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The banks being sued by Lehman Brothers Holdings Inc. in a long-simmering derivatives fight say that Lehman is seeking an "undue advantage" in the litigation by prohibiting the banks from seeking a dismissal without first receiving class-action status, Dow Jones Daily Bankruptcy Review reported today. In bankruptcy court filing on Monday, lawyers for 77 banks and other entities said that Lehman's bid to put the brakes on their bid to dismiss the lawsuit was unfair, and that receiving approval for class-action status should be a "secondary" matter. Lehman affiliates Lehman Brothers Special Financing Inc. and Lehman Brothers Financial Products Inc. in September 2010 sued the banks to recover funds the investment bank says were wrongly transferred to credit-default swap counterparties after it filed for bankruptcy protection. The swaps contained “flip clauses” that give investors priority over a counterparty that defaults.

General Motors wants to delay a federal judge in San Francisco from ruling on a class-action case until a bankruptcy judge in New York decides whether the company is shielded from all product liability claims tied to crashes or defects before it exited bankruptcy in July 2009, the Detroit Free Press reported today. It was believed to be the first time since the recall of 2.6 million cars began in February that GM acknowledged it would ask a federal bankruptcy judge to protect it from claims. In the filing Friday, the company said that it would make the request based on protections given “New GM” in 2009. GM went through a bankruptcy reorganization funded by U.S. taxpayers five years ago that left most of its product liability with the old company, which mainly consisted of shuttered factories, some of which have since been sold. GM’s critics have argued that it should bear responsibility for a defect linked to 13 deaths and 32 crashes in North America.
http://www.freep.com/article/20140415/BUSINESS01/304150107/general-moto…

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/

N.W. Holding Co., a St. Louis-based commercial truck leasing, repairing and fueling company, has filed for bankruptcy and is seeking to reorganize, the St. Louis Post-Dispatch reported today. Several other related companies also owned by the Costello family simultaneously filed for chapter 11 bankruptcy: Nu-Way Service Station, Nu-Way Repair Co., Nu-Way Fuel Distributors Co., and Rent-Me Trailer Leasing Inc. Combined, the trucking companies listed estimated liabilities ranging between $2 million and $4 million and estimated assets ranging between $1.6 million and $11.6 million, according to court documents.

Stephen Shires put his company, S.E. Shires Inc., into bankruptcy last week, telling a bankruptcy judge that the instrument maker has a purchase offer worth more than $1 million from an Eastman Music Co. division that intends to keep the business operating, the Wall Street Journal reported yesterday. The 40-worker company filed for chapter 11 protection last week after tax collectors — in pursuit of unpaid debts — went after the company’s bank account. Turned away by traditional lenders, the company borrowed money instead through factoring companies that provide temporary financing “at an unsustainable interest rate of 20 to 40 percent.” Last year, the company had sales of $2.8 million but lost about $379,000, according to court papers. The purchase offer from Eastman Brass Instruments Inc. would give the company $1 million in cash to pay its debts. The buyer also agreed to extend a $230,000 bankruptcy loan and to help the company get another $700,000 loan later.

Coldwater Creek Inc. won court approval to borrow $42 million to finance operations while the women’s clothing retailer prepares for going-out-of-business sales at its more than 370 stores, Bloomberg News reported yesterday. The loan from current lender Wells Fargo & Co. will allow the company to maximize returns for creditors, Coldwater said in court papers. Coldwater, founded as a catalog business 30 years ago, said last week it intends to start liquidating inventory just before the May 11 Mother’s Day holiday. Bankruptcy Judge Brendan Shannon at a hearing yesterday granted the company interim approval to borrow as much as $42 million of a $75 million financing package.

A bankruptcy judge approved Glacial Energy Holdings Inc.'s so-called first-day motions, which will allow the electricity and natural gas retailer to pay employees and to borrow the funds it needs to continue operations, Dow Jones Daily Bankruptcy Review reported today. The approvals from Judge Christopher Sontchi take the company a step closer to fulfilling a plan to sell its business to senior lender Vantage Commodities Financial Services LLC, subject to higher bids at auction. Judge Sontchi is allowing Glacial Energy to pay its vendors, access its bank accounts, as well as retain the professionals needed to handle its bankruptcy case.

Silicone and quartz producer Momentive Performance Materials Inc., owned by Apollo Global Management LLC , yesterday filed for chapter 11 protection as part of a "restructuring support agreement" with some of its creditors, Reuters reported today. Momentive listed assets and liabilities of above $1 billion, according to its bankruptcy filing. The restructuring includes a $600 million rights offering, which will provide the company a significant equity infusion, along with exit financing commitments of $1.3 billion, it said.

Bankruptcy Judge Brendan Shannon yesterday approved Sorenson Communications Inc.'s restructuring proposal, which a company lawyer said was supported by 100 percent of the creditors that voted on it, Dow Jones Daily Bankruptcy Review reported today. The company's pre-packaged bankruptcy plan was hashed out with creditors before the company filed for chapter 11. The restructuring stretches out the term of Sorenson's funded debt while transforming $735 million in senior secured notes into an 87 percent ownership stake in the company, cash and new notes.

A number of sealed documents in Garlock Sealing Technologies' chapter 11 bankruptcy accidentally got out, and now a federal judge has ordered them destroyed, the Rochester (N.Y.) Democrat & Chronicle reported today. In an order dated Monday, U.S. Bankruptcy Judge George R. Hodges said that anyone who on March 27 or 28 downloaded particular transcripts from the court's electronic case files system to destroy them. The transcripts were from hearings held in the summer of 2013 as part of the Palmyra manufacturer's bankruptcy and had to do with estimating how much company Garlock might have to reasonably pay in coming years to settle any asbestos-related personal injury lawsuits.

Quiznos is pushing off until May a key court hearing on its bankruptcy exit plan after unsecured creditors asked for more time to probe its restructuring strategy, the Wall Street Journal reported today. The sandwich chain labeled its chapter 11 proposal a pre-packaged plan, because the company filed for protection with support from key creditors, including senior lenders owed $444 million. Quiznos says that the chapter 11 plan itself, however, with $626 million in debt, is going to push a cramdown on unsecured creditors, forcing landlords, suppliers and other creditors to accept what it proposes to give them. Unsecured creditors, including suppliers, landlords and a franchisee, formed ranks recently in a bid to slow Quiznos's race to the bankruptcy exit. They negotiated an agreement from the company to postpone a chapter 11 plan confirmation hearing from April to May 12.