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Wall Street banks and hedge funds like Goldman Sachs and D.E. Shaw are not entitled to ask Lehman Brothers to chip in for their legal fees in the biggest chapter 11 case of all time, according to U.S. Trustee Tracy Hope Davis, the Wall Street Journal reported yesterday. Davis is asking a judge to knock out, reduce or scrutinize more than $33 million in attorneys' and advisers' fees that Lehman creditors such as Goldman Sachs Group Inc., Bank of America Corp. and D.E. Shaw & Co. want to put on Lehman's tab. The banks and hedge funds say that they are entitled to be reimbursed for the fees on the grounds that their work made a "substantial contribution" to the Chapter 11 case, during which Lehman has already racked up more than $1 billion in professional fees.

Bankrupt law firm Dewey & LeBoeuf revised its settlement offer to former partners yesterday, dropping its potential recovery to $90.4 million from $103.6 million, Reuters reported yesterday. The estate is seeking the money from the former partners in exchange for releasing the lawyers from potential clawback claims. Under the revised offer, detailed to partners during an afternoon meeting at the New York Hilton & Towers, the minimum amount was reduced to $5,000 from $25,000. The maximum contribution was increased to $3.5 million from $3 million. At the same time, the new plan calls for onetime members of Dewey's executive committee to pay a 20 percent premium on top of what they otherwise might contribute.

Apple Inc., which is fighting Eastman Kodak Co. over ownership of patents, argued a federal judge should transfer a Kodak lawsuit against the iPhone-maker out of bankruptcy court, Bloomberg News reported yesterday. Apple told U.S. District Judge George Daniels at a court hearing yesterday that Kodak's complaint over patent ownership should be considered in federal district court. Kodak and Apple are grappling over 10 patents that are included in a portfolio of patents Kodak is planning to sell as part of its bankruptcy restructuring. Kodak sued Apple in June in bankruptcy court, seeking an order that Apple does not own the assets. Apple argued in court papers that the bankruptcy court does not have the authority or "necessary expertise" to decide the dispute. Kodak opposes withdrawal of the case.

Rhode Island Economic Development Corp. authorities are collecting the remnants of former Boston Red Sox pitcher Curt Schilling's troubled company out of bankruptcy, Dow Jones DBR Small Cap reported today. Court papers filed this week say that the trustee overseeing the bankruptcy case has agreed to step aside and let Rhode Island Economic Development press for permission to put 38 Studios LLC into the hands of a state receiver.

Claims traders are peppering former Nortel Networks Corp. employees with offers to pay 70 cents, 80 cents or more for their bankruptcy claims, the Wall Street Journal reported yesterday. Nortel collapsed in January 2009, leaving many without jobs and without severance pay in a rocky economy. Now Nortel is sitting on some $9 billion in cash and has begun to sift through employee claims, sending out notices that say what the company thinks those claims are worth. Nortel says that the money in its deferred-compensation plan belongs to its creditors. It wanted to settle with deferred compensation claimants, anyway, because they are entitled to file claims as unsecured creditors. Settling would help the former employees cash in at the claims traders, according to Nortel. Not really, said Bernstein Shur Sawyer & Nelson LLP's Robert Keach, who has been hired by about half the deferred-compensation claimants to battle Nortel for the cash. Nortel's deferred-compensation claimants are not unsecured creditors, according to Keach. The money in the deferred-compensation fund belongs to them, not to Nortel, he contends.

The United Mine Workers (UMW) is concerned about a coal company's bankruptcy reorganization plan and its impact on its members, the Associated Press reported on Saturday. The UMW's concern involves Patriot Coal Corp., which filed for chapter 11 protection on July 16 in New York as it deals with reduced demand for coal and rising costs. In its bankruptcy filings, Patriot complained of "legacy costs" such as health-care benefits and pension payments. UMW lawyers are seeking to have the reorganization case moved from New York to southern West Virginia, where they say such issues can be more properly handled.

The official winding down Howrey LLP is taking his first step toward staking a claim in the profits from ongoing work that the defunct firm's former partners brought with them to their new firms, Dow Jones DBR Small Cap reported today. Bankruptcy trustee Allan B. Diamond this week won a judge's permission to subpoena 70 law firms that hired more than 200 Howrey partners and to start investigating the transfer of Howrey clients to those firms as well as the compensation the firms received for representing those clients.

The U.S. Treasury Department plans to demand back more than $5 million it granted a Montana power plant that later filed for bankruptcy, in what would be a rare foray by the government into the courts to claw back job-creation funds distributed under the 2009 economic-stimulus package, the Wall Street Journal reported today. The Treasury Department said that it plans to use the bankruptcy process to recover funds from Thompson River Power LLC. The Treasury paid Thompson River $6.5 million in 2010 from a piece of the American Recovery and Reinvestment Act known as Section 1603 that reimbursed developers of renewable energy with cash payments equivalent to 30 percent of their projects' costs. The program has given out more than $11 billion, the Treasury Department said. The grant to Thompson River, majority-owned by a Minnesota private-equity firm, was to convert a coal-fired plant to burn wood, which is considered a "renewable" power source. But since receiving the money, the plant never operated either as a coal- or wood-burning plant, according to Montana regulators, and has produced neither power nor new jobs. On July 3, Thompson River filed for chapter 7 bankruptcy, and has listed $26 million in assets and $6.6 million in liabilities.

A trustee representing the creditors of SemGroup Corp. sued Barclays Plc over a $143 million deal to offload the oil and natural gas pipeline company's commodities trading positions the month before it filed for bankruptcy in July 2008, Bloomberg News reported yesterday. SemGroup, which lost $2.4 billion shorting oil as prices rose in 2007 and 2008, emerged from bankruptcy in November 2009, according to a complaint filed on Monday. The trustee, Bettina Whyte, is seeking a return of the $143 million SemGroup paid Barclays to take over its trading book on the New York Mercantile Exchange. She claims that Barclays forced a "huge and unjustified" fee on SemGroup, with no benefit to the company or its creditors.

ABI's Commission to Study the Reform of Chapter 11 has released the names of nearly 130 corporate restructuring experts who have agreed to serve on one of 13 advisory committees to examine discrete current issues. The diverse group of professionals come from the backgrounds of law, finance and the judiciary. The lists of names can be found on the Commission's website. The thirteen advisory committees/study topics are: Administrative Claims, Critical Vendors and Other Pressures on Liquidity; Avoiding Powers; Bankruptcy Remote Entities, Bankruptcy-Proofing and Public Policy; Distributional Issues Under Plans; Executory Contracts and Leases; Financial Contracts, Derivatives and Safe Harbors; Financing Chapter 11; Governance and Supervision of Chapter 11 Cases and Companies; Labor and Benefits Issues; Multiple Enterprise Cases/Issues; Plan Issues: Procedure and Structure; Role of Valuation in Chapter 11 Cases; and Sales of Substantially all of the Debtor’s Assets, Including Going Concern Sales. The Commission is working to break down each study topic further into subtopics—a process intended to help advisory committees identify all potentially relevant issues and coordinate areas of potential overlap among study topics.

The Commission has announced a schedule of fall public hearings at major insolvency conferences, where interested members of the restructuring community can appear and provide testimony to the Commission or to one or more of the advisory committees. The hearings will be held at the NCBJ annual meeting on October 26, the TMA annual convention on November 3 and the Commercial Finance Association annual meeting on November 15. Other public hearing dates will be announced.