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One of the nation’s largest Social Security disability firms is preparing for a possible chapter 11 protection filing as soon as this week as it faces roughly $40 million of debt and shrinking demand for its services amid tightening government scrutiny of claims, the Wall Street Journal reported on Saturday. Binder & Binder, founded by brothers Harry and Charles Binder, is working with law firm Lowenstein Sandler LLP and turnaround firm Development Specialists Inc. to prepare the chapter 11 filing. The firm, which is dependent upon government-paid fees earned from shepherding Social Security disability claimants through the system, owes about $23 million to lenders U.S. Bank and Capital One Bank. The firm owes about another $16 million in unsecured debt to Stellus Capital Management, a spinoff of investment firm D.E. Shaw & Co.

The messy collapse of the mega-firm Dewey & LeBoeuf has claimed another casualty, and this time it’s one of the defunct law firm’s leading rainmakers, according to a New York Times analysis on Saturday. John J. Altorelli, now co-head of the U.S. finance practice at DLA Piper, the world’s largest firm measured by revenue, was among Dewey & LeBoeuf’s most important rainmakers, the term used to denote partners who land clients. At his peak, he was credited with generating more than $33 million in annual revenue for the firm. In 2011 alone, his compensation was $6 million. That same year, the firm was so eager to keep him as a partner that it offered a contract guaranteeing him $5 million a year for three years. His departure from Dewey & LeBoeuf in April 2012 was a precipitating factor in the firm’s collapse, which came soon after, in May 2012. Despite all these trappings of success, Altorelli, who is 57, filed for personal bankruptcy protection on Nov. 25 in Connecticut, where he owns a sprawling home currently on the market for $3.9 million. In a cautionary tale for any firm that may be contemplating a bankruptcy filing, the trustee overseeing Dewey & LeBoeuf’s bankruptcy is suing him for $12.9 million. He’s surrounded by lawyers and is personally responsible for his legal fees. He’s been grilled by prosecutors and cited as a potential witness in the pending criminal trial against Dewey & LeBoeuf’s former leaders. The Internal Revenue Service is also investigating him.

A bankruptcy judge yesterday refused to allow Donald Trump to forge ahead with a legal fight to reclaim his luxury brand from Trump Entertainment Resorts Inc., a descendant of the Atlantic City, N.J., casino company he once led, Dow Jones Daily Bankruptcy Review reported today. "This bankruptcy case right now is at a very sensitive and critical stage," said Judge Kevin Gross in explaining his refusal to immediately lift the bar shielding Trump Entertainment from legal action while it struggles to survive under chapter 11 protection. Trump and his daughter, Ivanka, sued shortly before the company filed for bankruptcy in September, seeking to force it to stop using the Trump name.

Bankruptcy Judge Kevin Carey said yesterday that shareholders of Exide Technologies, a 125-year-old battery manufacturer, are close to being wiped out and don’t need a court-approved committee to help them fight a reorganization plan that would pay them nothing, Bloomberg News reported yesterday. Judge Carey ruled yesterday that shareholders shouldn’t be given an official committee, with legal bills paid by Exide, because they didn’t present evidence that the company is worth enough to pay all its debts and still have something for them. Exide, based in Milton, Ga., filed for bankruptcy last year after state regulators shut down its lead-recycling plant in Vernon, Calif. The closing forced Exide to speed up its restructuring plans by hiring law firm Skadden, Arps, Slate, Meagher & Flom LLP and financial adviser Alvarez & Marsal North America LLC, according to court records. This is Exide’s second trip through bankruptcy. The company reorganized in 2004, winning court permission to eliminate $1.3 billion in debt in exchange for giving lenders about 90 percent of its stock. The other 10 percent went to unsecured creditors.

Scott Rothstein’s law firm creditors could soon be paid in full, more than five years after the exposure of Rothstein’s $1 billion-plus fraud brought on the firm’s collapse, the Wall Street Journal reported yesterday. A bankruptcy judge has been asked to approve a final distribution to unsecured creditors of Rothstein Rosenfeldt Adler, the now-defunct South Florida law firm that Rothstein used to conduct his massive fraud. Trustee Michael Goldberg, responsible for getting checks out to creditors, on Tuesday filed court papers seeking the court’s permission to send out of millions of dollars to the holders of nearly 80 unsecured claims. Among those slated for final payment are the NBA’s Miami Heat, which would receive nearly $172,000, and the American Heart Association, which would receive more than $26,000.

A Chicago company that produces boxed meals and snacks filed for chapter 11 protection last week, citing lack of growth and a dispute between the company's board and its former director, Crain’s Chicago Business reported yesterday. GoPicnic Brands, whose products are available at more than 15,000 retail locations worldwide, plans to continue operating during the case. The company filed for bankruptcy Dec. 3.

A bankruptcy judge said he won't reconsider a ruling that slashed Garlock Sealing Technologies' asbestos liability to $125 million from $1.3 billion, but plaintiffs' lawyers plan to appeal the decision, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge J. Craig Whitley denied on Tuesday the request by the official committee of asbestos personal injury claimants, which had asked the judge to consider new evidence that it said could change Garlock's liability to asbestos claimants.

Lehman Brothers Holdings Inc. dodged, for now, a bankruptcy court ruling that could have effectively barred the defunct investment bank from making further distributions to creditors, Bloomberg News reported yesterday. The estimated value of more than 209,000 residential mortgage-backed securities claims should remain capped at $5 billion, instead of being raised to $12.1 billion as requested by a group of trustees, Bankruptcy Judge Shelley Chapman ruled yesterday. There’s “pretty clear case law on this point,” she said. The ruling doesn’t resolve the issue as Judge Chapman will continue to hear arguments and expert testimony over the trustee group’s bid to value the loans using statistical sampling instead of one-by-one, as Lehman advocates. The trustees argue Lehman’s method will cost $110 million and take 41 years to complete. The streamlined process can be done in a year, they argue.

The new proposed buyer for the shuttered Revel Casino Hotel said yesterday that he will not give up his legal challenge to the auction of the Atlantic City, N.J., complex even though the winning bidder walked away from the deal. Revel filed papers overnight seeking approval to terminate its deal with Brookfield Property Partners LP and schedule a hearing to approve the sale to backup bidder Polo North Country Club Inc., an investment vehicle of Glenn Straub. Brookfield won the auction for Revel with a $110 million bid in October, outbidding Straub. Straub, a Florida developer, had at the time told Reuters he was prepared to bid up to at least $134 million. Straub has been pursuing an appeal of the order by Bankruptcy Judge Gloria Burns approving the sale to Brookfield.

Energy Future Holdings Corp., the Texas power company that filed for bankruptcy in April, listed fees of $20.5 million and $1.25 million in expenses paid to Kirkland & Ellis LLP from April 29 to Aug. 31, Bloomberg News reported yesterday. Gibson, Dunn & Crutcher LLP, Energy Future’s special counsel for “certain corporate and litigation matters,” was paid about $630,000 during the same period, and Godfrey & Kahn SC, which is acting as counsel to the fee committee, got about $580,000 from Aug. 21 to Oct. 31. The largest-ever bankruptcy in the energy industry, which came seven years after the company set a record as the biggest leveraged buyout, will keep bankruptcy lawyers at firms such as Morrison & Foerster LLP and Richards, Layton & Finger PA busy in the coming months as the company aims for a relatively quick exit from chapter 11. The filing in federal bankruptcy court in Delaware didn’t show how many hours were spent in accruing those fees, nor did it explain whether a $6 million retainer paid in May was included in the total.