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Philip Falcone’s LightSquared Inc., the bankrupt wireless company, is again the subject of competing plans over how to reorganize its business, with a potential hearing in October to confirm a final plan, Bloomberg News reported yesterday. Bankruptcy Judge Shelley Chapman said yesterday that she would consider a date around Oct. 20 to weigh arguments over how to reorganize the company, which previously narrowed three plans down to one, only to see it fail to win court approval. Judge Chapman said that she may have to “pick between or among two or three confirmable plans” after Falcone’s investment firm, Harbinger Capital Partners LLC, filed a new plan today, four days after LightSquared filed its own. Mast Capital Management LLC has said that it may put forth its own proposal, which would split up the company and separately reorganize debt at the “Inc.” and “LP” divisions, which have different lenders and own different rights to wireless spectrum.

In a setback for the trustee seeking money for former customers of fraudster Bernard Madoff, a U.S. appeals court refused to void two settlements benefiting investors who sued "feeder funds" that sent their money to Madoff, Reuters reported on Saturday. Friday's unanimous decision by a three-judge panel of the U.S. Court of Appeals for the Second Circuit left intact a $410 million settlement with J. Ezra Merkin, a Wall Street hedge fund manager who oversaw the Ariel Fund Ltd and Gabriel Capital LP, and an $80 million settlement with Fairfield Greenwich Ltd. The Merkin settlement had been negotiated by New York Attorney General Eric Schneiderman and also resolved claims by Bart Schwartz, the receiver of the Ariel and Gabriel funds. Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, claimed the settlements impeded his ability to recoup fraudulent transfers that Madoff made to Merkin and Fairfield, and which belong to the firm's estate. Writing for the appeals court, however, Circuit Judge Robert Sack said Picard "is incapable of establishing either that the settlements would in fact have an immediate adverse economic consequence for the BLMIS estate, or that the estate is likely to suffer irreparable harm" if the settlements go ahead.
http://www.reuters.com/article/2014/08/08/us-madoff-feederfunds-idUSKBN…

Don’t miss Irving Picard’s keynote, “Tales from the Madoff Bankruptcy,” at ABI’s 34th Annual Midwestern Bankruptcy Institute on Oct. 16-17 in Kansas City, Mo. Click here to register: http://www.abiworld.org/MW14/index.htm

The U.S. Trustee’s office urged a group of Energy Future Holdings Corp.’s creditors to wait at least 30 days before asking a judge to approve a second committee to represent debt holders in the company’s $49.7 billion bankruptcy case, said the U.S. Trustee, Bloomberg News reported on Friday. “The appointment of a second creditors’ committee at this time is premature,” Richard L. Schepacarter, an attorney with the Office of the U.S. Trustee said in a court filing on Thursday. Last month, American Stock Transfer & Trust Company LLC asked the U.S. Trustee to appoint a second panel to represent lower ranking creditors of Energy Future. American Stock is the indenture trustee for investors holding the company’s so-called legacy notes and some debt related to the company’s 2007 leveraged buyout. Energy Future filed bankruptcy in April, listing $49.7 billion of debt. A plan negotiated with senior lenders to split the company in two and give each piece to a different group of creditors was abandoned last month in the face of opposition by lower-ranking debt holders.

MF Global Holdings Ltd. is urging a judge not to toss its $1 billion lawsuit against PricewaterhouseCoopers LLP (PwC) for the alleged bad accounting advice that MF Global says led to its 2011 collapse, Dow Jones Daily Bankruptcy Review reported today. In a filing last week with the U.S. District Court in Manhattan, lawyers for the administrator in charge of MF Global fought PwC's argument that MF doesn't have the standing to sue PWC. PWC argued in a May court filing that only MF Global 's litigation trustee, who is in charge of pursuing certain lawsuits on behalf of creditors, has standing to file the suit. MF Global says its administrator also has the right.

