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The U.S. Supreme Court agreed to hear two Bank of America Corp. appeals that seek to give lenders more leverage over homeowners who file for bankruptcy protection, Bloomberg News reported yesterday. The question in the cases centers on whether homeowners can use bankruptcy liquidation proceedings as a means of wiping out, or “stripping off,” all liability on a second mortgage. Bank of America is seeking to overturn rulings by an Atlanta-based federal appeals court with jurisdiction over three Southeastern states. The lender says hundreds if not thousands of homeowners in those three states have sought to strip off the liens on their second mortgages. Other federal appeals courts around the country have refused to let homeowners wipe out second-mortgage debt in bankruptcy liquidation proceedings.
http://www.bloomberg.com/news/print/2014-11-17/bank-of-america-gets-u-s…

The cases are Bank of America v. Caulkett, 13-1421, and , 14-163. For more information and court filings, please click here: http://news.abi.org/court-decisions

A long-secret trove of court filings that bankrupt gasket maker Garlock Sealing Technologies says illustrates a pattern of fraud in asbestos litigation is expected to be opened to public view this week, possibly as soon as today, Forbes.com reported on Friday. The files, Garlock says, will show how plaintiff lawyers withheld evidence their clients were exposed to multiple asbestos products in order to extract higher settlements and court verdicts from Garlock. In one case that generated a $37 million verdict in California, Garlock says, a lawyer with prominent Dallas asbestos firm Waters & Kraus flatly denied exposure to dangerous insulation that his client had already admitted, under penalty of perjury, in another proceeding. The records in racketeering lawsuits Garlock filed against several asbestos law firms are to be unsealed after a fierce battle by plaintiff lawyers to keep them secret. In January, Bankruptcy Judge George Hodges in Charlotte, North Carolina slashed Garlock’s estimated liability for asbestos exposure from $1.4 billion to $125 million after determining that the higher estimates were based upon court cases “infected by the manipulation of exposure evidence by plaintiffs and their lawyers.”

Renault Winery Resort and Golf, the sprawling vineyard-golf resort-restaurant that straddles Egg Harbor City and Galloway Township, N.J., filed for chapter 11 protection yesterday, the Press of Atlantic City reported. Chief Operating Officer Dennis Del Vecchio said that the resort will remain open while it finds a stable financial footing in bankruptcy. The resort had been scheduled by Renault’s main creditor and mortgagee, OceanFirst Bank, for a sheriff’s sale auction in October that was adjourned until yesterday. The sale was canceled on account of the bankruptcy. Early this year the resort’s management said a New Jersey-based buyer had been found for the property, which was expanded under owner Joseph Milza, who bought the winery in 1977.
The 50-room Tuscany House hotel was added in 2001 and the 18-hole Vineyard Golf course in 2004.

One of the largest recycling companies in the Southeast, Memphis-based Recycle Solutions Inc., has filed for chapter 11 protection, the Memphis Business Journal reported today. Recycle Solutions, launched in 2001, reported debts of nearly $6.4 million and assets of more than $11.5 million in its voluntary petition filed on Nov. 4 in U.S. Bankruptcy Court. The filing comes after the company, hard hit by the recession, faces a $300,000 civil penalty by the Arkansas Department of Environmental Quality. On top of that, the company has a claim for an "unknown" amount against the town of Villa Rica, Georgia, where a dispute with the town has halted its operations.

Three U.S. units of OW Bunker A/S, the Danish shipping-fuel supplier that went from a $1 billion valuation after its initial public offering in March to bankruptcy last week, sought creditor protection in Connecticut, Bloomberg News reported today. The subsidiaries filed chapter 11 petitions yesterday in U.S. Bankruptcy Court in Bridgeport, Conn., listing assets of as much as $50 million against debt of as much as $100 million. The parent filed for bankruptcy on Nov. 7 in Denmark, blaming a $125 million internal fraud and risk management failures. OW Bunker, which eight months ago had Denmark’s second-biggest IPO since 2010, stunned investors after saying it would report to police two senior executives at its Singapore unit for alleged fraud. The Noerresundby-based company said it lost another $150 million on bad risk management.

