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A bankruptcy trustee’s quest to recoup money for investors defrauded by a Ponzi scheme has left a major California university in an uncomfortable situation, the Wall Street Journal reported today. For five years, the scoreboard at California Polytechnic State University’s football stadium has prominently displayed the name of Moriarty Enterprisesa onetime financial services firm run by Al Moriarty, a former Cal Poly athlete and longtime supporter of the university. Now, as the San Luis Obispo Tribune reported, Moriarty is serving out a five-year prison sentence after pleading no contest to seven felony fraud charges tied to an illegal scheme that prosecutors say cost investors millions of dollars. In light of Moriarty’s fall from grace, Cal Poly would like the felon’s name removed from its football stadium. However, a bankruptcy judge in Seattle ruled last week that the sign must stay up while a trustee winding down Moriarty’s affairs negotiates with Cal Poly over the return of the $625,000 he paid the school for the naming rights, according to the Tribune.

At least two last-minute bids were received yesterday for Atlantic City's Revel casino, which closed this month, setting up an auction to challenge an agreed sale to a Florida developer, Reuters reported yesterday. Bidding on the two-year-old casino, which cost $2.4 billion to build, will start at $94 million. Revel's owner obtained a stalking-horse cash bid of $90 million from Glenn Straub, a Florida developer.

The mediation involving the Catholic Archdiocese of Milwaukee and its creditors — aimed at bringing an end to its nearly four-year-old bankruptcy — has concluded with no agreement on compensating the church's victims of childhood sexual abuse, the archdiocese said yesterday, according to the Milwaukee Journal Sentinel. Lawyers for the archdiocese, its $60 million cemetery trust, its insurance companies, the bankruptcy creditors committee and the largest group of victims met with a mediator in Minnesota on Monday for the second time this month. The latest mediation, requested by the archdiocese, was the third failed attempt at a negotiated settlement since 2010. The failure means the parties will return to federal court for a new round of costly battles in a bankruptcy case in which legal fees have already topped $13 million. Before entering bankruptcy, the archdiocese paid at least $33 million in settlements, therapy, legal fees and other costs associated with the sex abuse crisis, according to its website. The archdiocese filed for chapter 11 in January 2011 in an effort to deal with mounting sex abuse claims, several of which were heading to court and potentially devastating legal judgments.

A bankruptcy judge Tuesday shut down an attempt by a former Dewey & LeBoeuf LLP executive to dismiss a lawsuit claiming he owes the defunct firm’s creditors $9.3 million, the Wall Street Journal reported today. Dewey’s bankruptcy trustee in March sued the executive, former Chief Operating Officer Dennis D’Alessandro, seeking the return of more than $9 million in salary, bonuses and other compensation that he received from 2008 until the firm’s 2012 collapse. In filing the suit, Dewey’s trustee, Alan Jacobs, said that the “astronomically generous” contract was atypical for the legal industry and “far above” the value of services he provided as COO. The suit seeks to recover the funds on the grounds that the payments were made while Dewey was unable to meet its other financial obligations.

California's Alecto Health Services said it has purchased Fairmont General Hospital , bringing the West Virginia's hospital bankruptcy case to an end, the Dow Jones Daily Bankruptcy Review reported today. Fairmont lawyer Mike Garrison of the law firm of Spilman Thomas & Battle said Monday in an emailed statement that Alecto, which paid $15 million for Fairmont, completed the sale last week. Fairmont, which filed for chapter 11 protection last September, is exiting bankruptcy not only with a new owner, but with a new name: Fairmont Regional Medical Center. (Subscription required.)
http://bankruptcynews.dowjones.com/Article?an=DJFDBR0120140923ea9nje6fq…

For more on hospital and medical insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition, on sale now in the ABI Bookstore.
http://bookstore.abi.org/abi-health-care-insolvency-manual-third-edition

