The latest turn in the ongoing Petters bankruptcy saga came on June 11, when U.S. Bankruptcy Judge Gregory Kishel issued a 46-page order examining 2012 amendments to the Minnesota Uniform Fraudulent Transfer Act (MUFTA).
Senior lienholders sued lenders holding junior liens on common collateral, arguing that the junior lienholders violated an intercreditor agreement. The bankruptcy court addressed the issues in the context of motions to dismiss the senior lienholder complaints.
On June 1, 2015, the United States Supreme Court decided Bank of America v. Caulkett, No. 13-1421, together with Bank of America v. Toledo-Cardona, No. 14-163, holding unanimously that a Chapter 7 bankruptcy debtor cannot “strip off” a junior lien.
The District Court for the Central District of California recently held that an assignee that acquired rights to a terminated swap agreement was not a "swap participant" under the Bankruptcy Code and, therefore, could not invoke safe harbors based on that status to foreclose on collateral in the face of the automatic stay. [1] The court ruled that the assignee acquired only a right to collect payment under the swap agreement, not the assignor's rights under the Bankruptcy Code to exercise remedies without first seeking court approval.
Background
The Fifth Circuit Court of Appeals recently issued a decision that should make defendants in Ponzi cases shiver in their boots. The court said that the defendant, the Golf Channel, had to return nearly $6 million and that it could not take advantage of a commonly-invoked “reasonably equivalent value” defense. Even though the Golf Channel had aired advertisements promoting the business, which would normally have been “reasonably equivalent value,” the Fifth Circuit held that by airing advertisements promoting the Ponzi scheme, the Golf Channel did nothing to help the Ponzi scheme
The Third Circuit’s recent holding in In re Jevic Holding Corp., raised a number of intriguing topics for us bankruptcy nerds so we could not resist taking a closer look at one of the issues presented in the case – structured dismissals. If you are not familiar with the concept, you are probably not alone, as the use of a structured dismissal as a means to exit bankruptcy is relatively uncommon. Although the ma
The Bankruptcy Code allows bankruptcy trustees, debtors in possession, and official committees to hire attorneys, accountants, and other professionals to assist them in carrying out their statutory duties, with their fees to be paid by the bankruptcy estate. However, to get paid, these professionals must obtain approval from the bankruptcy court. But what happens when someone objects to their fees? Can the professionals recover the fees they incur in defending their fee applications? The Supreme Court says no.
This week, the Weil Bankruptcy Blog premieres a new series, “Lookback Period.” In these entries, we will periodically review and summarize the hot topics on which we have been writing over the last couple of weeks. We thought this might be an easy way on a summer Friday (or a rainy weekend) to catch up on what you might have missed in the Weil Bankruptcy Blog.
More Momentive, This Time From the District Court
The courts continue to pick away at the “unfinished business rule.” The latest blow came earlier this month when a U.S. district court dismissed a Chapter 7 trustee’s claims against eight law firms who provided services to former clients of Howrey LLP. We are getting close to the point where the unfinished business rule may in fact be finished.
The most recent decisions (by judges in Delaware and several other relevant jurisdictions) hold that fiduciary duties are owed to the corporation that the director and officer is serving and do not change whether the corporation is solvent, approaching insolvency (described as the “zone of insolvency”), or insolvent.