%1

Administrators who run the state pension fund for public workers of the Northern Mariana Islands—a fund that made a 44-day attempt at chapter 11 protection to avoid running out of money in 2014—ran up a $750,937.82 legal bill before a bankruptcy judge could rule that the entity did not qualify for protection under the Bankruptcy Code, the Wall Street Journal reported today. Government leaders who are in charge of the Pacific Ocean territory and who also opposed the pension fund administrator's request for bankruptcy protection in a long-running power struggle between the two are now protesting the bill from the Brown Rudnick law firm, whose Boston-based attorneys put the fund into bankruptcy on April 17. Specifically, the government’s attorneys want an 85 percent discount from Brown Rudnick, a figure it arrived at based on the 15 percent chance that the fund would actually be eligible for protection. (It did not explain in its court-filed request how it arrived at that estimate.) Government officials said that the Brown Rudnick attorneys should not have run up the clock on legal work when they knew the case had such a high risk of getting dismissed.

Communications tech company FiberTower Corp . filed for bankruptcy on Tuesday with the hope of scaling back its operations and handing over ownership to bondholders who are owed a piece of its $527 million in debt, Dow Jones DBR Small Cap reported today. After losing business from wireless companies after aggressively growing its footprint, company executives placed the 57-worker company under chapter 11 protection, disclosing in court papers that the value of its business is less than the $132 million it owes a group of bondholders.

Bankruptcy Judge Allan L. Gropper yesterday approved an agreement between Eastman Kodak and a group of its retirees that ensures the group gets the representation it wants in Kodak's bankruptcy case, Dow Jones Newswires reported yesterday. Judge Gropper approved changes to his prior decision that gave the retiree group official "committee" status in the case. Without those changes, a lawyer for the retirees said, the group thought that it could be "inadvertently or inappropriately" limited in how it could participate in Kodak's case. Judge Gropper also approved the removal of a $50,000 cap on the fees the committee can rack up and approved the retention fees for the committee's professionals, but said that he was concerned about the fees piling up in the case.

Bankruptcy Judge Charles Rendlen III yesterday confirmed a bankruptcy plan that would pay about $26.5 million to hundreds of thousands of customers and other creditors of US Fidelis, the Wentzville, Mo., company that once led the nation in the sale of vehicle-service contracts, the St. Louis Post-Dispatch reported today. Before it collapsed in late 2009, US Fidelis was accused of cheating hundreds of thousands of consumers by selling them vehicle protection coverage that was virtually worthless. Judge Rendlen said that the plan was a victory for creditors, including about 625,000 consumers who bought vehicle-protection plans from US Fidelis. Under the plan, about $14.1 million will go to a national, consumer-restitution fund that will be administered by state attorneys general.

Bankrupt aircraft maker Hawker Beechcraft Inc said that a bankruptcy court approved its plans to enter into exclusive talks with China's Superior Aviation Beijing Co. over a sale of the company for $1.79 billion, Reuters reported yesterday. Hawker Beechcraft, owned by Goldman Sachs and Onex Corp., said that the approval gives the company up to 45 days to negotiate the deal with Superior Aviation. Last week, Hawker Beechcraft said Superior Aviation would provide financial support to the company's jet operations over the next six weeks. Superior will pay $25 million before the end of the week, apart from paying a similar amount within the next 30 days, Hawker Beechcraft said. Superior Aviation said that it would work to keep jobs in the United States by expanding production in locations across America, including Kansas, Arkansas and Texas.

Bankruptcy Judge Shelley C. Chapman said yesterday that she plans to approve LightSquared's access to a $51.4 million bankruptcy loan from a group of the wireless-satellite company's lenders that will keep the company running through November 2013, Dow Jones Newswires reported yesterday. Judge Chapman's approval of the debtor-in-possession financing would immediately release $30.6 million to LightSquared, although the company set a strict timetable as to how it plans to use the money. Last month, the company said that the loan would be only $30 million in total, but now it said that other cash it previously thought it could access was "not as easily available" as originally thought. Judge Chapman said that she would review the changes to the financing and most likely sign off on it by the end of the day.

Syms Corp. on Friday received a judge's approval to distribute its revamped chapter 11 plan to creditors for a vote, Dow Jones DBR Small Cap. Bankruptcy Judge Kevin J. Carey said that he would sign off on the defunct discount retailer's disclosure statement. The company's plan is to reorganize around its valuable real estate assets, raise $25 million through a rights offering and repay most of its debts in full, thanks to a deal with creditors and equity holders of both Syms and subsidiary Filene's Basement LLC.

Former New York Mets outfielder Lenny Dykstra pleaded guilty to looting valuables from his $18 million mansion and secretly selling them after his bankruptcy filing in 2009, Bloomberg News reported on Friday. Dykstra pleaded guilty to three counts of bankruptcy fraud, concealment of bankruptcy property, and money laundering at a hearing yesterday in federal court in Los Angeles. He faces as long as 20 years in prison.

Bankruptcy Judge Carol A. Doyle ruled that Peregrine Financial Group Inc.'s chapter 7 liquidation trustee can operate the firm until at least Sept. 13, Bloomberg News reported on Friday. Judge Doyle issued the ruling on Friday after Robert Fishman, a lawyer for Trustee Ira Bodenstein, said that his client needed time and a number of critical employees to complete work that was in progress when the firm sought bankruptcy protection on July 10. There were "numerous transactions in the middle of being executed" when the bankruptcy filing was made, Fishman said. Peregrine, based in Cedar Falls, Iowa, with offices in Chicago, filed for bankruptcy a day after the National Futures Association said it identified a shortfall of about $200 million in customer funds on deposit.

The U.S. Treasury Department plans to demand back more than $5 million it granted a Montana power plant that later filed for bankruptcy, in what would be a rare foray by the government into the courts to claw back job-creation funds distributed under the 2009 economic-stimulus package, the Wall Street Journal reported today. The Treasury Department said that it plans to use the bankruptcy process to recover funds from Thompson River Power LLC. The Treasury paid Thompson River $6.5 million in 2010 from a piece of the American Recovery and Reinvestment Act known as Section 1603 that reimbursed developers of renewable energy with cash payments equivalent to 30 percent of their projects' costs. The program has given out more than $11 billion, the Treasury Department said. The grant to Thompson River, majority-owned by a Minnesota private-equity firm, was to convert a coal-fired plant to burn wood, which is considered a "renewable" power source. But since receiving the money, the plant never operated either as a coal- or wood-burning plant, according to Montana regulators, and has produced neither power nor new jobs. On July 3, Thompson River filed for chapter 7 bankruptcy, and has listed $26 million in assets and $6.6 million in liabilities.