Bankruptcy Attorney: June 2014

Saturday, June 28, 2014

UPDATE 1-LightSquared reaches bankruptcy deal; mediator blasts Ergen

(Recasts with mediator's comments; adds detail from mediator's report, background on LightSquared's dispute with Ergen)

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LightSquared reaches bankruptcy deal, without Ergen

June 27 (Reuters) - LightSquared has reached a mediated deal to bring the wireless communications company out of its Chapter 11 bankruptcy, according to report from the mediator who lashed out at...

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BRIEF-Lightsquared reaches restructuring deal, lacks Charles Ergen’s support – mediator

June 27 (Reuters) - LightSquared LP : * Reaches restructuring supported by all creditors except charles ergen's

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Mediation session on pension debt ordered in Detroit bankruptcy

June 27 (Reuters) - Detroit and a group of hold-out creditors will meet on Monday over one of the last unresolved major issues in the city's historic bankruptcy case.

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Kentile Floors Sign Inspires T-Shirts, Nails, and Body Art

: Missy Hammond Dunaway’s painted notebooks depict the Kentile Floors sign.; Missy Hammond Dunaway

Commuters on the F and G subway trains may no longer have an up close view of the Kentile Floors sign in Brooklyn, which is being dismantled to later be relocated.

But the sight of it may never be too far.

Fans of the iconic sign, which began being taken down letter by letter last week, used to show their appreciation on Instagram and Facebook. Now, the sign will live on through T-shirts, totes, nails and even body art.

Pete Hildebrand, owner of Live Poultry Apparel, which has New York-inspired handmade clothes and accessories, said his Kentile Floors T-shirts have sold in the thousands since the sign became endangered.

“It’s been crazy, I feel sort of bad about it,” Mr. Hildebrand said. “It’s sort of bittersweet—I’d much rather see the sign saved than sell shirts.”

: Scaffolding covers the Kentile Floors sign in Brooklyn on June 5.; Keith Bedford forThe Wall Street Journal

He created a design for the sign about six years ago, painting the image from a photo and making it into a graphic, only changing the color of the sign from red to yellow.

“I made this shirt thinking nobody would buy it,” Mr. Hildebrand said.

But it turns out he was wrong about the popularity of the sign. He said he has met many people who have memories of the sign because a family member worked there or it was an indicator on the subway ride that they were close to grandma’s house.

“It seems to cut some sort of nerve with Brooklyn people,” said Mr. Hildebrand, who moved from Seattle to Manhattan in 1991 and a few years later to Brooklyn. “It’s sort of the Statue of Liberty of Brooklyn.”

The owner of the building on which the sign stood, Regal Home Collections, applied for a permit earlier this year to tear down the structure. Once it is fully dismantled, the Gowanus Alliance will bring the letters to one of its warehouses where it will further document and assess the status of the sign and find a new location for it, according to Paul Basile, president of the Gowanus Alliance.

: Kim Dalve shows her Kentile Floors sign-inspired nails in Brooklyn on Wednesday.; Tadej Znidarcic for The Wall Street Journal

“The letters have quite a bit of weather to them,” Mr. Basile said. “Part of our vision is to have the letters retain some of the scars from over the years.”

There is currently no set time for the rebuilding of the sign, but Mr. Basile said when it gets to that stage, the community will be very involved.

Shirts are only one way people have been commemorating the sign. Others have chosen even more personal means. Kim Dalve, who moved to Brooklyn from Florida two years ago and writes about beauty and lifestyle on her blog, painted her nails with the image of the sign on his back spread across her fingers.

“I took pictures of it all the time,” Ms. Dalve said. “It was a fun reminder I was in the city.”

Nail art of the sign was a way to combine two of her favorite things—and it was also a way for her to talk about the relocation of the sign on her blog.

“I hope they find a good place for it,” she added.

: David Dyte’s back tattoo piece features the sign.; Andrew Lamberson for The Wall Street Journal

Ms. Dalve and many others said the sign was a tribute to the history of the borough.

“I think it’s very much a time of old industrial Brooklyn,” said Lisa Pines, a teacher who commutes from Carroll Gardens to Bensonhurst on the subway and has two Kentile Floors shirts. “The sign connects people to that.”

Ms. Pines has a personal connection with the sign as well, having taken a picture of it every day for the past two years. She hopes to turn her work into a photobook when the sign is completely gone.

And even when that day comes, the sign will always be near to David Dyte, who moved from Australia to New York in 1999. Mr. Dyte has the image of the sign as part of a Brooklyn-themed tattoo on his back, with a passing subway, the skyline and all.

“It’s a beautiful symbol,” Mr. Dyte said of the eight-story sign. “It’s a fantastic piece of design.”

Mr. Dyte first moved to Manhattan, but didn’t like it. He loved Brooklyn though, and was first introduced to the sign when he was taking pictures around the city.

