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The U.S. Bankruptcy Court for the Southern District of New York has announced that Judge Stuart M. Bernstein will take over the wind-down of Bernard Madoff’s investment firm amid the unexpected death of Judge Burton Lifland, the Wall Street Journal reported yesterday. The case has been ongoing since December 2008, and with the recently announced J.P. Morgan Chase & Co. settlement, more than 55% of funds lost in the $17.5 billion Ponzi scheme have been recovered.

W.R. Grace & Co. cut the rate it is paying on a $900 million loan to support its emergence from bankruptcy, according to a person with knowledge of the transaction, Bloomberg News reported yesterday. The company will pay interest at 2.25 percentage points more than the London interbank offered rate on the debt that includes a $200 million portion denominated in euros, compared with 2.5 percentage points more than the lending benchmark initially proposed. The loans will have a 0.75 percent minimum on Libor. Grace, which filed for chapter 11 protection in 2001 to deal with 100,000 asbestos-related injury claims, has said it anticipates emerging from bankruptcy on Jan. 31. Last month, the Columbia, Md.-based company said that it would pay lenders $129 million, plus interest from Dec. 31, in addition to distributions under its reorganization plan, according to a regulatory filing.

OCZ Technology Group Inc. won court approval yesterday to sell its assets to Toshiba Corp. in a $35 million deal that preserves jobs but that likely means a slim recovery for creditors, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Peter Walsh signed off on the sale of the solid-state drive technology company, which arrived in bankruptcy late last year without the money to cover payroll.

Edgenet Inc. filed for chapter 11 protection on Tuesday in an effort to safeguard the planned sale of the company during a fight among creditors, who are battling over how to split up the proceeds, Dow Jones Daily Bankruptcy Review reported today. Citing "the real likelihood that the sale process will be stymied due to the dispute" between secured creditors owed a combined $103 million, the Atlanta company sought bankruptcy protection to ease the sale of its business. Edgenet provides technology that supports the sale of goods and services across mobile devices, on the web and in stores. No committed buyer has been signed up yet, but Edgenet Chief Financial Officer Juliet Reising said in court papers that the company is in "serious discussions with possible purchasers" and "strongly" believes a purchaser will be identified soon to lead a bankruptcy auction.

Cashing in on leveraged buyouts got a little riskier this week when a bankruptcy judge weighed in on the side of the former Lyondell Chemical Co.'s creditors in a lawsuit against former shareholders, Dow Jones Daily Bankruptcy Review reported today. Judge Robert Gerber said shareholders of the company, which tanked under the weight of debt piled on in a 2007 leveraged buyout, can't take refuge in a Bankruptcy Code safe-harbor provision to escape a state-law fraud lawsuit brought on behalf of creditors left unpaid in Lyondell's chapter 11 bankruptcy.

Bankruptcy Judge George Hodges accepted the $125 million figure proposed by Garlock Sealing Technologies, cutting more than $1 billion from what the company owes to current and future victims, the Charlotte Observer reported yesterday. The amount covers claims for mesothelioma, a rare and deadly cancer of the lining of the lungs and one of a host of diseases linked to asbestos. Attorneys representing current and future mesothelioma victims had asked the court to set liability at $1.3 billion. But in his 65-page order on Friday, Judge Hodges said that the attorneys’ dollar figure did not fairly reflect Garlock’s liability. According to the U.S. Chamber Institute for Legal Reform, an industry advocacy group, Hodges’ ruling marked the first time in more than 80 asbestos bankruptcies stretching back for more than 30 years that a judge refused to accept the plaintiffs’ estimate for future claims.

Wireless network provider FiberTower Corp. today will ask a judge to approve a bankruptcy-exit plan that would hand ownership of the San Francisco company to its bondholders, Dow Jones Daily Bankruptcy Review reported today. Court papers show that the bondholders, who are owed about $132 million, voted unanimously in favor of the restructuring plan that would give them a 100 percent stake in the reorganized business and wipe out the shares that once traded on Nasdaq.

Bankruptcy Judge Robert Gerber yesterday partly upheld efforts by creditors of the former Lyondell Chemical Co. to reclaim money from its shareholders, in a ruling that could help resolve the murky issue of how far shareholder protections extend when companies go bankrupt, Reuters reported yesterday. Judge Gerber dismissed one fraud claim against shareholders in the $6.3 billion lawsuit, but allowed another one to proceed. He also said that the creditors, who are represented by a trust, could replead the dismissed count, keeping the lawsuit alive. More critically, Gerber's decision denied a portion of the shareholders' bid to dismiss the lawsuit in which they argued that "safe harbor" protections afforded to shareholders under bankruptcy laws also apply under state laws.

The U.S. Supreme Court signaled interest in an appeal by the liquidator of Bernard Madoff’s firm, asking the Obama administration for advice on suits seeking $8 billion from banks alleged to have helped funnel money into his Ponzi scheme, Bloomberg News reported yesterday. Trustee Irving Picard is urging the justices to let him sue HSBC Holdings Plc, UniCredit SpA and UBS AG to recoup customer losses. A federal appeals court said that Picard lacked authority to press those suits, and the justices today requested input from U.S. Solicitor General Donald Verrilli. Picard argued in his appeal that the banks “are as responsible as Madoff for the enormous magnitude of customer losses.”

Bankruptcy Judge Kevin Gross yesterday approved Green Field Energy Services Inc.'s employee bonus and retention plans and will allow the company to keep key information about those plans secret, despite objections from a government bankruptcy watchdog, the Wall Street Journal reported today. Judge Gross also approved a request from Green Field's unsecured creditors for the appointment of an examiner to investigative possible legal violations that could alter the terms of Green Field's restructuring plan. U.S. Trustee Roberta A. DeAngelis said before the hearing that Green Field's bonus plan was structured to entice employees to remain with the company through its bankruptcy instead of rewarding them for performance. DeAngelis also objected to Green Field's move to keep key details of the bonus plan — including the identities of bonus recipients and the amount it sought to pay them — permanently shielded from public view by filing them under seal.