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GM Thwarts Plaintiffs' $1 Billion Accord With Old GM Trust

General Motors Co. thwarted a $15 million settlement between the company’s bankruptcy trust and thousands of plaintiffs that would have forced the automaker to contribute $1 billion in stock, prompting claims of a secret plot cooked up behind closed doors, Bloomberg News reported yesterday. The now-derailed deal was intended to resolve hundreds of personal-injury cases stemming from GM’s faulty ignition switches, as well as a class-action suit over millions of vehicles that allegedly lost value due to a series of recalls in 2014. In a letter filed yesterday in U.S. Bankruptcy Court in Manhattan, lawyers for the plaintiffs said that GM conspired with the trust to block the accord after GM previously accused the trust and the plaintiffs of engaging in the same behavior in negotiations last week. GM "undertook a secret, contrived scheme to undermine the settlement agreement through a campaign of threats, intimidation and payoffs," plaintiffs attorney Edward Weisfelner said in the letter, which was dated Wednesday. Detroit-based GM had fumed at the settlement and promised a court fight over what it called a "contrived scheme" to extract the $1 billion in stock. The company has been fighting to move on from the litigation after previously paying at least $870 million to settle claims and an additional $900 million to the Department of Justice to resolve a criminal probe.

CFPB Takes Action Against Aequitas Capital Management for Aiding Corinthian Colleges' Predatory Lending Scheme

The Consumer Financial Protection Bureau (CFPB) yesterday filed a complaint and proposed settlement against Aequitas Capital Management, Inc. and related entities, for aiding the Corinthian Colleges’ predatory lending scheme, according to a CFPB press release. The CFPB alleges that Aequitas enabled Corinthian to make high-cost private loans to Corinthian students so that it would seem as if the school was making enough outside revenue to meet the requirements for receiving federal student aid dollars. The risky loans saddled students with high-priced debt that both Aequitas and Corinthian knew students could not afford. Under the CFPB’s proposed settlement, if approved, about 41,000 Corinthian students could be eligible for approximately $183.3 million in loan forgiveness and reduction. In collaboration with the CFPB, several state attorneys general have also reached proposed settlements with Aequitas.

Bank of America to Pay $6 Million to Bankrupt Couple Evicted From Home

Bank of America Corp. has agreed to pay more than $6 million to a California couple whom a federal judge said had been harassed and illegally foreclosed upon by the bank's mortgage unit, ending an eight-year-long dispute, Dow Jones Newswires reported yesterday. The proposed settlement between the bank and Erik and Renee Sundquist would enable them "to end a long personal and legal nightmare that has impacted every facet of their and their sons' lives," according to court papers the couple filed to request that their 2014 lawsuit against the bank be dropped. The deal calls for Bank of America to pay a fraction of the fine of more than $46 million ordered by Judge Christopher Klein in March. In his ruling, the judge said the bank's mortgage modification process and mistaken foreclosure on the Sundquists' home in Lincoln, Calif., left them in "a state of battle-fatigued demoralization." The exact amount that the bank will pay the Sundquists is confidential, according to documents filed on Tuesday in U.S. Bankruptcy Court in Sacramento. The earlier order called for the bank to pay the couple nearly $6.1 million in damages.

N.C. Attorney General Delivers Fatal Blow to Embattled For-Profit Law School

North Carolina Attorney General Josh Stein on Tuesday informed the U.S. Education Department that Charlotte School of Law is no longer licensed to operate in the state and must close or face legal action, the Washington Post reported. The announcement arrives nearly a year after the department barred the for-profit college from receiving federal loans and grants for misleading students about their chances of passing the bar and its shaky accreditation with the American Bar Association. Since then, the school has fought to keep its doors open through negotiations with the department. Charlotte School of Law, which did not immediately respond to requests for comment, can still apply for a new license through the University of North Carolina Board of Governors, the state’s higher-education regulator. The board had voted in June to approve a restricted license that required the school to regain access to federal student aid by Aug. 10. The law school asked for additional time to comply, but the board refused. Once the date passed, the license expired.

Commentary: Joe’s Crab Shack: The Great, Shrinking Seafood Chain

Last week, Landry’s won the auction for Joe’s Crab Shack owner Ignite Restaurant Group, according to a commentary yesterday in Nation's Restaurant News. The company bid $57 million, edging out an offer from a shell company that, according to a source, was formed by Johnny Vassallo, founder of Mo’s Restaurants in Houston, and Houston businessman Corbin Robertson. Interestingly, the $57 million wasn’t even the most that Landry’s would have paid, according to the commentary. Recall that shortly after the bankruptcy was filed, the company bid $60 million and won a deal with Kelly Investment Group to act as a second stalking-horse bidder. The company ended up saving $3 million. Landry’s and its CEO, “Billion Dollar Buyer” Tilman Fertitta, are getting a debt-free, streamlined version of Ignite and its two chains. At its peak, in 2014, Joe’s operated 139 locations around the country. It slowly began closing units as sales problems increased, declining to 130 locations in 2015, and then 112 units at the end of 2016. That’s the number of units the chain had when it filed for bankruptcy. Of the 72 units currently remaining, 33 locations are in three states: Texas, California and Florida.

Upstate New York Bruegger's Bagels Stores to be Sold for $4.6 Million

Bruegger's Bagels is selling 28 of its upstate New York stores for $4.6 million as part of its franchisee's bankruptcy reorganization plan, the Albany (N.Y.) Times Union reported. The bagel chain's largest franchisee, Flour City Bagels of Rochester, filed for chapter 11 bankruptcy protection in 2016. Bruegger's has 12 local stores, including its original location on Congress Street in Troy, that are all part of the sale to New York Style Bagels LLC. Last year, Bruegger's Bagels abruptly closed its shop at Madison Avenue and South Allen Street, a neighborhood staple since the 1980s amid the closing of several of the upstate stores that existed at the time of the bankruptcy in 2016. At the time, HOT LLC, which describes itself as the sole member of Flour City Bagels, said that it hoped to continue operating while it restructured its debt.

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