A litigation trust for auto parts maker Meridian Automotive Systems Inc. has filed nearly 300 adversary cases over the last week in an attempt to recoup millions of dollars in money transfers the company made prior to falling into bankruptcy, Bankruptcy Law360 reported yesterday. The MAS Litigation Trust was created when

A bankrupt subsidiary of energy company Entergy Corp. will receive $200 million in federal funding, marking an important step toward the company’s emergence from chapter 11 protection, Bankruptcy Law360 reported yesterday. Judge Jerry Brown of the U.S. Bankruptcy Court for the Southern District of Louisiana approved the Entergy New Orleans’ acceptance of the storm relief funds on Wednesday. Entergy has already received state approval for the federal aid, which will be used to cover $213 million in costs incurred after Hurricane Katrina. Entergy told the court that the federal funds will be used to guard against rate increases caused by the high costs of repairing storm damage. The energy provider will raise prices by 7.5 percent through April 2009 to help cover the costs. The company has said that it will cost $465 million to completely repair its natural gas system.

The initial appearance that the debtor must make before a Chapter 7 panel trustee is called the section 341 meeting of creditors.  In reality, very few creditors, if ever, appear.  It is simply an opportunity for creditors to appear, and ask questions of the debtor.  The way it works is this:  A trustee, who was assigned to the case, will examine the debtor under oath.  The trustee will review the schedule and petitions and exhibits that were filed by the debtor.  The trustee will ask specific questions regarding the schedules.  He  can include questions regarding income, assets, debts, and any other issue related to the income, expenses, property and liabilities of the debtor.  What the trustee is trying to determine, is whether or not the debtor has any assets that can be taken, sold, and paid towards his creditors.  In the overwhelming majority of cases, there are no assets for creditors.  In those cases, the trustee will file a no asset report stating that the debtor is subject to discharge of these debts.

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