The Second Circuit’s recent opinion in The Matter of: Motors Liquidation Company, 2016 WL 3766237 (2nd Cir. 2016) should give pause to all buyers of assets from bankruptcy estates.
In a pair of decisions in 2015, the United States Bankruptcy Court of the District of Delaware determined that neither the first lien notes trustee nor the second lien notes trustee of Energy Future Intermediate Holdings Corp. (“EFIH”), a subsidiary of Energy Future Holdings (“EFH”), was entitled to receive a make-whole on the repayment of the corresponding indebtedness resulting from the acceleration of that debt in the EFH bankruptcy case.
Last week, the Seventh Circuit chimed in on whether time barred proofs of claim violate the FDCPA.In Owens v. LVNV Funding, LLC, the Seventh Circuit affirmed three district court decisions which dismissed consumer’s FDCPA claims against debt buyers who filed time barred proofs of claim.Owens v. LVNV Funding, LLC, Nos. 15-2044, 15-2082, 15-2109 (7th Cir. Aug. 10, 2016).In doing so, the Seventh Circuit joins the Second and Eighth Circuits in siding against the Eleventh Circuit’s decision in Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014).
“Just when I thought I was out…they pull me back in.” That must be what GM’s executives (and counsel) were thinking when the Second Circuit handed down its recent decision overturning portions of the 2015 Bankruptcy Court decision that could have immunized the “New GM” from “Old GM’s” liability related to the ignition switch recall of 2014. The decision also calls into question the 2009 sale order as a potential violation of the victims’ due process rights.
In order to confirm a chapter 11 plan, at least one class of creditors whose claims are “impaired” must accept the plan. The concept of “impairment” is very broad. Under the Bankruptcy Code, a class of claims is impaired unless the plan “leaves unaltered the legal, equitable, and contractual rights” to which the holder of the claim is entitled. That alteration can be very modest: payment in full but paid half at confirmation and the other half in 30 days, reduction of the applicable interest rate by one basis point, etc.
CLIENT PUBLICATION Financial Restructuring & Insolvency | August 9, 2016 Judge Chapman Flips the Script US Bankruptcy Court for the Southern District of NY Grants Noteholders’ Motion to Dismiss Based on Lehman’s Failure to State Claim With Respect to Flip-Clause Litigation On June 28, 2016, in what essentially was a clean sweep for the noteholder and trust certificate holder defendants (the “Noteholders”), the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) granted an omnibus motion to dismiss Lehman Brothers Special Financing, Inc.’s (“LBSF
Introduction
The Supreme Court will consider these key questions next term in Czyzewski v Jevic Holding Corp:(1)
Upon receiving notice of a debtor’s bankruptcy case, the prudent debt collector typically files a proof of claim, in the hope of receiving some distribution from the debtor’s bankruptcy estate. Absent a fraudulent claim by the debt collector, the Bankruptcy Code specifically provides for the filing of claims against the debtor’s estate. So how could a debt collector be sued for doing what the Code allows? It could happen if debts a collector actually holds are barred from enforcement under a state statute of limitations.
On August 4, 2016, the Delaware Bankruptcy Court considered cross-motions for summary judgment in a preference action case styled as Pirinate Consulting Group, LLC v. Maryland Department of the Environment (In re NewPage Corp.), Adv. Pro. No. 13-52206 (KG). This gem of an opinion is noteworthy in that it analyzes various defenses raised by a state agency to a preference complaint.
Key Points