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Gabriel Technologies Corp., a developer of global-positioning technology, filed for chapter 11 bankruptcy last week after a billion dollar lawsuit the company filed in 2008 against Qualcomm Inc. backfired, Bloomberg News reported yesterday. Having sued Qualcomm for patent infringement, Gabriel's doom was sealed in October when a federal district judge dismissed the last of the claims against San Diego-based Qualcomm. Earlier this month Qualcomm won a $12.4 million judgment against Gabriel for pursuit of what Qualcomm called an "objectively baseless" lawsuit brought in "bad faith." Gabriel claimed in the chapter 11 petition that assets and debt both exceed $10 million. The case is In re Gabriel Technologies Corp., 13-30340, U.S. Bankruptcy Court, Northern District California (San Francisco).

The owner of the struggling Revel casino in Atlantic City, N.J., is preparing to file for chapter 11 protection in the coming weeks, less than a year after the casino opened, the Wall Street Journal reported today. Revel AC Inc., which carries about $1.5 billion in debt, said yesterday that it has reached a deal with investment-firm lenders on a prearranged bankruptcy plan. It anticipates seeking chapter 11 protection as soon as mid-March, and the casino company is expected to continue paying employees and operate normally during the bankruptcy proceedings. Under the terms of the deal, Revel's creditors will forgive debt for ownership stakes in a restructured Revel, reducing the casino's obligations by more than $1 billion.

Negotiations are breaking down between creditors of bankrupt mortgage lender Residential Capital LLC and its parent, Ally Financial Inc., making it likely that the government-owned auto-finance company will face litigation as it seeks to sever ties, the Wall Street Journal reported today. The creditors, including Wilmington Trust Corp. and other members of a committee representing ResCap's unsecured creditors, are pushing Ally to provide more money to settle potential liabilities it could face as ResCap's parent. Ally, which is 74 percent-owned by the U.S. government, is working to cap its exposure to the subprime lender's mortgage business so it can move forward on efforts to repay its $17.2 billion crisis-era bailout and focus on its core auto-lending and online-banking businesses.

Bankruptcy Judge Martin Glenn yesterday approved the outline of a plan by liquidators and creditors of failed brokerage MF Global to repay the company's creditors, a key step toward ending its $40 billion chapter 11 case, Reuters reported yesterday. The approved outline was amended to address minor concerns that Judge Glenn had raised in refusing to approve an earlier version of the outline last week. Under the payout plan, the company's trader customers would be repaid in full. Louis Freeh, the trustee liquidating the MF Global parent, has agreed if necessary to support an effort by customers' trustee James Giddens to allocate some of the parent's assets to customer accounts to ensure their full recovery.

Mid America Brick & Structural Clay Products LLC filed for chapter 11 protection on Friday, the St. Louis Business Journal reported today. Company officials said that the depression of the U.S. housing market and over-capacity in the brick industry prevented it from meeting sales and profitability projections. Mid America Brick intends to reorganize and has obtained debtor-in-possession financing from a consortium led by an affiliate of Advantage Capital Partners, a St. Louis venture capital and small business finance firm. The Mexico, Mo.-based business has 50 to 99 creditors, estimated assets of $1 million to $10 million and estimated liabilities of $10 million to $50 million, according to the bankruptcy filing.

RDA Holding Co., publisher of the 91-year-old Reader’s Digest magazine, filed for bankruptcy to cut $465 million in debt and focus on North American operations as consumers shift from print to electronic media, Bloomberg News reported today. Reader’s Digest, founded by DeWitt and Lila Wallace, went public in 1990. An investor group led by private-equity firm Ripplewood Holdings LLC bought it in 2007 for $1.6 billion and the assumption of about $800 million in debt. The company also filed for bankruptcy in August 2009, citing a drop in advertising spending and the debt load incurred in its acquisition. The company listed assets and debt of more than $1 billion each in chapter 11 documents filed yesterday. Under a restructuring agreement supported by Wells Fargo & Co., $465 million of remaining senior notes will all convert to equity. The company expects to have about $100 million in debt when it exits chapter 11, about an 80 percent reduction.

The U.S. Trustee Program reached settlements with Capstone Advisory Group LLC and Kaye Scholer LLP in the bankruptcy case of GSC Group, Inc., according to USTP press releases last week. Both settlements are to resolve that both firms failed to make accurate and complete disclosures in the GSC Group bankruptcy. Under the proposed Capstone settlement, the financial adviser will pay $1 million, waive an additional success fee of $2.75 million, adopt policies and procedures approved by an independent monitor to ensure accurate and complete disclosure, including with respect to employment of contractors and conflicts of interest and undergo compliance reviews by the monitor for two years. The proposed Kaye Scholer LLP settlement will have the law firm paying $1.5 million, adopt policies and procedures approved by an independent expert to ensure the accuracy and completeness of disclosure, including checks for conflicts of interest and assurance that attorneys review documents filed in their name, establish a special compliance review committee to certify under penalty of perjury the law firm’s continuing compliance and provide training to its attorneys and other staff to ensure the accuracy and completeness of documents it files in bankruptcy court. The case is In re GSC Group Inc., U.S. Bankruptcy Court, Southern District of New York, No. 10-14653.

Liberty Medical Supply Inc. and affiliates that provide products and services for people with diabetes and other ailments filed for chapter 11 protection amid pressure from creditors, Bloomberg News reported on Friday. The Port St. Lucie, Fla.-based company listed assets and debts of as much as $500 million each in court papers filed on Friday. Among the largest unsecured creditors listed in court papers were CGS Administrators of Nashville, Tenn., owed $137 million, and Abbott Laboratories of Abbott Park, Ill., owed more than $5 million. The case is In re Liberty Medical Supply Inc., 13-10268, U.S. Bankruptcy Court, District of Delaware (Wilmington).

A bankruptcy judge has cleared California stereo-equipment maker AuraSound Inc. to auction its assets, with GGEC America Inc., a subsidiary of the company's biggest creditor and main primary supplier, kicking off bidding with a $4.8 million offer, Dow Jones DBR Small Cap reported today. Bankruptcy Judge Mark S. Wallace on Wednesday said that AuraSound can auction the assets, including the exclusive, royalty-free license to use AuraSound’s trademarks and all of the assets related to the operation of AuraSound’s Hitachi, Vizio and NRT lines of business, on March 1.

Ally Financial Inc. mortgage subsidiary Residential Capital wants more time to exclusively file a chapter 11 reorganization plan as it faces resistance from various creditors, Dow Jones Newswires reported yesterday. In a court filing yesterday, ResCap asked a judge to extend its exclusivity period through May 29 from a current expiration of Feb. 28. ResCap's exclusivity period has been extended twice before. Ally has proposed paying ResCap's estate $750 million to settle third-party claims, though creditors say that amount is too small. ResCap is in mediation with creditors and Ally to try to reach a consensual deal, though ResCap this week filed a motion to appoint a seasoned bankruptcy attorney as its chief restructuring officer to help further progress on this front.