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 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
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
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
Yes, says the Third Circuit. The Third Circuit recently held that the Bankruptcy Court has the authority to confirm a chapter 11 plan which contains nonconsensual, third-party releases when such releases are integral to the...more
1/13/2020
/ Bankrtupcy Confirmation Plans ,
Bankruptcy Court ,
Centers for Medicare & Medicaid Services (CMS) ,
Chapter 11 ,
Commercial Bankruptcy ,
Constitutional Challenges ,
Counterclaims ,
Creditors ,
Debtors ,
Department of Justice (DOJ) ,
Equity Investors ,
Injunctions ,
Judicial Authority ,
Lenders ,
Liquidity ,
Non-Consensual Rights ,
Reorganizations ,
Scope of Authority ,
Settlement Agreements ,
Shareholders ,
Stern v Marshall ,
Third-Party Release Agrements ,
Transfer of Assets
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
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
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
Following various disputes as to the scope of the collateral given to secured creditors, the debtors and certain of their noteholders jointly proposed a chapter 11. The plan included a rights offering that the consenting...more
In March 2018, the U.S. Supreme Court handed down its opinion in Merit Management Group, LP v. FTI Consulting, Inc., unanimously affirming the Seventh Circuit, holding that transfers are not protected from avoidance under the...more
In Mission Products Holdings, Inc. v. Tempnology, LLC, the U.S. Supreme Court resolved a question that vexed the lower courts and resulted in a circuit split: does the rejection by a debtor-licensor of a trademark license...more
6/1/2019
/ Bankruptcy Code ,
Breach of Contract ,
Commercial Bankruptcy ,
Debtors ,
Exclusions ,
Executory Contracts ,
IP License ,
Mission Product Holdings Inc v Tempnology LLC ,
Rescission ,
Reversal ,
SCOTUS ,
Section 365 ,
Split of Authority ,
Trademark Licenses ,
Trademarks ,
Trustees
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
Bankruptcy Rule 2004 allows the examination of any entity with respect to various topics, including conduct and financial condition of the debtor and any matter that may affect the administration of the estate. Does a...more
Manley Toys Limited once claimed to be the seventh largest toy company in the world. Due to ongoing litigation and declining sales, it entered into a voluntary liquidation in Hong Kong. On March 22, 2016, the debtor’s...more
5/16/2018
/ Bad Faith ,
Chapter 15 ,
Collective Actions ,
Commercial Bankruptcy ,
Concurrent Litigation ,
Corporate Misconduct ,
Debtors ,
Foreign Bankruptcies ,
Hong Kong ,
Insolvency ,
Judgment Creditors ,
Liquidation ,
Public Policy
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
5/14/2018
/ Adversary Proceedings ,
Appeals ,
Avoidance ,
Bankruptcy Court ,
Breach of Duty ,
Chapter 11 ,
Chapter 15 ,
Comity ,
Commercial Bankruptcy ,
Conservators ,
Debtors ,
Dismissals ,
Fiduciary Duty ,
Financial Crisis ,
Foreign Banks ,
Forum Non Conveniens ,
Forum Shopping ,
Fraudulent Transfers ,
Insolvency ,
International Litigation ,
Judicial Review ,
Motion to Dismiss ,
Multi-Jurisdictional Litigation ,
Parent Corporation ,
Receivership ,
Stays ,
Ultra Vires
As has been widely reported, over the last several years Takata Corporation and its various worldwide subsidiaries (together “Takata”) have been involved in a multitude of governmental investigations, class actions and...more
2/1/2018
/ Automobile Recall ,
Bankruptcy Code ,
Chapter 11 ,
Chapter 15 ,
Class Action ,
Constitutional Challenges ,
Corporate Restructuring ,
Creditors ,
Debtors ,
Due Process ,
Foreign Bankruptcies ,
Japan ,
Multi-Jurisdictional Litigation ,
Multidistrict Litigation ,
Proof of Claims ,
Public Policy ,
Takata
The Bankruptcy Court for the Southern District of New York recently held that a foreign counsel cannot be sanctioned for an attempt to assist its client in avoiding discovery orders issued by the court, when personal...more
1/31/2018
/ Commercial Bankruptcy ,
Contempt ,
Discovery Disputes ,
Extraterritoriality Rules ,
Foreign Bankruptcies ,
General Jurisdiction ,
Long Arm Statute ,
Minimum Contacts ,
Motion to Compel ,
Personal Jurisdiction ,
Post-Judgment Enforcement Actions ,
Sanctions ,
Specific Jurisdiction
Can foreign transfers of a U.S. debtor be avoided under the Bankruptcy Code’s avoidance provisions? While the Bankruptcy Court for the Southern District of New York recently found that the answer is no, that court, as well as...more
10/18/2017
/ Avoidable Transfer ,
Bankruptcy Code ,
Chapter 7 ,
Commercial Bankruptcy ,
Debt Restructuring ,
Extraterritoriality Rules ,
Foreign Bankruptcies ,
Insolvency ,
Israel ,
Legal Fees ,
Split of Authority
The Bankruptcy Court of the Southern District of New York recently addressed objections to the recognition of a Russian bankruptcy case as a foreign main case under Chapter 15 of the U.S. Bankruptcy Code and to the...more
10/16/2017
/ Acquisitions ,
Chapter 15 ,
Commercial Bankruptcy ,
Conflicts of Interest ,
Corporate Restructuring ,
Creditors ,
Foreign Bankruptcies ,
Foreign Judgments ,
Insolvency ,
Legal Representatives ,
Personal Finances ,
Public Policy ,
Russia
U.S. Bankruptcy Rule 9019 provides that on a motion brought by a trustee (and thus a chapter 11 debtor-in-possession as well) the court may approve a settlement. The prevailing view is that due to the court’s approval...more
Directors are required to review and approve transformative M&A transactions. The power to approve, however, comes with the potential liability that could be asserted if the transactions do not turn out as projected....more
7/18/2017
/ Board of Directors ,
Breach of Duty ,
Commercial Bankruptcy ,
Commercial Insurance Policies ,
Contract Drafting ,
D&O Insurance ,
Fiduciary Duty ,
Indemnification Clauses ,
Private Equity ,
Securities ,
Spinoffs ,
Verizon
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
7/13/2017
/ Appeals ,
Banks ,
Breach of Duty ,
Chapter 11 ,
Class Action ,
Commercial Bankruptcy ,
Corporate Officers ,
Creditors ,
D&O Insurance ,
Debt Restructuring ,
Denial of Insurance Coverage ,
Directors ,
Insolvency ,
OTS ,
Parent Corporation ,
Policy Exclusions ,
Prior Wrongful Acts ,
Securities Violations ,
Shareholders ,
Subsidiaries ,
Transfer of Assets
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
Addressing a novel issue in In re: International Oil Trading Company, LLC, 548 B.R. 825 (Bankr. S.D. Fla. 2016), the United States Bankruptcy Court for the Southern District of Florida recently denied in part an involuntary...more
6/8/2016
/ Attorney-Client Privilege ,
Commercial Bankruptcy ,
Common-Interest Privilege ,
Corporate Counsel ,
Creditors ,
Debtors ,
Document Productions ,
Involuntary Bankruptcy ,
Litigation Funding ,
Motion to Compel ,
Work-Product Doctrine