Department of Community and Economic Development (DCED) Secretary C. Alan Walker filed a petition with the Commonwealth Court to appoint David Unkovic as the receiver for the financially distressed state capital, Harrisburg.

The city’s failure to come to an agreement on an acceptable recovery plan has forced the commonwealth to take this action,‖ Governor Tom Corbett said in a statement. ―As more time goes by without action, the city’s financial situation continues to get worse.‖

Voicing concern about the Rural Utilities Service’s (RUS) oversight of federal loans for rural broadband network projects, six members of the House Energy and Commerce Committee wrote to RUS Administrator and former FCC Commissioner Jonathan Adelstein to request information on a $267 million loan granted by the RUS to Open Range Communications, a regional broadband service provider that filed for Chapter 11 bankruptcy protection last month. The RUS funds approved for Open Range during the administration of President George W.

FairPoint Communications’ 2008 purchase of New England landlines from Verizon Communications is the subject of a $2 billion fraudulent transfer lawsuit, filed late last week by a litigation trust formed by FairPoint creditors, who claim that the $2.3 billion acquisition forced FairPoint into bankruptcy just 18 months later. North Carolina-based FairPoint, which emerged from bankruptcy in January but continues to struggle financially, provides wireline telephony and Internet services to nearly two million customers in 18 states.

Governor Corbett is almost certain to sign legislation that places a Receiver in charge of Harrisburg‟s finances after the House agreed to Senate changes and sent the bill to the Governor‟s desk.

The General Assembly acted despite a recent move by Harrisburg City Council to file for bankruptcy. The architects of the Harrisburg „Receiver‟ plan, State Rep. Glen Grell, R-Cumberland and State Senator Jeff Piccola, R-Dauphin, both maintain that the bankruptcy move was illegal.

A measure that places a Receiver in charge of Harrisburg’s finances is expected to be approved by the Senate on October 17, despite the recent move by City Council to file for bankruptcy.

“From our point of view nothing has changed,” said State Rep. Glen Grell, R-Cumberland, who worked on the Receiver legislation with State Senator Jeff Piccola, R-Dauphin. “The bankruptcy move is specifically forbidden under legislation we passed in June. I don’t think there’s any doubt it will be challenged and pretty quickly dismissed.”

Borders has long collected personal information from customers and promised that such information would not be disclosed without consent. In light of that and Borders' current bankruptcy proceedings, the FTC has sent a letter to the consumer privacy ombudsman overseeing the Borders bankruptcy that seeks the protection of customer personal information.

On September 2, the Delaware Supreme Court affirmed a holding by the Court of Chancery that creditors of insolvent Delaware limited liability companies do not have standing to sue derivatively. This contrasts with Delaware corporations: the Delaware courts have recognized that when a corporation becomes insolvent, creditors become the residual risk-bearers and are permitted to sue derivatively on behalf of a corporation to the same extent as stockholders.

Two recent opinions from separate federal courts of appeal upheld the dismissal of lawsuits by sophisticated investors that suffered losses in the auction rate securities ("ARS") market against the securities broker-dealers that allegedly fraudulently induced the purchase of the ARS.1

A consortium uniting Apple, Inc. and Microsoft with other top players in the software, electronics and wireless handset industries outplayed Google in a bankruptcy court auction for Nortel’s patent portfolio, posting a winning offer of $4.5 billion for the trove of 6,000 patents that cover fourth-generation wireless, data networking, Internet, and semiconductor technologies.

Introduction

On June 23, 2011, after fifteen years of hugely acrimonious litigation, the Supreme Court of the United States (the “Court”) issued a decision on a narrow legal issue that may end up significantly limiting the scope of bankruptcy courts’ core jurisdiction.