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The House of Representatives passed a bill yesterday that would allow for banks to voluntarily begin bankruptcy, MarketWatch.com reported yesterday. The bill, known as “The Financial Institutional Bankruptcy Act of 2014,” allows financial institutions to voluntarily begin the process of bankruptcy, or, in some cases, allows the Federal Reserve to begin the process. The bill was passed with bipartisan support, and was co-sponsored by Rep. Spencer Bachus (R-Ala.), House Judiciary Committee Chairman Bob Goodlatte (R-Va.), and Ranking Member John Conyers (D-Mich.). The bill uses a “single point of entry” approach to enable a holding company to go into bankruptcy while permitting subsidiaries to stay out of the process. The law builds on attempts to prevent taxpayer bailouts of financial institutions like the ones in 2008. Under the Dodd-Frank financial reform law, there is a provision for an administratively-driven resolution process.

The House of Representatives today is scheduled to vote on a bankruptcy plan for big banks that deserves more attention from taxpayers, according to an editorial in today’s Wall Street Journal. The Financial Institution Bankruptcy Act enjoys broad bipartisan support and has received little public examination. The bill will be considered today under suspension of the rules, meaning it cannot be amended and will be subject to limited debate, though to pass the House it will need to attract a two-thirds vote. Co-sponsored by Reps. Spencer Bachus (R- Ala.), John Conyers (D-Mich.), and Bob Goodlatte (R-Va.), the bill creates a new section of the Bankruptcy Code for big financial firms. Bankruptcy courts, according to the editorial, would be better for resolving failing giants than the “orderly liquidation authority” created by the 2010 Dodd-Frank law that allows regulators to rescue these institutions and then discriminate among their creditors. However, nothing in the bill repeals the rescue authorities given to regulators under Dodd-Frank and there’s no ban on taxpayer assistance to the failing giants put through the new bankruptcy process. If the idea is to take power from bureaucrats and give it back to markets and judges, according to the editorial, it’s odd that not only the failing firm but also the Federal Reserve Board of Governors can trigger the bankruptcy filing if “necessary to prevent serious adverse effects on financial stability in the United States.” The affected company can contest the Fed’s decision privately before the court.

Aereo Inc., the online TV streaming service brought down by a U.S. Supreme Court ruling that its technology violated copyright, told a bankruptcy judge that there’s plenty of interest in the company’s assets, Bloomberg News reported yesterday. While there is no stalking horse in place to make an opening bid, an auction should be scheduled for Feb. 17 with an approval hearing set a few days later, said William Baldiga, Aereo’s lawyer. The Barry Diller-backed startup sought bankruptcy protection on Nov. 21 after the Supreme Court said its TV service violated programming copyright protections. The nation’s top court rang the death knell for the company in June, overturning a federal appeals court ruling and handing a victory to broadcast giants including CBS Corp., Walt Disney Co.’s ABC, Comcast Corp.’s NBCUniversal and 21st Century Fox Inc. Aereo had been striving to revolutionize broadcast TV viewing, offering live and recorded programs via the Internet for as little as $8 a month, using a massive antenna farm in Brooklyn, New York. The startup’s failure eliminated an alternative to cable and satellite bundles, which can cost $100 a month and include channels many subscribers don’t watch.

The Rehabilitation Center of St. Petersburg nursing home in Florida, which filed for bankruptcy earlier this year, can afford to repay all of its debts but still hasn't negotiated a deal with Medicaid regulators who have threatened to stop paying for low-income patients to stay at the facility, Dow Jones Daily Bankruptcy Review reported today. New court papers show that the nursing home expects to fully repay its $1.6 million in unsecured debt and to continue operating under the ownership of Tzvi Bogomilsky, a Miami resident, once the 159-bed nursing facility leaves chapter 11 protection. The nursing home filed for bankruptcy in August to block Medicaid officials from terminating its provider agreement.