“There’s the home where you’re from, that’s Australia,” he said, “and there’s the home you make.”

For Mr. Dyte, that is Brooklyn. And for many, the Kentile Floors sign represented it.

: The Kentile Floors sign adorns t-shirts and shopping totes by Live Poultry.; Live Poultry

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Texas lawmaker warns against hedge funds ‘flipping’ Energy Future unit

WILMINGTON, Del., June 27 (Reuters) - A powerful Texas state senator warned against a takeover by hedge funds of the power distribution unit of bankrupt Energy Future Holdings and said the state...

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Filipino Man Killed in NYC; Was It a Hate Crime?

A Filipino man was killed after being sucker-punched in NYC on Saturday, leaving some to wonder whether the incident was a hate crime. The punch knocked Roberto Martires, 56, to the pavement; he succumbed to his injuries Tuesday. Friends say Martires' attacker confronted him outside a Filipino eatery and asked......

Continue reading this article, and get more legal news and information, at FindLaw.com.

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Forward Motions: American Airlines Professionals Seek Fee Payments

On Tuesday in Manhattan, a judge will consider approving nearly $400 million in fees and expenses for the professionals who worked on the American Airlines bankruptcy.

The amounts were recommended by fee examiner Robert Keach, a former American Bankruptcy Institute president who said the attorneys and advisers engineered “perhaps the most efficient airline reorganization case on record.”

Mr. Keach, a lawyer from Bernstein, Shur, Sawyer & Nelson PA in Maine, said in a filing that the case was one of the most successful ever, pointing to the full repayment of the airline’s secured and unsecured creditors as well as a return to equity holders, a rare outcome in a bankruptcy case. American parent AMR Corp. exited bankruptcy through a merger with US Airways Group Inc.

American’s lead bankruptcy counsel, Weil, Gotshal & Manges LLP, is set to earn the most on the assignment, with a $77.4 million bill. Law firm Debevoise & Plimpton LLP, which served as aircraft counsel, logged $54.1 million.

Four other advisers requested more than $20 million: Deloitte Financial Advisory Services LLP, with $36.2 million; financial adviser Rothschild Inc., with $30.5 million; and law firms Skadden, Arps, Slate, Meagher & Flom LLP and Paul Hastings LLP, with $28.9 million and $27.4 million, respectively.

Mr. Keach worked with the professionals to trim several million dollars off the bills over the life of the case, according to court filings.

On Wednesday in Manhattan, General Motors Co. will update a bankruptcy judge on its case with the so-called “economic victims” of its ongoing ignition switch fiasco.

The new iteration of GM in early May asked Judge Robert Gerber, the bankruptcy judge who oversaw “old” GM’s Chapter 11 and eventual sale to the U.S. government, to halt class-action fraud lawsuits filed by GM owners following the auto maker’s recall of 2.6 million vehicles with a faulty ignition switch.

At the May hearing, a lawyer for plaintiffs who have been financially harmed by the faulty switches said they were denied due process in 2009 as part of the company’s government-orchestrated 2009 bankruptcy and sale.

The judge said he would consider the due process issue first, a win for the plaintiffs.

In the first round of issues, Judge Gerber, who five years ago oversaw GM’s bankruptcy case and approved the sale, said he will consider whether General Motors is discriminating against the class-action plaintiffs by treating personal injury claimants separately.

The judge said he also would weigh in on whether GM committed fraud in 2009 as a result of the ignition-switch issue. He permitted limited discovery, if the parties could agree on the scope, in connection with the fraud argument.

In 2009, General Motors ‘ healthy assets were sold to a government-backed entity, forming the “new GM.” As part of GM’s bankruptcy plan, burdensome liabilities were left with the old GM.

The auto maker says plaintiffs in some 60 class-action lawsuits can pursue claims only against the old GM’s liquidating trust.

Also on Wednesday in Manhattan is a judge’s self-imposed deadline to rule on Genco Shipping and Trading Ltd.’s restructuring plan.

Judge Sean H. Lane has scheduled a Genco hearing on another matter for that day, but if is likely he will also issue a ruling from the bench on Genco’s highly contested proposal.

A group of equity holders vehemently fought the company’s plan at a multiday trial earlier this month, saying Genco undervalued itself and that more money could be available to shareholders. Genco disagreed.

Genco’s plan of reorganization would slash $1.2 billion in debt from Genco’s balance sheet by swapping more than $1 billion of senior debt for 81.1% equity in the restructured company. Current equity would be canceled, and holders would receive seven-year warrants for 6% of Genco’s new equity struck at a $1.295 billion valuation, which Genco said are worth $32.9

Judge Lane said at the end of the trial that he wanted to rule by July 2, according to Reuters.

-Stephanie Gleason and Sara Randazzo contributed to this article.

Write to Joseph Checkler at joseph.checkler@wsj.com. Follow him on Twitter at @JoeCheckler.

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