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English schemes of arrangement: some practical advice for proponents

Van Gansewinkel Groep BV, Re [2015] EWHC 2151 (Ch) - In what appears to be a growing trend, the High Court in England has sanctioned another scheme of arrangement involving non-English companies. Last week’s judgment...more

CMS Investment Holdings, LLC v. Castle et al., C.A. No. 9468–VCP (Del. Ch. June 23, 2015) (Parsons, VC)

In this decision, the Delaware Court of Chancery largely declined to dismiss claims for breach of a limited liability company agreement, breach of the implied covenant of good faith and fair dealing, unjust enrichment, breach...more

Intercreditor Agreements: Recognize That Second Lien Financings Are A Special Case Of Subordinated Lending

BOKF, N.A. v. JPMorgan Chase Bank, N.A. (In re MPM Silicones, LLC), 518 B.R. 740 (Bankr. S.D.N.Y. 2014) – Senior lienholders sued lenders holding junior liens on common collateral, arguing that the junior lienholders...more

Court Of Chancery Explains Claims Available To LLC Members

This is an interesting decision because it explains what direct claims are available to investors in an LLC. That is not always an easy question to answer. After all, some claims (including those involved in this case)...more

Spoken in Your Office, Read in the Courtroom: What Corporate Officers and Trustees Need to Know About the Waiver of the...

The corporate bankruptcy process, where the roles of various stakeholders and parties in interest can change drastically throughout the case, presents unique challenges for the application of the attorney-client privilege....more

The United States District Court for the Southern District of New York Upholds Rulings With Respect to Subordination, Cramdown and...

In a memorandum decision dated May 4, 2015, Judge Vincent L. Briccetti of the United States District Court for the Southern District of New York affirmed the September 2014 decision of Judge Robert D. Drain of the United...more

Delaware Chancery Court Holds that Creditor Plaintiffs in Derivative Suits May Satisfy Standing Requirement by Showing...

In Quadrant Structured Products Co., Ltd. v. Vertin, C.A. No. 6990-VCL, 2015 WL 2062115 (Del. Ch. May 4, 2015), the Delaware Court of Chancery held that a creditor plaintiff needs only establish that a corporation was...more

Delaware court of chancery issues significant ruling on the ability of creditors to assert fiduciary duty claims against...

In Quadrant Structured Products Co. v. Vertin, 2015 WL 2062115 (Del. Ch. May 4, 2015), the Delaware Court of Chancery (Vice Chancellor J. Travis Laster) announced a bright-line standard governing the threshold inquiry of when...more

Dutch company, New York law – an English scheme of arrangement?

DTEK Finance B.V., Re [2015] EWHC 1164 (Ch) - Following upon the November judgment in Re APCOA Parking Holdings GmbH, last week Mrs. Justice Rose sanctioned a scheme of arrangement between DTEK Finance B.V. (“DTEK“), a...more

Court of Chancery Clarifies Creditors' Rights

A just-issued Court of Chancery decision clarifies, and possibly expands, creditors' rights. In 2007, the Delaware Supreme Court ruled that a corporation's creditors may sue its board of directors for violating its fiduciary...more

Illegality, insolvency and fraudulent directors: Clarity at last?

The Supreme Court recently handed down its judgment in Jetivia SA and another v Bilta (UK) Ltd (in liquidation) and others [2015] UKSC 23. The Court was unanimous in dismissing the appellants’ case that the claimants’ claims...more

Fleshing Out Creditor Derivative Standing in Delaware

The Court of Chancery issues a liberal ruling on creditor derivative standing and more obsequies for the “zone of insolvency.” ...more

Limited Liability Companies: Handle Bankrupt LLC Members With Care

Walro v. The Lee Group Holding Co., LLC (In re Lee), 524 B.R. 798 (Bankr. S.D. Ind. 2014) – A chapter 7 trustee sought a court determination that (1) a debtor’s voting rights in a limited liability company (LLC) were...more

Stripping of Unsecured Second Mortgages in Chapter 7 Bankruptcies in the Crosshairs

Since its 1989 opinion in Folendore v. Small Business Admin., the Eleventh Circuit Court of Appeals has allowed debtors to completely strip off and void wholly unsecured junior liens in Chapter 7 bankruptcies under Section...more

A Cautionary Tale (or Two) – The Need for Robust Internal Oversight in Financings

In this era of rushed financings and hectic corporate restructurings, internal controls and procedures are more important than ever. Adding litigious shareholders and debtholders to the mix means it’s never been more...more

Distressed Download - March 2015

What Happens in Delaware Does Not Always Stay in Delaware: Caesars Victorious in Venue Battle - On Wednesday, January 28, the Bankruptcy Court for the District of Delaware transferred venue for the involuntary bankruptcy...more

Proof of Claim: Foreign Qualification Requirements May Be More Important Than You Thought

In re Flex Fin. Holding Co., 518 B.R. 891 (Bankr. D. Kan. 2014) – A landlord filed a proof of claim for ~$1.34 million for a debtor’s prepetition breach of its lease. The debtor objected based on the landlord’s...more

Another Bankruptcy Proofing Strategy Bites the Dust, or Does It?

In an effort to minimize the risk of loss in connection with a loan default, lenders often employ creative means to make it difficult, if not impossible, for a borrower to file bankruptcy....more

Rejecting Jewel v. Boxer, The District Court’s Heller Decision Is A Potential Knock-Out Punch Against Unfinished Business Claims...

The Order Re Summary Judgment issued on June 11, 2014 by Judge Charles R. Breyer of the U.S. District Court for the Northern District of California in the Heller Ehrman LLP bankruptcy case may prove to be a knock-out punch...more

Concurrent ‘Alter-Ego’ Claims: Oklahoma Leads the Nation in Extending Protection to Shareholders, Officers and Directors

During the past several years, practitioners have devoted significant attention to the fate of the Oklahoma Legislature’s efforts at, and the Oklahoma Supreme Court’s response to, legislative tort reform. However, few noticed...more

Court Rules Houston Astros Cannot Strike Out Fiduciary Duties in Bankruptcy

Introduction - One of the incentives that Delaware law offers founders of business entities is the ability to tinker with the fiduciary duties that the managers of the business owe. While the duties owed by corporate...more

Eleventh Circuit Rejects Extension of the “No Duty” Rule and Allows D&Os to Pursue State-Law Defenses Based on FDIC Conduct

In a decision announced at the end of 2013 in the case of FDIC v. Steven Skow, et al., the U.S. Court of Appeals for the Eleventh Circuit rejected an argument proposed by the Federal Deposit Insurance Corporation (FDIC) that...more

Eleventh Circuit Upholds Directors’ Affirmative Defenses Based on FDIC’s Post-Receivership Conduct

The US Court of Appeals for the Eleventh Circuit recently issued the first appellate decision holding that, in actions brought by the Federal Deposit Insurance Corporation (FDIC), the officers and directors of failed banking...more

Environmental Liability of Dissolved Corporations in Delaware is Forever

Ever since the Supreme Court’s decision in Citizen’s United, an effort has been made to humanize corporations, culminating in Mitt Romney’s infamous pronouncement that “Corporations are people my friend.” Now it turns out...more

Can a Receiver for a Corporation Settle Litigation it is a Party to?

After a receiver is appointed to enforce a settlement, can the defendant, a California corporation, appeal the judgment and order appointing the receiver, or is the receiver the only party that has the right to appeal?...more

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