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More than half of investors' funds have been recovered nearly four years after Bernard Madoff's arrest for running the biggest Ponzi scheme ever, the Wall Street Journal reported today. Trustee Irving Picard said Monday that he recovered, or reached deals to recover, more than $9.2 billion of the $17.3 billion in principal that investors lost as a result of Madoff's scheme, which landed him a 150-year prison sentence. Picard said that he collected $115.3 million by settling 18 cases between April 1 and Sept. 30. During that six-month period, Picard paid about $2.5 billion to Mr. Madoff's investors, bringing the total compensation they have received to $3.7 billion.

San Bernardino, Calif., won more time to prove it should remain in bankruptcy as a judge told city officials to develop a temporary budget by December or risk losing chapter 9 protection, Bloomberg News reported yesterday. Bankruptcy Judge Meredith M. Jury agreed to put off until Dec. 21 a court showdown between San Bernardino and California Public Employees’ Retirement System over whether to throw the city out of bankruptcy. To remain, the city must make progress on a pendency plan, Judge Jury said yesterday.

A123 Systems Inc., the bankrupt maker of electric-car batteries that received a $249.1 million federal grant, won court approval to borrow $50 million from China’s Wanxiang Group Corp., Bloomberg News reported today. Bankruptcy Judge Kevin Carey gave interim approval for the loan yesterday. Wanxiang replaced Johnson Controls Inc.as the lender for A123’s chapter 11 case. Johnson Controls said that it withdrew as the lender to avoid a fight over the financing. A123, based in Waltham, Massachusetts, filed for bankruptcy protection last month with plans to sell its automotive-business assets to Milwaukee-based Johnson Controls for about $125 million. Wanxiang said last week that it wants to be the lead bidder at an auction for A123’s assets.

The U.S. Internal Revenue Service lost its request to delay Solyndra LLC from carrying out its restructuring plan while the agency appeals a bankruptcy judge’s approval of the failed solar-panel maker’s plan to exit court protection, Bloomberg News reported yesterday. The IRS was denied its bid for a stay to keep Solyndra, which received a $535 million U.S. Energy Department loan guarantee before going bankrupt, from implementing its plan which the government claims will make its appeal moot because it would be too difficult to undo afterward. "I find that the government has failed to prove a likelihood of success," on its appeal of Bankruptcy Judge Mary Walrath's plan approval, U.S. District Judge Gregory M. Sleet said at hearing yesterday. "The government claims that the evidence clearly showed the principal purpose was tax avoidance but offers no proof to support its position," Judge Sleet added, saying that the U.S. relies on "circumstantial" evidence rather than fact.

American Suzuki Motor Corp., the U.S. distributor of Suzuki Motor Corp. automobiles and motorcycles, filed for bankruptcy protection to wind down its automotive division, Bloomberg News reported today. American Suzuki had assets of $233 million and debt of $346 million as of Sept. 30, according to chapter 11 documents filed yesterday. Revenue for fiscal year ending March 31, 2012, was about $1.04 billion, according to court papers. American Suzuki said that it will redirect all of its operating resources to its motorcycle, all-terrain vehicle and marine products businesses. The Brea, Calif.-based company said it plans to sell substantially all its assets to NounCo. Inc., a unit of Suzuki Motor Corp.

Eastman Kodak won bankruptcy court approval yesterday to stop providing health and welfare benefits to 56,000 U.S. retirees and dependents, the Rochester (N.Y.) Democrat and Chronicle reported today. Kodak had been seeking court approval to stop offering such benefits by the end of the year as the company said that it spends nearly $10 million a month on such benefits. The two largest wedges of the retiree-related debt are health coverage for 32,000 Medicare-eligible retirees, representing a $440 million liability on its balance sheet, and the Survivor Income Benefit for 7,500 people representing a $510 million liability.

Bankruptcy Judge Kevin Gross on Friday cleared private-equity giants Sun Capital and Cerberus, among others, to pay $166 million to settle allegations that their 2004 purchase of Mervyns from Target Corp. doomed the now-defunct retailer, the Wall Street Journal reported today. The settlement paves the way for Mervyns’ creditors to pocket some extra change about four years after the retailer’s liquidation saw the closure of its 175 stores and the loss of thousands of jobs. Mervyns sought chapter 11 protection in July 2008, four years after Sun Capital Partners Inc., Cerberus Capital Management LP and Lubert-Adler purchased the California retailer from Target for $1.2 billion. The investor group structured the buyout as two separate purchases — one for the retail operations, and one for the chain's valuable real-estate holdings. The group had earned more than $250 million in profits on Mervyns.

Bankruptcy Judge Charles E. Rendlen said that shoe retailer Bakers Footwear Group Inc . can hire professional liquidators to close down more than 150 stores by the end of the year, Dow Jones DBR Small Cap reported today. Judge Rendlen on Thursday signed off on Bakers' request to name a joint venture formed by liquidators SB Capital Group and Tiger Capital Group as the stalking-horse bidder to conduct the sales pending an auction scheduled for today.

Vann's Inc. received approval on Friday from a bankruptcy judge to sell its five electronics stores to Texas-based McMagic Partners LP, the Missoulian reported on Saturday. Bankruptcy Court Judge John L. Peterson's authorization of the motion for sale clears the way for a Monday closing on the $4.5 million deal intended to keep the stores open. The $4.5 million McMagic offer is just over half the $8 million Vann’s owes to a list of creditors.

A fraud suit launched in California state court by former Dewey & LeBoeuf partner Henry Bunsow against several former leaders of the defunct law firm is headed to New York, a judge ruled last week, American Law Daily reported today. Bunsow's suit has been the subject of a jurisdictional battle since soon after he filed it on June 13, claiming that former Dewey chairman Steven Davis and others affiliated with the firm wooed new partners using a Ponzi-like scheme that portrayed Dewey as fiscally stronger than it actually was. Bunsow’s suit also names as defendants former Dewey partner and litigation head Jeffrey Kessler, former executive committee member James Woods, former chief financial officer Joel Sanders, and former executive director Stephen DiCarmine.