By David M. LeMay (US) on Posted in USWoodbridge Group of Companies, a luxury real-estate developer, filed for chapter 11 reorganization on December 4, 2017. Woodbridge and its 200-plus affiliates operated a sprawling, complex real estate enterprise that focused on the acquisition and development of high-end properties. Although the company estimates the value of its properties to be nearly $1 billion, it asserts it… Continue Reading
By Christy Rivera (US) on Posted in USLast week, the Second Circuit established an “efficient market”-based approach for calculating cramdown interest rates. Adopting a test established by the Sixth Circuit, the Second Circuit held that courts must apply a market interest rate where an efficient market exists. See Momentive Performance Materials Inc. v. BOKF, NA (In the Matter of: MPM Silicones, L.L.C.),… Continue Reading
By Christy Rivera (US) on Posted in USA bankruptcy filing by one company does not necessarily mean that its affiliates will also file for bankruptcy. It is common for a financially distressed company to file for bankruptcy while its financially sound affiliates continue business operations in the ordinary course. The bad news, however, is that a court may disregard a company’s decision not… Continue Reading
By Christy Rivera (US) on Posted in Latin America,USLast month, the Bankruptcy Court for the Southern District Of New York overruled an objection to proposed substantive consolidation provisions included in the plan of reorganization for Republic Airways Holdings Inc. See In re Republic Airways Holdings Inc., 565 B.R. 710 (Bankr S.D.N.Y. 2017). The bankruptcy court’s ruling provides a good refresher on the requirements… Continue Reading
By Eric Daucher (US) on Posted in USEarlier today, in Czyzewski v. Jevic Holding Corp., the Supreme Court put an end to “structured dismissals” that allow a debtor to leave bankruptcy while circumventing the Bankruptcy Code’s creditor payment priority scheme. A Chapter 11 debtor generally has three options for exiting bankruptcy: (1) a confirmed plan of reorganization (or liquidation); (2) conversion to… Continue Reading
By James Salwen on Posted in Bankruptcy Courts,USServing on a court-appointed bankruptcy committee can come with many benefits, and the list just got a little longer. In Blixseth v. Brown, the Ninth Circuit held that committee members enjoy some of the same protections as trustees when it comes to potential attacks for actions taken during a bankruptcy case. Applying the Barton doctrine,… Continue Reading
By James Salwen on Posted in USA recent decision by Judge Sontchi in the Bankruptcy Court for the District of Delaware casts some light on the methods that representatives of non-U.S. debtors can—and can’t—use to track down those who owe such debtors money. The Representatives of the Irish liquidation proceeding for Irish Bank Resolution Corporation Limited (“IBRC”) obtained recognition of the… Continue Reading
By Francisco Vazquez (US) on Posted in USUnder the Bankruptcy Code, a creditor may be reimbursed its actual and necessary expenses in making a “substantial contribution” in a chapter 9 or 11 case. Whether a creditor has made a substantial contribution is a question of fact, but generally requires that a creditor demonstrate a tangible benefit to the estate. It is unlikely… Continue Reading
By Francisco Vazquez (US) on Posted in USChadbourne & Parke LLP currently represents the English liquidators of Hellas Telecommunications (Luxembourg) II SCA, a company that formerly owned one of the largest mobile phone operators in Greece. On behalf of the English liquidators, in 2012 Chadbourne obtained an order from the US Bankruptcy Court from the Southern District of New York granting Chapter… Continue Reading
By Christy Rivera (US) on Posted in USThere has been a lot of discussion, by both the courts and practitioners, regarding whether the bankruptcy court, as part of a chapter 11 plan, can release a third party from creditors’ claims over the objection of such creditors. We have talked about these non-consensual third-party releases on this blog as well. Courts are not… Continue Reading
By on Posted in USOn May 26, 2015, the Supreme Court of the United States (SCOTUS) decided Wellness International Network, Ltd. v. Sharif—another case addressing issues raised in the wake of the Court’s “narrow” Stern v. Marshall decision. While the case clarified some of the jurisdictional issues raised by litigants post-Stern, many issues remain and each Justice seems more… Continue Reading
By on Posted in USWhen a defendant in a lawsuit files for bankruptcy, the bankruptcy court will not necessarily have jurisdiction over the pending litigation. The court must determine that the case is either “core” or “related” to the bankruptcy. In Ammini v. Labgold (In re Labgold), Case No. 14-01043, decided on June 16, 2015, the Bankruptcy Court for… Continue Reading
