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District Court affirms that zero purchase price repo transactions may be considered "repurchase agreements" under the Bankruptcy Code

INTRODUCTION

USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Consideration
Delaware Chancery Court evaluates ‘public, commercially reasonable’ foreclosure sale under UCC

Edgewater Growth Capital Partners LP v. H.I.G. Capital, Inc., 68 A.3d 197 (2013)

CASE SNAPSHOT

USA, Delaware, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Foreclosure, Default (finance), Uniform Commercial Code (USA), Delaware Court of Chancery
Comity outweighed by significant differences in law in chapter 15 case

Ad Hoc Group of Vitro Noteholders v. Vitro S.A.B. de C.V., 701 F.3d 1031 (5th Cir. 2012)

CASE SNAPSHOT

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Comity, Title 11 of the US Code, United States bankruptcy court, Fifth Circuit
Loan ‘participant’ that bears no risk is neither a ‘participant’ nor a creditor

Inre Brooke Capital Corp., 2012 WL 4793010 (Bankr. D. Kan., Oct. 5, 2012)

USA, Kansas, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Subsidiary
Under the bucket theory, zero purchase price repo transactions are condisered repurchase agreements under section 101(47) of the Bankruptcy Code

In re Homebanc Mortgage Corp.,No. 07-51740-KJC, 2013 WL 211180 (Bankr. D. Del. Jan. 18, 2013)

CASE SNAPSHOT

The Bankruptcy Court found that individual repurchase transactions having a purchase price of zero may fall within the definition of "repurchase agreement" under section 101(47) of the Bankruptcy Code provided that the master agreement governing such transactions acknowledges that each transaction constitutes consideration for every other transaction under the master agreement.

FACTUAL BACKGROUND

USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Security (finance), Consideration
Offshore bankruptcy-remote entity is not bankruptcy-proof; trust indenture voting requirement overridden in involuntary bankruptcy case

Inre Zais Investment Grade Limited VII, 455 B.R. 839 (2011)

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USA, Insolvency & Restructuring, Litigation, Securitization & Structured Finance, Reed Smith LLP, Bankruptcy, Debtor, Security (finance), Collateralized debt obligation, Title 11 of the US Code
What Anna Nicole Smith’s bankruptcy case may mean to credit managers everywhere

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.  

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Defamation, Supreme Court of the United States, United States bankruptcy court
Court upholds ipso facto clause and default interest rate

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

CASE SNAPSHOT

USA, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Interest, Default (finance)
MF Global enters insolvency proceedings on both sides of the pond

MF Global, one of the world's leading broker/dealer firms entered into insolvency proceedings in both the US and the UK on 31 October 2011. US entities MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code in the Bankruptcy Court for the Southern District of New York. Also on 31 October, the US Securities Investor Protection Corporation ("SIPC") initiated the liquidation of MF Global, Inc. a jointly registered futures commission merchant and broker-dealer, under the Securities Investor Protection Act ("SIPA").

United Kingdom, USA, Capital Markets, Insolvency & Restructuring, Reed Smith LLP, Bankruptcy, Clearing house (finance), Futures contract, Commodity broker, Margin (finance), Liquidation, Broker-dealer, Capital requirement, Subsidiary, US Securities and Exchange Commission, Securities Investor Protection Corporation, Credit rating agency, FSA, United States bankruptcy court
1031 exchange agreements: drafting failure can lead to unsecured status

A Virginia bankruptcy court has issued a decision that should be a major eye-opener for any entity that engages in tax-free exchanges under section 1031 of the Internal Revenue Code.

USA, Virginia, Insolvency & Restructuring, Litigation, Tax, Reed Smith LLP, Bankruptcy, Debtor, Unsecured debt, Breach of contract, Interest, Liability (financial accounting), Beneficial interest, Internal Revenue Code (USA), United States bankruptcy court