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Privy Council rules on Fairfield

On 16 April 2014, the Privy Council ruled in the claims brought by the liquidators of Fairfield, one of the largest feeder funds into Bernard Madoff’s investment company. The BVI Commercial Court and the Eastern...more

The Fisker Case and Its Impact on Distressed M&A

As is well known, the right to credit bid is the entitlement of a secured lender to bid the amount of its outstanding claims at the sale of its collateral. If the secured lender places the winning bid, no money is exchanged...more

The Fisker Decision – Possible Far Reaching Implications for Buyers of Distressed Debt

Buyers and sellers of distressed debt should be aware of the recent decision in the Fisker bankruptcy case, In re Fisker Automotive Holdings, Inc., 2014 WL 210593 (Bankr. D. Del.), which drastically limited the right of a...more

Deviation From Statutory Scheme In Sale Of Receivership Property

The sale of real and personal property in a receivership estate is governed by 28 U.S.C. §§ 2001 and 2004, and both contain procedures for both a public and private auction of property. Regarding personal property, § 2004...more

New value defense preserved for three-party transactions

New value is an important defense to preference liability under the Bankruptcy Code. It allows a preference defendant to relieve their preference liability on a dollar-for-dollar basis for the value provided to the debtor...more

Eleventh Circuit Holds Replacement Value - Applies to Surrender of Collateral in Chapter 13 Plan

On March 27, 2014, the Eleventh Circuit (the “Court”) issued a ruling, which will have a major impact on how Chapter 7 and 13 debtors are able to treat claims of secured creditors. The issue in In re Brown, 13-13013, 2014 WL...more

Editorial: In re Fisker Automotive Holdings, Inc., "I Got A Brand New Car, And I'm Feeling Good So Far"

Without question, the bedrock of bankruptcy, particularly a successful one, is consent. Indeed, the notion of consent is threaded throughout the Bankruptcy Code and related law in respect of diverse issues ranging from the...more

Reform of French Insolvency Law Overview of The Executive Order of 12 March 2014

Executive Order n° 2014-326 of 12 March 2014 reforming French insolvency proceedings was published in the Official Journal of the French Republic (Journal officiel de la République Française) on 14 March...more

Eighth Circuit Applies Subsequent New Value Defense To Payments Received From Third Party Creditor

The Eighth Circuit held that preferential payments are subject to a new value defense of § 547(c)(4) where the new value was provided by a third party that benefitted from the preferential transfers....more

Unauthorized UCC Termination Filings No Longer Effective — Commentary on Recent Bankruptcy Decision

Article 9 and the Life of a UCC Financing Statement - Article 9 of the Uniform Commercial Code (UCC) provides the process by which a secured lender obtains, perfects and enforces a security interest in a debtor’s...more

Identifying Further Restructuring Risks in Germany - Federal Court of Justice Clarifies Liability for Continuing the Business of...

The Financial Crisis, a difficult market situation and a tense liquidity status have led to remarkable difficulties for mid-sized businesses within the past years. Strategic and financial investors have and continue to...more

Sentinel Decision Prioritizes Protection of Securities and Futures Markets

On March 19, 2014, the U.S. Court of Appeals for the Seventh Circuit decided Grede v. FCStone, LLC, Nos. 13-1232, 13-1278 (7th Cir. Mar. 19, 2014), an opinion that reinforces the importance of the portability of investment...more

Assignment of Rents May Not Allow Golf Course Lenders to See The Green

Much to the chagrin of golf course lenders, bankruptcy and appellate courts around the country have consistently held that a properly-perfected mortgage or security interest in golf course revenues, including cart rentals and...more

Material Reform of the Spanish Insolvency Law

The Royal Decree Law 4/2014 of 7 March significantly amends the Spanish Insolvency Law, ostensibly in favor of refinancing agreements. With the approval of Royal Decree Law 4/2014 of 7 March on urgent measures...more

Legislative Trial Balloon for Puerto Rico Public Corporation Insolvency Process Attracts Bondholder Attention

Last Tuesday, Puerto Rico sold its much ballyhooed $3.5 billion in non-investment grade general obligation bonds. Two days later, two legislators in Puerto Rico’s Senate filed a bill which, if enacted, would permit...more

NY Court Rejects Recourse Triggers Accepted in Cherryland and Gratiot

In a prior post (“Emerging Statutory Threats to Recourse Triggers”), we tackled Michigan and Ohio statutes that invalidated non-recourse triggers sprung by certain types of insolvency events. As noted there, the statutes were...more

Private Equity Newsletter - Winter 2014: Recent Developments in Acquisition Finance

Several recent legal developments will likely impact acquisition finance. A recent decision of the U.S. Bankruptcy Court for the Southern District of New York examines who is an “Eligible Assignee” entitled to acquire...more

U.S. Supreme Court Round-Up: Sun Capital Cert Denied, Omnicare Cert Granted and Whistle-Blower Protection Extended

As first discussed in July 2013 the First Circuit Court of Appeals held in Sun Capital Partners III, LP, et al. v. New England Teamsters & Trucking Industry Pension Fund that a Sun Capital Partners private equity fund (Sun...more

Bankruptcy: Preference Defendants Don’t Feel “Preferred”

This year, many unsuspecting businesses will be hauled into court by a trustee seeking return of a “preferential” payment made by a party now in bankruptcy. To those uninitiated, a bankruptcy trustee’s power to “avoid” or...more

California Bankruptcy Court Holds Junior Lienholder Liable for Payments Debtors Made to Senior Lienholder as Preferential...

Section 547 of the Bankruptcy Code allows a bankruptcy trustee to recover transfers from creditors that are labeled “preferences.” To avoid a transfer as a preference, the trustee must generally demonstrate that the transfer:...more

High Court to Consider the Scope of a Liquidator's Lien

On 6 March 2014, the High Court of Australia (High Court) will consider in detail, for the first time since Re Universal Distributing Co Ltd (1933) 48 CLR 171, the circumstances in which a liquidator is entitled to claim a...more

Fisker bankruptcy update: Should secured creditors really be concerned?

The opinion by the Delaware bankruptcy court in In re Fisker Auto. Holdings, Inc., raised alarm bells for secured creditors throughout the country. Many worry that it will diminish the valuable right of secured creditors to...more

Fisker Automotive: Narrow Decision Limiting Credit Bidding Rights Where The Scope And Validity Of Creditor’s Lien Was In Question

Section 363 of the Bankruptcy Code governs the sale of a debtor’s assets outside of the ordinary course of business. A debtor may use Section 363 to sell all, or substantially all, of its assets free and clear of any liens...more

Tales From The Crypt: Tale 2 - Tough Choices For Tough Cookies

Tough Cookie 1 has spent the more than half of her 20+ legal career working in the Integrity and Compliance field, and has been the architect of award-winning and effective ethics and compliance programs at both publicly...more

In re Fisker Automotive Holdings, Inc.—Delaware District Court Refuses to Hear Distressed Investor’s Appeal of Order Limiting...

On January 17, 2014, the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) entered an order in the Fisker Automotive (“Fisker”) chapter 11 bankruptcy cases limiting the ability of Fisker’s...more

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