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Corporate minds do not all think alike: The Supreme Court affirms a purposive approach to the corporate attribution doctrine

Two recent Supreme Court of Canada decisions demonstrate that the corporate attribution doctrine is not a one-size-fits-all approach.

Canada, Company & Commercial, Insolvency & Restructuring, Litigation, McCarthy Tétrault LLP, Supreme Court of Canada
There’s Something About (Hail) Mary: Appeals of Sale Processes and Pre-Receivership Sale Agreements

Court approval of a sale process in receivership or Bankruptcy and Insolvency Act (“BIA”) proposal proceedings is generally a procedural order and objectors do not have an appeal as of right; they must seek leave and meet a high test in order obtain it. However, in Peakhill Capital Inc. v.

Canada, Ontario, Insolvency & Restructuring, Litigation, McCarthy Tétrault LLP
Lender’s use of debtor’s valuation judicially estops lender from making value objection

In re Investors Lending Group, LLC, 489 B.R. 307 (Bankr. S.D. Ga. 2013)

CASE  SNAPSHOT

The secured lender was judicially estopped from objecting to the valuation of parcels of land that the debtor proposed to surrender to the secured creditor through its plan of reorganization because the debtor used the valuations provided by the secured lender’s appraiser.

FACTUAL  BACKGROUND

USA, Georgia, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Collateral (finance), Foreclosure, Fair market value, Secured creditor
Trustee fails to carry burden, court affirms pre-petition transfers to cover check-kiting losses not avoidable preference

The Unsecured Creditors Comm. v. Community Bank(In re Stinson Petroleum Co., Inc.), Case No. 12-60234 (5th Cir., Jan. 7, 2013)

CASE SNAPSHOT

USA, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Legal burden of proof, Liquidation, Trustee, Fifth Circuit
‘Unfinished business’ doctrine in law firm dissolutions is the subject of recent opposing decisions within the same district

1) Dev. Specialists, Inc. v. Akin Gump Strauss Hauer & Feld LLP, Case No. 1:11-cv-05995 (S.D.N.Y. May 24, 2012)

CASE SNAPSHOT

USA, New York, Insolvency & Restructuring, Litigation, Reed Smith LLP, Limited liability partnership, Contingent fee
Secured blanket lien on inventory trumps reclamation rights

In re Furrs Supermarkets, Inc., No. 11-01-10779 SA (Bankr. D.N.M. Aug. 15, 2012)

CASE SNAPSHOT

USA, New Mexico, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Unsecured debt, Secured creditor, Unsecured creditor
‘Contingent claim’ not sufficient to establish right of setoff for lift-stay motion

In re WL Homes LLC, Case No. 09-10571 (Bankr. D. Del. May 16, 2012)

CASE SNAPSHOT

The debtor’s insurer sought to lift the automatic stay in order to setoff $2.2 million in return premiums against potential defense costs that the insurer expected to incur related to certain insurance claims made against the debtor. The court denied the motion, finding that the insurer had not established a right to setoff under either state law or the Bankruptcy Code.

FACTUAL BACKGROUND

USA, Delaware, Insolvency & Restructuring, Insurance, Litigation, Reed Smith LLP, Title 11 of the US Code
A defendant may have a complete defense to a commercial claim where a plaintiff has failed to disclose the claim in a prior discharged bankruptcy

When being sued, corporate and individual defendants should always confirm that the plaintiff has not been previously discharged in bankruptcy and failed to disclose the claim in the proceeding as an asset of the bankruptcy estate. In Guay v. Burack, 677 F.3d 10 (1st Cir. 2012), the plaintiff brought numerous claims against various governmental entities, governmental officials and a police officer.

USA, Insolvency & Restructuring, Litigation, Masuda Funai Eifert & Mitchell Ltd, Bankruptcy, Debt
Court finds indirect upstream owner exercised de facto control, warrants liability for WARN Act notice violation

D’Amico, et al. v. Tweeter Opco, LLC and Schultze Asset Management, LLC (In re Tweeter Opco, LLC), 453 B.R. 534 (Bankr. D. Del. 2011)

CASE SNAPSHOT

USA, Delaware, Employment & Labor, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Worker Adjustment and Retraining Notification Act 1988 (USA)
‘Indubitable equivalence’ not proven in proposal to effect partial conveyance of property in full satisfaction of claim

In re SUD Properties, Inc., Case No. 11-03833-8-RDD (Bankr. E.D.N.C. Aug. 23, 2011)  

CASE SNAPSHOT

USA, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Debtor, Legal burden of proof