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A&O Shearman

Eighth Circuit Reverses Jury Verdict For Aiding And Abetting Ponzi Scheme, Holding That In Pari Delicto Defense Barred Bankruptcy...

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On September 12, 2024, the United States Court of Appeals for the Eighth Circuit reversed a trial court decision that had rejected a bank’s assertion of the in pari delicto defense to aiding and abetting claims brought by the...more

Patterson Belknap Webb & Tyler LLP

Tenth Circuit Holds that Sovereign Immunity Does Not Limit Section 544 Claim

Section 544(b)(1) of the Bankruptcy Code enables a trustee to step into the shoes of a creditor and avoid a transfer “of an interest of the debtor in property” that an unsecured creditor could avoid under applicable state...more

Bracewell LLP

"Fatal Means Fatal": 5th Circuit's Broad Read of 363(m) Continues to Moot Section 363 Appeals after the Sale

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Recent rulings out of the United States Court of Appeals for the Fifth Circuit and its lower bankruptcy courts have emphasized the circuit’s broad interpretation of section 363(m) of the Bankruptcy Code, which protects...more

Snell & Wilmer

Married Couple’s Acquisition of Title as Joint Tenants Does Not Rebut the Presumption of Community Property

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In re Brace, 470 P.3d 15 (Cal. 2020), a California married couple acquired real property with community funds, and took title as “husband and wife as joint tenants.” When the husband filed a chapter 7 petition in bankruptcy,...more

ArentFox Schiff

Third Circuit Favors Cramdown’s ‘Flexibility’ and ‘Rough Justice’ Over Strict Enforcement of Subordination Agreements

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Eight years after the Delaware bankruptcy court confirmed the chapter 11 plan of Tribune Company and its affiliates, the United States Court of Appeals for the Third Circuit (the Court) affirmed the bankruptcy court’s...more

Dechert LLP

Are the Standards Governing Trustee Appointment Different in Chapter 9?

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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

Perkins Coie

Regulatory Fines Dischargeable in Bankruptcy

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Debtors facing regulatory fines and penalties want to shed them in bankruptcy and emerge without paying them. With certain exceptions, the Bankruptcy Code provides for the discharge of most debts that arise before a plan is...more

Patterson Belknap Webb & Tyler LLP

Bankruptcy Court Closes Chapter 11 Cases Even with an Appeal Pending and Over the Objection of the U.S. Trustee.

Debtors in chapter 11 cases are required to make quarterly payments to the United States Trustee’s Office. These fees support the UST Program that serves in all districts but those in two states. Quarterly fees must be paid...more

Jones Day

In Brief: On Remand, Momentive Bankruptcy Court Rules That Cramdown Notes Should Bear "Process Efficient" Market Interest Rate

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In Momentive Performance Materials Inc. v. BOKF, NA (In re MPM Silicones, L.L.C.), 874 F.3d 787 (2d Cir. 2017), cert. denied, 138 S. Ct. 2653 (2018), the U.S. Court of Appeals for the Second Circuit affirmed a number of lower...more

Morrison & Foerster LLP

The Supreme Court Clarifies a Trademark Licensee’s Rights After Rejection in Bankruptcy

The Supreme Court’s recent decision in Mission Product Holdings, Inc., v. Tempnology, LLC clarifies that a debtor-licensor’s rejection of a trademark license under § 365(a) of the Bankruptcy Code is treated as a breach, and...more

Patterson Belknap Webb & Tyler LLP

Another Ruling on Public Auctions Versus Private Sales Under Section 363

Two weeks ago, we discussed asset sales under Bankruptcy Code section 363. As that post noted, section 363 requires court approval for asset sales outside the ordinary course of business, with courts ensuring that sales...more

Skadden, Arps, Slate, Meagher & Flom LLP

Second Circuit Allows Avoidance Actions Against Foreign Transferees in Madoff Proceeding

On February 25, 2019, the U.S. Court of Appeals for the Second Circuit vacated the bankruptcy court’s dismissal of avoidance actions brought by Irving Picard, the trustee (Trustee) for the liquidation of Bernard L. Madoff...more

Patterson Belknap Webb & Tyler LLP

Another Gotcha for the Calendar: Section 365(d)(1)

