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The question at oral argument in the case of Republic of Argentina v. NML Capital Ltd. before the Supreme Court yesterday was whether federal courts in the U.S. may issue subpoenas to banks to help creditors who have won judgments against Argentina find assets around the world, the New York Times reported today. Several justices seemed prepared to allow subpoenas for some information, though some of them suggested the creditors’ requests had been too sweeping. Theodore B. Olson, a lawyer for the bondholders in both cases, said that they were entitled to detailed information because Argentina had been disguising and hiding its assets. “If it’s an airline that says Argentine Air Force on the side of it,” he said, “it still could be commercial property. We need to know what those assets are.” Chief Justice John G. Roberts Jr. said that request went too far. “Doesn’t that seem pretty extraordinary?” he asked, adding: “That’s pretty intrusive at a sovereign level to say you can find out how many jet fighters Argentina happens to have.” Jonathan I. Blackman, a lawyer for Argentina, said the information sought would also intrude on other matters protected by foreign sovereign immunity.

A proposal to pay Brookstone Holdings Corp. executives at least $840,000 in bonuses faces opposition from a federal bankruptcy watchdog, who argues that the company isn't making it difficult enough to earn the extra cash, Dow Jones Daily Bankruptcy Review reported today. U.S. Trustee Roberta DeAngelis said in a Friday court filing that tying the bonuses to a sale offer struck before Brookstone sought bankruptcy protection doesn't push the executives enough to enhance the company's value in order to earn the bonuses. Brookstone filed for bankruptcy on April 3 with a plan to sell its business to the owner of the Spencer's retail chain for $146.3 million.

The Supreme Court yesterday declined to hear a dispute from the AMR Corp. bankruptcy over whether the former American Airlines parent owes its bondholders a penalty fee in connection with the prepayment of more than $1.3 billion in debt, Dow Jones Daily Bankruptcy Review reported today. The high court's decision not to take the case means a controversial topic in corporate restructurings, so-called make-whole payments, won't get its day in court. However, restructuring experts have said that the case is very specific to AMR's bankruptcy and likely wouldn't have invited a ruling on the general allowance of make-whole payments.

Bankruptcy Judge Sean H. Lane ruled that former American Airlines parent AMR Corp. doesn't have the unilateral right to terminate benefits to about 46,930 retirees, Dow Jones Daily Bankruptcy Review reported today. Judge Lane on Thursday denied AMR's request, brought during its chapter 11 case, for a summary judgment that it could unilaterally modify the health and welfare benefits it offered its retirees because its benefit programs "lack language categorically reserving" its right to do so. AMR had sought to shift the cost of the benefits to its retirees, who include union and nonunion members.

General Motors Co.’s move to freeze ignition-defect lawsuits in California and Texas has solid legal precedent behind it and could help slash customer demands for compensation by billions of dollars, Bloomberg News reported yesterday. GM asked federal judges in both states last week to delay litigation over the defect in several of its models until a U.S. bankruptcy judge in New York rules whether some accident victims’ claims can be brought without violating a sale order in its 2009 reorganization. The aggressive legal strategy runs the risk of further damaging GM’s image with lawmakers and the public. A win in bankruptcy court would allow GM to declare it’s not responsible for defect liabilities, said Chip Bowles, a bankruptcy lawyer at Bingham Greenebaum Doll LLP. Bankruptcy Judge Robert Gerber’s 2009 order let the current GM reject its predecessor’s liabilities, including claims for damages based on design defects, the automaker said in filings in San Francisco and Corpus Christi, Texas. Judge Gerber’s original ruling on liability is “quite clear,” said Prof. Stephen Lubben of Seton Hall University School of Law. “Having the court reaffirm its order could head off attempts to litigate the issue before some other court, which might not be as well-versed in bankruptcy and the broad reach of the bankruptcy code.” Read more.
http://www.bloomberg.com/news/print/2014-04-16/gm-move-to-freeze-lawsui…

For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel at ABI's Annual Spring Meeting. This panel will discuss the General Motors bankruptcy case with an in-depth discussion about the issuance of public units in a major bankruptcy. The session will also include the challenges addressed by the trust such as liability claims. For more information or to register, please click here: http://www.abiworld.org/ASM14/

