A bankruptcy trustee was “not entitled to avoid” a secured lender’s “lien under the Bankruptcy Code” (“Code”), held the U.S. Court of Appeals for the Seventh Circuit on Sept. 11, 2019. In re 180 Equipment, LLC, 2019 WL 4296751, *6 (7th Cir. Sept. 11, 2019). The court rejected the trustee’s argument that the lender’s “lien [was] avoidable because the [lender’s] financing statement failed to properly indicate the secured collateral.” Id., at 1.
A bankruptcy trustee could not “avoid [a] debtor’s transfer” of encumbered asset sale proceeds when the debtor holds the funds “as a mere disbursing agent [under] a contract that” restricted its use, held the U.S. Court of Appeals for the First Circuit on April 18, 2018. Keach v. Wheeling & Lake Erie Railway Co. (In re Montreal, Me. & Atl. Ry.), 2018 U.S. App. LEXIS 9772 *14 (1st Cir. Apr. 18, 2018).
“Transaction fees are part of the standard, negotiated base compensation for the investment banker,” held the Bankruptcy Court for the Southern District of New York on Dec. 16, 2016. In re Relativity Fashion, LLC, 2016 Bankr. LEXIS 4339, *10 (Bankr. S.D.N.Y. Dec. 16, 2016) (Wiles, B.J.). The court denied objections to the transaction fees sought by two investment bankers, P and H, ruling that the objecting parties (a fee examiner, the debtor and a secured lender) had no right under Bankruptcy Code (“Code”) § 328(a) to challenge the transaction fees. Id. at *25.
“Puerto Rico’s Recovery Act is barred by § 903(1) … of the Bankruptcy Code,” held the U.S. Supreme Court on June 13, 2016. Commonwealth of Puerto Rico v. Franklin California Tax-Free Trust, 2016 WL 3221517, *11 (U.S. June 13, 2016) (5-2). Affirming the First Circuit, the court reasoned that Code § 903(i) “preempts state bankruptcy laws [enabling] insolvent municipalities to restructure their debts over the objections of creditors [and] instead requires municipalities to restructure [their] debts under Chapter 9 of the Code.” Id., at *2.
So-called “red flags” were not “sufficient to impose a duty on [a gambling casino (‘Casino’)] to investigate” a Chapter 11 debtor’s pre-bankruptcy fraudulent transfers to its insiders who gambled at the Casino, held the U.S. Court of Appeals for the Seventh Circuit on Oct. 13, 2015. In re Equipment Acquisition Resources, Inc., 2015 WL 5936354, at *6 (7th Cir. Oct. 13, 2015).
The U.S. Court of Appeals for the Second Circuit, on Sept. 26, 2014, held that a U.S. bankruptcy court was required to conduct a full review of a foreign debtor’s sale of property “within the territorial jurisdiction of the United States,” relying on the “plain” language of Bankruptcy Code (“Code”) Section 1520(a)(2) (“section 363 … [applies] … to a transfer of … property that is within the territorial jurisdiction of the United States to the same extent that the section … would apply to property of … an estate.”). In re Fairfield Sentry Ltd., 2014 WL 4783370, *4-5 (2d Cir.
The U.S. Court of Appeals for the Third Circuit held on July 30, 2013, that a reorganized Chapter 11 debtor could reopen its closed case, enabling the debtor assignee to enforce a purchase option in a real property lease despite the lease’s “anti-assignment provisions.” In re Lazy Days’ RV Center Inc., 2013 WL 3886735, *5 (3d Cir. July 30, 2013).
The U.S. Court of Appeals for the Seventh Circuit held on July 9 that the nondebtor licensee of a rejected trademark license may continue to use the trademark (Sunbeam Products, Inc. v. Chicago American Mfg., LLC, ___ F.3d ___, 2012 WL 2687939 (7th Cir. July 9, 2012) (Easterbrook, Ch. J.)). The court's clear, concise and no-nonsense opinion explained that Bankruptcy Code ("Code") § 365(g) deems a trustee's rejection to be a "breach" of the contract, enabling "the other party's rights [to] remain in place." Id., at *3.
On March 15, 2010 Lehman Brothers Holdings, Inc. and its affiliated debtors (the “Debtors”) filed a motion (the “Motion”) with the Bankruptcy Court overseeing the Debtors’ Chapter 11 cases (the “Court”) seeking authorization to establish certain claims and alternative dispute resolution procedures designed to expedite the process of reconciling claims filed against the Debtors’ estates.
The procedures, set forth in detail in an exhibit to the proposed order filed with the Motion, are summarized as follows: