On May 21, 2015, the United States Court of Appeals for the Third Circuit (the "Third Circuit") held that in rare instances a bankruptcy court may approve a "structured dismissal"- that is, a dismissal "that winds up the bankruptcy with certain conditions attached instead of simply dismissing the case and restoring the status quo ante" - that deviates from the Bankruptcy Code's priority scheme. See Official Committee of Unsecured Creditors v. CIT Group/Business Credit Inc. (In re Jevic Holding Corp.), Case No.
In a significant and somewhat surprising decision, the New York Court of Appeals recently held that, absent an express provision to the contrary, an individual lender in a syndicated loan is prohibited from enforcing its rights under the loan agreement or a related guaranty.
In a groundbreaking, and somewhat surprising decision, the Delaware Supreme Court recently held that creditors of a company that is either in the zone of insolvency or actually insolvent cannot, as a matter of law, directly sue directors of the company for breaches of the directors’ fiduciary duties.
In a closely watched case against Motorola, Inc. arising out of the Iridium chapter 11 case, Judge James M. Peck of the Bankruptcy Court for the Southern District of New York has adopted a market approach to determining prepetition solvency, finding “insufficient cause to set aside the verdict of solvency and capital adequacy already given to Iridium by the public markets.” In his 111-page opinion1 Judge Peck agreed with the Third Circuit’s approach in VFB LLC v.
In a recent decision1 in a claims objection proceeding in the Solutia chapter 11 case, the Bankruptcy Court for the Southern District of New York set clear limits on the allowance of secured claims.
If you thought, like many, that the Delaware Supreme Court’s decision in Trenwick Am. Litig. Trust v. Billet, 2007 Del. LEXIS 357 (Del. 2007), put the theory of “deepening insolvency” to rest, once and for all, well, think again. A recent decision, George L. Miller v. McCown De Leeuw & Co. (In re The Brown Schools), 2008 Bankr. LEXIS 1226 (Bankr. D. Del. April 24, 2008), from the United States Bankruptcy Court for the District of Delaware shows that “deepening insolvency” endures, albeit in reduced form.
Resolving a split among various circuits, the United States Supreme Court has ruled that the exemption from state stamp taxes under section 1146(a) of the Bankruptcy Code does not apply to asset sales under section 363 of the Bankruptcy Code that took place before confirmation of a debtor’s chapter 11 plan—an event that may take months or years to accomplish.1
On September 15, 2008, Lehman Brothers Holdings Inc. (“LBHI”) filed for protection under chapter 11 of the United States Bankruptcy Code in New York. The case bears the caption In re Lehman Brothers Holdings Inc., Case No. 08-13555, and has been assigned to Judge James M. Peck. Notably, the only Lehman entity thus far to file for chapter 11 protection is LBHI; neither the main “broker dealer” (Lehman Brothers, Inc.) nor other subsidiaries of Lehman filed for U.S. bankruptcy protection. However, Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
The United States Bankruptcy Court for the District of Delaware inElway Company, LLP v. Miller (In re Elrod Holdings Corp.), 2008 WL 4414315 (Bankr. D. Del. Sept. 30, 2008) recently held that transfers in payment of a private stock sale to insiders constituted “settlement payments” under section 546(e) of the Bankruptcy Code and were therefore immune from avoidance as constructively fraudulent transfers by the chapter 7 trustee.
WorldSpace, a key provider of satellite radio services to customers living in ten European, African and Asian nations, filed for Chapter 11 protection last Friday before the U.S. Bankruptcy Court in Wilmington, Delaware, listing assets of $307.4 million against debts of $2.12 billion.