Next Week in Bankruptcy

Monday in Chicago, Caesars Entertainment Operating Co. will ask a judge to expand the scope of an independent investigation into the company’s prebankruptcy dealings with its parent, Caesars Entertainment Corp.

CEOC wants examiner Richard Davis’s probe to include the 2008 leveraged buyout of the company by private equity firms Apollo Global Management LLC and TPG, but creditors think the request is a ploy to halt their own investigation.

Judge A. Benjamin Goldgar has already ordered Mr. Davis to look into any transactions or “apparent self-dealing or conflicts of interest” for which creditors might bring claims against Caesars, including current and former officers of Caesars. CEOC says it thinks that includes the roughly $30 billion buyout, but creditors say it doesn’t. If Mr. Davis’s examination includes the buyout, it would stop them from fully investigating witnesses related to the LBO until Mr. Davis’s report is released, or Oct. 15, whichever comes first.

In January, subsidiary CEOC and nearly 175 affiliates filed for bankruptcy protection in Chicago after a group of junior creditors filed an involuntary bankruptcy petition against the entity in Delaware. A Delaware judge later kicked the entire case back to Chicago, Caesars’ preferred venue.

Wednesday in Wilimington, Del., Altegrity Inc. will seek court approval of its restructuring plan, which would pay off some creditors with ownership of the business and keep private-company security and employment screening businesses Kroll and HireRight, in operation.

The company is slated to emerge from bankruptcy with fresh cash from backers. Altegrity, which is currently owned by private equity firm Providence Equity Partners, will give creditors equity post-chapter 11.

Altegrity filed for bankruptcy in February after its US Investigations Services unit lost its lucrative contracts to investigate candidates for security-sensitive positions in the federal government. The chapter 11 plan sets out how USIS will wrap up its affairs and offers suppliers and other unsecured creditors a chance to share proceeds of potential lawsuits, but doesn’t specify grounds for the suits.

While USIS’ unsecured creditors are hoping for lawsuit recoveries, unsecured creditors of Altegrity , Kroll and HireRight are allotted $1.25 million to split under the plan.

Thursday in Chicago, a judge will consider a settlement that calls for U.S. Bancorp’s U.S. Bank to pay former Peregrine Financial Group Inc. customers $44.5 million in a deal that settles litigation over the bank’s alleged role in the multi-million dollar fraud that brought down the brokerage.

The deal, filed last month, resolves litigation brought by former Peregrine customers alleging that U.S. Bank enabled a fraud in which Peregrine founder Russell Wasendorf Sr. plundered more than $215 million from brokerage customers over nearly two decades. The bank has said it wasn’t aware of the fraud and was a victim of the fraud itself.

Court papers show approximately $30 million of the money is expected to be made available to Peregrine’s U.S.-based customers in the brokerage’s bankruptcy liquidation. The remainder is expected to go to the customers’ lawyers.

U.S. Bank will also withdraw its challenge to a similar settlement reached with J.P. Morgan Chase Bank last year, allowing that deal—which pledges about $15 million to Peregrine customers—to close.

Another component of the settlement grants U.S. Bank a $3 million unsecured claim against the brokerage in its bankruptcy case. The bank previously sought more than $6 million.

Peregrine filed for chapter 7 bankruptcy liquidation in July 2012. Mr. Wasendorf, the brokerage’s founder and former chief executive, was arrested the same month after confessing to the fraud in a failed suicide attempt. He was later convicted of stealing more than $215 million in customer funds from more than 13,000 victims over a nearly 20-year span.

-Patrick Fitzgerald and Jacqueline Palank contributed to this article.

Write to Joseph Checkler at [email protected]. Follow him on Twitter at @JoeCheckler