The judge overseeing Nortel Networks Inc.’s bankruptcy said he may pressure creditors fighting over $7 billion to reach a deal in a closed-door meeting, Bloomberg News reported yesterday. Bankruptcy Judge Kevin Gross told U.S. bondholders and a monitor for Nortel’s Canadian parent in a court hearing on Friday that he wanted to meet with them for several hours and proposed an October date. Gross said that the meeting in his chambers won’t be a formal mediation session. “I am going to provide some direction and perhaps some pressure,” the judge told lawyers. The monitor for the bankrupt parent company and creditors in Canada and the U.K. have been fighting with U.S. bondholders and the bankrupt U.S. unit over how to split $7 billion in cash raised as Nortel liquidated its assets since filing bankruptcy in 2009. Judge Gross said that the meeting would be the night before a still unscheduled court fight between the bondholders and the Canadian monitor over a proposal to pay the bondholders as much as $1 billion in interest.

At the time it filed for bankruptcy on July 23, the Truland Group was the 10th largest electrical contractor in the U.S. and had roughly 1,000 employees working on more than 250 construction projects around the country — including some of the most high-profile developments in the Washington, D.C. area, the Washington Post reported on Saturday. Last Wednesday, there were few signs of a once-bustling business at two of the company’s Virginia offices. Truland is working its way through the initial stages of a chapter 7 bankruptcy that could bring about the end of a family-owned business whose roots in the region date back more than 100 years. Its shutdown is creating ripple effects across the D.C. region, impacting not just hundreds of laid-off Truland employees — many of whose paychecks have bounced — but dozens of construction companies that hired Truland to do electrical work on condos, office buildings, hospitals, hotels and schools. Many are now hustling to find replacement subcontractors and looking to recoup costs from Truland’s insurance companies.

DirecTV and AT&T Inc. would jointly own a Houston sports network under a plan to end the network's bankruptcy, although current part-owner Comcast Corp. warned it may challenge the proposal, Reuters reported yesterday. The Houston Regional Sports Network, which operates as Comcast Sportsnet Houston, broadcasts the games of the Houston Astros baseball and Houston Rockets basketball teams. DirecTV Sports Networks would own 60 percent of Houston Regional Sports Network and AT&T would own 40 percent, according to court documents filed on Wednesday. The plan must be put to a vote of creditors and approved by the U.S. Bankruptcy Judge Marvin Isgur.

A bankruptcy judge yesterday authorized Love Culture Inc. to sell its remaining assets to investors who plan to keep open between 40 and 45 of the clothing retailer's stores, the Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Novalyn Winfield approved a deal to sell what remains of Love Culture following an earlier sale to United LC Capital LLC for $10.5 million plus several million dollars more to cover the costs of taking over its store leases.

Wireless venture LightSquared yesterday overhauled its reorganization plan, and the new proposal appears to spell the end of longtime backer Philip Falcone's ownership of the wireless venture, the Wall Street Journal reported today. In the plan, LightSquared didn't make any references to a prior $3.05 billion restructuring proposal it had touted, which would have given 74 percent of the company to Cerberus Capital Management, Fortress Investment Group LLC and JPMorgan Chase & Co. in exchange for new money. Under the proposal filed yesterday, Dish Network Corp.'s Charlie Ergen, LightSquared's largest secured lender, would receive debt and nonvoting shares on account of his $900 million claim if he votes to accept the proposal. A group of investors holding LightSquared's bank debt would get the company's voting shares, although others could buy that equity from them at an auction. The plan calls for $500 million in new loans backstopped by those bank-debt holders. The company is scheduled to appear in bankruptcy court Monday afternoon.

Bankruptcy Judge Sandra Klein recommended jail time for Girls Gone Wild founder Joe Francis after he failed to turn over luxury cars owned by Girls Gone Wild to the lawyers who are handling the bankruptcy of the porn business, the Wall Street Journal. The Girls Gone Wild brand, whose low-budget, late night commercials advertised topless coeds on spring break, was sold to new owners earlier this year. Francis said that he can’t return the vehicles, a 2007 Cadillac Escalade and a 2012 Bentley Flying Spur, because a strip-club owner in Mexico — angry that several Girls Gone Wild promotions fell through — took them, according to court papers. Judge Klein didn’t buy that argument and last month decided to fine him $5,000 a day until the vehicles are returned.