On November 14, 2008, a letter was sent to derivatives counterparties of Lehman Brothers Holdings Inc. and its affiliates (collectively, “Lehman”) notifying them of Lehman’s Motion to Settle or Assign Derivative Contracts. The letter concerns a motion filed in the bankruptcy court by Lehman Brothers Debtors on November 13, 2008, which seeks to establish two procedures relating to its pre-petition derivative contracts with counterparties.

On November 25, LandAmerica Financial Group, Inc. (“LandAmerica”) filed a Chapter 11 petition in Virginia, seeking bankruptcy protection. By separate agreement (the “Stock Purchase Agreement”), LandAmerica agreed to sell Commonwealth Land Title Insurance Company (“Commonwealth”) to Chicago Title Insurance Company (“Chicago Title”) and Lawyers Title Insurance Company (“Lawyers”) and United Capital Title Insurance Company (“United”) to Fidelity National Title Insurance Company (“Fidelity”).

Attention holiday shoppers. Not sure what to buy Aunt Matilda or cousin George? A gift card allows them to buy whatever they like? Maybe. Large retailers such as Sharper Image, Bombay Company and Linens ‘N Things have filed for bankruptcy or gone out of business, leaving behind millions of dollars in unused gift cards. In bankruptcy, money left on a gift card is treated as a debt, which the bankruptcy court can decide if it is to be repaid, and how. If the retailer stays in business, the court may allow it to continue to honor its cards, but even then consumers may not get the full value.

Late the night of Nov. 25, LandAmerica Financial Group, Inc. and its subsidiary, LandAmerica 1031 Exchange Services, Inc., filed a Chapter 11 petition in the U.S. Bankruptcy Court for the Eastern District of Virginia ("Bankruptcy Court"), seeking bankruptcy protection for both entities. The action does not cover Commonwealth Land Title Insurance Company or Lawyers Title Insurance Company, two LandAmerica subsidiaries that are each domiciled in the State of Nebraska.

In In re River Center Holdings, LLC,1 the United States Bankruptcy Court for the Southern District of New York refused to permit lenders to enforce an oral commitment of the debtors’ principal to fund certain litigation. In River Center, the debtors’ principal had stated at a hearing that he would fund a condemnation action relating to property that served as collateral for the lenders’ financing.

In Henderson v. Powermate Holding Corp. (In re Powermate Holding Corp.)1, the United States Bankruptcy Court for the District of Delaware became the second bankruptcy court to address the status of WARN Act claims after the 2005 amendments to section 503 of the Bankruptcy Code.

In ABN Amro Bank N.V. v. Parmalat Finanziara S.p.A. (In re Parmalat Finanziara S.p.A.),1 the United States District Court for the Southern District of New York affirmed the Bankruptcy Court’s entry of an injunction pursuant to former section 304 of the Bankruptcy Code (the precursor to current chapter 15, applicable in crossborder insolvency proceedings), which prevented the beneficiary of a guaranty governed by New York law from asserting its guaranty claim against Italian debtor (and guarantor) Parmalat S.p.A. (“Parmalat”) in the United States.

A grim report on bankruptcy filings was recently issued by the Administrative Office of the U.S. Courts. Federal bankruptcy filings increased by 30% for the 2008 fiscal year ending September 30, 2008. Business filings increased by 49% to 38,700 from 26,000 for the 2007 fiscal year. Individual bankruptcies, the bulk of all bankruptcy filings, increased 30%, to 1.043 million from 801,000 in 2007 fiscal year. States showing the largest number of filings on a per capita basis are Tennessee, Nevada, Georgia, Alabama, and Indiana.

Legislation intended to address additional issues related Ohio’s asbestos litigation system was defeated by the Ohio House by a vote of 48-45. Senate Bill 370 House Bill 631 would have discourage “double dipping” by plaintiffs who file lawsuits in Ohio courts while making the same claims against bankruptcy trusts set up by federal bankruptcy courts.

AUTOMOTIVE

EZ Lube LLC, Express Lube Inc. filed for Chapter 11 protection in Delaware.  

Key Plastics files prepackaged Chapter 11 petition; secured $20M in DIP financing.  

Precision Parts International filed Chapter 11 petition; commences winding down operations.  

BROADCASTING

Equity Media Holdings, Corp. filed for Chapter 11; secured lender seeks conversion to Chapter 7  

ENERGY