bankruptcy

Troubled Fones Cliffs property listed for bankruptcy sale

Nearly 1,000 acres of land at Virginia’s famous Fones Cliffs on the Rappahannock River will be put up for auction at a bankruptcy sale.

A listing by New York-based Auction Advisors puts the minimum bid for the property as $4.25 million in an auction to be held Nov. 3.  

The 977-acre undeveloped property, which is currently owned by Virginia True Corporation, has been embroiled in difficulties since 2017, when the company purchased the property for $12 million from long-time owners the Diatomite Corporation of America. 

Virginia True planned to develop a luxury golf course and resort on the property. In November 2017, however, Richmond County ordered the company to stop work after it cleared more than 13 acres of forested land near the cliffs without a permit. A lack of required stormwater controls at the site led to extensive erosion and landslides.

Virginia’s Department of Environmental Quality subsequently issued three notices of violation to Virginia True, and the lawsuit was later referred to the Office of the Attorney General. 

A document filed in bankruptcy court this August lists the company owing the state $200,000 related to “governmental enforcement action.” 

A four-mile stretch of striking white cliffs on the

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September 18, 2022 by ATTORNEY

Revlon executives to get up to $36M in bankruptcy bonuses

“In fact, the metrics imposed are indeed tall orders and serious challenges,” Jones said. “They will require the senior executive team to not only work hard, which I have no doubt they’re doing, but also work extremely effectively, probably creatively, and in ways I don’t even know.”

Bankruptcy bonuses are commonly ladled out by ailing companies to top management shortly before or soon after filing for Chapter 11 protection. In 2005 Congress amended the bankruptcy code and aimed to rein in “retention bonuses” doled out to executives simply for staying on the job. Companies responded by labeling payouts as “incentive bonuses” and tied them to financial goals that could benefit the reorganization.

But critics say the goals are typically easy to meet and amount to backdoor executive payout schemes at companies scrambling for every dollar.

Nonetheless, judges typically approve bankruptcy bonuses because they feel doing so will maximize value going forward, even if the bonus recipients are the same people who led the company into Chapter 11.

“It is a tricky thing to explain how and why you need your senior management team to stick around,” acknowledged Jones, who drew comfort from the fact all of Revlon’s creditors support its

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September 17, 2022 by ATTORNEY

Bankruptcy Courts Are Good At Adjudicating Tort Claims

Economists tend to view tort law differently than lawyers—or state attorney generals—and this difference explains both the advent of bankruptcy trusts in adjudicating class action liability claims and the complaints by the latter group concerning this development.

Tort law covers someone who was injured because of an action or omission that harms another. Its purpose is to change the essential cost-benefit calculus for a firm so that it does all that is feasible to prevent this from happening.

A classic example of the application of tort law is the manufacture of the Ford Pinto. Engineers placed the gas tank in the very rear of the car as a cost expedient measure even though they knew it would leave the car more vulnerable to a fire or explosion in an accident. They concluded that the liability costs would be less than re-engineering the car to place the tank elsewhere.

The courts found this calculus appalling and contrary to the public interest, and Ford’s liability ended up being many times greater than if it had addressed this vulnerability to begin with.

However, these days tort liability is invariably driven less by a desire to incentivize proper decisions and more by the

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September 8, 2022 by ATTORNEY

3M awaits bankruptcy ruling that could sink litigation tactic

3M’s attempt to block jury trials of more than 230,000 lawsuits accusing it of harming U.S. soldiers faces a key test this week in front of a federal judge in Indianapolis.

U.S. Bankruptcy Judge Jeffrey Graham is set to consider a temporary halt to the lawsuits so that 3M and its bankrupt subsidiary, Aearo Technologies, can try to settle the claims, most of which have been filed by veterans who say the combat arms earplugs left them with hearing damage.

Graham’s decision will echo across the offices of other firms facing massive numbers of product liability lawsuits, Harvard Law School professor Jared Ellias said in an interview.

“To the extent 3M suffers a setback here it’s likely to set off alarm bells in other corporate boardrooms of companies that want to take advantage of the bankruptcy system,” Ellias said.

The Aearo case uses an increasingly popular strategy in which profitable companies use insolvency proceedings to force settlement talks with victims of allegedly harmful products.

Johnson & Johnson and lumber giant Georgia-Pacific have also put units into bankruptcy with the same goal of ending their litigation woes in one place instead of fighting thousands of trials around the country.

Fighting each

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August 26, 2022 by ATTORNEY

Sandy Hook parents seek to stop InfoWars bankruptcy payments to Alex Jones

By Dietrich Knauth

(Reuters) – Parents of children killed in the 2012 Sandy Hook school massacre urged a U.S. bankruptcy judge on Wednesday not to allow the parent company of far-right website InfoWars to send any money to its founder, conspiracy theorist Alex Jones, or his companies until they have an opportunity to get to the bottom of InfoWars’ finances.

As a jury deliberates in Austin, Texas, over how much Jones must pay two parents for his false claims that the deadly shooting was a hoax, families of Sandy Hook victims who have sued Jones for defamation in that trial and others who have sued in Connecticut warned a bankruptcy judge in Houston that Jones might continue to pull assets from InfoWars parent company Free Speech Systems LLC while using its bankruptcy case to avoid paying court judgments in the defamation cases.

Marty Brimmage, an attorney for the Sandy Hook parents, told U.S. Bankruptcy Judge Christopher Lopez in Houston on Wednesday that Jones had told his audience that the bankruptcy would “tie up” any defamation judgment for years.

Judges in the Texas and Connecticut cases have already found Jones liable for defamation. The parents in the Texas trial are seeking

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August 14, 2022 by ATTORNEY
December 2024
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