Official Committee of Unsecured Creditors v. Baldwin (In re Lemington Home for the Aged), No. 10-4456 (3d Cir., Sept. 21, 2011)

CASE SNAPSHOT

In June 2011, the United States Supreme Court issued its opinion in the case known as Stern v. Marshall. The U.S. Supreme Court held that filing a proof of claim in a bankruptcy case does not constitute consent to the bankruptcy court’s jurisdiction over all counterclaims or actions that the bankruptcy estate may later bring against the creditor.

In fact, filing the proof of claim constitutes consent only to those claims or actions that either (1) stem from the bankruptcy case itself; or (2) are necessary to the resolution of the creditor’s proof of claim.  

When a traditional nonbanking company files a case under the Bankruptcy Code, a judge is appointed to be the neutral arbiter of disputes that arise between the debtor and its creditors.

In re General Growth Props., Inc., Case No. 09-11977 (ALG), 2011 BL 189724 (Bankr. S.D.N.Y. July 20, 2011)  

CASE SNAPSHOT

Giuliano v. Shorenstein Company, LLC (In re Sunset Aviation, Inc.), Adv. No. 11- 50965, Bankr. No. 09-10778, 2011 WL 4002429 (Bankr. D. Del. Sept. 7, 2011)  

CASE SNAPSHOT

In re Marcal Paper Mills, Inc., No. 09-4574, 650 F.3d 311 (3d Cir., 2011)

CASE SNAPSHOT

Sprint Nextel Corporation v. U.S. Bank N.A. (In re TerreStar Networks, Inc.), Case No. 10-15446 (Bankr. S.D.N.Y., Aug. 19, 2011)

CASE SNAPSHOT

Leading the Past Week

Due to the economic crisis of the past few years, many large and medium-sized businesses were forced to file for bankruptcy protection. Now, many businesses are faced with letters from bankruptcy trustees, or worse, a summons where the trustee is seeking liability for a “preference.” Faced with these demands, many businesses are failing to defend themselves, and incurring unnecessary liability. But acting quickly can help protect you and your business and settle preference claims short of expensive litigation.

Recent trade publications have prophesized a wave of shipping bankruptcies. We have already seen several in the United States in 2011, such as Omega and Marco Polo. Trailer Bridge and General Maritime fi led in November. There will undoubtedly be more, despite the potential debtors having little or no connection to the United States. In this respect, non-U.S. listed shipowning companies considering restructuring and reorganization may not factor in the potential for a U.S. main proceeding under Chapter 11 reorganization on the assumption that they do not qualify to be U.S. debtors.