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U.S. Asks Supreme Court to Review Insider Trading Ruling

U.S. Attorney Preet Bharara prevailed yesterday in persuading the Justice Department to ask the Supreme Court to review an appellate court ruling that sharply narrowed the definition of insider trading, the New York Times reported today. Donald B. Verrilli Jr., the solicitor general, filed a petition with the court asking the justices to examine the ruling by a three-judge appeals panel in December that overturned the convictions of two hedge fund managers, Anthony Chiasson and Todd Newman. Bharara has argued for months that the ruling will make it more difficult for federal prosecutors to pursue insider trading cases in the future and could open the door to more rogue trading on Wall Street. In his petition, the solicitor general said that the appellate decision “unjustifiably impedes the government’s ability to restrain and punish” those who provide confidential tips and those who benefit from them. The ruling, Verrilli said, will “hurt market participants, disadvantage scrupulous market analysts and impair the government’s ability to protect the fairness and integrity of the securities markets.”

Alpha Natural Said Filing for Bankruptcy as Soon as Monday

Alpha Natural Resources Inc. is planning to file for bankruptcy protection in Virginia as soon as Monday as the biggest miner of U.S. coal used in steelmaking struggles amid the worst commodities slump in more than a decade, Bloomberg News reported yesterday. The company’s senior lenders including Citigroup Inc. and Davidson Kempner Capital Management plan to provide a loan to fund the company through bankruptcy. The company is in talks with the creditors over a plan that would include shutting mines. Bristol, Va.-based Alpha Natural would follow rivals Walter Energy Inc., Patriot Coal Corp. and James River Coal Co. in filing for bankruptcy during the past 15 months as met coal prices dropped 72 percent since 2011.

Judge Won't Extend Deadline for St. Paul and Minneapolis Archdiocese Bankruptcy Claims

A federal judge yesterday rejected the request of abuse victims to extend a deadline for bankruptcy court claims against the Archdiocese of St. Paul and Minneapolis as the deadline will remain Monday, reported yesterday. The creditors’ committee in the archdiocese bankruptcy case, composed entirely of clergy sex abuse victims, had wanted Bankruptcy Judge Robert Kressel to push the deadline back to May 2016, contending that the archdiocese had provided inadequate notice of the Aug. 3 deadline and that victims might need more time to file. The panel also argued that pushing back the deadline would expedite a settlement and provide more insurance money for abuse victims. As of late Wednesday, more than 400 creditors had filed claims. Abuse victims accounted for more than 250 of them. The judge said extensive notice of the cut-off date had been given by the archdiocese and through the media and other channels.

Lehman Increases Money Recovery Estimate to $92.2 Billion

Lehman Brothers Holdings Inc., which collapsed nearly seven years ago, increased its estimate of how much money it will recover to $92.2 billion, thanks to gains in real estate, derivatives and private-equity investments, Dow Jones Daily Bankruptcy Review reported today. In a Wednesday court filing, Lehman increased the number, which is net of operating disbursements, by $1.8 billion from its last quarterly estimate. Such increases have been a hallmark of the failed bank since it collapsed into bankruptcy in 2008. Of the $92.2 billion, Lehman already has paid out $72.4 billion to so-called third party, or non-Lehman, creditors. In April, Lehman made its seventh distribution to outside creditors, paying them $6.3 billion.

A&P Hires Gordon Brothers for Store Liquidations

Great Atlantic & Pacific Tea Co. has tapped Gordon Brothers Retail Partners LLC as its liquidation consultant for the grocer’s going-out-of-business sales, which received preliminary approval to go forward earlier this week, the Wall Street Journal reported today. In a Wednesday filing with U.S. Bankruptcy Court in White Plains, N.Y., A&P said it tapped Gordon Brothers to conduct the final sales of groceries, as well as the fixtures, furniture and supplies, at the 25 stores it plans to initially close. The agreement also covers additional stores A&P decides to close. A&P will pay Gordon Brothers a small fee if the grocery sales equal more than A&P initially paid for the products sold. For the fixtures and furniture, Gordon Brothers will get 10 percent of all gross sales. In the filing, A&P estimated expenses related to the sales at the first 25 closing stores at $800,000.

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