Our May 11th memo entitled “General Growth Properties Bankruptcy Court Defers Final Ruling on Cash Collateral, Cash Management and DIP Financing Issues” concluded that the ultimate impact of the bankruptcy filings of General Growth Properties, Inc. and its affiliates would depend in large part on how the cash collateral and DIP Loan issues were resolved. On May 13th, Judge Allan L. Gropper, the U.S. Bankruptcy Judge before whom these bankruptcies are pending, entered final orders on the pending cash collateral, cash management and debtor-in-possession financing motions.

C.A. No. 3017-CC (Del. Ch. May 15, 2009)

On May 15, 2009, Chancellor Chandler issued a four-page order in Fisk Ventures, LLC v. Segal, et al. addressing a motion for injunction or stay of the judicial dissolution of Genetrix, LLC pending appeal by Dr. Andrew Segal. Segal was appealing the January 13, 2009 Memorandum Opinion and the March 10, 2009 Order and decree of judicial dissolution of Genitrix, LLC.

On January 13, 2009, in Fisk Ventures, LLC v. Segal, the Court of Chancery of Delaware considered the petition by an investor to have Genetrix, LLC dissolved because it was no longer “reasonably practicable” to continue to operate the company when the company had no operating revenue, no prospects of equity or debt infusion, a deadlocked board of directors and an operating agreement that gave no means of navigating around the deadlock. The court found in favor of the investor and concluded that judicial dissolution was the best and only option for the members in the company.

Our first update1 discussed various initial proceedings in the Chrysler bankruptcy cases. This update provides certain information on the Order Approving Bidding Procedures for the Sale of Substantially all of the Debtors’ Assets, which was entered by the court on May 7, 2009, and the Interim Order Approving a DIP Credit Facility and Authorizing the Debtors to Obtain Post-Petition Financing, which was entered by the court on May 4, 2009. The final DIP Financing and Sale hearings are scheduled for May 20, 2009, and May 27, 2009, respectively.

As previously reported (3/17/08 post), this case involves the interpretation of the terms of a reinsurance contract and the duties of the parties under that contract. In the most recent development, the Eighth Circuit affirmed the Bankruptcy Appellate Panel’s judgment affirming in part, and reversing in part, a prior decision of the bankruptcy court regarding the reinsurance contract at issue.

Judge Arthur J. Gonzalez presided over hearings May 20, 2009, in this mega bankruptcy case. There were 21 matters on the agenda, as well as an emergency motion, that were heard or adjourned to a later date, in approximately two and a half hours of hearings (click here for a link to the audio file provided by the Clerk of the U.S. Bankruptcy Court for the Southern District of New York; it may take a moment to load before playing).

Retiree benefits are often a central issue in bankruptcy cases. For many employers the high cost of retiree medical benefits has been a significant contributing factor to the Chapter 11 filing and a matter of ongoing concern if the debtor is to be able to successfully reorganize. Understandably, employees, retirees and unions are equally concerned about the status of retiree benefits. Their obvious interest is to attempt to prevent the erosion of benefits that had been expected to be available during retirement.

The recent ruling by the Bankruptcy Court for the District of Montana in the Chapter 11 case of In re Yellowstone Mountain Club LLC 1 (“Yellowstone”), which found that a senior secured lender had engaged in “overreaching and predatory lending practices”, suggests an application of lender liability theory from today’s perspective to a transaction that took place before the credit crisis.  

On June 1, 2009, General Motors Corporation (“GM”) filed for Chapter 11 bankruptcy protection in the Bankruptcy Court of the Southern District of New York (the “Court”). Pursuant to numerous first day motions filed by GM, the Court has entered various orders relating to the administration of this bankruptcy proceeding. Of particular significance to GM’s suppliers are the following:

1. Deadlines Relating to the Assumption of Supplier Contracts.

On April 16, General Growth Properties, Inc. and certain of its affiliates (“GGP”) filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of New York. GGP operates a national network of approximately 200 shopping centers. To the surprise of many, most of GGP’s property-specific SPE subsidiaries (“SPE Debtors”) also filed for bankruptcy.