Raleigh, N.C.-based surgical device developer Baxano Surgical filed for chapter 11 protection and will sell its product lines through a court-supervised auction process, the Triangle Business Journal reported today. Founded in 2000, Baxano designs and markets minimally invasive products to treat degenerative conditions of the spine affecting the lumbar region. Any sale of Baxano Surgical's products in connection with the bankruptcy case will be subject to bankruptcy court approval, and could be subject to antitrust approval.
Stevens & Lee. P.C. is serving as legal advisors, Houlihan Lokey is serving as investment banker and Tamarack Associates is serving as restructuring advisor to Baxano Surgical.

Samuel Wyly and the estate of his brother Charles should pay $329 million for using offshore accounts to hide stock holdings and engage in illegal trading, regulators argued in seeking to increase the penalty ordered by a judge, Bloomberg News reported yesterday. Wyly and the estate should pay that sum plus an undetermined amount of interest, a U.S. Securities and Exchange Commission lawyer told U.S. District Judge Shira Scheindlin in Manhattan today. In September, the judge found that the brothers must pay $187.7 million plus interest, which could push the amount to more than $300 million. The bigger penalty, if accepted, could more than double what the agency is owed, according to court filings.

A Los Angeles hedge fund that had been trying to oust the management of Variant Holding Co. has pulled its request for a chapter 11 trustee to run the real estate firm, Dow Jones Daily Bankruptcy Review reported today. Hedge fund Beach Point Capital withdrew its request for a chapter 11 trustee to take control of the real estate firm, according to bankruptcy court papers filed on Tuesday. The withdrawal comes after Beach Point settled with the real estate firm and agreed to provide a $10 million bankruptcy loan to finance Variant's restructuring. Bankruptcy Judge Brendan L. Shannon of signed off on the settlement two weeks ago.

Nortel Networks Corp.’s U.S. unit spent $169 million on its bankruptcy case in the first nine months of this year, and there’s no end in sight to the spending on its lawyers and advisers, the Wall Street Journal reported today. The numbers began popping up last Thursday on the bankruptcy docket after a lawyer for Nortel’s Canadian parent pointed out to a judge that the U.S. unit was about eight months in arrears in complying with its chapter 11 financial reporting requirements. Nortel filed eight months’ worth of financial reports between Thursday and Monday. Once the pride of the Canadian technology community, Nortel and its international counterparts launched a global liquidation in 2009, battered by the global economic slump. It sold its businesses and patents, ringing up $7.3 billion in the process. However, Nortel U.S., which had more than $1 billion in cash at the end of 2011, stopped filing its monthly financial reports earlier this year as it prepared for an international fight over how to distribute the proceeds of its global liquidation, and that pricey litigation continues.

Kodak earlier this month filed a final tally of costs for its chapter 11 bankruptcy, as well as a motion asking the final closing of the case, the Rochester (N.Y.) Democrat and Chronicle. That $245.2 million total is $2.1 million more than the $243.1 million worth of bills presented to the court in November 2013. Kodak semi-officially ended its bankruptcy in September 2013 when its reorganization plan took effect. That moment saw the company selling off its Personalized Imaging and Digital Imaging businesses to a British pension fund, cancel out all its existing stock, and issue new shares to an array of parties holding IOUs, from the financiers who helped pay for Kodak's bankruptcy to the legions of creditors left with unpaid bills when the company filed for protection. Since then, the Kodak General Unsecured Creditors Trust has been suing numerous firms that did business with Kodak before the bankruptcy, seeking to claw back some of the money Kodak spent in those pre-bankruptcy weeks to then divide it up among various unsecured creditors. The court also has continued to rule on cases where Kodak objected to some of the 7,000 claims and requests for payment that had been filed against it. And during all this time, Kodak has been paying out what it had been ordered to pay as part of its reorganization plan. According to the motion, Kodak has paid out some stock and stock warrants to holders of unsecured claims, and expects to do one final payout of yet more.