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General Motors said in a court filing yesterday that it should not have to face lawsuits based on safety issues in cars made before its 2009 bankruptcy, including a faulty ignition switch that led to the recall of 2.6 million cars earlier this year, Reuters reported yesterday. The brief, filed in Manhattan bankruptcy court, lays out GM's legal arguments and is the opening salvo in litigation from GM drivers who say the automaker should make them whole for losses related to recalls this year. The ignition switch recalls, which began in February, have since grown to encompass numerous problems affecting millions of vehicles. The company is facing some 130 lawsuits over accidents and lost vehicle value. In April, GM asked Judge Robert Gerber of the U.S. Bankruptcy Court in Manhattan, who oversaw the bankruptcy, to bar claims related to vehicles made before 2009 based on the terms of the sale order that created the so-called "New GM." Liabilities related to older vehicles were largely retained by a shell company now known as "Old GM." Plaintiffs' lawyers have asked Gerber to rule that bankruptcy protection does not apply because their clients were not informed about the problems at the time and had no chance to argue their cases during the proceedings. GM said yesterday that plaintiffs' lawyers were trying to re-litigate issues that had been aired fully and settled five years ago.

Unsecured creditors are balking at Trump Entertainment Resorts Inc.’s proposed bankruptcy exit plan, calling it a “charade” and a power play by Carl Icahn to preserve hundreds of millions of dollars in tax credits for his benefit, the Wall Street Journal reported today. Unlike most bankruptcy plans that look to secure votes from a variety of creditors, Trump Entertainment has said that the only vote that matters is that of Icahn, the billionaire activist investor who controls the secured debt of the Atlantic City, N.J., boardwalk gambling operation. A hearing is scheduled to take place tomorrow to win a court’s approval for the voting scheme. The chapter 11 plan calls for Icahn’s companies to swap out some of their Trump Entertainment debt for a controlling equity stake in a reorganized company as well as for new debt. Additionally, Icahn’s affiliates will invest $100 million to get the ailing gambling operation on its feet, court papers say.

Dish Network Corp. Chairman Charlie Ergen would receive a controlling stake in troubled wireless company LightSquared under the company's newest restructuring plan, Dow Jones Daily Bankruptcy Review reported today. The deal, reached Friday as a result of mediation with Bankruptcy Judge Robert Drain, would give Ergen 60 percent of the new equity in the restructured LightSquared plus $1 billion in new junior debt. JPMorgan Chase Co., one of LightSquared's lenders, would receive a total of 31.9 percent of the equity and a seat on the board of directors in exchange for its debt and $189 million in funding. Other lenders would receive a smaller piece of equity and warrants to purchase common stock.

Bankrupt power company Energy Future Holdings Corp. received conditional court approval to accept bids for its majority stake in Oncor, a power transmission company in Texas worth billions of dollars, Reuters reported yesterday. Bankruptcy Judge Christopher Sontchi said yesterday that Energy Future could begin accepting bids once it had changed the way affiliates approved of the plan to sell Oncor. He also said that the bidding process must involve the two official creditors committees and the time frame for the sale should be extended. "The immense size of this case and $18 billion asset is certainly unusual and the involvement of public companies as bidders is a complicating factor,” Judge Sontchi said. “But there is no reason to depart from established practices that have developed for selling an asset in bankruptcy.” Creditors had objected to the proposed process because it involved sealed bids to choose a stalking-horse bidder. Once the stalking horse was chosen, Energy Future planned to have an open auction when all bids could be reviewed by participants. Judge Sontchi said that Energy Future would have to allow the participation of the two official creditors committees in the selection of a stalking horse bidder. The company originally set a deadline for final bids for the role of stalking horse on Nov. 21, which Sontchi said would have to be extended.

It has been three years since the last Borders store closed its doors, but that hasn’t stopped a group of jilted gift-card holders from continuing to fight for their unredeemed vouchers to be turned into cash, the Wall Street Journal reported on Saturday. The group faced its latest setback on Wednesday when the U.S. Court of Appeals for the Second Circuit sided with two lower courts and ruled that the former customers waited too long to raise their claims for the unused gift cards. According to Borders, the former bookseller had 17.7 million unredeemed gift cards worth $210.5 million at the time it closed, dating back to when the first card was issued in 1998. Since January 2012, attorney Clinton Krislov has argued that Borders didn’t make enough of an effort to notify the gift-card holders that they had to act fast to use the cards once Borders entered chapter 11. Krislov said he plans to appeal last week’s decision by either requesting that the full appeals-court panel hear the case or by offering it up for the U.S. Supreme Court’s consideration.

