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Aetna AET won a judicial ruling giving it access to filings made by asbestos claimants in the bankruptcy of gasket maker Garlock Sealing Technologies, opening a new front in the battle between plaintiff lawyers and companies that accuse them of double-dipping and fraud, Forbes.com reported on Friday. Bankruptcy Judge George R. Hodges on Thursday granted the motion of Aetna to examine Rule 2019 statements lawyers have filed in the Garlock bankruptcy. The statements require lawyers to identify clients with claims against the bankrupt company as well as the nature of those claims. Aetna is one of several insurers seeking asbestos claims information to try and recover medical expenses from customers who have been paid for the same costs through litigation. Judge Hodges denied similar requests from Ford, Volkswagen, and other companies that are seeking access to other sealed documents from a trial over Garlock’s asbestos liabilities. The judge deferred that request, saying it is already being considered by a federal court weighing an appeal by Legal Newsline, a publication funded by the U.S. Chamber Institute for Legal Reform.

The owner of a handful of popular Washington D.C. bars and restaurants — including legendary Capitol Hill watering hole Hawk ‘n’ Dove — filed for bankruptcy protection on Friday, the Wall Street Journal reported on Saturday. Baltimore-based Barrack’s Row Entertainment filed for chapter 11 protection, putting eating spots like Hawk ‘n’ Dove, Senart’s Oyster House and The Chesapeake Room into protection with it. Barrack’s Row, which is owned by a group of investors, said that it has between $1 million and $10 million in debt.

The former finance director of the bankrupt law firm Dewey & LeBoeuf, who pleaded guilty earlier this year to taking part in a scheme to manipulate the firm’s financial statements, told New York prosecutors that the firm’s former chairman, Steven Davis, was nervous before a meeting with an auditor to discuss the firm’s 2010 finances, the New York Times DealBook Blog reported yesterday. Francis Canellas, in a statement made as part of his plea agreement with New York prosecutors, said he believed that Davis was nervous because he was worried the auditor from Ernst & Young would detect some of the “inappropriate adjustments” that were being made to Dewey’s financial statements by the firm’s finance team. The statement from Canellas and his plea on Feb. 13 to one count of grand larceny were unsealed yesterday by Justice Michael J. Obus of the New York State Supreme Court in Manhattan.

Lehman Brothers Holdings Inc.’s creditors are set to receive about $17.9 billion next month in the fifth such distribution since the company filed the biggest U.S. bankruptcy at the peak of the financial crisis, Bloomberg News reported yesterday. The payout scheduled for April 3 will include about $11.7 billion on third-party claims and $1.1 billion for recently allowed claims that would have been paid by earlier distributions, lawyers for the defunct investment bank said today in a filing in U.S. Bankruptcy Court in New York. A sixth payout is expected around Sept. 30, Lehman said. Lehman’s estate has already paid out more than $56 billion to third-party creditors — a figure that’s expected to reach at least $80.6 billion before the case is resolved, court records show. That estimate, made public in July, is an increase over the $65-billion recovery projected in the company’s liquidation plan approved in December 2011.

More than a decade of wrangling between a bankrupt agricultural specialty retailer and the Internal Revenue Service ended on Tuesday when the U.S. Supreme Court ruled severance pay is taxable under the Federal Insurance Contributions Act (FICA), the Wall Street Journal reported yesterday. In a case that has caught the eye of tax practitioners and restructuring advisers, the High Court said that the government gets to collect FICA contributions on severance pay handed out by Quality Stores Inc., which was pushed into bankruptcy in 2001. The ruling is a loss for those in charge of collecting money for Quality Stores' creditors, and it is a lesson to those designing severance-pay plans for companies undergoing restructuring, in and out of bankruptcy. Quality's lump-sum severance payments to people who lost their jobs weren't linked to receipt of state unemployment benefits, the high court noted, and varied according to job seniority and time in service to the company. The company's program was aimed at discouraging leaders and long-term employees from fleeing in the crucial final months of Quality's corporate life. Before filing for chapter 11 bankruptcy, Quality closed about 63 stores and nine distribution centers. During the bankruptcy, the remaining 311 stores and three distribution centers were closed. All told, more than 4,000 employees lost their jobs involuntarily due to Quality's struggles from 1999 through 2002, court records say.

Federal prosecutors said that the former chief executive officer of Sentinel Management Group Inc. was found guilty yesterday of defrauding customers out of more than $500 million before the suburban Chicago firm collapsed in August 2007, Reuters reported yesterday. Jurors deliberated less than two hours in Chicago federal court before finding Eric Bloom guilty on 18 counts of wire fraud and one count of investment adviser fraud, following a four-week trial, the office of U.S. Attorney Zachary Fardon said. Each wire fraud count carries a maximum 20-year prison term plus a fine. The government is also seeking a forfeiture of more than $500 million.

Jon Corzine, the former MF Global Holdings Ltd chief executive, and two former colleagues failed to win the dismissal of a lawsuit by a trustee seeking to hold them responsible for the futures brokerage's rapid demise and bankruptcy, Reuters reported yesterday. U.S. District Judge Victor Marrero said on Monday that the trustee may pursue damages over claims that Corzine, former chief operating officer Bradley Abelow and former chief financial officer Henri Steenkamp breached their duties of care and loyalty to the company. "Defendants and other MF Global officers repeatedly increased the company's exposure to risky bets on sovereign debt and shuffled funds among MF Global's subsidiaries to cover a growing liquidity crisis," Marrero wrote. "These facts give rise to reasonable inferences that defendants acted in bad faith."

The House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law will be holding a hearing today at 4 p.m. ET titled "Exploring Chapter 11 Reform: Corporate and Financial Institution Insolvencies; Treatment of Derivatives." ABI members Prof. Michelle Harner, the official reporter for ABI's Commission to Study the Reform of Chapter 11, Bankruptcy Judge Christopher Sontchi (S.D.N.Y.) and Jane Vris of Millstein & Co. (New York) are among the witnesses set to testify at the hearing. For more information, please click here: http://judiciary.house.gov/index.cfm/hearings?ID=94D02F41-1832-4385-B16…

Global Geophysical Services Inc., a provider of seismic data to oil and gas companies, filed for bankruptcy due to heavy debt and said it was seeking court approval for $60 million in debtor-in-possession financing, Reuters reported today. Global Geophysical said on Tuesday that its foreign subsidiaries were not included in the bankruptcy filing. Demand for seismic data, which creates images of the earth's subsurface and helps companies to identify oil-and-gas-bearing structures, has risen as energy companies increase exploration in remote and difficult areas. Global Geophysical had warned of a liquidity crunch earlier this month.

Former customers of Bernard Madoff will have recouped nearly $6 billion of their money if a federal bankruptcy judge approves the latest payout request by the trustee liquidating the swindler's firm, Reuters reported yesterday. Trustee Irving Picard yesterday said that he is seeking approval to pay out $349 million to fraud victims with 1,080 accounts, with payments ranging from $496 to $77.3 million. The bulk of the payout comes from Picard's $325 million settlement of claims against JPMorgan Chase & Co., once Madoff's main bank. Picard said that the payout would boost the total amount distributed to Madoff victims above $5.9 billion, including sums advanced by the Securities Investor Protection Corp, which oversees the liquidation of failed brokerages.