On June 10, the Second Circuit Court of Appeals held in the Quebecor World (USA) Inc. bankruptcy that payments made by a company in purchasing notes issued by an affiliate constituted transfers made in connection with a securities contract. Therefore, the payments were protected from avoidance by a "safe harbor" under section 546(e) of the Bankruptcy Code. Orrick covered the Quebecor decision in depth in the linked client memo.
In many Chapter 11 business bank - ruptcies, the office of the U.S. Trustee (the “UST”) will appoint a representative body of unsecured creditors (the “Com mittee”) to represent the interests of all unsecured creditors. The Committee is selected from unsecured creditors of the debtor who generally hold the largest unsecured claims against the debtor, are not “insiders” of the debtor and are willing to serve. A potential Committee member’s willingness to serve is demon strated through returning the creditor questionnaire to the UST and/or attending the formation meeting when scheduled.
In re Zota Petroleums, LLC, 482 B.R. 154 (Bankr. E.D. Va. 2012)
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In re RAG East, LP– Case no. 12-04545-CMB (Bankr. W.D. Pa. March 4, 2013)
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The court granted summary judgment in favor of a defrauded lender in a lien priority dispute with subsequent third-party lenders. The court determined that the lien of a purchase money mortgage that was allegedly released pursuant to a fraudulent satisfaction piece nonetheless had priority over the liens held by innocent third parties who provided loans to the debtor without notice of the fraud.
FACTUAL BACKGROUND
The Unsecured Creditors Comm. v. Community Bank(In re Stinson Petroleum Co., Inc.), Case No. 12-60234 (5th Cir., Jan. 7, 2013)
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Teed v. Thomas & Betts Power Solutions, LLC, (7th Cir., No. 12-2440, Mar. 26, 2013)
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In re WEB2B Payment Solutions, Inc., 2013 WL 1188041 (8th Cir. BAP, Mar. 26, 2013)
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The bank, which held a possessory lien in the deposit account of the debtor, lost its lien when it turned over the funds in the account to the trustee upon his turnover demand, because the bank failed to seek adequate protection prior to turning over the funds.
FACTUAL BACKGROUND
In re ESA Environmental Specialists, Inc., 2013 WL 765705 (4th Cir., Mar. 1, 2013)
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In re Burcam Capital II, LLC, Case No. 12-04729-8-JRL (Bankr. E.D.N.C., Feb. 15, 2013)
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Prudential Insurance Company of America v. WestLB AG, 961 N.Y.S. 2d 360 (2012)
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