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Just days after U.S. District Judge Rudolph T. Randa issued a key ruling in favor of the Archdiocese of Milwaukee in its bankruptcy, the church’s creditors are seeking an emergency order to determine whether Randa has a conflict of interest that should have been disclosed, the Milwaukee Journal Sentinel reported yesterday. Randa ruled last week that forcing the archdiocese to tap the $50 million-plus it holds in a trust for the perpetual care of cemeteries would substantially burden its free expression of religion under the First Amendment and a 1993 federal law aimed at protecting religious liberty. Lawyers representing the archdiocese’s creditors — primarily sex abuse victims — filed a motion on Friday asking U.S. Bankruptcy Judge Susan V. Kelley to compel the release of any records showing whether Randa and his wife, Melinda, have purchased any plots or crypts in one of the archdiocese’s cemeteries, or whether they have any interest as heirs or beneficiaries of several relatives known to be buried in them. Depending on what they find, the motion says, the lawyers say they may seek to vacate Randa’s order and ask him to recuse himself from the case.

Ambulance operator Rural/Metro Corp., owned by private equity firm Warburg Pincus, filed for chapter 11 protection with the aim of cutting its debts after it missed an interest payment in July, Reuters reported yesterday. The Scottsdale, Arizona-based company also intends to renegotiate unprofitable contracts and free up capital for investments through the bankruptcy process, according to the filings. The provider of private ambulance and fire protection services declared liabilities and assets each worth more than $500 million. Rural/Metro reached an agreement with both its senior secured and unsecured debt holders to reduce its debt and interest payments by nearly 50 percent. Bondholders have also agreed to infuse $135 million in new equity financing once Rural/Metro emerges from chapter 11, according to a filing.

Casey Anthony has agreed to pay $25,000 to her bankruptcy estate to avoid having to sell her life story, the Associated Press reported yesterday. A judge in her bankruptcy case in Tampa approved the agreement between Anthony and her bankruptcy trustee in court papers made public on Wednesday. The trustee had considered the possibility of selling Anthony’s life story to help pay off her debts to creditors. Anthony had opposed the idea, and her lawyers had argued that it would give the purchaser of the rights control over Anthony for the rest of her life. Anthony was acquitted two years ago of murder, manslaughter and child abuse charges in the death of her 2-year-old daughter, Caylee, in Orlando.

Residential Capital LLC has reached a deal with borrowers to settle a class-action lawsuit over so-called high-cost mortgage loans, Dow Jones Daily Bankruptcy Review reported today. In a court filing on Wednesday, ResCap said it will create a fund with no less than $57.6 million, which will go to the borrowers on 44,535 second mortgage loans. The borrowers, who were suing ResCap over what they said was $1.87 billion in damages, will receive an allowed claim of $300 million in ResCap’s bankruptcy case.

Bankruptcy Judge Shelley Chapman yesterday signed off on a deal for Russian oil giant Lukoil to pay $93 million to its former Getty Petroleum Marketing Inc. unit to resolve a trial over Getty’s collapse, Reuters reported yesterday. Getty, a gas station operator, declared bankruptcy in December 2011, eventually appointing a trustee, Alfred Giuliano, to liquidate its assets and pay back creditors. A key piece of Giuliano’s strategy was to sue Lukoil, saying the company stripped Getty of its best gas stations and exacerbated its insolvency. The sides reached a settlement earlier this month, halting a trial after 17 days of testimony. Giuliano alleged that Lukoil moved Getty’s most profitable stations to another subsidiary in 2009 in exchange for $120 million, far less than what Getty felt the assets were worth. Under the settlement, Lukoil will pay the Getty estate an extra $93 million, resolving both the trial and a separate dispute between the parties over the allocation of tax benefits, court documents show.

A judge signed off Friday on Residential Capital LLC’s deal with the Federal Reserve Board to set aside $230 million for borrowers who may have had their homes improperly foreclosed upon, Dow Jones Daily Bankruptcy Review reported today. The deal approved by Bankruptcy Judge Martin Glenn replaces a costly and drawn-out review process that sent millions to the professionals investigating the foreclosed loans and little or nothing to most borrowers who may have been wronged.

Victims in Tennessee of a deadly U.S. meningitis outbreak won the right to pursue a new avenue of litigation against healthcare facilities and doctors there, after a ruling by a U.S. bankruptcy judge last week, Reuters reported on Friday. Tennessee was the second hardest-hit state, behind Michigan, in a meningitis outbreak that has injured or killed more than 700 people nationwide. There were about 65 healthcare facilities and doctors in Tennessee on the customer list of New England Compounding Center, which U.S. authorities said made and shipped the fungus-tainted steroid cited in the deadly outbreak. U.S. Bankruptcy Judge Henry J. Boroff on Wednesday declared NECC insolvent, clearing the way for meningitis victims from Tennessee to file product-liability claims against medical providers, health clinics and other sellers of the tainted product.

A U.S. bankruptcy court judge on Wednesday dealt a blow to Detroit’s public employee unions and pension funds opposed to the city’s historic bankruptcy filing by suspending legal challenges in Michigan state courts while he reviews the city’s petition for protection from creditors, Reuters reported yesterday. Bankruptcy Judge Steven Rhodes ordered three lawsuits filed by city workers, retirees and pension funds be halted and extended that stay to suits against Michigan’s governor, treasurer and Detroit’s emergency manager. Rhodes’s action ensures that the only path to fight the city’s chapter 9 bankruptcy petition runs through his courtroom in downtown Detroit. The city’s unions and pension funds had hoped to keep the fight in state court, where they felt Michigan’s constitutional protections of retiree benefits would prevail against efforts by Orr to scale them back. Now, barring an appeal of the Judge Rhodes ruling, their fight likely turns to convincing the judge that Detroit emergency manager Kevyn Orr has not negotiated with them in good faith since he was appointed by state officials in March.
http://www.reuters.com/article/2013/07/24/usa-detroit-idUSL1N0FU14G2013…

In related news, Bankruptcy Judge Steven Rhodes has proposed appointing a federal judge as mediator to hash out the most difficult disputes as the city struggles to resolve more than $18 billion in bond and pension obligations, Reuters reported yesterday. Judge Rhodes has proposed appointing federal judge Gerald Rosen to oversee confidential mediation, if it is needed. The proposal filed on Tuesday was included in a list of issues to be heard on Aug. 2. The proposed mediation order would allow Judge Rhodes to send any matters to Judge Rosen or another mediator of Judge Rosen’s choosing. The mediation sessions would be confidential and protected from discovery, according to the court filing.
http://www.reuters.com/article/2013/07/24/usa-detroit-mediator-idUSL1N0…

The U.S. bankruptcy case of Taiwan-based shipping company TMT Group can proceed under chapter 11 protection, a judge ruled on Tuesday, affirming that the case was filed in good faith, Dow Jones Daily Bankruptcy Review reported today. The ruling this week from Bankruptcy Judge Marvin Isgur allows the company to move forward with its plan to cut its debt load by $1.46 billion and increase the efficiency of its business while protecting its ships, many of which are arrested in ports around the world.

Basis Farm to Chef LLC, a project of New York entrepreneur Bion C. Bartning, on Tuesday filed for chapter 7 bankruptcy liquidation, the Wall Street Journal reported today. Bartning founded Basis in 2008 to sell chicken, fruits, vegetables, milk and other farm products to New York restaurants and other customers. The following year, Basis took over Farm to Chef, another local food distribution business that began in 2004 with support from New York State agricultural officials. Farm to Chef reported assets of nearly $127,000 and debts of $491,600 in its bankruptcy petition.