Associated Press

Warren Beatty

Warren Beatty’s fight with Tribune Co. over motion picture and TV rights to “Dick Tracy” heads back to a California court following a battle over which court gets to decide who controls the comic-book sleuth.

The actor and director says he is entitled to hold on to Dick Tracy rights purchased from Tribune in 1985 and wants a California judge to make the call. Beatty leveraged his Dick Tracy rights into a 1990 box office success, with himself as producer, director and star.

Tribune, which filed for Chapter 11 protection last year, made money on Beatty’s hit, too, and could really use some more. The company claims the Dick Tracy rights belong to it, because it moved to get them back and Beatty didn’t act in time to stop the rights from reverting. Tribune wanted the Delaware bankruptcy court to decide the rights fight.

Judge Kevin Carey of the U.S. Bankruptcy Court in Wilmington, Del. ruled in Beatty’s favor, saying that the actor is likely to beat Tribune in court anyway, so he might as well get to do it closer to home.

Beatty trotted out evidence that he started work on a Dick Tracy TV special in time to save the rights from being reclaimed by the troubled media company, Carey noted. That tipped the balance against Tribune, and meant the matter goes back to California, even though, technically, Carey found he has jurisdiction to haul Beatty before the Delaware bankruptcy court if he wants to.

He won’t, even though the judge refused to throw out a lawsuit Tribune filed in bankruptcy court against Beatty involving the Dick Tracy rights.

Technically, the Delaware Dick Tracy case is still alive. Practically speaking, it’s going nowhere, unless Tribune is in the mood to irk an overloaded bankruptcy judge who has other things on his mind right now. Like, oh, for example, whether to sign off on $67 million worth of bonuses for top executives this year, on the grounds that Tribune’s $800 million drop in revenue has left them upset and in need of comfort.

Carey is still pondering a raft of 2009 bankruptcy bonus programs that includes up to $17 million for Tribune’s top 10 executives, money the company wants to pay out with its fortunes at a 10-year low. Tribune’s top executives probably won’t risk disturbing the judge’s concentration at this important moment in media history by asking him to revive the Delaware action against Beatty.

Tribune owes billions to investors who backed Sam Zell’s ill-fated leveraged buyout of the Chicago media company, which he has dubbed the “deal from hell.” Zell is not in line for a bonus.

YRC Worldwide Inc. Monday launched a $536.8 million debt-exchange, a move designed to stave off a bankruptcy, the Associated Press reports.

Six Flags Inc. has overhauled its bid to exit bankruptcy, proposing a plan financed with $950 million in new loans and a $450 million rights offering backstopped by Avenue Capital Management and others. Read the Daily Bankruptcy Review story here.

The Star Tribune is cutting about 100 jobs as it further trims costs after emerging from bankruptcy protection, according to the Associated Press.

Charter Communications Inc., which plans to exit Chapter 11 protection soon, reported a wider third-quarter loss as the cable-television provider took a $2.85 billion write-down on its franchises, according to WSJ.

Joshua Gotbaum, an investment banker and former official in the Bill Clinton administration, was tapped by President Barack Obama to head the Pension Benefit Guaranty Corp., Bloomberg reports.

Jeffry M. Picower, a longtime investor in Bernard L. Madoff’s fraud scheme who died last month, left an estate with assets far in excess of $1 billion, money that could be used to help repay Madoff’s investors, according to the New York Times.

On Friday, the Honolulu Symphony announced that it was being forced to cancel all remaining 2009 performances and seek bankruptcy protection, according to the Honolulu Star Bulletin.

“Given its current and projected financial status, the Society cannot continue to sustain a 64-piece orchestra,” Majken Mechling, executive director of the Honolulu Symphony Society told the newspaper. “We cannot continue with business as usual.”

The 109-year old organization, the nation’s oldest west of the Rocky Mountains, had been struggling amid the economic downturn, according to the Associated Press. While ticket sales had remained relatively steady, donations – which generally cover 70% of the symphony’s costs – had dried up.

Other performing arts organizations have experienced similar struggles as consumers hunker down and cling to their disposable income, eschewing charitable donations and nights out at the theatre for saving and financial security. Baltimore, for example, saw its opera company close its doors for good this year, and the Virginia Symphony Orchestra flirted with bankruptcy before nabbing a $1 million loan.

The Honolulu Symphony, too, was temporarily bailed out with an anonymous $1 million donation in May 2008, but it wasn’t enough to keep it out of bankruptcy court. With $1 million in debt, the company expects to seek court protection this week. It is determined to make it out of Chapter 11 alive, though, and plans to whittle down its roster of musicians – which represent its biggest expense – and emerge as a leaner organization.

Six Flags Inc. has filed a new bankruptcy-exit plan that represents a victory for hedge fund Avenue Capital Management, which fought the theme-park operator’s original plan, Reuters reports.

Court documents indicate that Wall Street firms had doubts about American Business Financial Services Inc.’s business practices long before it collapsed, WSJ reports.

