor Bean’s financial statements from 2005 through July 2009. The settlement comes ahead of an Oct. 21 trial in the case. Taylor Bean, once the 12th-largest U.S. mortgage lender, collapsed in 2009 after federal regulators began probing a fraud that involved fake mortgage assets, targeted the federal bank bailout program and contributed to the failure of Montgomery, Ala.-based Colonial Bank.

Citigroup Inc. is firing back at Lehman Brothers Holdings Inc.'s "unprecedented" bid to cut off its right to hundreds of millions of dollars in interest payments tied to Citi's $3 billion bankruptcy claim against the failed investment bank, Dow Jones Daily Bankruptcy Review reported today. Lehman wants Bankruptcy Judge James Peck to end what it calls Citi's "interest rate arbitrage" with respect to rival claims on billions of dollars in assets. By provisionally paying off the bank, Lehman would stem the flow of interest payments to Citi, which could total hundreds of millions of dollars by the time the two sides face off in court, which isn't expected until 2015.

A federal judge rejected a bid by defunct law firm Dewey & LeBoeuf's former managers to move a lawsuit accusing them of violating securities laws to New York from Iowa, Dow Jones Newswires reported on Friday. In an order signed earlier this month, Judge James E. Gritzner of the U.S. District Court in Iowa said the U.S. Bankruptcy Court in Manhattan isn't the proper venue for the case, in which a U.S. unit of U.K. insurance giant Aviva PLC is suing former Dewey Chairman Steven Davis and two others over a 2010 bond deal made when the firm was in "dire" financial trouble.