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Hostess Brands Inc. is defending the upcoming sales of its various bakery businesses against the objections of its bakers union and others, arguing that the deals are its only viable option, Dow Jones Daily Bankruptcy Review reported today. In a court filing on Thursday, Hostess said that four objections remain to the sales of its top brands, including Wonder bread and Twinkies, which a judge will consider at a hearing this week. (Subscription required.)

The a bankruptcy court may soon be overseeing what could be a legally dicey firesale—an apparent arsenal of Glock and Beretta handguns and other weapons, Reuters reported on Friday. Advanced Interactive Systems Inc. of Seattle, which owns shooting ranges and trains security professionals, filed for chapter 7 bankruptcy. It was unclear how many guns the company actually held. At least 15 guns were listed in the safe of the company's Melbourne, Fla., location. In addition, there were scores of entries for gun parts, from barrels to triggers. The company noted that in its rush to file for bankruptcy its records may be incomplete. The case is Advanced Interactive Systems Inc., U.S. Bankruptcy Court, District of Delaware, No. 13-10517.

Hostess Brands Inc. said yesterday that its Drake's snack cake business will be acquired by McKee Foods Corp., which had submitted a baseline bid of $27.5 million earlier this year, Reuters reported yesterday. Hostess, the maker of such iconic goods as Drake's, Twinkies and Wonder Bread, is liquidating after filing for bankruptcy last year, its second since 2004. An auction for Drake's was canceled after no other qualified bids were submitted. McKee was the only qualified bidder to step up by Wednesday's deadline, according to a Hostess statement.

Southern Air Holdings Inc., an air-cargo company that transported troops into Afghanistan, won court permission to exit bankruptcy under the control of a group of lenders led by Canadian Imperial Bank of Commerce, Bloomberg News reported yesterday. Bankruptcy Judge Christopher Sontchi approved the company's reorganization plan yesterday, less than six months after seeking court protection from creditors. Its former owner, Oak Hill Capital Partners LP, will retain 17.5 percent of the company and appoint one person to the new, five-member board, Southern Air attorney Brian Rosen of Weil Gotshal & Manges LLP said after the hearing.

A Portland, Ore.-based law firm has been able to pay its bills and emerge from Chapter 11 bankruptcy after settling a big case, the ABA Journal reported yesterday. The same prolonged legal battle with Pfizer Inc. that forced Williams Love O'Leary & Powers to file for bankruptcy in 2011 also resulted in a settlement sufficient to pay its bills, although exact terms of the settlement reached last year are confidential. The case against the pharmaceutical giant concerned 500 women who said that they developed cancer as a result of hormone replacement therapy. Pursuing Pfizer cost the law firm some $3 million.

Bankruptcy Judge Martin Glenn yesterday approved a settlement that will increase JPMorgan Chase & Co.'s potential recoveries from the liquidation of MF Global Holdings to as much as 76 cents for every dollar in claims, Reuters reported yesterday. The deal resolves a complaint from JPMorgan over the value of an intercompany settlement among MF Global affiliates. That complaint had posed a potentially significant obstacle to getting creditor support and court approval for MF Global's payout plan. Judge Glenn approved a supplement to the payback plan that raises the maximum projected recovery for JPMorgan for its $1.2 billion loan. Its recovery had maxed out at about 73 percent in an earlier version of the plan. The settlement also provides for a slight increase in the size of JPMorgan's claim.

American Airlines parent AMR Corp., which is planning to merge with US Airways Group, has asked a judge for another extension of its exclusive period to file a plan to exit bankruptcy, Reuters reported yesterday. The carrier and its unsecured creditors' committee asked the U.S. Bankruptcy Court yesterday to extend the time during which creditors cannot pursue their own restructuring plans for the airline to May 29. Currently, American has until April 15 to file its reorganization plan. American and US Airways announced their plan to combine last month in an $11 billion deal that would form the world's biggest airline.

Bankruptcy Judge James Peck yesterday gave creditors of Lehman Brothers approval to subpoena former JPMorgan Chase & Co trader Bruno Iksil, the so-called "London Whale," in an $8.6 billion lawsuit against the bank, Reuters reported yesterday. Judge Peck rejected arguments from JPMorgan that Iksil had little to do with the allegations in the lawsuit, which centers on JPMorgan's role as Lehman's main clearing bank in the days leading up to its Sept. 15, 2008, bankruptcy. Lehman and its unsecured creditors' committee accuse JPMorgan of using its access to Lehman to extract $8.6 billion of collateral in the four business days ahead of the chapter 11 filing.

A company that bought gas storage facilities from an Arcapita Bank subsidiary is bashing the bank's wind-down plan, saying that the subsidiary, Falcon Gas Storage Co., should be placed in the hands of an independent trustee, Reuters reported yesterday. In court papers filed on Monday in Arcapita's chapter 11 case, Tide Natural Gas Storage objected to the bank's plan to liquidate its assets and pay back creditors, saying that the plan would do little to satisfy Falcon's creditors. Tide in 2010 agreed to buy two gas storage facilities from Falcon for $515 million, $70 million of which remains in escrow. The deal has led to ongoing litigation, with Tide claiming that Falcon and Arcapita misrepresented financial information.

Hostess Brands Inc. Chief Executive Officer Greg Rayburn said Flowers Foods Inc.'s bid to buy most of the bankrupt baking company's bread brands is going through U.S. Justice Department review, Bloomberg News reported yesterday. Hostess is working closely with the department to clear "hurdles," Rayburn said yesterday. Flowers, based in Thomasville, Ga., made the only qualified offer for Hostess’s Wonder, Butternut, Home Pride, Merita and Nature’s Pride brands, as well as 20 bread plants, 38 depots and other assets. Hostess, based in Irving, Texas, declared the $360 million bid the highest and best, eliminating the need for the scheduled Feb. 28 auction. A March 19 hearing has been set in bankruptcy court for review and approval of the purchase. The deal is also subject to regulatory approvals, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and closing conditions, Flowers said in a Feb. 28 regulatory filing.