Fannie Mae said it has $15.8 billion in claims against Lehman Brothers Holdings Inc., according to Bloomberg.

A bankruptcy judge in Camden, N.J., set the stage for a five-day fight in January over the best way to bail out troubled casino operator Trump Entertainment Resorts Inc. Read the Daily Bankruptcy Review story here.

MagnaChip Semiconductor LLC has emerged from Chapter 11 bankruptcy protection under the control of Avenue Capital Management II LP, according to Bloomberg.

Lev L. Dassin, a former top federal prosecutor whose office won the conviction of Bernard L. Madoff, is joining law firm Cleary Gottlieb Steen & Hamilton, the New York Times reports.

The Microsoft Corp. co-founder’s Vulcan Ventures placed what’s left of digital video recorder-maker Digeo Inc. into Chapter 11 protection this week in Seattle.

The filing comes weeks after a judge approved a plan for Allen’s Charter Communications Inc. to exit bankruptcy. That reorganization will see Allen’s voting stake in the cable giant cut to 35% from 91%.

9 OM Inc., the holding company for Digeo’s remnants, listed between $1 million and $10 million in assets and owes creditors more than $100 million, according to court papers. Tribune Media Services Inc., Time Warner Cable, and law firm Fenwick & West LLP are among the company’s unsecured creditors.

Bankruptcy “is the prudent forum for winding down a remaining business,” spokesman David Postman, a spokesman for Vulcan Ventures, told the Seattle Times. “It’s the method to do that, to take the last piece of this company and liquidate.”

Diego made the Moxi HD DVR and related products.

Essentially a TiVo on steroids, the $799 Moxi can store more than three days of high-definition video without subjecting users to advertisements or monthly fees.

Most of the company’s assets were sold to ARRIS Group Inc.  for $20 million. Allen had reportedly invested more than $110 million in Digeo since the company was started in 1999.

ARRIS plans to add the Moxi to the lineup of products it sells to providers of high-speed Internet access.

Associated Press

Sholom Rubashkin

As a federal jury prepares to consider his fate, former Agriprocessors executive Sholom Rubashkin admitted he “made mistakes” in his management of the Iowa kosher meat plant that last year filed for bankruptcy. But he denied that he intentionally violated fraud and immigration laws, as he’s been charged with doing.

The Des Moines Register was there Thursday as Rubashkin, the final witness, took the stand to defend himself against the 91 counts of bank, mail and wire fraud, money laundering and other charges the government has charged him with. Rubashkin, who testified in a courtroom filled with his supporters from the Orthodox Jewish community, faces a maximum prison sentence of 1,280 years.

Specifically, prosecutors accuse him of defrauding the plant’s lender in order to draw more under the $35 million loan. But according to Rubashkin’s testimony, any questionable financial practices were the fault of other employees or his own oversight - not a scheme he’s alleged to have orchestrated.

“I made mistakes,” Rubashkin said. “I’m a human being. I took the information people gave me and sort of went with it without really drilling down to see if it was for real or not.”

Rubashkin added that he was “trying hard to comply with the law” both before and after the May 2008 immigration raid that brought the Postville, Iowa, plant national notoriety. Nearly 390 illegal immigrant workers were arrested during that raid. But speaking Thursday, Rubashkin denied that he knowingly hired illegal immigrants. Pressed by Assistant U.S. Attorney C.J. Williams, Rubashkin disclosed that he did know that the plant had received letters from the federal government warning that employees there were working with incorrect Social Security numbers.

In his questioning, Rubashkin was also asked to respond to what other witnesses said about him during the trial. Told that a plant purchasing manager declared Rubashkin an incompetent manager, Rubashkin replied “sadly, it’s true.”

The prosecution and defense will make their final arguments in the case Monday, and then Rubashkin’s fate will be placed into the jury’s hands.

Chrysler’s bankruptcy estate wants to use $302 million in its accounts to wind down its bankruptcy, Bloomberg reports.

A new rule to cap interest rates paid by weak banks will force them to shrink and get healthy faster, or, in some cases, accelerate their demise, according to The Wall Street Journal.

General Motors Co. Chief Executive Frederick “Fritz” Henderson said Thursday he will pick a new management team for the auto maker’s European operations soon, WSJ reports.

The Malibu Country Club, part-owned by former Lehman Brothers Holdings Inc. Chief Executive Richard Fuld, filed for bankruptcy protection, according to Bloomberg.

The daughter-in-law of an Indian steel tycoon won an auction for distressed German fashion house Escada, the New York Post reports.

A new lawsuit accuses Jeffrey Soffer of creating a “corporate shell game” to borrow nearly $3 billion for the Fontainebleau Las Vegas, which is now in bankruptcy, according to the Miami Herald.

Reuters

Rick Warren delivers the invocation during President Barack Obama’s inauguration.

The Purpose-Driven Connection is no more. Reader’s Digest, which is restructuring in Chapter 11, has broken off its joint publishing venture with evangelical pastor Rick Warren, according to the Associated Press.

