Now that we’ve recovered from the balmy holidays, survived a record snowstorm in New York, eaten way too many snacks at Super Bowl parties, wished everyone a Happy Year of the Monkey, enjoyed two long weekends, and debated the effects of the passing of Justice Scalia, it’s time to settle back down to business and take the rest of this short week to catch up on what you may have missed in the Weil Bankruptcy Blog so far this year.
Bankruptcy Code Preempts McCarran-Ferguson Act in Dispute Over Courts’ Jurisdiction
(Bankr. S.D. Ind. Feb. 16, 2016)
Allowance of Claims—Make-Whole Premiums
On November 17, 2016, the Third Circuit Court of Appeals issued a highly anticipated ruling in the chapter 11 reorganization of Energy Future Holdings Corp. ("EFH"), invalidating one of the aspects of EFH’s confirmed chapter 11 plan. InDel. Tr. Co. v. Energy Future Intermediate Holding Co. LLC (In re Energy Future Holdings Corp.), 842 F.3d 247 (3d Cir. 2016), a three-judge panel of the Third Circuit reversed lower court rulings disallowing the claims of EFH’s noteholders for hundreds of millions of dollars in make-whole premiums allegedly due under their indentures.
(S.D. Ind. Feb. 8, 2016)
The district court affirms the bankruptcy court’s decision holding that the debtor was collaterally estopped from challenging the amount of the mortgage lender’s claim. The lender had obtained judgment in a prepetition state court foreclosure action, in which the debtor had presented the same arguments regarding the loan balance calculation. The district court finds that the doctrine of collateral estoppel applies and the claim amount could not be re-litigated in the bankruptcy. Opinion below.
To the extent authorized by a State, Chapter 9 of the Bankruptcy Code allows municipalities (defined as a “political subdivision or public agency or instrumentality”) of that State – including public hospitals – to reorganize their debts in the face of insolvency. Municipalities achieve this goal through implementation of a court-approved plan of adjustment. Although the standards for confirming (approving) a Chapter 9 plan resemble the well-established standards for confirming a Chapter 11 plan, differences exist.
On November 5, 2015, the United States Bankruptcy Court for the Northern District of California issued a “Memorandum re Plan Confirmation” in In re Bowie, Case No. 15-10144 (Bankr. N.D. Cal. Nov.
An overvalued property may now have a bigger impact on a secured creditor’s bottom-line during bankruptcy. Splitting with the Seventh Circuit, the Fifth Circuit in Southwest Securities, FSB v.
The court overseeing the liquidation of Reliance Insurance Company, one of the largest insurance liquidations in history, has approved the liquidator’s request for a final claims bar date of March 31, 2016. Reliance’s current payment percentage is 65%, so any insured with a significant coverage claim against Reliance should ensure that it files a proof of claim and provides the requisite supporting information by the bar date. If your company needs assistance in determining whether you have a valid claim against Reliance or in filing and documenting a claim, our firm can help.
A Chapter 11 debtor’s impairment in its reorganization plan of two unsecured claims filed by its former lawyer and accountant “was transparently an artifice to circumvent the purposes of” the Bankruptcy Code (“Code”), held the U.S. Court of Appeals for the Sixth Circuit on Jan. 27, 2016. In re Village Green I G.P., 2016 WL 325163, at *2 (6th Cir. Jan. 27, 2016).