Siga Technologies Inc., the biological-warfare defense firm supplying the only smallpox drug for the U.S. strategic stockpile, received court permission to mediate a damages award in a licensing dispute that drove it into bankruptcy, Bloomberg News reported on Friday. Siga and competitor PharmAthene Inc., which won a 2006 lawsuit, agreed to mediate a final resolution over the amount of damages Siga must pay, Bankruptcy Judge Sean Lane said in a ruling on Thursday in Manhattan. A creditor committee that includes PharmAthene had supported mediation, according to court papers. The litigation, pending in Delaware state court, will continue during mediation, and any accord over a possible $232 million in damages reached by the companies will require bankruptcy court approval, Judge Lane said. Delaware’s highest court last year upheld a judge’s 2011 finding that Siga violated promises to negotiate in good faith with Annapolis, Md.-based PharmAthene over a license for Tecovirimat when it was being developed. Siga may have walked away from the talks after realizing the drug’s potential value, the court ruled.

A deal to acquire the stalled Chicago Spire project out of bankruptcy hasn't closed and may not, according to a lawyer for the project's longtime leader, leaving the future of the proposed high rise in doubt, Dow Jones Daily Bankruptcy Review reported today. Thomas Murphy, a lawyer for Irish developer Garrett Kelleher, said on Friday that new investor Atlas Apartment Holdings LLC hasn't yet met Friday's deadline to obtain the financing it needs to pay off the Spire's creditors and take over the project.

A bankruptcy judge on Thursday approved a restructuring plan that will hand control of ComcastSportsNet Houston, a regional sports network, to DirecTV and AT&T Inc., the Wall Street Journal reported on Saturday. The plan, which Judge Marvin Isgur approved over the objections of Comcast Corp., will shut down the network and then relaunch it under the name Root Sports Houston. Comcast, through subsidiaries, owns about 23 percent of CSN Houston, which broadcasts games for Major League Baseball’s Houston Astros and the National Basketball Association’s Houston Rockets. The Astros own about 46 percent of the channel and the Rockets own 30 percent. Comcast is owed more than $100 million stemming from funding it provided to create the network. During the hearing, Craig Goldblatt, a lawyer representing Comcast, said the restructuring plan “jumps through a series of hoops” to deprive Comcast of its right to be repaid. Under the plan, Comcast will receive the proceeds of the sale of the network’s assets, for which the Astros and Rockets have agreed to place an initial $26.2 million bid. “Comcast’s economic recovery here is better than if we don’t confirm the plan,” Judge Isgur said as he gave his ruling from the bench. “A denial of confirmation results in liquidation.”

A bankruptcy judge refused last week to dismiss lawsuits against seven former Dewey & LeBoeuf LLP partners seeking nearly $16 million for the defunct law firm’s creditors, ruling that under New York state law, any money the partners were paid while the firm was insolvent can be clawed back, the Wall Street Journal reported on Saturday. The decision comes 2 1/2 years after the firm’s dramatic collapse and after the vast majority of ex-partners have rid themselves of most Dewey-related liability. In the months after Dewey entered bankruptcy protection, 475 of the firm’s former partners agreed to join a $70.4 million settlement that formed the basis of Dewey’s creditor repayment plan. Others have since settled individually. The ruling, released on Wednesday from U.S. Bankruptcy Judge Martin Glenn in New York, is a big win for Dewey’s liquidating trustee. Judge Glenn found that under New York’s debtor and creditor laws, the partners can’t argue that the value of the work they did for Dewey offsets the money they were paid, a defense that can sometimes be used in such clawback suits. If such a defense were available, a partner who, for instance, brought in $2 million in fees and received $1 million in compensation during the same period could argue that he or she owes the bankrupt firm nothing.

Ahead of a key hearing this week in the Trump Entertainment Resorts Inc. bankruptcy, unsecured creditors blasted the company's disclosure statement for its chapter 11 reorganization plan as a "charade" that should not be approved by the judge, Philly.com reported on Saturday. The creditors said that the plan is designed for the "sole purpose of preserving hundreds of million of dollars in tax attributes for the exclusive benefit of [Carl] Icahn," who has a $292 million secured claim on Trump assets. Under the plan, affiliates of Icahn would trade $292 million in debt for 55 percent of the stock in the company and a $100 million note that would not require cash interest payments. Instead, the amount owed to Icahn would increase over five years, according to bankruptcy court filings. Icahn — who lost a battle for ownership of Trump Entertainment in 2010 bankruptcy — would obtain the remaining 45 percent of the company's equity in exchange for a $100 million investment. But Icahn will only make that $100 million investment if state and local governments agree to provide $175 million in aid over the next five years, including $55 million immediately after the company emerges from bankruptcy, according to the plan.