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Bankruptcy
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September 27, 2024
LA Plane Parts Maker Hits Ch. 11 With At Least $10M In Debt
A California-based aircraft parts maker, Skylock Industries, filed for bankruptcy reporting between $10 million to $50 million in both assets and liability as it faces litigation alleging that it owes half a million dollars in past-due rent, as well as a lawsuit seeking to collect a finder's fee on a $9 million loan.
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September 27, 2024
Cooley Accused Of Hiding Fraud From Startup Investors
A former board member of a dry-cleaning delivery startup has alleged in New Jersey federal court that Cooley LLP and its attorneys deliberately kept investors in the dark about fraud claims against the startup's chief executive.
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September 26, 2024
Judge Says Avon Should Hold Off On Deal With Parent Co.
A Delaware bankruptcy judge told cosmetics giant Avon Products Inc. on Thursday that it needs to give creditors more time to investigate its dealings with its Brazilian parent company before he can approve a proposed settlement of claims against the parent.
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September 26, 2024
NY Diocese Reaches $323M Settlement With Abuse Survivors
Long Island's bankrupt Roman Catholic diocese has agreed to a nearly $323 million deal with hundreds of survivors of sexual abuse, a historic settlement that will bring to a close after four years the church's Chapter 11 case, according to a statement issued Thursday.
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September 26, 2024
Del. Bankruptcy Judge Says Purdue Limits Opt-Out Releases
A Delaware bankruptcy judge says the U.S. Supreme Court's decision in Purdue Pharma LP barring nonconsensual third-party releases does not allow a kind of oft-used opt-out waiver for voters who don't return ballots.
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September 26, 2024
J&J Is 'Forum-Shopping' In New Spinoff Ch. 11, Trustee Says
The U.S. Department of Justice's bankruptcy watchdog has asked a judge to send the latest Johnson & Johnson talc-liability spinoff bankruptcy to New Jersey, saying Thursday that J&J subsidiary Red River Talc's Chapter 11 petition in the Southern District of Texas is an "assault on the very integrity of the bankruptcy system" and amounts to forum-shopping.
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September 26, 2024
Atty Can't Shield Bank Records In Judge Romance Probe
A former Jackson Walker LLP lawyer on Thursday lost her bid to torpedo a subpoena from the U.S. Trustee's Office seeking her bank records in connection with an inquiry into her secret relationship with a former Texas federal bankruptcy judge, court records show.
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September 26, 2024
FTX Strikes Deal With MDL Counsel For Ch. 11 Plan Support
FTX Trading Ltd. has asked a Delaware bankruptcy judge for permission to enact a settlement with plaintiffs and counsel it's facing in multidistrict litigation in Florida, saying the proposed deal would prevent potentially costly legal tussles and bring the plaintiffs on board to support FTX's Chapter 11 plan.
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September 26, 2024
Y Combinator-Backed Firstbase.io Files Ch. 11 In New York
Firstbase.io Inc. has filed for Chapter 11 protection in New York bankruptcy court with up to $50 million of debt, more than three years after the business services company nabbed an investment from startup accelerator Y Combinator.
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September 25, 2024
Sullivan & Cromwell Didn't Ignore FTX 'Red Flags,' Report Says
The Chapter 11 examiner appointed in the bankruptcy case of fallen cryptocurrency exchange FTX Trading determined Wednesday that debtor law firm Sullivan & Cromwell didn't ignore any "red flags" about FTX's misconduct related to a $500 million purchase of stock in financial service and digital trading platform Robinhood Markets Inc.
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September 25, 2024
8th Circ. Told Student Debt Relief Should Remain Blocked
Seven Republican-led states are asking the Eighth Circuit to finalize its court order blocking the Biden administration from implementing its second attempt at student loan forgiveness, accusing the White House of "hiding the ball" on the true cost of the plan.
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September 25, 2024
Developer's NorCal Spree Ends With Fraud Claims In Ch. 11
Northern California real estate company LeFever Mattson stockpiled more than $400 million in real estate, including several local landmarks in a small town north of San Francisco. The firm now seeks bankruptcy protection amid claims following an alleged scheme by one executive to pocket millions by selling bunk equity stakes to investors.
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September 25, 2024
Silvergate Can't Block Activist Investor From Board In Ch. 11
The parent company of defunct cryptocurrency-friendly bank Silvergate on Wednesday lost its bid to keep activist investor Joseph Stilwell from seeking election to its board, after a Delaware bankruptcy judge rejected its request for a temporary restraining order that would have halted the company's annual shareholder meeting on Friday.
