Commercial Restructuring & Bankruptcy Alert - June 2012


In this issue:

- Construction Lenders Beware

- Supreme Court Upholds Secured Creditor’s Right to Credit Bid in a Bankruptcy Case

- Jointly Administered Plans Must Obtain Impaired Class Approval ‘Per Debtor’ Rather Than ‘Per Plan’

- Court Rejects ‘Whole Enterprise’ Argument of Jointly

- Administered Debtors; Holds Each Debtor is a SARE

- Court Analyzes Objective Factors to Find Chapter 11 Petition Filed in Bad Faith

- Rental Payments and Administration Expenses Back in the Spotlight: Luminar Decision Clarifies Circumstances in Which Rental Liabilities Qualify as Administration Expenses

- Creditor’s Proposed Plan Violated Absolute Priority Rule – Court Dismissed Bankruptcy Case

- Dividend Paid in LBO/Recapitalization Not Protected by 546(e) Safe Harbor

- Asset Purchasers May Be Subject to Seller’s Liabilities, De Facto Merger Doctrine Expanded in Pennsylvania

- Ending Forbearance is Not Equivalent to Economic Duress

- Statute of Frauds Bars Claims, Except for Interference with Prospective Contractual Relations

- Illinois Mortgagees Beware – Mortgages Lacking Interest Rate and Maturity Date Avoidable By Bankruptcy Trustee

- Split Continues – Individual Chapter 11 Debtors Not Subject to Absolute Priority Rule

- Court Relies on its Own Logic to Value Mortgage Servicing Rights

- SARE Creditor’s Right to Pre-Petition Interest Governed by State Law

- CMBS Certificateholder is Not a ‘Party in Interest’ in Chapter 11 Case

- Court Allows Pro Se Claimant to Withdraw Claim to Preserve Right to Jury Trial

- Indenture No-Action Clause Bars Suit Against Issuer, Directors and Officers

- Ipso Facto Clause Results in Master Lease Termination, Nullifies Sublessee’s Right to Possession

- Second Creditor Out of Luck in Debtor’s Fraudulent Transfer Scheme

- Secured Party Must Turn Over Repossessed Collateral if the Debtor’s Rights to the Collateral Were Not Terminated Pre-Petition

- Counsel’s Corner: News From Reed Smith

Please see full newsletter below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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