WSJcomBankruptcyBeat

Washington Mutual Inc’s plan to pay more than $7 billion to creditors and exit bankruptcy was rejected for a second time by a judge who ordered the warring parties into mediation. Read the Daily Bankruptcy Review story here.

A federal judge ruled that the court-appointed trustee overseeing the liquidation of Thornburg Mortgage Inc. can move forward with a lawsuit against Barclays Capital Inc. over allegations that the bank made improper margin calls that helped drive the mortgage lender into bankruptcy. Read the Daily Bankruptcy Review story here in The Wall Street Journal.

Swedish labor union Unionen, representing about 1,000 unpaid employees at troubled Swedish car maker Saab Automobile AB, submitted an application for Saab Automobile’s bankruptcy Monday as its members still haven’t received their August wages. Read the Dow Jones Newswires story here.

This week on The Broke and the Beautiful, creditors of the Los Angeles Dodgers seek to hire investment bankers, Lenny “Nails” Dysktra pleads not guilty to indecent-exposure charges, and a special-effects company fades to black for good.

Weighing legislation that would divert large corporate bankruptcy cases away from the two top courts that now handle most of that work, federal lawmakers heard testimony from an expert panel that largely countered the doomsday predictions from the legal community over the consequences of such a change.