In the United States, in a typical plain vanilla lending arrangement, if a counterparty files for bankruptcy, an automatic stay of enforcement actions is imposed that would prevent a lender from (i) foreclosing on the property of the debtor, (ii) terminating contracts with the debtor, (iii) commencing or continuing certain enforcement actions against the debtor or its property and/or (iv) setting off amounts owed under such arrangements (in each case unless a motion is filed and granted in the related bankruptcy case).
Mission Product Holdings Inc. v. Tempnology, LLC, No. 17-1657
Section 365 of the Bankruptcy Code provides that a bankruptcy trustee may “assume or reject any executory contract” of the debtor and that “the rejection of an executory contract … constitutes a breach of such contract.” The Supreme Court today granted certiorari to decide whether the decision of a bankruptcy trustee to terminate a debtor’s agreement to license intellectual property thereby terminates the rights of the licensee to use the intellectual property.
Czyzewski v. Jevic Holding Corp., No. 15-649
A Chapter 11 bankruptcy is implemented through a plan that assigns allowed claims to classes of different priority levels. Unsecured claimants without priority are not entitled to any payment on their claims until all priority claims have been satisfied.
In Michigan State Housing Development Authority v. Lehman Brothers Derivatives Products, Inc., et al. (In re Lehman Brothers Holdings Inc., et al.) (Michigan State Housing), 1 the US Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) recently held that a provision in a swap agreement that shifted the methodology for calculating termination amounts upon the debtor counterparty’s bankruptcy was enforceable under the Bankruptcy Code’s safe harbor for liquidating, terminating and accelerating swap agreements.
It finally happened. On 12 December 2011, New York Governor Andrew Cuomo signed Senate Bill 2713A into law. The bill, which was passed by the legislature in June, adds important provisions to the New York Insurance Law regarding the treatment of qualified financial contracts in an insurance insolvency proceeding.
The Federal Deposit Insurance Corporation (FDIC) has announced that the agenda for its board meeting next Tuesday, January 18, 2011, will include discussion regarding a “Final Rule Implementing Certain Orderly Liquidation Authority Provisions of the Dodd-Frank Act.”
In a December 16, 2021, decision,1 Judge Colleen McMahon of the US District Court for the Southern District of New York reversed the bankruptcy court order confirming the Chapter 11 plan of Purdue Pharma, L.P.
In its recent opinion arising out of the Orexigen Therapeutics Inc.
The U.S. Bankruptcy Court for the Northern District of Georgia ruled in In re Serendipity Labs, Inc., 620 B.R. 679 (Bankr. N.D. Ga.
As discussed in earlier posts,1 substantial uncertainty exists over whether companies in bankruptcy are eligible to pursue funding pursuant to the SBA’s Paycheck Protection Program, or PPP, which was established by the CARES Act to support small businesses by offering SBA-guaranteed loans on advantageous terms.