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September 25, 2024
UpHealth Wins Most Of $115M Award In Glocal Merger Dispute
Bankrupt digital health services company UpHealth can enforce a large part of a $115 million arbitral award against the Indian healthcare services platform Glocal in their feud over an ill-fated merger, an Illinois federal judge has ruled.
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September 25, 2024
Philly-Area Atty Convicted In Bankruptcy Fraud Case
A suspended attorney in the Philadelphia suburbs is one of two men who were recently convicted by a federal jury of participating in fraudulent schemes that involved stealing a house from a deceased couple's family.
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September 25, 2024
NYSE Cancels Proposal To Extend SPAC Merger Deadlines
The New York Stock Exchange has pulled a proposal that would have provided special purpose acquisition companies with more time to complete mergers while remaining listed, several months after it sought regulatory approval for the extension.
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September 25, 2024
Fuel Refiner Vertex Hits Ch. 11 With $422M Debt, Lender Deal
Oil refiner Vertex Energy filed for Chapter 11 protection with $422.5 million in debt and plans to pursue a sale under a prenegotiated restructuring agreement.
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September 24, 2024
Judge Defends Atty Fees In Failed Law Firm Case
A California bankruptcy judge on Tuesday pushed back against criticisms of big fees for professionals in the case of defunct debt relief law firm Litigation Practice Group and said he would approve interim professional fees and expenses of $8.1 million.
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September 24, 2024
'Joker' Producer's Broker To Pay $60M In Ponzi Scheme Suit
An investor asked an Illinois state judge Tuesday for his early approval of a $60 million settlement with an investment adviser who convinced her and others to put money toward an international Ponzi scheme she says movie producer Jason Cloth carried out by raising new funds to pay off older investors.
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September 24, 2024
Revlon Talc Claimants Can Appeal Directly To 2nd Circ.
A New York bankruptcy judge has found the Second Circuit can review his decision to reject 42 asbestos-tainted talc exposure claims against Revlon as having come too late because the claimants' appeal presents questions new and significant enough to justify skipping the district court.
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September 24, 2024
NYC Condo Building's Ch. 11 Plan Sent Back For Revisions
A New York bankruptcy judge asked the owner of a Manhattan condominium complex to make changes to its Chapter 11 plan after raising several concerns with details in the planned restructuring that would hand unsold residential units over to its main lender.
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September 24, 2024
Star Witness Against Bankman-Fried Gets 2 Years In FTX Case
A Manhattan federal judge sentenced former cryptocurrency executive Caroline Ellison to two years in prison Tuesday, crediting her decision to testify against FTX founder Sam Bankman-Fried but saying the $11.2 billion fraud was too big to warrant a "get out of jail free card."
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September 24, 2024
NJ Judge Leaves J&J Ch. 11 Venue Change To Texas Judge
A New Jersey bankruptcy judge on Tuesday declined the U.S. trustee's request to move Johnson & Johnson's latest talc-unit Chapter 11 from Texas to the Garden State, saying the issue could be as ably decided by a Texas court while avoiding a thorny issue of authority.
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September 23, 2024
J&J Talc Claims Paused In Latest Spinoff Ch. 11
A Texas bankruptcy judge Monday froze certain talc personal injury litigation against Johnson & Johnson, saying a three-week administrative stay will give the court time to decide key jurisdictional issues in the Chapter 11 case of Red River Talc LLC, a newly created J&J spinoff and the pharmaceutical and cosmetics giant's latest attempt to settle claims in bankruptcy that its baby powder caused cancer.
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September 23, 2024
Mallinckrodt Brass Can't Avoid Investor Suit Over 2nd Ch. 11
A New Jersey federal judge ruled Monday that senior leaders of drugmaker Mallinckrodt cannot escape a lawsuit brought by shareholders alleging the company tricked them into thinking it had recovered from bankruptcy and would make a $200 million payment to opioid claimants, finding the investors sufficiently pleaded securities law violations.
Expert Analysis
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To Make Your Legal Writing Clear, Emulate A Master Chef
To deliver clear and effective written advocacy, lawyers should follow the model of a fine dining chef — seasoning a foundation of pure facts with punchy descriptors, spicing it up with analogies, refining the recipe and trimming the fat — thus catering to a sophisticated audience of decision-makers, says Reuben Guttman at Guttman Buschner.
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Circuit Judge Writes An Opinion, AI Helps: What Now?
