BRK.A, BCS, MF Global: Bankruptcy News Roundup

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BRK.A, BCS, MF Global: Bankruptcy News Roundup

Here’s the latest bankruptcy news making headlines.

Barclays Wins Lehman Ruling

On Tuesday, a judge ruled in Barclays PLC’s (NYSE:BCS) favor in its ongoing controversy with the trustee responsible for undoing Lehman Brothers Holdings Inc.’s brokerage. The bank purchased the brokerage in September 2008.

Judge Katherine Forrest of U.S. District Court in Manhattan said that Barclays can receive the majority of the $2.054 billion from a “margin account.” This overturns a 2011 bankruptcy judge’s decision that determined that the trustee, James W. Giddens, had been  entitled to the money.

Giddens is likely to appeal this latest decision.

Berkshire Hathway Inc. Wants Examiner, Confidentiality

In a Monday court filing with the U.S Bankruptcy Court in Manhattan, Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A, BRK.B) wants an independent examiner appointed for the Ally Financial Inc. bankruptcy case with its mortgage subsidiary Residential Capital LLC. The company has asked that an examiner review the relationship between Ally and Residential Capital both prior and after its May 14 ResCap’s bankruptcy filing.

Berkshire is the owner of more than $1 billion in ResCap bonds.

In other company news, Berkshire Hathaway Inc. disclosed on Tuesday that it has a three percent stake in Lee Enterprises Inc. according to The Wall Street Journal. This comes after Securities and Exchange Commission rejected Berkshire’s proposal on May 25 to have this  investment information be treated confidentially.

In a regulatory filing, Berkshire said it has 1.66 million shares of Lee Enterprises, Incorporated (NYSE:LEE) as of March 31.

Romney Fails with Funding

According to a Reuters story, three ventures that had been funded by presidential candidate hopeful Mitt Romney failed during his tenure as governor of Massachusetts.

From a $17 million, energy fund developed and backed by the state during Romney’s reign as Massachusetts governor, after investing in a dozen companies, three have been closed said the fund’s manager, Massachusetts Green Energy Fund LP.

William Osborn, a founding partner with the fund, said to Reuters that while it’s too early to “judge” the success of the project, some are taking longer than expected to show a return.

Government support for clean-energy companies has become a campaign issues in this year’s presidential race. Last week after noting Solyndra LLC’s collapse following its $535 million U.S. loan guarantee, Romney said it represented President Barack Obama’s failure to create jobs. Osborn noted that Romney used to support this stuff as governor.

MF Global Holdings Ltd.’s Trustees Put on the Gloves

Tensions are rising between the two trustees over MF Global Holdings Ltd (PINK:MFGLQ) with Louis Freeh as the trustee for the parent company trying to recover money for bondholders while James Giddens, the brokerage unit’s trustee, is trying to obtain  funds for customers.

On Monday in a bankruptcy court filing, Freeh asked for more than $2.3 billion in claims against the company’s brokerage unit. According to The Wall Street Journal, Freeh believes his report “gets to the heart of the complex intercompany relationships” at MF Global, citing  a deal that enabled a brokerage unit to place bets on European sovereign debt using reduced capital requirements.

Meanwhile, Giddens plans to challenge Freeh’s request and said this latest move would require them to put aside funds that should go to customers who are waiting for an estimated $1.6 billion.

New Group to Monitor Regulatory Reform

On Wednesday, look for an announcement from former Federal Deposit Insurance Corp. chairwoman Sheila Bair regarding a new regulatory reform monitoring group.

Blair said in a New York Times article, “The great challenge is to devise a system to identify risks that threaten market stability before they become a danger to the general public. We need a more effective and efficient early-warning system to detect issues that jeopardize the functioning of U.S. financial markets before they disrupt credit flows to the real economy. And two of the most critical tasks are how to impose greater market discipline on excess risk-taking and effectively end the doctrine ‘too big to fail.”

The new group will issue reports soon and includes a long impressive list: former Senators Bill Bradley, Democrat of New Jersey,  Chuck Hagel, Republican of Nebraska and Alan K. Simpson, Republican of Wyoming, Brooksley E. Born, Paul H. O’Neill, John S. Reed, and Hugh F. Johnston.

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