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Bankruptcy
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March 19, 2024
SAS Gets Nod On Ch. 11 Plan With $325M For Creditors
Airline holding company SAS AB, the Stockholm-based owner of Scandinavian Airlines, received a New York bankruptcy judge's approval Tuesday for a reorganization plan that will turn over control of the business to investors that collectively agreed to provide $1.2 billion as part of a refinancing deal last year.
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March 19, 2024
Skin Care Drug Co. Can Ask Creditors To OK Ch. 11 Plan
A Delaware bankruptcy judge said Tuesday she will give a debtor formerly known as Timber Pharmaceuticals Inc. permission to send its Chapter 11 plan out for a vote by the dermatology drug developer's creditors, after counsel for the company explained it had expanded the creditors' ability to opt out of the plan's claim releases.
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March 20, 2024
Future Of Judge-Shopping Reform Hazy After Rule Proposal
The policymaking body for U.S. courts provoked a stir last week when it proposed a rule designed to curb "judge shopping," with observers saying that the policy does address one type of the practice but that it remains to be seen if individual federal district courts will be willing to adopt even that limited reform.
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March 19, 2024
EV Charging Biz Pitches $400K Ch. 11 Staff Retention Plan
Charge Enterprises Inc., a company that builds electric vehicle charging stations and other infrastructure, has urged a Delaware bankruptcy judge to let it offer about $400,000 in bonuses to keep a dozen employees the firm deemed critical during its Chapter 11 case.
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March 19, 2024
Bankman-Fried's Fraud Left FTX Users Reeling, Letters Say
Customers of Sam Bankman-Fried's fallen crypto exchange are struggling with financial insecurity, skimping on expenses including food and worrying about their assets, according to victim letters lodged ahead of the FTX founder's sentencing for what prosecutors call an $11 billion fraud.
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March 18, 2024
Genesis Gets OK For $21M Deal To End SEC Crypto Loan Suit
A New York federal judge on Monday approved a $21 million settlement to resolve allegations that bankrupt crypto lender Genesis Global Capital LLC violated the U.S. Securities and Exchange Commission's regulations by selling unregistered securities in a joint partnership with crypto exchange Gemini Trust Co.
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March 18, 2024
Genesis Defends Crypto Payments At Ch. 11 Plan Hearing
Cryptocurrency lender Genesis Global Holdco Monday told a New York bankruptcy judge its proposal to distribute cryptocurrency to its customers is both fair and legal as the hearing on its Chapter 11 liquidation plan wound down.
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March 18, 2024
Voyager Investors Suing Mark Cuban Seek Class Cert.
Investors suing billionaire Mark Cuban over his role in promoting now-bankrupt Voyager Digital Ltd. have pushed for class certification and urged the court to rule that Voyager was selling unregistered securities.
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March 18, 2024
Amyris Gets OK To Settle Pot Co.'s $15M Trade Secret Suit
A Delaware bankruptcy judge has approved biotechnology company Amyris' $15.1 million settlement with cannabinoid manufacturer Lavvan, resolving yearslong litigation and arbitration proceedings alleging the debtor misused its then-business partner's trade secrets.
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March 18, 2024
Kirkland Wants To Escape Suit Over Ex-Judge's Relationship
Kirkland & Ellis LLP wants to bring down the hammer on a racketeering lawsuit claiming the firm "conspired" to profit from a Texas bankruptcy judge's secret romance scandal, saying the "flimsy" suit should be dismissed, and both the plaintiff and his attorneys at Bandas Law Firm PC should be sanctioned for filing it.
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March 18, 2024
Major Lindsey Followed Rules In Sex Assault Suit, Judge Says
A Chicago-based attorney who represents Major Lindsey & Africa LLC in an ex-employee's New York sexual assault suit did not run afoul of court requirements by sending a letter demanding that she drop the claims, a judge held Monday.
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March 18, 2024
Barnes & Thornburg Lands Morris Manning Bankruptcy Team
Barnes & Thornburg LLP picked up a former Morris Manning & Martin LLP bankruptcy group in Atlanta, the firm announced Monday.
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March 18, 2024
Catching Up With Delaware's Chancery Court
Multimillion-dollar e-cigarette settlements, $4 billion in stock buybacks and a $6.1 million appraisal tweak were among the big-dollar items logged in the Delaware Court of Chancery's ledger last week. Also on the docket: a Panama port project, a news outlet's defamation case, drone disputes and a flood of mail from Tesla shareholders. In case you missed it, here's all the latest from the Chancery Court.