The announcement comes less than a year after the publisher announced its partnership with Warren, who wrote the best-selling book “The Purpose-Driven Life” and and gave the invocation at President Barack Obama’s inauguration. Subscribers to the multimedia venture, called the Purpose Driven Connection, paid $29.99 for a year-long membership, which entitled them to a quarterly print magazine, a workbook, DVD curriculum for church group meetings and access to extra online content.

At the time the partnership was announced, Warren told the New York Times that the venture merged his message of charitable acts with the nearly 90-year-old publisher’s interest “in the practical aspects of helping people in their daily lives.” Now, Warren’s Southern California church will take over a revamped version of the endeavor. The magazine, which faced lagging subscriptions, will send it out its last issue this month and will go online in January, where content will be available for free.

“I imagine (Reader’s Digest officials) were hoping for this to explode, and it didn’t explode,” said Brian Bird, the magazine and website’s managing editor, who added that subscriptions were between 2,500 and 5,000 per month. “But it’s had slow, steady growth. It takes a long time for anything to really grow, especially in a competitive media culture.”

The venture wasn’t Reader’s Digest’s first connection with Warren and his Saddleback Valley Community Church. Bankruptcy court papers show the publisher donated $5,000 to the church in the year before its August bankruptcy filing.

Judge Prudence Carter Beatty of the U.S. Bankruptcy Court in Manhattan, one of New York’s most outspoken and controversial judges, is retiring effective Jan. 4, 2010, according to the 2nd U.S. Circuit Court of Appeals.

Appointed in 1982, she is the second longest-serving judge at the bankruptcy court and, without a doubt, its most entertaining.

Beatty is notorious for her random musings and unleashing stinging criticism of those appearing before her. As one executive told The Wall Street Journal in 2005 during Delta Air Lines’ bankruptcy case, visiting her seventh-floor courtroom is like visiting the Grand Canyon: “you have to see it once, and it is worth the price of admission.”

Beatty didn’t give a reason for her retirement, according to the 2nd Circuit, but she did take a medical leave of absence during the Delta case. The 2nd Circuit is in the process of choosing her replacement as well as a replacement for Judge Robert Drain, who is headed to the bankruptcy court in White Plains, N.Y. His replacement should be made public sometime next year, the appeals court said.

In the meantime, here are some of our favorite Beatty remarks and exchanges, and we invite readers to share their own stories:

– During a hearing in Delta’s case, a Delta executive was testifying about what the company did when it fell behind its financial targets, Beatty cut in: “They did what everyone else did: engage in creative accounting. It’s what Enron did, what Worldcom did.” The executive, obviously alarmed at the judge linking Delta to the two fraud-riddled companies, replied: “That’s absolutely not the case.”

– Beatty railed against the U.S. Trustee’s office at the end of Solutia Inc.’s bankruptcy case, when the office, an arm of the Justice Department, objected to numerous fees billed by the company’s legal and financial advisers, including reimbursement for car services and expensive stays at the Ritz Carlton. But the judge didn’t see a problem, saying lawyers and investment bankers “aren’t interested in getting sweaty or dirty while they’re on the job.” A $1,000 meal for three people billed by Rothschild? No problem in Beatty’s eyes. “Wine is expensive,” she said.

– In Quigley Co.’s bankruptcy in 2004, lawyers for asbestos personal-injury claimants asked Beatty to step down from the case, saying she had disparaged their clients and questioned the legitimacy of their claims. She told one law firm that was representing the plaintiffs: “Haven’t I seen the name of your firm on subway train ads looking for more people?”

– That wasn’t the only time a lawyer hit Beatty with a request to step down. In the Delta case, a lawyer representing the airline’s pilots asked Beatty to recuse herself after she described the pilots’ pay as “hideously high.” “I mean, they get paid an awful lot of money,” she said. “The only good thing about them is they can’t work after they’re 60.”

Nokia Siemens Networks is mulling a bid for Nortel Networks Corp.’s optical-network unit, according to WSJ.

Chrysler Group LLC says it will return to profitability by 2011 and pay back billions of dollars to the U.S. government by 2014, WSJ reports.

J.P. Morgan Chase & Co. has reached a deal with the Securities and Exchange Commission to pay a $50 million penalty to Jefferson County, Ala., and forfeit $647 million in swap termination fees over bond deals that left the county close to bankruptcy, according to the Birmingham News.

Berkshire Hathaway Inc. and Leucadia National Corp. could face competition in their effort to buy Capmark Financial Corp.’s loan-servicing business, an attorney for Capmark said Wednesday. Read the Daily Bankruptcy Review story here.

“Morganization” is back, according to WSJ. J.P. Morgan Chase & Co. now owns stakes in dozens of companies that have declared bankruptcy amid the recession.

A former vice president of SK Foods, which filed for Chapter 7 bankruptcy protection earlier this year, has agreed to plead guilty to conspiracy charges in an ongoing federal probe of the tomato industry, according to the Californian.