The energy unit has completed bankruptcy and has been completely written off without further liability ($56M write-off). This stock was at $55-60 immediately after the earnings and then the correction came and the huge sell-off without renewed interest. High debt and a possibly volatile business reliant on the US government are the main concerns but a p/e of 8-9 is a much better valuation.
Even though Hallwood Energy LP is bankrupt, a lawsuit is pending against Hallwood Group, Gumbiner, and other executives for damages of excess of $100 million (including the failure to pay $3.2 million dollars to FEI Shale under the Farmount agreement). The trial is set for October/November.
The lawsuit against Brookwood should have a summary judgment anytime soon and hopefully in the next 10-Q we will get an update. The likelihood of this lawsuit succeeding is low.