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March 18, 2024
Joann Hits Ch. 11 With $1B Secured Debt, Creditor Deal
Fabric retailer Joann Inc., better known as Joann Fabrics, filed for bankruptcy in Delaware on Monday with $1 billion in secured debt and an agreement with its creditors to trim $505 million from its balance sheet.
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March 16, 2024
Up Next At High Court: Gov't Jawboning & Retaliatory Arrests
The U.S. Supreme Court has a packed oral arguments calendar this week that includes disputes over the Biden administration's work with social media companies to combat misinformation, the appropriate evidence standard for bringing retaliatory arrest claims and whether the federal government can object to a consent decree entered into by three states.
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March 15, 2024
Ex-Prisoners Partially Settle Prepaid Card Suit For $2.8M
Central National Bank NA and a class of former inmates who were charged fees for using the bank's prepaid debit cards from partner Numi Financial reached a $2.8 million settlement following mediation, but the parties have requested the court stay the case while class counsel investigates Numi's potential insolvency.
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March 15, 2024
Eletson Creditors Urge Cutting Most Of Reed Smith's Fee Bid
Eletson Holdings Inc.'s unsecured creditors told a New York bankruptcy judge to cut the "vast majority" of the fees Reed Smith LLP requested for its work on the tanker company's Chapter 11 case because the firm wants nearly $1.9 million for work that didn't help the estate.
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March 15, 2024
Peer Street Can Solicit Ch. 11 Plan Votes, Judge Says
Peer Street told creditors of the company and its entities Friday to expect ballots for their Chapter 11 plan, after a Delaware bankruptcy judge decided the real estate investment platform had disclosed enough information about its proposal for reorganization.
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March 15, 2024
Kwok Daughter Says Ch. 11 Judge Can't Hear RICO Suit
The daughter of Chinese exile Ho Wan Kwok has implored a Connecticut bankruptcy judge to punt to the district court the civil Racketeer Influenced and Corrupt Organizations claims that a Chapter 11 trustee for her father leveled, contending they raise "significant issues involving non-bankruptcy federal law."
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March 15, 2024
Judge Voids Boy Scouts Ch. 11 Ballots For Likely Forgery
Three Chapter 11 plan ballots that opted for a quicker but smaller settlement payout in the Boy Scouts of America's bankruptcy should be tossed, a Delaware bankruptcy judge has ruled, finding they were likely forged.
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March 15, 2024
Cybersecurity Co. Co-Founder Must Face SEC Fraud Claims
A New York federal judge determined that the U.S. Securities and Exchange Commission has sufficiently alleged that the co-founder of a now-bankrupt cybersecurity company raked in over $6.2 million in ill-gotten gains by participating in a fraudulent securities scheme that defrauded investors of over $100 million.
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March 15, 2024
Camden Diocese Gets OK For Ch. 11 Plan On 4th Attempt
The Roman Catholic Diocese of Camden has won approval from a New Jersey bankruptcy judge for its plan to settle sexual abuse claims for $87.5 million after three prior versions of the plan were rejected over insurance carrier objections.
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March 15, 2024
Feds Say Bankman-Fried Deserves 40 To 50 Years In Prison
Sam Bankman-Fried should spend 40 to 50 years in prison for engaging in a massive fraud that sank his FTX crypto exchange, Manhattan federal prosecutors argued Friday, pushing back against a request by defense counsel for a sentence of roughly six years.
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March 14, 2024
Lehman Brothers Can't Undo Trial Loss Over Crisis-Era CDS
A New York appeals court on Thursday affirmed a bench trial loss Lehman Brothers' bankrupt European unit suffered last year in a suit attempting to claw back nearly half a billion dollars from Assured Guaranty over losses on credit default swaps tied to the 2008 financial crisis.
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March 14, 2024
72-Year Weil Alum, 'True Visionary' Corporate Atty Dies At 97
Ira M. Millstein, the legendary Weil Gotshal & Manges LLP senior partner who helped save New York City from bankruptcy in the 1970s and used his bipartisan connections to help smooth Ruth Bader Ginsburg's path to the federal judiciary, has died, the firm said Thursday.
Expert Analysis
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Opinion
What Happens If High Court Rejects Releases In Purdue Ch. 11
Reading the tea leaves following the U.S. Supreme Court's recent arguments in Harrington v. Purdue Pharma, it appears likely that the justices will decide that bankruptcy courts lack the power to release third-party claims against nondebtors, which would result in one of three scenarios, says Gregory Germain at Syracuse University.
