A mortgage loan repurchase facility (more casually referred to as a “repo”) is a financing structure commonly utilized to finance mortgage loans. These facilities are utilized by both residential and commercial mortgage loan...more
The Second Circuit recently held that a non-party to an assumed executory contract is not entitled to a cure payment (although it may be so entitled if is a third-party beneficiary of the contract). The result would have...more
Under Section 101(54) of the bankruptcy code, any means of disposing with an interest in property is considered a transfer, and therefore, under certain circumstances, may be avoided as a preference or fraudulent transfer. In...more
Judge David S. Jones of the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) recently denied Chapter 15 recognition of a Cayman Islands proceeding (Cayman Proceeding) in which the Cayman...more
Section 303(i) of the Bankruptcy Code authorizes the court to award the debtor sanctions on account of an improper filing of an involuntary petition against it. But can a non-debtor third-party obtain such a relief? Yes, says...more
12/16/2022
/ Automatic Stay ,
Bad Faith ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Federal Rules of Bankruptcy Procedure ,
Fees ,
Involuntary Bankruptcy ,
Non-Debtors ,
PA Supreme Court ,
Sanctions
The U.S. Court of Appeals for the First Circuit recently ruled in the Puerto Rico bankruptcy case that Fifth Amendment takings claims cannot be discharged or impaired by a bankruptcy plan. As a matter of first impression in...more
The Bankruptcy Court for the District of New Jersey denied motions to dismiss the chapter 11 case of the newly created subsidiary of Johnson & Johnson, LTL Management LLC, and granted the debtor’s motion to stay prosecution...more
Highlights Introduction Last week, the House Judiciary Committee voted to send the Nondebtor Release Prohibition Act of 2021 to the floor of the house for vote. If passed, the bill would introduce two major amendments to the...more
In a recent opinion, the Bankruptcy Court for the District of Maryland dealt with a conflict between the strong presumption in favor of enforcing arbitration agreements and the Bankruptcy Code’s emphasis on centralization of...more
Turns out, it depends on who you ask. Judge Bernstein said no. Recently, Judge Glenn said yes, but only for causes of action that resemble actual fraudulent transfers. It is unusual for the bankruptcy judges in Manhattan to...more
In a first, the Bankruptcy Court for the Southern District of New York in the Arcapita Bank case had to decide whether Shari’a compliant investment agreements, providing for Murabaha and Wakala transactions, qualify for the...more
In a recent decision, the Court of Appeals for the Third Circuit closed the door on triangular setoffs, ruling that the mutuality requirement under Section 553 of the Bankruptcy Code must be strictly construed and requires...more
In a recent decision, the Court of Appeals for the Sixth Circuit held that the election of a tenant, under Section 365(h) of the Bankruptcy Code, to remain in possession of real property governed by a rejected lease causes a...more
A recent decision of the New York Court of Appeals, Sutton v. Pilevsky held that federal bankruptcy law does not preempt state law tortious interference claims against non-debtors who participated in a scheme that caused a...more
Recently, in In re Tribune Company, the Third Circuit affirmed that the Bankruptcy Code means exactly what it says and that the enforcement of subordination agreements can be abridged when cramming down confirmation of a...more
9/1/2020
/ Appeals ,
Bankruptcy Code ,
Chapter 11 ,
Commercial Bankruptcy ,
Cramdown ,
Creditors ,
Debtors ,
Discrimination ,
Interest Rate Swaps ,
Parent Corporation ,
Reorganizations ,
Senior Secured Debt ,
Subordination Agreement
Swaps, together with repurchase agreements, forward contracts, securities contracts and commodities contracts receive special treatment under the bankruptcy code-they are largely exempt from the automatic stay, bankruptcy...more