Last week's Eleventh Circuit opinion in Snell v. United Specialty Insurance, notable for a concurrence outlining the use of artificial intelligence to evaluate a term's common meaning, is hopefully the first step toward developing a coherent basis for the judiciary's generative AI use, says David Zaslowsky at Baker McKenzie.
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Perspectives
Trauma-Informed Legal Approaches For Pro Bono Attorneys
As National Trauma Awareness Month ends, pro bono attorneys should nevertheless continue to acknowledge the mental and physical effects of trauma, allowing them to better represent clients, and protect themselves from compassion fatigue and burnout, say Katherine Cronin at Stinson and Katharine Manning at Blackbird.
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5th Circ. Bond Claim Ruling Shows Creditors Must Be Vigilant
In Raymond James & Associates v. Jalbert, the Fifth Circuit recently held that the bankruptcy debtor's indemnification obligations were discharged by the confirmed plan because the indemnified party failed to speak up, demonstrating that creditors must proactively protect their rights, says Joshua Lesser at Bradley Arant.
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Series
Playing Music Makes Me A Better Lawyer
My deep and passionate involvement in playing, writing and producing music equipped me with skills — like creativity, improvisation and problem-solving — that contribute to the success of my legal career, says attorney Kenneth Greene.
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How Attys Can Avoid Pitfalls When Withdrawing From A Case
The Trump campaign's recent scuffle over its bid to replace its counsel in a pregnancy retaliation suit offers a chance to remind attorneys that many troubles inherent in withdrawing from a case can be mitigated or entirely avoided by communicating with clients openly and frequently, says Christopher Konneker at Orsinger Nelson.
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Using A Children's Book Approach In Firm Marketing Content
From “The Giving Tree” to “Where the Wild Things Are,” most children’s books are easy to remember because they use simple words and numbers to tell stories with a human impact — a formula law firms should emulate in their marketing content to stay front of mind for potential clients, says Seema Desai Maglio at The Found Word.
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2nd Circ. Ruling Affirms NY Law's Creditor-Friendly Approach
The Second Circuit’s recent ruling in 245 Park Member v. HNA International provides creditors with some reason for optimism that debtors in New York may face rejection in court for aiming to keep creditors at arm’s length by transferring personal assets into an LLC, says Jeff Newton at Omni Bridgeway.
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Series
Being An EMT Makes Me A Better Lawyer
While some of my experiences as an emergency medical technician have been unusually painful and searing, the skills I’ve learned — such as triage, empathy and preparedness — are just as useful in my work as a restructuring lawyer, says Marshall Huebner at Davis Polk.
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Exploring An Alternative Model Of Litigation Finance
A new model of litigation finance, most aptly described as insurance-backed litigation funding, differs from traditional funding in two key ways, and the process of securing it involves three primary steps, say Bob Koneck, Christopher Le Neve Foster and Richard Butters at Atlantic Global Risk LLC.
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11th Circ. Ruling May Foreshadow Ch. 15 Clashes
The Eleventh Circuit's recent decision in In re: Talal Qais Abdulmunem Al Zawawi has introduced a split from the Second Circuit regarding whether debtors in foreign proceedings must have a domicile, calling attention to the understudied nature of Chapter 15 of the Bankruptcy Code, say attorneys at Cleary.
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Series
Teaching Yoga Makes Me A Better Lawyer
Being a yoga instructor has helped me develop my confidence and authenticity, as well as stress management and people skills — all of which have crossed over into my career as an attorney, says Laura Gongaware at Clyde & Co.
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A Vision For Economic Clerkships In The Legal System
As courts handle increasingly complex damages analyses involving vast amounts of data, an economic clerkship program — integrating early-career economists into the judicial system — could improve legal outcomes and provide essential training to clerks, say Mona Birjandi at Data for Decisions and Matt Farber at Secretariat.
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Bankruptcy Courts Have Contempt Power, Del. Case Reminds
A Delaware bankruptcy court recently held Camshaft Capital and its principal in contempt, serving as a reminder to bankruptcy practitioners and anyone else that appears before a bankruptcy judge that there are serious consequences for failing to comply with court orders, say Daniel Lowenthal and Kimberly Black at Patterson Belknap.
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What Lies Behind Diverging US And UK Insolvency Trends
Contrasting U.K. and U.S. insolvency trends highlight the importance of policy interventions in shaping consumer financial outcomes and economic recovery, and while the U.K.'s approach seems to have mitigated issues, the U.S. faces challenges exacerbated by economic conditions and policy transitions, says Thomas Curran at Thomas H. Curran Associates.