Creditors opposed to Momentive Performance Materials Inc.’s bankruptcy reorganization lost a bid to keep the plan from being implemented while they challenge it, Bloomberg News reported today. U.S. District Judge Vincent Briccetti yesterday denied the creditors’ request for a stay, and also refused to let the plan opponents take their case directly to the U.S. Court of Appeals in Manhattan. This month, Apollo Global Management LLC’s Momentive Performance, a maker of silicone and quartz products, won bankruptcy court approval of a plan that cuts debt to less than $1.3 billion from about $4 billion. Yesterday’s decision is another victory for Leon Black’s Apollo, which took over the Waterford, New York-based company for $3.8 billion in 2006. Bankruptcy Judge Robert Drain had said that groups of senior creditors that originally opposed the plan weren’t allowed to change their votes at the last minute, which would have allowed them to be paid in cash rather than new debt. They and a group of low-ranking creditors, who are to get nothing under the plan, sought to keep it from being carried out while they appealed Judge Drain’s decision. Briccetti refused to put the plan on hold, saying that the challengers didn’t show a likelihood that they would succeed on their appeal. He said Judge Drain was probably correct in his treatment of the senior creditors’ claims.

The operator of the Indiana Toll Road, owned by affiliates of Macquarie Group Ltd. and Ferrovial SA, sought bankruptcy protection with a creditor-supported restructuring plan after dwindling traffic soured a $3.8 billion bet on a 75-year lease, Bloomberg News reported yesterday. The company listed assets and liabilities of more than $1 billion each in its chapter 11 filing yesterday in Chicago bankruptcy court. The company has an estimated $6.3 billion in secured obligations when including projected amounts of interest through next August, according to court papers. The Indiana road company isn’t the first to seek creditor protection since the financial crisis as operators of the South Bay Expressway, a 10-mile toll road near San Diego, and the 16-mile Southern Connector in Greenville County, South Carolina, each filed for bankruptcy in 2010 after experiencing low traffic. The case is In re ITR Concessions Co. LLC, 14-34284, U.S. Bankruptcy Court, Northern District Illinois (Chicago).

Three-and-a-half years after Howrey LLP shut its doors, another 31 former partners of the bankrupt law firm have agreed to chip in money to pay back Howrey’s creditors, the Wall Street Journal reported today. In settlement papers filed in bankruptcy court on Friday, Howrey trustee Allan Diamond says that he’s reached deals to bring in close to $1.5 million from the batch of onetime equity partners. That’s on top of a nearly identical settlement reached in May with 60 ex-partners that raised $4.2 million for creditors. The contributions, ranging from $3,532 to $200,000, claw back 16 percent of what partners earned between April 2010 and Howrey’s dissolution a year later — a period during which Diamond argues Howrey was insolvent. (Subscription required.)
http://blogs.wsj.com/bankruptcy/2014/09/22/former-howrey-partners-contr…

For more on law firm bankruptcies and “unfinished business” claims, be sure to read “Is the Unfinished-Business Rule Finished? Recent Decisions Could Close the Book on Hourly Matters” in the September edition of the ABI Journal.
http://journal.abi.org/content/is-the-unfinished-business-rule-finished…

Payment processor Phoenix Payment Systems Inc. canceled its auction and declared an affiliate of North American Bancard LLC as the winner of its assets, Dow Jones Daily Bankruptcy Review reported today. In a Wednesday court filing, Phoenix Payment Systems said that it didn't receive any qualified competing offers to the $50 million stalking horse, or lead, bid by the North American Bancard affiliate. The entity making the bid is EPX Acquisition Co., named that way because Phoenix Payment Systems does business as EPX. EPX said that it will ask Judge Mary F. Walrath to approve the sale at a hearing tomorrow.

Rasmus Auctions has begun selling off desks, chairs, coffeemakers, televisions, bookcases, conference tables and other items from Truland Group’s corporate headquarters and warehouses, the Washington Post reported on Friday. The online auction for the office furniture, part of the liquidation of Truland’s assets as the company winds through bankruptcy, began this week and will close tomorrow. Rasmus was hired by Ray Yancey, the receiver managing the liquidation of Truland’s assets for BMO Harris Bank, Truland’s largest secured creditor. Yancey’s role is to recover Truland assets for both secured and unsecured creditors. Proceeds from the auction will go toward BMO Harris, which is owed about $27 million, according to documents filed in U.S. Bankruptcy Court for the Eastern District of Virginia.