It always amazes me when, after more than a half-century of Uniform Commercial Code (“UCC”) jurisprudence, an issue one thinks would arise quite commonly appears never to have been decided in a reported case. Such an issue was recently decided by the U.S. Court of Appeals for the Ninth Circuit in an adversary proceeding in the Pettit Oil Co. Chapter 7 case.[1]
In a recent cross-border insolvency case, In re Agrokor d.d., 591 B.R. 163 (Bankr. S.D.N.Y. 2018), Judge Glenn of the United States Bankruptcy Court for the Southern District of New York recognized and enforced a restructuring plan approved by a Croatian court. Due to the nature of the debt to be discharged under the plan, the Court went through an in-depth analysis of international comity in the context of international bankruptcy law.
In 2010, Lehman Brothers Special Financing Inc. (“Lehman”) commenced an adversary proceeding against Shinhan Bank (“Shinhan”) to avoid and recover pre-bankruptcy transfers made to the South Korean bank. In 2015, while a motion to dismiss the case was pending, a mediator proposed a resolution to both sides at a settlement conference.
Substantive consolidation is the ultimate disregard of the corporate separateness of a group of related debtors--it is “the effective merger of two or more legally distinct (albeit affiliated) entities into a single debtor with a common pool of assets and a common body of liabilities,”[1] but without the actual de jure merger of the debtors.
Section 303(b)(1) of the Bankruptcy Code generally requires three petitioning creditors to join an involuntary petition, each of which must hold claims against the debtor that are not contingent as to liability and are not the subject of a bona fide dispute as to liability or amount.[1] The Bankruptcy Code does not define the term “bona fide dispute,” which has generated my
Avoiding a fraudulent transfer to the Internal Revenue Service (“IRS”) in bankruptcy has become easier, or at least clearer, as a result of a recent unanimous decision by a panel of the Court of Appeals for the Ninth Circuit, Zazzali v. United States (In re DBSI, Inc.), 2017 U.S. App. LEXIS 16817 (9th Cir. Aug. 31, 2017).
Earlier today AMR Corporation, its subsidiary American Airlines, Inc., and 18 other affiliates ("Debtors") filed petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York in Manhattan.1 The case was assigned to Bankruptcy Judge Sean H. Lane. The Debtors have asked the Court to consolidate all 20 cases for procedural purposes under the captionIn re: AMR Corporation, Case No. 11-15463.
Overview
In In re Nuverra Environmental Solutions, Inc., Case No. 18-3084, the Third Circuit affirmed the opinion of the District Court for the District of Delaware denying the confirmation appeal of an unsecured noteholder as equitably moot. In doing so, the Third Circuit (i) refused to allow a full-class recovery, as it would unscramble the substantially consummated plan, and (ii) refused an individualized payout to the bondholder, as it would unfairly discriminate against other members of the class in contravention of the Bankruptcy Code.
The Bottom Line
In Wheeling & Lake Erie Ry. Co. v. Keach (In re Montreal, Me. & Atl. Ry.), No. 19-1894 (1st Cir. Apr. 9, 2020), the First Circuit held that when determining the value of legal claims as collateral, the party with the burden of proof must establish the likely validity of the claim and the likelihood of recovery — demonstrating possible damages alone does not suffice.
What Happened?
Background
The Bottom Line