8/18/2020
/ Appeals ,
Automatic Stay ,
Bankruptcy Code ,
Collateralized Debt Obligations ,
Commercial Bankruptcy ,
Commodity Sale Agreements ,
Exemptions ,
Flip Transactions ,
Forward Contracts ,
Ipso Facto Clauses ,
Lehman Brothers ,
Liquidation ,
Noteholders ,
Reaffirmation ,
Repurchase Agreements ,
Securities ,
Swaps
Analyzing the inner workings of the elements required for the securities contract “safe harbor” protection under Section 546(e) of the Bankruptcy Code, the Bankruptcy Court for the SDNY dismissed a complaint seeking to...more
No, says the Delaware Bankruptcy Court in In re Maxus Energy Corp. In Maxus, the defendant, Vista Analytical Laboratory, Inc. (“Vista” or the “Defendant”), a designated critical vendor, sought summary judgement dismissing the...more
It is well established that by filing a proof of claim in bankruptcy, a creditor submits itself to the equitable jurisdiction of the bankruptcy court and waives any right it would otherwise have to a jury trial with respect...more
Two courts recently answered “yes,” finding that environmental claims brought against reorganized debtors by government entities were discharged under confirmed Chapter 11 plans of reorganization. In In re Exide Techs., 613...more
5/15/2020
/ Air Pollution ,
Appeals ,
Bankruptcy Code ,
Bankruptcy Discharge Order ,
Batteries ,
Carve Out Provisions ,
Chapter 11 ,
Civil Monetary Penalty ,
Coal Industry ,
Commercial Bankruptcy ,
Common Law Claims ,
Corporate Restructuring ,
Debtors ,
Dischargeable Debts ,
Enforcement Actions ,
Environmental Violations ,
Fines ,
Fraud ,
Global Warming ,
Municipalities ,
Permanent Injunctions ,
Police Power ,
Proof of Claims ,
Public Nuisance ,
Recycling ,
State Regulators ,
Strict Liability
Yes, says the First Circuit. The First Circuit recently affirmed the District Court’s decision to deny a group of bondholders’ (the “Bondholders”) motion to have a trustee appointed for the Employees Retirement System of the...more
5/9/2020
/ Appeals ,
Avoidance ,
Bankruptcy Code ,
Chapter 9 ,
Creditors ,
Debtors ,
Judicial Appointments ,
Puerto Rico ,
Retirement Funds ,
Reversible Error ,
Trustees
Disagreeing with the much-critiqued SDNY opinion in Enron, the SDNY bankruptcy court disallowed claims brought by secondary transferees because the original claimants allegedly received millions of dollars in fraudulent...more
4/29/2020
/ Avoidable Transfer ,
Bank Fraud ,
Bankruptcy Code ,
Banks ,
Chapter 11 ,
Commercial Bankruptcy ,
Corporate Crimes ,
Criminal Proceeds ,
Debtors ,
Fraudulent Transfers ,
Secondary Markets ,
Section 502
In general, a trustee or debtor in possession may assign a lease if it cures any monetary defaults and provides adequate assurance of future performance by the proposed assignee. If the lease is for space in a shopping...more
3/30/2020
/ Appeals ,
Assignments ,
Bankruptcy Code ,
Brick-and-Mortar Stores ,
Commercial Leases ,
Commercial Tenants ,
Contract Terms ,
Debtors-in-Possession ,
Retailers ,
Sears ,
Shopping Centers ,
Subleases
Confirmation of a Chapter 11 plan generally requires the consent of each impaired class of creditors. A debtor can “cramdown” a plan over creditor dissent, however, as long as at least one class of impaired claims accepts the...more
2/24/2020
/ Bankruptcy Code ,
Bifurcation ,
Chapter 11 ,
Commercial Bankruptcy ,
Commercial Buildings ,
Confirmation Proceedings ,
Cramdown ,
Creditors ,
Debtors ,
Flooding ,
Gerrymandering ,
Secured Debt ,
Shopping Centers ,
Unsecured Debt
The Second Circuit Court of Appeals recently held in In re Tribune Company Fraudulent Conveyance Litigation, No. 13-3992-cv (L) (2d Cir., Dec. 19, 2019) that Bankruptcy Code Section 546(e) barred claims seeking to avoid...more
1/21/2020
/ Appeals ,
Avoidance ,
Bankruptcy Code ,
Commercial Bankruptcy ,
Creditors ,
Dismissals ,
Financial Institutions ,
Fraudulent Conveyance ,
Leveraged Buyout ,
Merit Management Group v FTI Consulting ,
Preemption ,
Safe Harbors ,
Section 546(e) ,
Shareholders ,
Standing ,
Subsidiaries ,
Unsecured Debt