Although it may be difficult to define precisely what an “executory contract” is (with the Bankruptcy Code providing no definition), I think most bankruptcy lawyers feel how the late Supreme Court Justice Potter Stewart...more

Holland & Knight LLP

Eleventh Circuit Issues Opinion on New Value Defense to a Preference Claim

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• In its recent decision in William S. Kaye, Trustee of the BFW Liquidating Trust v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC), the U.S. Court of Appeals for the Eleventh Circuit held that liability for a...more

Burr & Forman

Blue Bell Creameries: Dishing Out a New Value Treat for Preference Defendants

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Trying to explain the primary purpose of Section 547 of the Bankruptcy Code to a client that just received a demand letter or complaint to avoid and recover preferential transfers can be a tough sell. Although the Section’s...more

Fox Rothschild LLP

Hawaii Bankruptcy Appeal Serves As A Reminder On Preferential Transfers

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In an appeal from the U.S. Bankruptcy Court for the District of Hawaii, the U.S. District Court for the District of Hawaii determined when the date of the transfer occurred for the purposes of a preferential transfer asserted...more

Patterson Belknap Webb & Tyler LLP

Check Pleas: Reimbursement Check Delivered to Employee Pre-Petition is Unauthorized Post-Petition Transfer

Section 549 of the Bankruptcy Code permits a trustee or debtor in possession to avoid (and ultimately recover) a transfer of the debtor’s property “that occurs after the commencement of the case” and “is not authorized under...more

Patterson Belknap Webb & Tyler LLP

Delaware District Court Dismisses Appeal by Creditors’ Committee After Case is Converted from Chapter 11 to Chapter 7

The Bankruptcy Code provides for the appointment of a creditors’ committee in chapter 11 bankruptcy cases. See 11 U.S.C. § 1102. There is no parallel provision applicable to chapter 7 cases. When a bankruptcy case is...more

Patterson Belknap Webb & Tyler LLP

Major Section 546(c) Safe Harbor Issue Resolved by the Supreme Court

Our post last year concerning “[t]he long-running litigation spawned by the leveraged buyout of Tribune Company . . . and the subsequent bankruptcy case” described a case--FTI v. Merit--that was then pending in the Supreme...more

Jones Day

Lease Profit-Sharing Provision Unenforceable Condition to Assignment in Bankruptcy

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In Antone Corp. v. Haggen Holdings, LLC (In re Haggen Holdings, LLC), 2017 WL 3730527 (D. Del. Aug. 30, 2017), the U.S. District Court for the District of Delaware considered whether, as part of a bankruptcy asset sale, a...more

Ward and Smith, P.A.

Limiting Ponzi Scheme Recoveries in Bankruptcy: United States Supreme Court Declines to Review Fraudulent Transfer Ruling in Favor...

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The United States Supreme Court recently declined to review a decision from the United States Court of Appeals for the Fourth Circuit favorable to a bank regarding alleged fraudulent transfers to the bank. In doing so, the...more

Jones Day

Second Circuit Issues Key Cramdown Interest Rate Ruling

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In Momentive Performance Materials Inc. v. BOKF, NA (In re MPM Silicones, L.L.C.), 2017 BL 376794 (2d Cir. Oct. 27, 2017) ("Momentive"), the U.S. Court of Appeals for the Second Circuit, in a long-anticipated decision,...more

Winstead PC

Court Denies Request For Mandamus Relief Regarding Court Order Requiring Spouse of Deceased Trustee To Prepare An Accounting

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In In re Ng, after a jury found that a deceased trustee did not breach fiduciary duties, a trial court nonetheless ordered the deceased trustee’s spouse to prepare an accounting of the trust. No. 09-17-00386-CV, 2017 Tex....more

Perkins Coie

Debtor’s Failure to Disclose No Longer Deadly in Eleventh Circuit

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Employers and other defendants suffered a setback recently. Most large companies have been sued by an employee who failed to disclose the lawsuit or cause of action in their individual bankruptcy case. For many years, the...more

Jones Day

Two Recent Decisions Demonstrate Continued Disagreement Over Whether Economic Value or Face Amount of Liens Is Appropriate Metric...

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The ability of a trustee or chapter 11 debtor in possession ("DIP") to sell bankruptcy estate assets "free and clear" of liens on the property under section 363(f) of the Bankruptcy Code has long been recognized as one of the...more

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