The Archdiocese of Milwaukee won a victory in its bankruptcy case yesterday when U.S. Bankruptcy Judge Susan V. Kelley agreed to move forward with a key document that, once approved, would put the local church one step closer to exiting its 3-year old chapter 11 proceedings, the Milwaukee Journal-Sentinel reported today. Judge Kelley stressed Thursday that she was not taking up the archdiocese's reorganization plan, only its accompanying disclosure statement. Attorneys for the creditors committee, which includes sex abuse survivors, had asked Kelley to delay acting on the statement. They argued that the judge should first decide a separate point of contention: whether the archdiocese had the right to include in the reorganization plan that a pending lawsuit over $60 million in archdiocesan cemetery funds would be settled. Judge Kelley denied those requests, saying that she was determined to move the case forward.

With no other offers on the table, plus-size women's clothing retailer Ashley Stewart said on Wednesday that it plans to cancel a scheduled bankruptcy auction and sell its assets to lead bidder Clearlake Capital Group, the Wall Street Journal reported yesterday. Clearlake, a private-equity firm that specializes in distressed investing, offered $18 million in cash for the company last month. Depending on the value of Ashley Stewart's remaining inventory, the total purchase price could rise to as high as $23 million, according to court filings. The company planned to test Clearlake's offer at an auction this week but received no competing bids by a Tuesday deadline, according to a court filing on Wednesday. In light of that, Ashley Stewart said that it plans to present the final Clearlake sale agreement for court approval at an April 22 hearing.

The Judicial Conference of the United States has approved several bankruptcy related fee increases to take effect starting June 1. Based on the chapter, the cost to file will be:

- Chapter 7: $335
- Chapter 13: $310
- Chapter 9, 11 and 15: $1,717
- Chapter 12: $275

The fee schedule changes project to raise about $35 million per year for the courts, based on current case loads. For more information, visit http://www.tnwb.uscourts.gov/PDFs/news/DIR14-035[1].pdf

A federal judge yesterday said that a lawsuit filed by a former MF Global Holdings Ltd. futures customer against former Chief Executive Jon S.Corzine and other top officials could move forward but dismissed all claims against the failed brokerage's independent directors and investment firm J.C. Flowers, Dow Jones Daily Bankruptcy Review reported today. U.S. District Judge Victor Marrero said that former MF Global customer Sapere CTA Fund LP can pursue its lawsuit against Corzine and some of his others — including former No. 2 Bradley I. Abelow and ex-finance chief Henri J. Steenkamp — alleging that the firm's liquidity crisis was brought on by an ill-conceived trades devised by Corzine, a former governor of New Jersey. Sapere contended that it had millions of dollars in cash and United States Treasury bills in accounts at MF Global 's FCM subsidiary in late 2011, when MF Global filed for bankruptcy.

Sen. Richard Blumenthal (D-Conn.) said yesterday that bankruptcy judges should deny General Motors protection from liability claims tied to the safety recall of 2.6 million cars, the Detroit Free Press reported today. Blumenthal was responding to reports that GM plans to ask a bankruptcy judge for protection from claims arising from the defect. In a legal filing last week, the company said that it was afforded that protection as part of its 2009 bankruptcy reorganization and would ask a judge in New York soon to reaffirm that, an action which could result in the dismissal of class-action lawsuits around the country. Blumenthal, who was Connecticut’s attorney general in 2009, was a critic of providing GM the bankruptcy protection. Yesterday he reiterated his call to force GM to establish a fund to compensate people injured or families who lost relatives in crashes tied to the defect.
http://www.freep.com/article/20140416/BUSINESS01/304160155/sen-richard-…

In related news, General Motors Co.’s move to freeze ignition-defect lawsuits in California and Texas has solid legal precedent behind it and could help slash customer demands for compensation by billions of dollars, according to a Bloomberg News analysis today. GM asked federal judges in both states last week to delay litigation over the defect in several of its models until a U.S. bankruptcy judge in New York rules whether some accident victims’ claims can be brought without violating a sale order in its government-assisted bankruptcy in 2009.
http://www.bloomberg.com/news/print/2014-04-16/gm-move-to-freeze-lawsui…

For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel at ABI's Annual Spring Meeting. This panel will discuss the General Motors bankruptcy case with an in-depth discussion about the issuance of public units in a major bankruptcy. The session will also include the challenges addressed by the trust such as liability claims. For more information or to register, please click here: http://www.abiworld.org/ASM14/