As we previously report here, Ambac Financial Group, Inc. (“AFG”), the holding company for the bond insurer, Ambac Assurance Corp. (“AAC”), filed for bankruptcy in November 2010 after it was unable to raise additional capital or come to terms with its debt holders.

If there was such a contest, the 232-unit Spa at Sunset Isles would be in the running for "worst case scenario" condo-conversion.  Here is a summary of the development's situation as it existed in late 2010:  

On September 19th, the Ninth Circuit considered whether the exception to Chapter 7 bankruptcy discharge for debts resulting from a violation of state or federal securities laws applies when the debtor himself is not culpable for the securities violation that caused the debt. The case involved an attorney who was required by court order to return the unearned retainer paid by a company that engaged in securities fraud. The attorney filed a petition for Chapter 7 bankruptcy before he was technically required to return the money.

When dealing with a debtor in Chapter 11, vendors typically seek to protect against loss by insisting upon payment in advance or on very short terms. However, the monies paid to a vendor following the filing of bankruptcy often constitute the cash collateral of a secured creditor. It is critical that a vendor determine whether the debtor has authorization to use cash collateral.

The Bottom Line: 

Sending the Debtors back to the drawing board after almost three years in bankruptcy, in a 139 page opinion, the Bankruptcy Court has for the second time denied confirmation of the Plan of Reorganization for Washington Mutual, Inc. (“WaMu”), which was the owner of the largest savings bank ever to be seized by the FDIC.

On September 21, 2011, FTC Bureau of Consumer Protection Director David Vladeck sent a letter to the court appointed consumer privacy ombudsman in the Borders Group, Inc. (Borders) bankruptcy proceeding advising against the sale of Border's customer information absent customer consent or significant restrictions on the transfer and use of the information.

Earlier this month, James Carroll in his capacity as the "Wind Down Professional" for the Velocity Express bankruptcy, began filing preference actions against various defendants.  As alleged in the preference complaints, Carroll was appointed as Velocity's Wind Down Professional under a "Wind Down Order" entered by the Delaware Bankruptcy Court in July of last year.  At the time it filed for bankruptcy, Velocity was a package delivery (aka "logistics") provider whose services included customer bulk shipments, pick-up and delivery services as well as "expedited point to point servi

• On September 16, 2011, the U.S. Department of Justice amended its complaint to enjoin the AT&T/T-Mobile merger to include the states of New York, California, Illinois, Pennsylvania, Massachusetts, Washington, and Ohio as additional plaintiffs. United States v. AT&T Inc., No. 11-cv-1560 (D.D.C.).
• On September 19, 2011, the United Stated District Court for the Northern District of Texas largely denied the motion to dismiss of Verizon Communications, and related entities, against claims that they defrauded investors and creditors via spinoff company Idearc.

Masuda, Funai, Eifert & Mitchell routinely represents creditors in bankruptcy proceedings in order to protect their contractual and legal interests and rights to payment. The following is a list of some recent larger U.S. bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.

AUTOMOTIVE