U.S. judge rejects creditors' request to remove Caesars' lawyers

CHICAGO Oct 29 A judge has rejected an unusual attempt by junior bondholders of Caesars Entertainment's bankrupt operating unit to disqualify law firm Kirkland & Ellis from leading the casino group's $18 billion Chapter 11 restructuring.

Jones Day, the junior bondholders' law firm, had asked the court to reconsider a May order that allowed the bankrupt unit of Caesars Entertainment Corp to hire Kirkland, led by a lawyer known in the industry as the "godfather of restructuring," James Sprayregen.

The fresh motion in the contentious bankruptcy case accused Sprayregen of giving misleading court testimony earlier this year regarding pre-bankruptcy work Kirkland handled for Caesars. Jones said it unearthed new evidence including minutes from a 2014 board meeting.

Jones Day's heavily redacted filing did not disclose the meeting minutes.

Allegations of misleading a court about potential conflicts have led to law firms being forced to disgorge fees and even criminal convictions. Kirkland & Ellis has billed $21 million for the case through May, according to court filings.

In his denial to consider the motion at a Nov. 18 hearing, U. S. Bankruptcy Judge Benjamin Goldgar of Illinois said Jones Day should have requested court permission before filing such a restricted document.

He said they could ask to refile the motion.

Jones Day is led by Bruce Bennett, who squared off against Sprayregen in the landmark Detroit municipal bankruptcy case.

Kirkland has overseen some of the biggest corporate bankruptcy cases in recent years, including Energy Future Holdings and United Airlines UAL Corp.

No one from Kirkland or Jones Day could immediately be reached for comment. (Reporting by Tracy Rucinski; Editing by Matthew Lewis)

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UPDATE 1-Fraud found at Kenya's Imperial Bank but still viable - central bank

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NAIROBI Oct 27 (Reuters) - The receiver for Kenya's privately owned Imperial Bank (IBL) found substantial fraud but the bank is still viable and shareholders are considering a proposal to inject capital, the central bank said on Tuesday.

Imperial Bank was put into receivership this month after the board alerted the central bank to malpractices at the mid-sized lender, rattling the financial community.

The central bank said it had received a report from the receiver, Kenya Deposit Insurance Corporation (KDIC), that "confirms fraudulent activities of substantial magnitude, and the misrepresentation" of Imperial Bank's financial statements.

"The fraudulent activities have resulted in a significant shortfall in IBL's capital position," the Central Bank of Kenya said in a statement, adding that it and the receiver still considered Imperial Bank to be "viable".

But the shareholders would have to inject new capital to meet the capital shortfall in order to reopen the bank, the central bank said.

"Shareholders requested to consider the proposal over the next few days and to come back with an implementation plan for the way forward," it said.

The fraudulent activities included "irregular loans" granted by the management, and in particular that this had violated the limit on lending to a single borrower, it added. (Writing by Edmund Blair, editing by David Evans and Adrian Croft)

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Samson Resources' CEO to quit, falling gas imperils debt plan

WILMINGTON, Del Oct 29 Samson Resources Corp's chief executive officer plans to resign, a lawyer for the bankrupt oil and gas producer told a judge on Thursday, adding that the company's six-week-old restructuring deal is in peril due to tumbling natural gas prices.

CEO Randy Limbacher will continue in his role until December to smooth the transition, said Joshua Sussberg, Samson's lawyer.

Sussberg said the continuing dive in commodity prices has unraveled the company's restructuring support agreement, or RSA, struck just before it entered bankruptcy. He said the company and lenders were negotiating for new terms to refinance.

"The initial RSA can be terminated at any moment," said Sussberg. He said milestones in the deal had not been met.

"As of yesterday, the spot price for gas was down 30 percent from commencement of this case," he said.

Samson entered bankruptcy in September with a plan to reduce its billions in debt by swapping control to a group of investors who held the company's $1 billion second-lien loan. Those lenders were also planning to buy $450 million in stock in the reorganized Samson.

Sussberg said a new deal was being negotiated that might provide less value for the holders of the company's second-lien loan.

The group of lenders includes affiliates of Cerberus Capital Management, Columbia Management, Credit Suisse, Eaton Vance Management, Invesco Ltd, New York Life Insurance Co and Silver Point Capital, according to court documents.

Holders of $2.5 billion unsecured bonds will receive almost nothing under the proposed plan.

Samson's bankruptcy comes four years after the company agreed to be acquired in a leveraged buyout led by KKR, for $7.2 billion. KKR and its partners on the buyout made a big bet on the future of shale oil and gas, investing $4.15 billion in equity on the deal. The rest was funded with debt.

The case is Samson Resources Corp, U. S. Bankruptcy Court, District of Delaware, 15-11934 (Reporting by Tom Hals in Wilmington, Delaware; Editing by David Gregorio)

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