The U.S. Trustee overseeing Marcal Paper Mills Inc.’s chapter 11 proceedings objected to Apollo Capital Management LP’s quest for reimbursement, arguing that the private-equity firm should not be eligible for compensation just yet despite bankrolling the paper company’s reorganization plan, Bankruptcy Law360 reported yesterday. U.S. Trustee Kelly Beaudin Stapleton filed a protest on Friday in the U.S. Bankruptcy Court for the District of New Jersey, opposing Apollo’s request for $750,000 to cover the expenses the financier has purportedly incurred throughout Marcal’s bankruptcy proceedings. Apollo is currently seeking recompense for expenses related to the paper supplier’s reorganization, including legal fees, accounting and tax services, and environmental costs, according to court documents.

The group attempting to buy Pittsburgh Brewing Co. out of bankruptcy asked a federal judge for another 45 days to finalize the takeover, the Associated Press reported on Saturday. Pittsburgh Brewing Acquisition LLC said deadlines were due to expire this week, but that it needs more time to negotiate final terms with bankers, investors and government officials. The group has renamed the company Iron City Brewing Co. The former Pittsburgh Brewing, maker of Iron City and other beers, sought bankruptcy court protection in December 2005 after the Pittsburgh Water and Sewer Authority threatened to shut it down over more than $2 million in unpaid bills. U.S. Bankruptcy Judge M. Bruce McCullough approved the bankruptcy plan in June after months of negotiations between the company and its creditors.

Three years after he left Chrysler, Wolfgang Bernhard is coming back to become the chairman of the new Chrysler once Cerberus Capital Management completes its purchase of the automaker from DaimlerChrysler, the New York Times reported yesterday. Thomas W. LaSorda will remain as Chrysler’s CEO, a position he has held since the beginning of 2006. Chrysler is expected to name the members of two boards, one for the auto company and another for a holding company that is set to be created, when the sale is complete and that may occur as early as next week.

After a yearlong investigation, federal regulators have charged Amaranth Advisors, a high-flying hedge fund that collapsed in 2006, with attempts to manipulate natural gas prices last year, the New York Times reported today.  The suit, filed yesterday, contends that Amaranth and its former head energy trader, Brian Hunter, tried to influence prices on the New York Mercantile Exchange on two separate days several months apart.  The civil enforcement action was filed by the Commodity Futures Trading Commission in Federal Court for the Southern District of New York. It seeks fines of $130,000 for each violation and is asking the court to block Amaranth and Hunter from trading. Amaranth lost more than $6.5 billion on wrongheaded bets in the natural gas market last summer before shutting itself down. The fund’s demise, and the recent battering of two hedge funds managed by Bear Stearns, showed how quickly some risky investments by hedge funds could collapse.

Solutia Inc.’s shareholder and bondholder committees have objected to the bankrupt chemical company’s request for a twelfth extension to its exclusivity period for filing a reorganization plan, Bankruptcy Law360 reported yesterday. The shareholders reiterated their opposition to Solutia’s settlement with former parent Monsanto Co., which, along with a retiree settlement, is supposed to propel the company out of bankruptcy. The bondholders took a less confrontational point of view, saying the exclusivity period should only be extended 45 days, and not five months like Solutia requested, to cover a Sept. 5 hearing in which the court will analyze the Monsanto and retiree settlements. A hearing on the exclusivity extension is scheduled for tomorrow.

Zuhdi Karagjozi, the founder of Kara Homes Inc., is working with a home builder and a private-equity firm to make an alternative bid for his bankrupt company, the Asbury Park Press (N.J.) reported today. The Teicher Organization, an East Brunswick, N.J.-based developer, and The Patriot Group, a private-equity group based in Darien, Conn., are working on a proposal that would give unsecured creditors a larger dividend than previously has been offered, said Stuart I. Teicher, senior vice president and general counsel of Teicher. The parties, whose identities were revealed at a hearing Monday, have yet to file a formal plan with the bankruptcy court, but Teicher said a filing is “imminent.” East Brunswick-based Kara, one of the largest home builders in Monmouth and Ocean counties, filed for chapter 11 bankruptcy in October after the housing market slumped and the company couldn’t repay creditors. It reported assets of $350 million and liabilities of $227 million.

