Tribune Co. believes it will still emerge from bankruptcy protection this year even though a court-appointed examiner concluded that talks leading up to a leveraged buyout of the company had bordered on fraud.

In a memo to employees, Tribune CEO Randy Michaels and Chief Operating Officer Gerald Spector said they agreed with only some of the conclusions in Monday's report, while disputing others. They did not go into specifics, saying it would be premature to comment while the full examiner's report remains under court seal.

A hearing on whether to release the nearly 700-page document was scheduled for Thursday in Wilmington, Del.

The 2007 leveraged buyout took the company private and ultimately helped land it in Chapter 11. The deal has drawn scrutiny from bondholders who are trying to recover more of their money.

Real estate mogul Sam Zell led the deal, which piled on what turned out to be an unsustainable amount of debt. The company, which owns the Chicago Tribune, Los Angles Times and other properties, filed for Chapter 11 protection in December 2008.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

A federal appeals court has overturned rulings allowing auto parts supplier Visteon Corp. to terminate its retirees' health and life insurance benefits.

In a ruling Tuesday, the appeals court in Philadelphia sided with attorneys representing some 2,100 retirees from two Visteon manufacturing plants in Indiana.

A Delaware bankruptcy judge concluded in March that the retirees did not have vested rights in the benefits, and that Van Buren Township, Mich.-based Visteon could terminate them unilaterally. That decision was upheld by a federal district court judge in Delaware.

But the appeals court agreed with the retirees that Congress, through the bankruptcy code, intended to restrict a debtor's ability to modify or terminate retiree benefits during a Chapter 11 case, regardless of whether it could terminate those benefits outside of bankruptcy.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

BP PLC has several options to explore in dealing with the worst environment disaster in U.S. history, but the oil giant may file for bankruptcy if it faces a never-ending flow of claims, lawyers and bankers said Tuesday.

"BP has many options besides bankruptcy and is a long way from exhausting those," said Loretta Cross, a national managing partner at Grant Thornton's corporate-advisory and restructuring-services group, during a conference call organized by the American Bankruptcy Institute.

The Deepwater Horizon platform exploded on April 20, killing 11 people. It sank two days later, triggering a massive oil leak that's still spewing oil and gas. BP shares have plummeted on concern that the company could be overwhelmed by tens of billions of dollars in claims and other liabilities.

Cross, who specializes in energy-company reorganizations, estimated Tuesday that BP needs roughly $30 billion in cash outside of what the company can generate from its balance sheet.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

A Delaware bankruptcy court judge on Friday cleared the way for auto parts supplier Visteon Corp. to begin soliciting votes on its proposed reorganization plan, which would leave unsecured bond holders in control of the company.

Overruling objections from certain shareholders and holders of unsecured trade claims, Judge Christopher Sontchi approved documents describing Visteon's proposed reorganization plan and the process for creditors to vote on it.

Creditors will have until July 30 to vote on the plan, and Sontchi scheduled a plan confirmation trial to begin Sept. 28.

The shareholders could receive nothing under Visteon's plan, and the trade creditors would get no more than 50 cents on the dollar for their claims, which total about $48 million. Their attorneys argued that the disclosure statement outlining Visteon's plan did not contain enough information on the company's valuation, and that the plan itself was unconfirmable because of how it treats various creditor groups.

Attorneys for Visteon argued that the objections to the disclosure statement were without merit, or that they should be addressed at what promises to be a contentious plan confirmation trial stretching over two weeks.

Originally posted at Breaking Legal News. Please visit http://breakinglegalnews.com/.

The FDIC said on Friday the agreement settles claims between the bankrupt bank's holding company and JPMorgan Chase, which acquired the failed bank.

The FDIC is involved because it was appointed receiver of Washington Mutual in September 2008, during the height of the financial crisis. The deal comes after the FDIC board had rejected a previous proposed settlement.

The bank holding company has been seeking a way out of 18 months of legal fights so it can begin repaying creditors.

The three parties have been fighting over deposits Washington Mutual had at its seized bank and over billions of dollars in tax refunds.

"This agreement will result in substantial recoveries to the receiver and resolve potential claims that could have taken years and millions of dollars to litigate," FDIC General Counsel Michael Bradfield said in a statement.

