The controversial rehabilitation plan for the Segregated Account of Ambac Assurance Corporation (“Ambac”) was recently upheld on appeal in a decision that reached some rather revolutionary conclusions on a wide range of issues affecting various policyholders. The decision by the Court of Appeals of Wisconsin should caution policyholders that they may not have certain basic rights and protections they might expect — including with respect to claims priority — and highlights the great deference given to the insurance commissioner to formulate a plan of rehabilitation.

Cross-Border Enforcement of Orders in Restructuring Cases (2013 Winter Leadership Conference Business Reorganization/International committee educational session) - Mark W. Deveno, Rachel E. Albanese, G. Eric Brunstad, Jr., Mark P. Kronfeld, Andrew M. Leblanc

In the past month, no rulemaking requirement deadlines passed, three rulemaking requirements were finalized and one rule was proposed that would meet four rulemaking requirements. http://www.davispolk.com/sites/default/files/Dec2013_Dodd.Frank_.Progress.Report_0.pdf

In re KB Toys Inc.,1 the US Court of Appeals for the Third Circuit affirmed the holdings of the lower courts that claims subject to disallowance under Section 502(d) of the Bankruptcy Code are “similarly disallowable in the hands of the subsequent transferee.” According to the Third Circuit, when a creditor owes property to the estate, until that property is returned to the estate, that creditor’s claim, regardless of who holds it, is impaired, and the subsequent sale of that claim cannot rid it of its impairment.

The U.S. Court of Appeals for the Third Circuit in In re KB Toys Inc., No. 13-1197, 2013 WL 6038248 (3d Cir. Nov. 15, 2013), held that trade claims that are subject to disallowance under § 502(d) of the Bankruptcy Code in the hands of original claimants are similarly disallowable in the hands of a subsequent transferee of such claims.

The United States Court of Appeals for the Third Circuit recently held that bankruptcy claims subject to disallowance under section 502(d) of the Bankruptcy Code will also be disallowed in the hands of an assignee or purchaser of the claim.

In a decision that demonstrates the potentially broad impact of the forthcoming Supreme Court decision in Bellingham, the Fifth Circuit held that bankruptcy judges may not “determine” non-core matters even where the parties consent. BP RE, L.P. v. RML Waxahachie Dodge, L.L.C. (In re BP RE, L.P.), No. 12-51270 (5th Cir. Nov. 11, 2013). This Alert provides an update on the case and discusses the Article III limitations.

On November 12, 2013, the U.S. Department of Justice announced a proposed settlement of its challenge to the US Airways/American Airlines merger. The settlement, which requires extensive divestitures, clears the way for the carriers to close the $11 billion deal they announced on February 14, 2013. Consummation of this deal brings to a close a period of significant industry consolidation that has reduced the number of major U.S. airlines from nine to five since 2008.

Proofs of claim are generally required to be filed by creditors in bankruptcy cases if they want to receive a payment on their claims. Many creditors have these claims forms prepared and signed by in-house or outside counsel. As a consequence of an amendment to the proof of claim form, having the claim signed by counsel runs the risk of waiving attorney-client and attorney work product privileges. This Alert discusses a recent case so holding, who should sign the claim forms in light of the amendment to the form, and what to do if your attorney has signed the claim form.

As Edward Snowden pursues asylum in Russia, the world is reeling in the revelations of the United States’ NSA (National Security Agency) surveillance activities and the US Postal Service’s policy of photographing every “mail cover” passing through the system.