CR&B Alert: Commercial Restructuring & Bankruptcy News - December 2010, Issue 4



• Swaps — page 2

• Delaware Bankruptcy Court Sheds Light on the Common Interest Doctrine Preventing the Waiver of Privileged Communications — page 2

• The Donald Trumps Icahn - Intercreditor Agreement Restrictions on Junior Lenders Not Controlling in Consideration of Approval of Nonconsensual Reorganization Plan — page 3

• Creditors of Insolvent Subsidiaries May Bring Derivative Actions Against Parent Company’s Officers and Directors for Breach of Fiduciary Duties — page 5

• Credit Bidding Cannot Be Prohibited – The Recent Decision in River Road Hotel Partners — page 7

• Consideration of a TRAC Clause Under the UCC and Economic Realities Required To Determine if Equipment Leases are True Leases or Disguised Financing — page 8

• In a Case of First Impression, the Circuit Court Determines That a Trustee of a Securitized Investment Pool is a ‘Transferee’ in a Preference Action — page 10

• Post-Confirmation Cramdown Interest Rate: ‘Market Formula’ Applies to Oversecured Loan in this Developing Area — page 11

• A Proposed Plan’s Voting Stock Allocation Causes an Incurable Change-of-Control Breach and Impermissible Reinstatement of Secured Debt — page 12

• Compensation Distributions Triggered by Events Outside the Debtor’s Control are Property of the Estate and Subject to Avoidance — page 13

• Trustee’s Use of Strong-Arm Powers Limited Where State UCC Gives Priority to the Lender That Perfects its Lien Post-Petition — page 15

• Funds ‘Earmarked’ for Bondholders Not Property of the Estate and Not Subject to Avoidance — page 16

• ‘Ordinary Course of Business’ Enables Supplier To Keep Payments in a Preference Action — page 17

• Omission of Plat in a Mortgage Renders Its Recording a Nullity, Provides No Notice to the Trustee and Subjects the Mortgage to Avoidance — page 19

• Bankruptcy Court (Mostly) Dismisses Complaint Against Pre-petition Lenders Based On Alleged Inequitable Conduct — page 20

• Undersecured Mortgage Lenders May Include Fees & Costs in Arrearage Cure Amount of Chapter 13 Debtor Under Section 1322(e) —page 22

• Counsel’s Corner — page 23

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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