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Del. Ruling Shows Tension Between 363 Sale And Labor Law
The Delaware federal court's ruling in the Braeburn Alloy Steel case highlights the often overlooked collision between an unstayed order authorizing an asset sale free and clear of successor liability under Section 363 of the Bankruptcy Code and federal labor law imposing successor liability on the buyer, say attorneys at Proskauer.
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How Clients May Use AI To Monitor Attorneys
Excerpt from Practical Guidance
Artificial intelligence tools will increasingly enable clients to monitor and evaluate their counsel’s activities, so attorneys must clearly define the terms of engagement and likewise take advantage of the efficiencies offered by AI, says Ronald Levine at Herrick Feinstein.
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Del. Insurance Co. Liquidation Reveals Recovery Strategies
Arrowood's recent liquidation in the Delaware Chancery Court offers a positive development for policyholders and claimants, providing access to guaranty association protections amid the company's demise, say Timothy Law and Ann Kramer at Reed Smith.
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How The NY AG Leads Investigations In Civil Securities Fraud
Although investigating white collar fraud can put significant strain on state and local resources, the New York Attorney General's Office has continued to use its expansive statutory authority to take a leading role in bringing civil enforcement actions in highly complex financial matters, say Carrie Cohen and Nathan Reilly at MoFo.
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Series
The Pop Culture Docket: Judge D'Emic On Moby Grape
The 1968 Moby Grape song "Murder in My Heart for the Judge" tells the tale of a fictional defendant treated with scorn by the judge, illustrating how much the legal system has evolved in the past 50 years, largely due to problem-solving courts and the principles of procedural justice, says Kings County Supreme Court Administrative Judge Matthew D'Emic.
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Navigating Asset Tracing Challenges In Bankruptcy
A Virginia court’s recent ruling in Health Diagnostic Laboratory Inc.'s bankruptcy highlights the heightened demand for asset tracing and the strategic use of the lowest intermediate balance rule in recovering funds from commingled accounts, says Daniel Lowenthal at Patterson Belknap.
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Lender Agreements And Unitranche Facilities: A Fresh Look
Unitranche facilities — which offer blended interest rates in a single loan document — are gaining prevalence, and lenders and borrowers should understand their advantages, as well as concerns over the enforceability of a unitranche-style agreement among lenders in bankruptcy, say attorneys at Mayer Brown.
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What Banks Should Know About FDIC Assessment Rule
Max Bonici at Venable answers questions banking organizations may have about the Federal Deposit Insurance Corp.'s recent approval of a rule implementing a special assessment on banks to recoup costs associated with protecting uninsured depositors after the bank failures earlier this year, and highlights other considerations for uninsured deposits.
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Series
Performing Music Makes Me A Better Lawyer
The discipline of performing live music has directly and positively influenced my effectiveness as a litigator — serving as a reminder that practice, intuition and team building are all important elements of a successful law practice, says Jeff Wakolbinger at Bryan Cave.
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Opinion
Bankruptcy Must Be On The Table As A Student Loan Solution
Amid the ongoing discourse on student loan forgiveness, borrowers must have a deeper understanding of U.S. Departments of Justice and Education guidance regarding how the government will agree to discharge loans in bankruptcy, or miss a life-changing opportunity currently available to regain control over their financial condition, say Jonathan Carson and Eric Kurtzman at Stretto.
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Breaking Down High Court's New Code Of Conduct
The U.S. Supreme Court recently adopted its first-ever code of conduct, and counsel will need to work closely with clients in navigating its provisions, from gift-giving to recusal bids, say Phillip Gordon and Mateo Forero at Holtzman Vogel.
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Rockport Ch. 11 Highlights Global Settlement Considerations
A Delaware bankruptcy court’s recent rejection of Rockport’s proposed settlement serves as a reminder that there is a risk that a global settlement executed outside of a plan may be rejected as a sub rosa plan, but shouldn’t dissuade parties from seeking relief when applicable case law supports approval, says Kyle Arendsen at Squire Patton.
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How Purdue High Court Case Will Shape Ch. 11 Mass Injury
The U.S. Supreme Court's recent arguments in Harrington v. Purdue Pharma, addressing the authority of bankruptcy courts to approve nonconsensual third-party releases in Chapter 11 settlement plans, highlight the case's wide-ranging implications for how mass injury cases get resolved in bankruptcy proceedings, says George Singer at Holland & Hart.
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Opinion
Legal Profession Gender Parity Requires Equal Parental Leave
To truly foster equity in the legal profession and to promote attorney retention, workplaces need to better support all parents, regardless of gender — starting by offering equal and robust parental leave to both birthing and non-birthing parents, says Ali Spindler at Irwin Fritchie.