Oasys Mobile Inc., which provides games, ring tone and other content for mobile devices, filed for chapter 11 bankruptcy with a pre-negotiated reorganization plan in hand, the Associated Press reported on Friday. The plan, filed Wednesday with the U.S. Bankruptcy Court in Wilmington, Del., would give Oasys’ senior lenders, RHP Master Fund Ltd. and LAP Summus Holdings LLC, substantially all the common stock in the reorganized company, in exchange for their claims of over $8.84 million. To allow the cash-strapped company to keep operating during its stay in bankruptcy, the lenders have agreed to provide the company with a $2.66 million debtor-in-possession loan. Oasys listed assets of about $2.12 million and debts of about $11.5 million in its chapter 11 petition.

Former trustees of two pension plans at Buffalo Color Corp. have been ordered to pay $300,000 to the Pension Benefit Guaranty Corp., Msn.com reported today. A consent judgment requiring the payment was granted to the U.S. Department of Labor, which sued the former trustees for violating the Employee Retirement income Security Act. The governmental agency said the seven trustees used pension assets to buy notes from Buffalo Color’s parent company, Lanesborough Corp., which were later deemed worthless. Also, the labor department said two votes were taken on the matter in December 2000 although Lanesborough filed for chapter 11 protection that September. The defendants were identified as Kenneth Funsten, Armen Dekmejian, Lawrence Kaminski, Michael Lindaman, Frank Giumpa, Lawrence Zollinger and Frank Miller. The Pension Benefit Guaranty Corp. has been trustee of the pension plan since October 2004.

Some prominent conservatives are coming out in favor of a Democratic proposal to raise taxes on the private equity and hedge fund industries, signaling a break with anti-tax groups and Republican lawmakers on the issue, The Hill reported yesterday.  William A. Niskanen, the chairman of the libertarian Cato Institute and a former member of President Reagan’s Council of Economic Advisors, called the share of investment profits, or “carried interest,” earned by hedge fund and private-equity managers “basically fees for managing other people’s money” and said it should be taxed as ordinary income rather than as a capital gain. John Chapoton, the Treasury’s former assistant secretary for tax policy under Reagan, called the current treatment of carried interest “a policy mistake”: “It was earned by the work of promoters [in the private equity industry] and it should be taxed as compensation.” A partisan fight erupted last month after Rep. Sandy Levin (D-Mich.) introduced legislation to raise taxes on carried interest from the capital gains rate of 15 percent to ordinary income rates of as high as 35 percent.

Two months after emerging from bankruptcy, Northwest Airlines Corp. has finally settled one of the claims still lingering in its chapter 11 case, putting to rest a dispute with Wells Fargo over aircraft leases, Bankruptcy Law360 reported yesterday. U.S. District Judge Stuart Bernstein signed off on the proposed stipulation agreement on Monday between the reorganized carrier and Wells Fargo Bank Northwest, NA over a slew of aircraft leases that date back to before Northwest ducked into bankruptcy. The heart of the dispute began in 2000, when Northwest first entered a lease agreement for various planes including the British Aerospace Avro 146-RJ85A model, court documents stated. After Northwest entered chapter 11 in 2005, the airline and the U.S. Bank NA entered into an agreement that allowed Northwest to return the aircraft and to reject the relevant leases, which the court endorsed. In March, however, Wells Fargo filed a general unsecured claim against Northwest in the amount of $9,350,499.72, seeking to recoup damages regarding the aircraft and the agreements. Under the new deal, Northwest will now pay at least $1,682,319 for the three class 1-D claims and at least $1,165,045 for each of the guaranteed claims, according to court documents.