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GSE Environmental Inc., a maker of landfill liners and manhole systems, won court approval of a reorganization plan that hands control of the company to holders of $173.4 million in secured notes, Bloomberg News reported on Friday. Bankruptcy Judge Mary Walrath approved a program giving all the new stock to first-lien lenders, including Littlejohn Opportunities Master Fund LP, Tennenbaum Opportunities Partners V LP and Strategic Value Partners LLC. Under the plan, negotiated with first-lien lenders before the May chapter 11 filing, trade claims will be paid in full if the creditor is willing to continue doing business with GSE for one year and grant normal market trade-credit terms. General unsecured creditors will share a $1.3 million recovery pool.

Crumbs Bake Shop Inc. may proceed with plans to sell itself at a bankruptcy auction in August, a judge ruled Thursday, despite an objection from a newly formed creditor committee that more time is needed to look for prospective bidders, the Wall Street Journal reported on Friday. An investor group that includes Dippin’ Dots owner Fischer Enterprises and reality TV show host Marcus Lemonis has agreed to serve as the lead bidder at an Aug. 21 auction. The group’s approximately $6.5 million credit bid would forgive loans Fischer and Lemonis have extended to Crumbs, including a $1.1 million loan that is funding the company’s chapter 11 proceeding. Bankruptcy Judge Michael Kaplan on Thursday approved the auction timeline along with bidding procedures that include an $82,500 breakup fee to Lemonis and Fischer if a competing offer trumps them at the auction.

Waterville Window Co. Inc., in Winslow, Maine, filed for chapter 7 bankruptcy after 61 years in business, citing liabilities of $813,870 to about 30 creditors, including a couple of PVC extruders, PlasticsNews.com reported. The window fabricator will cease operations and liquidate assets of $54,500 — a truck, van and office equipment — to pay down debt owed to four creditors, two of which are banks. Secured claims total $389,000. Window profile extruder Veka Inc. of Fombell, Penn., has the largest unsecured claim of $111,000 after essentially repossessing $1,780 of product in February, according to the July 14 court filing.

Efforts to cap the amount of interest due to U.S. bondholders of Nortel Networks Ltd. are a "blatant attempt" to "subvert" the priority of debtholders in bankruptcy cases, Nortel's U.S. bondholders argue in new legal filings, Dow Jones Daily Bankruptcy Review reported today. Canada's Globe and Mail reported an ad hoc group of U.S. bondholders and debenture trustees filed court submissions on Tuesday, arguing that they deserve to be paid the contractual amount of interest that has accrued on $4.1 billion (U.S.) of outstanding bonds since Nortel filed for bankruptcy protection in 2009 — an amount estimated to be worth $1.6 billion and climbing.

Love Culture Inc. yesterday filed for Chapter 11 bankruptcy, becoming the latest women's apparel retailer to seek protection from creditors, and said it may be sold after having received interest from possible buyers, Reuters reported yesterday. The company, which according to its website has 82 stores stretching from Massachusetts to Hawaii, joins Ashley Stewart Holdings Inc., Coldwater Creek Inc., Dots LLC and Loehmann's Inc. among retailers to file for bankruptcy since late last year as consumers curb spending and visit malls less. In a court filing, the company's chief restructuring officer, Rick Bunka, said sales remain below projections, while vendors in April began curbing credit and demanding payment for goods faster or upon delivery, leading to "significant liquidity challenges." Love Culture said it plans during the bankruptcy process to close money-losing stores, restructure its debt and investigate options "including a possible sale of substantially all of its assets as a going concern."

M*Modal, a leading provider of clinical documentation and Speech Understanding solutions, announced that it expects to emerge from chapter 11 within three weeks following a recent confirmation of the company's reorganization plan by a bankruptcy court, ABLAdvisor.com reported today. The company’s plan reflects the terms of M*Modal's previously announced agreement with its controlling bondholders and lenders on the terms of a financial restructuring plan. Once completed, this financial restructuring will strengthen the company's balance sheet resulting from reducing its debt by more than 55 percent and establishing a capital structure supporting M*Modal's continued investment in clinical documentation services and solutions.

The bankruptcy court overseeing the chapter 11 proceeding of Revel AC Inc. approved bid procedures for the company that would see qualified bids submitted by Aug. 4, an auction, if one is required, on Aug. 7, and a sale hearing on Aug. 8, according to a court order, LeveragedLoan.com reported yesterday. Letters of intent to bid are due by July 18, the order said. The auction would take place at the New York offices of the company’s counsel, White & Case, and the sale hearing at bankruptcy court in Camden, N.J. According to the July 14 order, lenders under the company’s DIP facility and its pre-petition first-lien credit agreement will be permitted to credit bid.

A bankruptcy judge yesterday put Crumbs Bake Shop Inc. on the path to a quick sale, which the cupcake chain hopes will allow it to reopen the doors at many of its locations, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Michael Kaplan set a July 24 hearing to approve procedures for an auction of the company, with the lead bid set at roughly $6.5 million from Fischer Enterprises and CNBC star Michael Lemonis.

Diamond McCarthy LLP is suing a former partner, who Diamond McCarthy says unjustly pocketed a $1.4 million fee for her work as Dreier LLP’s bankruptcy trustee, the Wall Street Journal reported today. Sheila Gowan, a former federal prosecutor in New York, began unwinding Ponzi-scheme operator Marc Dreier’s law firm in December 2008 while working as a partner at Diamond McCarthy. She moved to Sadowski Fischer PLLC in February 2013 and took the assignment with her, concluding work on the case in May when Dreier’s creditor-repayment plan went into effect. In a suit filed earlier this month in Texas state court, Diamond McCarthy says that it is entitled to much of the $1.4 million because its partnership agreement requires all fees earned by its lawyers, including as a bankruptcy trustee, to flow back to the firm. The firm says that it brought the suit “with considerable regret and only after potential avenues of compromise reached an impasse.”

The bankruptcy trustee for Bernard L. Madoff's investment firm filed an amended lawsuit against Madoff's two sons yesterday, adding detail to claims that the men were aware of the Ponzi scheme and actively worked to conceal it from the Securities and Exchange Commission by deleting, altering or hiding records during an audit, the Wall Street Journal reported today. The new complaint also seeks the return of more than $153 million that it says the brothers, who were executives at Madoff's securities firm, took improperly in the form of inflated bonuses and salaries, sham loans and fabricated trading profits. That is more than $16 million higher than a previous complaint by the trustee, Irving Picard. (Subscription required.)
http://online.wsj.com/articles/madoff-bankruptcy-trustee-files-amended-…

Madoff trustee Irving Picard will be providing a keynote titled “Tales from the Madoff Bankruptcy” at ABI’s 34th Annual Midwest Bankruptcy Institute on Oct. 17. For more information or to register, please click here: http://www.abiworld.org/MW14/