Introduction
On Sunday, Citadel Broadcasting, the nation’s third largest radio station operator, filed for Chapter 11 bankruptcy protection after reaching a pre-negotiated restructuring agreement with creditors that hold 60% of the company’s secured debt. Citadel owns and operates 224 AM and FM radio stations that include KABC-AM in Los Angeles, WLS-AM in Chicago, and WPLJ-FM in New York City. New York’s WABC-AM, which is owned by Citadel, is the home of ABC Radio News and also hosts several syndicated radio personalities, including Don Imus and Rush Limbaugh. In documents filed with the U.S.
Bankruptcy Rule 2019, an often ignored procedural rule in U.S. bankruptcies, has returned to the public eye with a vengeance in light of a recent ruling by the influential Bankruptcy Court for the District of Delaware¹ and controversial pending amendments to Rule 2019 proposed by the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States (the “Rules Committee”). The amendments will be the subject of a public hearing held in New York City on February 5, 2010.²
Lehman Brothers Holdings Inc.’s September 15, 2008 bankruptcy was an event of default under thousands of derivatives contracts to which a Lehman entity was a party and for which Lehman Brothers Holdings was the guarantor. This default entitled the vast majority of Lehman’s counterparties to terminate these contracts, and almost all were terminated.
As we count down the days until the New Year, we are reminded of the momentous year we will leave behind us on December 31. While memorable for many things, 2009 may long be remembered as a year of record corporate insolvency. In 2009, General Motors, CIT, Chrysler, and Thornburg Mortgage filed four of the ten largest corporate bankruptcies in U.S. history. Equally notable are the number of corporate filings made in 2009.
On Friday, the Michigan Office of Financial and Insurance Regulation closed Citizens State Bank, headquartered in New Baltimore, Michigan, and the FDIC was named as receiver.
On Friday, the OTS closed First Federal Bank of California, headquartered in Santa Monica, California, and the FDIC was named as receiver.
The Supreme Court declines to review a circuit court decision in Oneida Ltd., which held that a debtor cannot discharge in bankruptcy, as a prepetition claim, premiums it owes to the Pension Benefit Guaranty Corporation in connection with the termination of a pension plan.
Introduction
The Florida Office of Insurance Regulation has placed Magnolia Insurance Company under administrative supervision, finding that the company was in an unsound condition. Under terms of a December 14, 2009 consent order, the company will not be able to issue or renew any policies without permission from the regulator. Magnolia’s President, H. James Irl, has resigned and is prohibited from exercising any managerial control. The consent order also required the company to notify policyholders and agents that if they choose to obtain coverage from Magnolia, they do so at their own risk.
There is something for everyone in the suitably named Worker, Homeownership, and Business Assistance Act of 2009–including potential recoveries for unsecured creditors of a debtor reorganizing or liquidating pursuant to the United States Bankruptcy Code.
Background