The United States Bankruptcy Court for the Southern District of Texas recently clarified the administrative expense standard applicable to indenture trustees by holding that they can recover fees and expenses as...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 Bankruptcy Court for the Southern District of New York held that a purported debt held by an entity with a near-majority membership interest in the Debtor was actually equity disguised as a loan. ...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
Dischargeable Claims -
In a recent ruling, the District Court for the Middle District of Florida affirmed a bankruptcy court’s ruling that the premiums arising under the Coal Industry Retiree Health Benefit Act of 1992...more
On September 29, 2020, the United States House of Representatives Committee on the Judiciary advanced a Democrat-backed bill to the full chamber that seeks to address perceived shortcomings in the Bankruptcy Code’s...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
In a recent bench ruling, the Delaware bankruptcy court denied a motion to dismiss a chapter 11 bankruptcy filing, notwithstanding the fact that the filing contravened an express bankruptcy-filing blocking right, or “golden...more
In a recent decision on motions for summary judgement in the TransCare case, the SDNY bankruptcy court addressed the test for the imposition of liability under the US and New York Worker Adjustment and Retraining Notification...more
5/22/2020
/ Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Common Ownership ,
Corporate Restructuring ,
Debtors ,
Economic Realities Test ,
Financial Distress ,
Layoffs ,
Motion for Summary Judgment ,
Private Equity Funds ,
Single Employer Liability Test ,
Unpaid Wages ,
WARN Act
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
Key Takeaways
- The CARES Act did not explicitly or implicitly give private plaintiffs a right to sue lenders for supposed violations of that statute.
- The Small Business Administration has primary responsibility for...more
4/20/2020
/ Appeals ,
Applicants ,
Bank of America ,
Banks ,
CARES Act ,
Coronavirus/COVID-19 ,
Eligibility ,
Federal Loans ,
Lenders ,
Paycheck Protection Program (PPP) ,
Preliminary Injunctions ,
Private Right of Action ,
Putative Class Actions ,
SBA ,
Standing
Section 546(e) of the Bankruptcy Code excepts certain transfers made to certain protected parties, under or in respect of securities contracts, from avoidance as preferences or constructively fraudulent transfers. A recent...more
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
All forms of movement are under serious threat in the current global climate: with an estimated 1/4 of the world’s population in lock down, this unprecedented government intervention has slashed passenger demand and halted...more
3/30/2020
/ Automotive Industry ,
Aviation Industry ,
Best Practices ,
Coronavirus/COVID-19 ,
Cruise Ships ,
Economic Stimulus ,
EU ,
Federal Loans ,
Financial Assistance Policies ,
Government Assistance ,
Government Lockdown ,
Relief Measures ,
Risk Management ,
Shipping ,
Supply Chain ,
Transportation Industry ,
UK
Section 365(f) of the Bankruptcy Code allows the assignment of leases and executory contracts notwithstanding any provision in the contract or the applicable law that “prohibits, restricts, or conditions the assignment….” So,...more
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