Morgan & Finnegan, the New York IP boutique that dissolved in February after a raft of partner departures, has filed for bankruptcy, according to a Law.com report today. The chapter 7 filing, first reported on the blog Above the Law, came six days after a New York state judge placed the firm into receivership in response to a lawsuit by lender JPMorgan Chase. The boutique, whose revenue declined 38 percent last year, listed $6.37 million in assets and $10 million in liabilities. In 2007, Morgan & Finnegan grossed $60.63 million, and revenue dropped to $36.99 million in 2008, according to filings. The firm’s partners were in merger discussions with Locke Lord Bissell & Liddell by December 2008. Locke Lord ultimately agreed in February to hire 30 lawyers, including 13 partners, with an expectation they could bill $28 million in 2009, according to leaked offer letters. Locke Lord took over Morgan & Finnegan’s space at World Financial Center. JPMorgan is now suing for $4.1 million from the firm because the landlord tapped a letter of credit, and the firm has allegedly not repaid the bank. Morgan & Finnegan lists JPMorgan’s claim as a little less at $3.82 million.

U.S. Trustee Diana Adams chose Anton Valukas, a former federal prosecutor and a specialist in white collar crime, as the examiner in the Lehman Brothers bankruptcy case, the Associated Press reported yesterday. Valukas’s investigation could be used to determine whether Lehman executives lied, committed fraud or mismanaged the company. He will need to conduct his investigation simultaneously with several pending criminal investigations. Lehman and its former executives face investigations by U.S. attorneys in the Southern District of New York, the Eastern District of New York and the District of New Jersey, as well as the Securities and Exchange Commission. Valukas’ appointment was approved by U.S. Bankruptcy Judge James Peck yesterday.

Auto-parts supplier Checker Motors Corp., which used to make the iconic Checker taxi cab, filed for bankruptcy protection, citing high labor and raw material costs, as well as weak sales due to a decline in its customers’ market share, Reuters reported yesterday. The Kalamazoo, Mich.-based company filed for chapter 11 protection in a U.S. bankruptcy court in Michigan on Friday, and said that it expects to restructure itself to respond to changes in the auto industry. Checker, established by Morris Markin in 1922 through a merger of Commonwealth Motors and Markin Automobile Body, had assets worth about $24.5 million and liabilities of about $21.8 million as of Nov. 30, 2008, the court papers showed.

Wall Homes Inc., the builder that constructed a north Texas home for ABC Television’s reality show “Extreme Makeover: Home Edition,” sought bankruptcy protection from creditors, Bloomberg News reported yesterday. The Arlington, Tex.-based company listed assets of less than $1 million and debt of less than $50 million in Chapter 11 documents filed Jan. 17 in U.S. Bankruptcy Court in Dallas. Its Wall Homes Texas unit listed assets of less than $500 million and debt of less than $50 million. Wall’s equity partners, Warburg Pincus Private Equity VIII LP and Jen I LP, unsuccessfully tried to work out an arrangement with the lenders prior to the filing. New York-based Warburg Pincus owns 73 percent of Wall Home Inc.’s outstanding common stock and 82 percent of the outstanding preferred stock, according to court papers. The case is In re Wall Homes Inc., 09-30362, U.S. Bankruptcy Court, Northern District of Texas (Dallas).

Interstate Bakeries Corp. has not nailed down financing necessary for the company to exit bankruptcy more than a month after getting a judge’s approval, the Associated Press reported yesterday. The Kansas City, Mo.-based maker of Hostess Twinkies and Wonder Bread said that it is still negotiating with lenders. It also said it couldn’t be sure that it would get the deal done. Agreements providing the almost $600 million in post-bankruptcy financing expire Feb. 9. A spokesman for the company said that if it can’t reach a deal by then and can’t get its lenders to extend the deadline, it would likely have to begin liquidating its assets. Interstate Bakeries has been under chapter 11 protection from creditors for more than four years.

Link

Jewelry store retailer Shane Co. has filed for chapter 11 bankruptcy protection, saying the business suffered a disappointing holiday season, the Associated Press reported today. The company filed paperwork Monday in U.S. Bankruptcy Court in Denver, requesting to be able to continue paying its 542 employees in stores in 14 states. The court filings show that the company has between $100 million to $500 million in estimated assets and liabilities. The company listed about 6,000 creditors. Its largest creditor was listed as New-York based Dison Gems, Inc., with about $4.7 million, with the 20 largest unsecured claims totaling $26.2 million, according to court documents. The company said it plans to continue business without interruption while it executes a restructuring plan.

Link

The Education Resources Institute Inc. (TERI), the bankrupt student loan guarantor, will now be collecting payments on student loans for Sovereign Bank NA and PNC Bank NA, according to yesterday’s TheDeal.com. Judge Henry J. Boroff of the U.S. Bankruptcy Court for the District of Massachusetts in Boston signed orders on Dec. 16 allowing one of 2008’s largest debtors to enter into collection services agreements with the two banks, court papers said. In exchange for managing the bank’s collection of student loans, TERI will receive a percentage of the money it recovers from the defaulted student loans, court documents said, but the exact fees TERI would receive weren’t disclosed. Through the agreement, TERI will have the authority to collect, settle, enforce through litigation, enter into forbearance agreements and create payment plans for the defaulted loans. TERI said that it wanted to get involved in the loan collections in order to provide an ongoing source of revenue to fund its operations.

Link

Bankruptcy Judge Kevin Gross on Tuesday approved a request made by Whitehall Jewelers Inc. to terminate its private-label credit card program administered by GE Money Bank, Bankruptcy Law360 reported yesterday. Whitehall had asked the court in late November to terminate its private-label credit card agreement with GE Money Bank. Before the company filed for bankruptcy protection in June, Whitehall offered its customers Whitehall credit cards through GE Money Bank. However after the filing, GE Money Bank claimed that the agreement it had made with Whitehall to provide the credit cards included provisions giving the company the right to terminate the program. Whitehall was initially unwilling, and attempted to negotiate with GE Money Bank with an eye toward continuing the credit card program on a post-petition basis.

Link

Global economic forecasting firm CSM Worldwide said that General Motors and Ford have viable reorganization plans in place, provided Congress authorizes billions of dollars in loans to help them survive the severe economic downturn, but that Chrysler’s demise is all but inevitable, the New York Times reported today. Chrysler, which this month warned that it could soon run out of money without a $7 billion loan, “doesn’t really have the scale, at least in most vehicle lines, that is really required to survive in this market,” CSM said. The company, which cut a quarter of its white-collar work force last month through a buyout and an early retirement program, no longer has the resources to be competitive, he said. CSM predicted a controlled wind-down in Chrysler’s operations over the next several years.

Link

Two experts said that the attorneys’ fees in a potential General Motors bankruptcy could reach as high as $800 million, Bankruptcy Law360 reported on Friday. “For professionals, this is a bankruptcy the size of Enron,” said Lynn M. LoPucki, a professor at UCLA and Harvard Law School. Enron generated more than $1 billion in fees when those approved by the bankruptcy court and others assessed before and after the filing were included, according to LoPucki. Lehman Brothers Holdings Inc. could generate up to $1.4 billion in fees, LoPucki’s earlier research showed. LoPucki’s research partner, John W. Doherty of UCLA, said that with only 60 percent of total fees being awarded by a judge, professional fees for a GM bankruptcy could reach as high $1.3 billion on GM’s annual 10-K reports to the Securities and Exchange Commission.

Link