Washington Mutual said in a statement later on Friday that settlement was filed with the full support of the FDIC, JPMorgan, and the official committee of unsecured creditors.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

Bank holding company Washington Mutual Inc. has filed an amended Chapter 11 reorganization plan.

The plan filed Sunday in Delaware bankruptcy court is based on a settlement involving WMI, the Federal Deposit Insurance Corporation and JPMorgan Chase Bank, which filed lawsuits against one another after the FDIC seized Washington Mutual's flagship bank in 2008 and sold its assets to JPMorgan for $1.9 billion.

The FDIC objected to the initial settlement plan, resulting in negotiations that led to the amended plan.

In addition distributing some $7 billion in funds among various parties as part of the settlement, the plan allows certain creditors to buy new shares in the reorganized company. Holders of existing shares would receive nothing.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

It takes an average of about 100 days from the time a U.S. Supreme Court justice announces his or her retirement until the Senate confirms a replacement, according to Senate Judiciary Committee.

President Barack Obama on Monday nominated Solicitor General Elena Kagan as successor to the retiring Justice John Paul Stevens.

While no nomination is guaranteed to be approved by the Senate, Kagan is seen as having a good chance for confirmation. Here is a look at what she faces in the drive to be sworn in.

* In coming days, Kagan will likely have courtesy visits with Senate Democratic leader Harry Reid and Senate Republican leader Mitch McConnell. She will also visit with the 12 Democrats and seven Republicans on the Judiciary Committee who will hold the confirmation hearing.

* The 400,000-member American Bar Association, the world's largest voluntary professional association, will conduct its own review of the nominee. The ABA will deem Kagan "well qualified," "qualified" or "unqualified." While the rating will not ensure confirmation or rejection, it is certain to be a factor in Senate consideration.

* The Judiciary Committee will submit a questionnaire to Kagan. Questions will range from age, place of birth and education to net worth, copies of the nominee's public writings and speeches, potential conflicts of interest and if anyone at the White House asked how she might rule. In 2005, the panel complained that President George W. Bush's nominee Harriet Miers had inadequately filled out her questionnaire. She withdrew from consideration.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

The Supreme Court on Monday unanimously upheld part of the U.S. bankruptcy law that bars attorneys from advising clients to take on more debt while considering a bankruptcy filing.

The opinion by Justice Sonia Sotomayor reverses a ruling by a U.S. appeals court that a provision of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was unconstitutionally broad and violated free-speech rights.

The provision prohibits bankruptcy professionals like attorneys from advising their clients to incur more debt, such as mortgages or student loans, before filing for creditor protection.

The ruling is a victory for the U.S. Justice Department, which defended the provision. It said Congress adopted the law fight abuse of the bankruptcy system encouraged by lawyers.

Department attorneys also argued that the law can be interpreted narrowly to prohibit only advice that a client take new debt with the intent of abusing the bankruptcy system. Sotomayor agreed with that interpretation.

The Minneapolis-based bankruptcy law firm Milavetz, Gallop & Milavetz PA, two of its attorneys and two prospective clients sued in 2007, saying the law violated constitutional free-speech rights under the First Amendment.

A U.S. appeals court based in St. Louis agreed, ruling that the law prevented lawyers from fulfilling their duty to clients to give them appropriate financial advice.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

A federal judge has approved Affiliated Media Inc's bankruptcy reorganization plan, clearing the way for the publisher of the Denver Post and San Jose Mercury News to emerge from Chapter 11 protection this month.

Judge Kevin Carey of the U.S. Bankruptcy Court in Wilmington, Delaware, at a Thursday hearing approved the plan, which he called "fair, equitable and reasonable," and warranted by "exceptional and unique circumstances."

Affiliated Media is holding company for MediaNews Group, which it said is the second-largest U.S. newspaper publisher by circulation, owning 54 daily newspapers and more than 100 non-daily newspapers.

The company has said all but one of its newspapers were profitable, but a restructuring was needed because of the slump in advertising, which generates about 80 percent of its revenue. It has said the current environment could not sustain what it called "yesterday's balance sheet."

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.