bankruptcy court

Serta’s Bankruptcy Court Win Bolsters Future for Favored Lenders

Bankrupt Serta Simmons Bedding LLC’s recent court win for a deal to get a cash infusion from creditors who were then moved up higher in payout priority bolsters other distressed companies’ odds of pursuing the controversial debt restructuring tactic.

The US Bankruptcy Court for the Southern District of Texas’s June decision is the first time a court ruled on the merits on the so-called debt liability management deals that have spurred lender-on-lender disputes, attorneys said.

The issue has come up before, both in and out of bankruptcy cases. But Judge David R. Jones’ opinion in Serta’s Chapter 11 could embolden more companies and lenders to employ the strategy in the estimated $1.4 trillion market for syndicated commercial loans.

“It is somewhat of a momentous ruling,” said Jennifer Taylor, a partner at O’Melveny & Myers LLP.

Among the companies that have similarly controversial debt management deals and sought bankruptcy in Houston are Incora, Diebold Nixdorf, and KKR Co.’s Envision Healthcare Corp.

TPC Group, J. Crew, and Neiman Marcus have also pursued deals and landed in bankruptcy.

Open-Market Purchase

Serta, one of the largest US bedding makers and distributors in North America, filed for Chapter 11 in January with about $1.9 billion

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July 4, 2023 by ATTORNEY

3M Unit Bankruptcy Toss Is Second Blow to Mass Tort Defense Play

The termination of 3M Co. unit Aearo Technologies LLC’s bankruptcy casts fresh doubt on the tactic of using Chapter 11 bankruptcy as a legal strategy in mass tort litigation, likely emboldening plaintiffs.

The June 9 decision from Judge Jeffrey J. Graham of the US Bankruptcy Court for the Southern District of Indiana hewed closely to the US Court of Appeals for the Third Circuit’s analysis earlier this year in its dismissal of a Johnson & Johnson subsidiary’s bankruptcy on similar grounds.

The two rulings are a pair of major setbacks for solvent companies eyeing bankruptcy to handle mass tort liabilities—a practice that has seen substantial growth in recent years.

Graham’s decision, along with the Third Circuit’s ruling on J&J unit LTL Management LLC, creates “hurdles that may be absent from the bankruptcy code,” said attorney Douglas Mintz of Schulte Roth & Zabel LLP.

“I think the biggest application here is it will empower plaintiffs to push more aggressively outside of bankruptcy and leave tort defendants with fewer tools in their toolbox or less certainty that one of the tools will work,” Mintz said.

Graham held that Aearo’s attempt to use bankruptcy to settle approximately 230,000 lawsuits over allegedly defective military

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June 15, 2023 by ATTORNEY

After 8 years, Milford strip club settles lawsuit with dancers

After 8 years, Milford strip club settles lawsuit with dancers
FILE PHOTO: Keepers Gentlemen's Club at 354 Woodmont Road on Tuesday, January 26, 2016. The club was sued by dancers saying they were not being paid the minimum wage.

FILE PHOTO: Keepers Gentlemen’s Club at 354 Woodmont Road on Tuesday, January 26, 2016. The club was sued by dancers saying they were not being paid the minimum wage.

Brian A. Pounds / Hearst Connecticut Media

A hearing in the case had been scheduled for Monday morning on a request from the dancers’ lawyer to have a $200,000 judgment in the case taken from a land use settlement between the town of Stratford and Gus Curcio, a resident convicted of extortion in the 1980s who is also linked to the club.

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Krayeske would not discuss the specifics of the agreement Monday.

“The matter is settled,” he said, declining further comment. 

The settlement comes a month after a bankruptcy trustee in the case of Joseph Regensburger, a Fairfield man who was once president of the club, said he could not find any assets to satisfy the dancers’ claims, even though a Department of Justice lawyer has alleged the bankruptcy was a ruse designed to hide assets. 

The bankruptcy hearing had seemed to have left the former exotic dancers who sued the club in 2015 alleging wage theft years away from seeing a dime of

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June 14, 2023 by ATTORNEY

Bankruptcy Clinic Students Save Legacy in Decade-Long Advocacy

The Eleanor R. Cristol and Judge A. Jay Cristol Bankruptcy Pro Bono Assistance Clinic at Miami Law offers pro bono legal services to low-income individuals who are dealing with bankruptcy.




Since 1995, the University of Miami School of Law’s bankruptcy clinic has given current Hurricane law students the opportunity to deliver life-changing pro bono legal services to indigent clients throughout South Florida.

Bankruptcy attorney Patricia “Trish” Redmond founded the clinic at the school where she still serves as an adjunct professor. A 2019 Tobias Simon Pro Bono Award Winner and shareholder at Stearns Weaver Miller, Redmond devotes between 200-400 hours every year to her pro bono work, which benefits thousands of underprivileged and low-income individuals, children, and families.

Bankruptcy cases are far from easy. A simple Chapter 7 can last up to six months while a more complex Chapter 13 can take up to five years, which makes the case Redmond and her team just completed all the more shocking.

“This case came to the clinic around 2010,” Redmond said. “Thirteen years’ worth of law students worked on this case.”

As Redmond explained, the debtor, a construction worker on dialysis, had lost his home in a Chapter 13 bankruptcy case.

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June 4, 2023 by ATTORNEY

St. Clare’s pensioners want lawsuit against Albany Diocese restarted after bankruptcy filing

The legal team representing the St. Clare’s Hospital pensioners has filed a motion requesting the case be sent back to state court.

In March, the Diocese of Albany announced it was filing for bankruptcy. Bishop Ed Scharfenberger insisted that the diocese didn’t see any other alternative, after settling 50 of over 400 cases brought under the Child Victims Act.

The filing put a hold on the lawsuits involving 1,100 St. Clare’s pensioners who worked at the former hospital in Schenectady. They lost some or all of their retirement savings when, in March 2019, the St. Clare’s Corporation petitioned the state Supreme Court to dissolve, claiming it had run out of money.

Six months later, a group of advocates, including the Legal Aid Society of Northeastern New York and the AARP, filed a lawsuit against the Diocese seeking damages for the pensioners.

In late 2022 a judge ruled the pensioner’s should merge with one filed in May by the Attorney General’s office.

Meryl Grenadier is a Senior Attorney at AARP Foundation.

“Our clients are what is considered, what is called ‘unsecured creditors’ in the bankruptcy proceeding,” said Grenadier. “And in order to obtain any money out of the bankruptcy

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May 13, 2023 by ATTORNEY
December 2024
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