Creditors

News & Analysis as of

Ninth Circuit: Affordable Housing Restrictions Do Not Limit Value of Secured Claim in Bankruptcy Cram Down

In In re Sunnyslope Housing Ltd. Partnership, No. 12-17241, 2016 WL 1392318 (9th Cir. Apr. 8, 2016), a divided panel of the Ninth Circuit held that affordable housing restrictive covenants should not affect the valuation of a...more

How to Protect Your Personal Treasure in a Legal Lockbox

When you are in a high-profile profession—doctor, attorney, business owner—you have a lot to lose. Being in your position, you are a high liability target for lawsuits and claims. No one wants to lose their...more

The Atypical Creditor: How EU Bail-In Provisions Impact Borrowers

On January 1, 2016, the European Union’s “bail-in” provisions went into effect. The bail-in provisions, authorized under the Bank Recovery and Resolution Directive (BRRD) and implemented by the Single Resolution Mechanism...more

Illinois Bankruptcy Court Nullifies Lender's Right To Block Debtor's Bankruptcy Filing

Often, as part of a forbearance agreement, a lender will obtain a provision requiring its consent to any subsequently filed bankruptcy; the theory being that if the business debtor subsequently defaults under its restructured...more

Ninth Circuit Rulings on Equitable Mootness in Transwest and Sunnyslope Impact Third Party Investors

The doctrine of equitable mootness provides that Chapter 11 reorganization plans will be deemed moot, and therefore not subject to appellate review, if a plan has been substantially consummated and granting appellate relief...more

Dot Your “I”s and Cross your “T”s: When It Comes to Perfecting Your Security Interest

It always starts so easy. Borrower comes in and wants to borrow money. Lenders want some form of collateral to secure (potentially) a loan and the Borrower happily agrees to provide, or pledge, collateral to secure a loan. ...more

UK Financial Regulatory Developments - April 2016 #11

LSE updates AIM company rules to reflect EU MAR - LSE is consulting on an updated version of its Alternative Investment Market (AIM) rules for companies. These changes predominantly incorporate references to the incoming...more

Bankruptcy & Financial Restructuring/Finance Advisory: Second Circuit Rejects Potential Loophole in the Securities Contract Safe...

The Second Circuit Court of Appeals recently held that the “safe harbor” protections for securities contracts in Section 546(e) of the Bankruptcy Code prevented individual creditors’ state law constructive fraudulent transfer...more

Ever-Expanding Safe Harbor Leaves Creditors’ Claims Stranded at Sea

Second Circuit holds that Bankruptcy Code preempts creditors’ state law constructive fraud claims. On March 29, 2016, the Second Circuit issued its opinion in In re Tribune Company Fraudulent Conveyance Litig.,...more

The Un-Bankruptcy: A Texas Receivership as an Alternative to Bankruptcy (and fourteen ways to appoint a receiver in The Lone Star...

Creditors seeking to exercise control over a borrower or collateral may utilize a number of remedies. They may seek a foreclosure or UCC sale, assignment for the benefit of creditors, file an involuntary bankruptcy petition...more

Taking Stock in Related-Party Debt: Regulations Propose Sweeping Changes

On April 4, the Treasury and the Internal Revenue Service (IRS) released proposed regulations under IRC § 385 (the Proposed Regulations) that are intended to combat perceived concerns associated with indebtedness between...more

Sub-Participation Agreement: Recharacterisation Risk Before Spanish Court

Financial players in the distressed market in Spain are commonly using the LMA sub-participation agreement. However, “sub-participation” is not a concept that has been traditionally recognised under Spanish law. This has...more

The Ultimate Arizona Bankruptcy Guide – Pt. 5 – The Automatic Stay

People don’t want to file for bankruptcy. Often the decision to file for bankruptcy only occurs after a point is reached where something financially painful is about to happen. Wage garnishment. Foreclosure. Debt collection...more

Of ECOA and the FDCPA – A Tie in the Supreme Court and A Fourth Circuit Win for Debt Collection

It was a busy week in the fabled halls of justice last week as judges undoubtedly worked to get out a few more opinions before Easter break. Two opinions, one from the Supreme Court and one from the Fourth Circuit Court of...more

Fourth Circuit Rules FDCPA Does Not Apply to Consumer Finance Company Collecting Debt on Its Own Behalf, Even if It Acquired the...

Reed Smith secured a precedential victory in the Fourth Circuit for client Santander Consumer USA Inc., holding that the Fair Debt Collection Practices Act (“FDCPA”) does not apply to a consumer finance company trying to...more

Another Alternative Fee Arrangement Bites the Dust

On March 16, 2016, Judge Shannon of the U.S. Bankruptcy Court for the District of Delaware rejected a proposed fee structure for Baker Botts L.L.P., which was proposed counsel to the debtors in In re New Gulf Resources, LLC. ...more

CFPB Issues Interim Final Rule Expanding QM Coverage for Small Creditors

On March 22, 2016, the Consumer Financial Protection Bureau (CFPB) published an interim final rule to implement provisions of the Helping Expand Lending Practices in Rural Communities (HELP) Act, which was enacted by Congress...more

US Supreme Court Fails to Resolve Guarantors’ Status Under ECOA

On March 22, in an Equal Credit Opportunity Act (ECOA) case that was closely followed and highly anticipated, the U.S. Supreme Court (in a four-to-four vote) failed to issue a definitive ruling regarding whether Regulation B...more

"There Can Sometimes Be Good Forum Shopping"

In Re Codere Finance (UK) Ltd [2015] EWHC 3778 (Ch), 17 December 2015, the English High Court sanctioned a scheme of arrangement involving an English company deliberately acquired by a foreign parent to attract the court's...more

A Guaranty Is Only As Good As The Person Who Signs It: Enforcing Commercial Lending Guaranties In Massachusetts

Guaranties are common practice in the commercial lending industry. Typically, the borrower is a small corporation, limited liability company, or similar entity that is thinly capitalized with few (likely encumbered) assets....more

Five Things to Consider When Approached by a Bankruptcy Claims Trader

When a business files for bankruptcy, it can be a confusing and frustrating time for the debtor’s creditors. If an investment firm reaches out with an offer to purchase a creditor’s claim against the debtor, it may appear to...more

R&I Update: Hot Topics in Oil and Gas Restructurings, Volume 2 Can Gathering Agreements Be Rejected as Executory Contracts?

“The carnage is going to be terrible,” cried a recent Dallas Morning News headline. “It’s a hellacious problem,” lamented another article. It’s no secret the energy sector has come upon hard times. Oil prices are down 70...more

Delaware Bankruptcy Court Holds, Twice: “ASARCO is Here to Stay” (But Your Authors Have Hatched Another Plan; Read Below!)

You may recall the holding and analysis of ASARCO from Jay’s previous post, here. At bottom, ASARCO followed a strict interpretation of Section 330(a) of the Bankruptcy Code, holding that professionals are allowed to charge...more

Can the E&P Debtor Reject Gas Gathering Agreements in Bankruptcy?

What’s a sure way to destroy untold millions of dollars of energy infrastructure value built in reliance on the promise of reimbursement for huge capital investments necessary to move a producer’s product to market for the...more

How Sports Authority’s Bankruptcy Filing Impacts Landlords and Trade Creditors, and Creates Opportunities for Retailers

On March 2, 2016, Sports Authority, Inc. (“Sports Authority”) and six of its affiliates filed for Chapter 11 bankruptcy in Delaware. The filing will significantly impact Sports Authority’s landlords and trade creditors. In...more

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