Creditors of failed smartphone screen material supplier GT Advanced Technologies will get a peek at Apple Inc.'s secrets under a protective court order signed yesterday, the Wall Street Journal reported today. Apple is handing over documents and submitting to questions in advance of a planned December court review of a proposed settlement with GT, which would clear Apple of allegations it is to blame for GT’s bankruptcy. The information exchange is under wraps, but anything creditors seize on as grounds to challenge Apple’s deal with GT will have to meet strict standards to justify the secrecy, Bankruptcy Judge Henry Boroff warned the companies at a hearing yesterday.

The former owners of Lake Las Vegas, including two of Texas’ billionaire Bass brothers, paid $115 million last month to quietly settle a long-running lawsuit tied to the luxurious golf community and resort’s collapse into bankruptcy in 2008, the Wall Street Journal reported today. The lawsuit was brought by Larry Lattig, a court-appointed bankruptcy trustee, who sued the initial backers of Lake Las Vegas for the $470 million they took out of the project — a 3,600-acre resort community centered on a man-made lake about 20 miles from the Las Vegas Strip — before it tumbled into bankruptcy. The ex-owners — billionaire brothers Sid and Lee Bass and the estate of the late California developer Ron Boeddeker — were able to cash out of their investments in the resort community, due to a syndicated loan arranged by Credit Suisse Group. The Credit Suisse loan was similar to a home-equity loan, allowing the resort’s backers to cash out their investments. The Swiss bank later marketed similar loans to a number of other owners of western luxury resorts — including Yellowstone Club in Montana, the Promontory Club in Utah and the Tamarack Resort in Idaho — that eventually ended up going bust when property values cratered.

Customers of Mt. Gox, once the world’s largest Bitcoin exchange, are closer to getting back at least some of the money they lost this year when it shut down and announced that their funds had gone missing, New York Times DealBook reported today. The bankruptcy trustee for Mt. Gox, which is based in Tokyo, announced today that it would work with a California-based Bitcoin exchange, Kraken, to return the money left in the estate to the company’s 127,000 creditors. Jesse Powell, Kraken’s chief executive, said that his company would help with the claims process, including evaluating the assets owed to creditors, and that it would assist in the investigation of Mt. Gox’s collapse. He said that the trustee would have the final decision on payments in Bitcoin.

Three former leaders of defunct law firm Dewey & LeBoeuf accused of falsifying the company's financial results cannot go to trial in January because an insurance company has refused to pay their latest legal bills, their lawyers told a judge on Friday, Reuters reported yesterday. Justice Robert Stolz of New York State Supreme Court in Manhattan agreed to postpone the case for a month, setting a February 23 trial date, while legal wrangling takes place to get the insurer to pay up. Former Dewey chairman Steven Davis, ex-executive director Stephen DiCarmine and former chief financial officer Joel Sanders face grand larceny, scheming to defraud and other criminal charges. They are accused of overstating revenue and decreasing expenses to keep the firm's true financial condition from banks and other creditors. Two carriers have paid a total of $35 million in claims under Dewey's directors and officers insurance, the lawyers said, but the third has refused to make good on its $15 million of coverage.

NII Holdings Inc. yesterday announced a restructuring deal that would put the company in the hands of its bondholders, Dow Jones Daily Bankruptcy Review reported today. The Latin American Nextel Carrier said that the deal has the support of its major creditors, including hedge-fund manager Aurelius Capital Management and those holding bonds of NII's Luxembourg subsidiaries. The company said that $4.35 billion of its unsecured notes would be converted into equity in a reorganized NII. Aurelius and Capital Research and Management Co. also agreed to backstop a $500 million rights offering, according to a filing with U.S. Bankruptcy Court in Manhattan.

LDK Solar Co., the Chinese solar-cell maker that defaulted on its bonds this year, won U.S. court approval of its foreign restructuring, capping an international reorganization, Bloomberg News reported yesterday. The restructuring “is believed to be the first judicially approved, multi-jurisdictional debt restructuring of its kind for a China-based corporate group,” said Jessica Boelter, a lawyer for LDK. Xinyu, China-based LDK filed for chapter 15 protection last month, listing about $1.13 billion in debt and $510 million in assets as of May 31.