The new receivership and assignment for benefit of creditors statutes took effect in 2012. See Minn. Stat. §§ 576 and 577. The statutes codified existing common law and best practices, and provided a comprehensive reference point for practitioners and judges. See e.g. Minn. Stat. § 576.22(d). It was anticipated that the receivership and ABC law would become more accessible and usable. While concrete statistics are not available, receiverships and ABCs appear to be used with greater frequency.

The Supreme Court of New Jersey reversed the decision of the Appellate Court, and held that a settlement that a borrower and a lender reached during mediation pursuant to the Residential Mortgage Foreclosure Mediation Program was enforceable because the borrower fulfilled all contingent terms making the agreement permanent. 

A copy of the opinion is available at: Link to Opinion.

In one of the most important bankruptcy court decisions of all time, Northern Pipeline Construction Co. v. Marathon Pipe Line Co., the United States Supreme Court held that the 1979 Bankruptcy Code was unconstitutional because it lodged too much judicial power in bankruptcy judges who were not given “Article III” status, which grants lifetime tenure and salary protection and helps assure judicial independence.

GST Autoleather, Inc., a manufacturer of leather interior products for automobiles based in Southfield, Michigan, along with five of its subsidiaries and affiliates, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 17-12100).

On September 27, 2017, the Senate passed the Bankruptcy Judgeship Act of 2017. The Senate’s bill is intended to ease the burden on certain overworked bankruptcy courts and also increase bankruptcy fees in larger cases. The House of Representatives passed a different version of the bill earlier in the year.

On March 22, 2017, the Supreme Court decided Czyzewski v. Jevic Holding Corp., holding that a bankruptcy court may not approve a structured dismissal of a Chapter 11 bankruptcy case if the order does not comply with the priority rules of the Bankruptcy Code. 580 U.S. __ (2017).

In order to file for bankruptcy, a corporate entity must be legally authorized to do so. Whether the bankruptcy petition has been duly authorized is governed by state law and often depends on the entity’s governance documents. If a petition has not been properly authorized, creditors may seek its dismissal.

In many decisions involving US chapter 15 cases, the bankruptcy court’s principal focus will be on what is the debtor’s center of main interests (COMI). An ancillary issue is whether it is appropriate to create COMI to obtain the benefit of a more favorable jurisdiction to restructure a company’s debt (otherwise known as “COMI shifting”).

The ability to avoid fraudulent or preferential transfers is a fundamental part of U.S. bankruptcy law. However, when a transfer by a U.S. entity takes place outside the U.S. to a non-U.S. transferee—as is increasingly common in the global economy—courts disagree as to whether the Bankruptcy Code’s avoidance provisions apply extraterritorially to avoid the transfer and recover the transferred assets. A pair of bankruptcy court rulings handed down in 2017 widened a rift among the courts on this issue.

Creditors lacking liens to secure their claim can fare poorly in a bankruptcy case. The “absolute priority rule” is a bedrock principle of bankruptcy law and provides that a creditor at a particular rung of the claim priority hierarchy must be paid in full before any money flows down to junior creditors. Secured creditors reside near the top of the hierarchy, followed by administrative expense claimants, priority claimants and general unsecured creditors.