Shmuel Vasser on Appeals

Are Lockbox Lenders Subject to Implied Duties?

Recently, in In re Moon Group Inc., a bankruptcy court said no, but the district court, which has agreed to review the decision on an interlocutory appeal, seems far less sure. The bankruptcy court held that a lockbox...more

7/14/2023 / Advances , Appeals , Bankruptcy Court , Chapter 11 , Chapter 7 , Credit Agreements , Debtors , Interlocutory Appeals , Lenders , Line of Credit , Liquidity , Notice of Default

First Circuit Holds that Fifth Amendment Takings Claims Must be Paid in Full

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

9/8/2022 / Appeals , Bankruptcy Code , Compensation , Eminent Domain , Private Property , Puerto Rico , Puerto Rico Oversight Management and Economic Stability Act (PROMESA) , Takings Clause

Subordination Agreement Ignored in a Cramdown — But What’s So Unfair About That?

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

Second Circuit Affirms Enforceability of Swaps’ Flip Provisions

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

Fresh Air and Fresh Start: Are Environmental Regulatory Penalties Dischargeable?

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

Are the Standards Governing Trustee Appointment Different in Chapter 9?

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

Loan Applicants Lack Standing to Sue Lenders for Claimed Violations of the CARES Act

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

Sears, Mall of America and a New Look at Shopping Center Lease Protections

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

The U.S. Supreme Court Holds that Orders Granting or Denying Lift Stay Motions are Final

The consequences of an order or judgement being final or interlocutory are enormous. An order from an interlocutory order requires leave since these orders are not appealable as of right. In addition, a failure to obtain...more

1/28/2020 / Appeals , Automatic Stay , Bankruptcy Court , Commercial Bankruptcy , Creditors , Debtors , Dismissals , Federal Rules of Bankruptcy Procedure , Final Judgment , Interlocutory Orders , Mootness , Motion for Relief from Automatic Stay , Non-Appealable Decisions , Reaffirmation , Right To Appeal , Ritzen Group Inc v Jackson Masonry LLC , SCOTUS , Time-Barred Claims

Second Circuit Paves a Way to Protect LBO Payments from Avoidance Actions

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

No Futility Exception: Where Transferee is on “Inquiry Notice,” No Good Faith Defense to Fraudulent Transfer Clawback Absent...

Answering “no” to a certified question from the Fifth Circuit, the Supreme Court of Texas held that a transferee on inquiry notice of fraud cannot shield itself from clawback without diligently investigating its initial...more

1/16/2020 / Affirmative Defenses , Appeals , Bankruptcy Code , Clawbacks , Creditors , Debtors , Failure to Investigate , Fraud , Fraudulent Transfers , Good Faith , Inquiry notice , Internal Investigations , Investors , Stanford Ponzi Scheme , Transferees , TX Supreme Court , UFTA

Third Circuit Clarifies the Inner Workings of Foreclosure on Repo Collateral

In the fifth opinion involving the repo liquidation saga of HomeBanc, the Third Circuit addressed several crucial issues involving the liquidation and valuation of repo collateral in bankruptcy. In re HomeBanc Mortg....more

1/7/2020 / Affiliates , Appeals , Auction , Automatic Stay , Bankruptcy Code , Bid Solicitation , Buyers , Chapter 11 , Chapter 7 Conversions , Collateral , Commercial Bankruptcy , Damages , Default , Deficiency Judgments , Foreclosure , Good Faith , Inside Information , Investment Banks , Liquidation , Mortgage Lenders , Mortgage-Backed Securities , Mortgages , Repossess , Safe Harbors , Securities , Sellers , Trustees , Valuation

Jurisdiction Over Rejection of Power Purchase Agreements—Confusion Continues

Periods of volatility in energy prices cause spikes in energy companies’ bankruptcies. These bankruptcies lead to debtors’ attempts to reject power purchase agreements (“PPAs”). These attempts ignite the unresolved legal...more

1/2/2020 / Administrative Authority , Appeals , Bankruptcy Court , Business Judgment Rule , Commercial Bankruptcy , Debtors , Energy Projects , Energy Sector , Exclusive Jurisdiction , Executory Contracts , Federal Power Act , FERC , Filed-Rate Doctrine , Jurisdiction , PG&E , Power Purchase Agreements , Rejection Notices

Appointing a Future Claims Representative: Recent Developments

A New Jersey District Court recently addressed several issues in connection with the appointment of a future claims representative (“FCR”). In light of the recent increase in mass-tort bankruptcy cases, exploring these issues...more

10/11/2019 / Appeals , Asbestos Litigation , Asbestos Trust Claims , Commercial Bankruptcy , Disinterested Parties , Fiduciary Duty , Future Claims , Judicial Appointments , Legal Representatives , Mass Tort Litigation , Nominations , Objections , Standard of Review , Trustees

Fourth Circuit Allows Unsecured Claim for Post-Petition Legal Fees

It is a well-established principle of bankruptcy law that claims generally crystallize as of the bankruptcy petition date. Of course, section 506(b) of the bankruptcy code allows over-secured, secured creditors to recover...more

4/25/2019 / Appeals , Commercial Bankruptcy , Consumer Bankruptcy , Creditors , Legal Fees , Post-Petition Interest , Reversal , Section 506 , Secured Debt , Unsecured Debt

Restructuring and Insolvency Bulletin: Issue 4 - May 2018: If You Don’t Succeed in Anguilla, Should You Try Again in the US?

Two United States Bankruptcy Judges for the Southern District of New York recently issued a joint opinion addressing common issues raised by motions to dismiss in two separate adversary proceedings – one pending before Judge...more

Restructuring and Insolvency Bulletin Issue 1 - 2017: United States: D&O Insurance Policies – a cautionary tale: the Peril of...

Directors and officers (D&Os) of troubled companies should be highly sensitive to D&O insurance policies with Prior Act Exclusion. While policies with such exclusion may be cheaper, a recent decision by the U.S. Court of...more

Second Circuit Issues Reversal in Closely Watched Marblegate Case

In a 2-1 opinion, the Second Circuit overruled the district court in Marblegate Asset Management LLC v. Education Management Corp., finding no violation of the Trust Indenture Act (“TIA”) in connection with an out-of-court...more

1/28/2017 / Appeals , Bonds , Commercial Bankruptcy , Corporate Restructuring , Creditors , Debt Restructuring , Fraudulent Conveyance , Lenders , Payment Terms , Section 316(b) , Secured Notes , Senior Indenture , Trust Indenture Act , Vacated

Shmuel Vasser

Dechert LLP

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