“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.

The Federal Rules of Bankruptcy Procedure (“Bankruptcy Rules”) require each corporate party in an adversary proceeding (i.e., a bankruptcy court suit) to file a statement identifying the holders of “10% or more” of the party’s equity interests. Fed. R. Bankr. P. 7007.1(a). Bankruptcy Judge Martin Glenn, relying on another local Bankruptcy Rule (Bankr. S.D.N.Y. R.

An undersecured mortgagee’s “release of [its entire underlying claim] was value obtained ‘in exchange for’ the [pre-bankruptcy] sale of the [debtor’s] property,” held the U.S. Court of Appeals for the Tenth Circuit on Dec. 6, 2016. In re Expert South Tulsa LLC, 2016 U.S. App. LEXIS 21704, at *11 (10th Cir. Dec. 6, 2016). The Tenth Circuit flatly rejected the debtor’s attempt “to set aside as a fraudulent transfer its own sale of real estate that was encumbered by a mortgage far exceeding the sale price.” Id. at *1.

“Any ... suit [against creditors’ committee members for their official acts] must be brought in the bankruptcy court, or in another court only with the express permission of the bankruptcy court,” held the U.S. Court of Appeals for the Ninth Circuit on Nov. 28, 2016. In re Yellowstone Mountain Club LLC, 2016 U.S. App. LEXIS 21187, *9 (9th Cir. Nov. 28, 2016).

A Chapter 11 debtor “cannot nullify a preexisting obligation in a loan agreement to pay post-default interest solely by proposing a cure,” held a split panel of the U.S. Court of Appeals for the Ninth Circuit on Nov. 4, 2016. In re New Investments Inc., 2016 WL 6543520, *3 (9th Cir. Nov. 4, 2016) (2-1).

“[T]he bankruptcy court did not abuse its discretion in denying [the debtor’s former employees’] motion to compel arbitration” when the dispute turned on the relative priority of their claims, held the U.S. Court of Appeals for the Second Circuit on Oct. 6, 2016. In re Lehman Bros. Holdings Inc., 2016 WL 5853265, *2 (2d Cir. Oct. 6, 2016). The Securities Investor Protection Act (“SIPA”) trustee in the liquidation of Lehman Brothers Inc.

“Equitable mootness” prevented the U.S. Court of Appeals for the Sixth Circuit from “unravel[ing] the entire Plan, … forc[ing] the City [Detroit] back into emergency oversight, and requir[ing] a wholesale recreation of the vast and complex web of negotiated settlements and agreements.” In re City of Detroit, 2016 U.S. App. LEXIS 17774, *14, *17 (6th Cir. Oct. 3, 2016) (2-1).

“[T]he price received at a California tax sale” properly held under state law “conclusively establishes ‘reasonably equivalent value’ for purposes of” the Bankruptcy Code’s (“Code”) fraudulent transfer section (§ 548(a)(1)), held the U.S. Court of Appeals for the Ninth Circuit on Sept. 8, 2016. In re Tracht Gut LLC, 2016 WL4698300, at *1 (9th Cir. Sept. 8, 2016). Affirming the lower courts, the Ninth Circuit reasoned that “California tax sales have the same procedural safeguards as the California mortgage foreclosure sale” approved by the U.S. Supreme Court in BFP v.

The safe harbor protection of Bankruptcy Code (“Code”) §546(e) does not protect “transfers that are simply conducted through financial institutions,” held the U.S. Court of Appeals for the Seventh Circuit on July 28, 2016. FTI Consulting Inc. v. Merit Management Group LP, 2016 WL 4036408, *1 (7th Cir. July 28, 2016).

“[T]he claims of [an individual debtor’s] general unsecured creditors are ‘senior to or equal [to]’” a defrauded investor’s security claim under Bankruptcy Code (“Code”) § 510(b), held the U.S. Court of Appeals for the Ninth Circuit on Aug. 22, 2016. In re Del Biaggio, 2016 WL 4435904, *9 (9th Cir. Aug. 22, 2016). The investor (“F”) had filed a claim against the debtor based on his wrongful failure to fund, through his affiliated limited liability company (“LLC”), his share in an acquisition venture with F.