By on Posted in USIn Nobel Group, Inc. v. Cathay Bank (In re Nobel Group, Inc.), the Bankruptcy Court for the Northern District of California reviewed the scope of its jurisdiction post-confirmation and held that, notwithstanding plan provisions stating the contrary, the court did not have jurisdiction over the reorganized debtor’s claims asserted against its previously secured creditor.… Continue Reading
By on Posted in USCircuit courts are divided as to whether provisions of a bankruptcy plan of reorganization may release a non-debtor from creditors’ claims over the objection of a non-consenting creditor (i.e. non-consensual third-party releases). A majority of courts will permit non-consensual third-party releases under certain limited circumstances. This issue has been in the news recently with speculation that… Continue Reading
By Eric Daucher (US) on Posted in USFraudulent transfer statutes were enacted to protect creditors from improper depletion of a debtor’s assets. They generally accomplish this goal by allowing creditors (or a bankruptcy estate representative) to avoid transactions that are either actually or constructively fraudulent as to creditors, and to recover some or all of the proceeds of the transaction. For example,… Continue Reading
By on Posted in USThe Third Circuit Court of Appeals recently passed on a chance to join numerous other federal and state jurisdictions in rejecting “deepening insolvency” as an independent tort, leaving the doctrine weakened, but still technically viable in the significant bankruptcy arena. However, in In re Lemington Home for the Aged, the Court did strongly indicate that… Continue Reading
By on Posted in USOn January 23, 2015, the Eleventh Circuit recognized the res judicata effect of provisions contained in a bankruptcy plan of reorganization that released all claims against a third-party guarantor. In deciding In re FFS Data, Inc., the court examined (i) the plain language of the plan provisions to determine whether a particular claim was included… Continue Reading
By Eric Daucher (US) on Posted in USOn January 14, 2015, the Supreme Court of the United States heard oral argument in Wellness International Network, Limited v. Sharif, a case that gives SCOTUS the opportunity to finally clarify the constitutional limits of bankruptcy courts’ decision-making power raised by its 2011 decision in Stern v. Marshall. But as we saw with last year’s… Continue Reading
By on Posted in USConstitutional mootness is a threshold question for determining whether a court has jurisdiction over an appeal. It arises from the “case or controversy” requirement under Article III of the U.S. Constitution – if no “case or controversy” exists for which the court may grant effective relief, the court lacks jurisdiction and must dismiss the appeal… Continue Reading
By on Posted in USChapter 11 of the Bankruptcy Code is designed to allow struggling companies to reorganize their debts and emerge as stronger, healthier companies or to liquidate in an orderly fashion. In either case, the company better be struggling, as made clear in a recent decision in In re Derma Pen, LLC, No. 14-11894, 2014 WL 7269762… Continue Reading
By on Posted in USFollowing Judge Drain’s decision in Momentive, many in the bankruptcy world have written about and discussed the issue of how to determine the appropriate interest rate that should be paid to secured creditors in the context of a Chapter 11 cramdown (the so-called “cramdown interest rate”). While many questions have been asked and remain unanswered,… Continue Reading
By on Posted in USBankruptcy Code section 510(b) provides for mandatory subordination of any claims “arising from,” among other things, the purchase or sale of a security. It is an expansive provision that courts have interpreted broadly, causing some commentators to wonder: “Are there any limits to mandatory subordination under section 510(b)?” In a decision entered last week in… Continue Reading
By Christy Rivera (US) on Posted in USFocusing on the plain language provided in Bankruptcy Code section 546(e), the Court of Appeals for the Second Circuit this week held that customers of the now defunct Bernard Madoff Investment Securities LLC can retain funds they had withdrawn from their customer accounts before the Madoff firm was placed into liquidation. Irving Picard, the trustee… Continue Reading
By on Posted in USFollowing up last week’s post on fiduciary duties, we review another bankruptcy decision, also in Delaware, that provides a good refresher on the fiduciary duties of directors and officers. In dismissing claims that officers and directors had breached fiduciary duties, the bankruptcy court in Lightsway Litigation Services, LLC v. Yung (In re Tropicana Entertainment, LLC)… Continue Reading
