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Major changes to bankruptcy rules that govern the administration of consumer bankruptcy cases, and Chapter 13 cases in particular, were recently approved by the Supreme Court and transmitted to Congress.1 After several years of drafting and debate by the rules committee, these rule amendments will become effective December 1, 2017.

In Nortel Network’s (“Nortel”) chapter 11 case, In re: Nortel Networks Inc., et al., United States Bankruptcy Court for the District of Delaware, Case No. 09-10138(KG), Bankruptcy Judge Kevin Gross recently reduced the Indenture Trustee’s counsel fees by $913,936.00 in response to heavily litigated objections to the fees by noteholders, Solus Alternative Asset Management LP (“Solus”) and PointState Capital LP (“PointState”) (collectively the “Objecting Noteholders”).

This week the U.S. Court of Appeals for the Second Circuit issued its highly-anticipated ruling in Marblegate Asset Management, LLC v. Education Management Corp. (“Marblegate”). At issue in Marblegate was whether Education Management Corp. (“EDMC”) violated the Trust Indenture Act when it implemented a restructuring that impaired the rights of Marblegate Asset Management, LLC (“MAM”). The Second Circuit reversed the District Court’s decision in favor of MAM, and held that EDMC’s restructuring did not violate the TIA.

Recently, in Caesars Entertainment Operating Co. (“Caesars”), U.S. Bankruptcy Judge A. Benjamin Goldgar denied payment of indenture trustee Wilmington Trust’s attorneys’ fees and costs in connection with the Debtors’ motion to approve a settlement. The U.S. Trustee objected to payment arguing that the Debtor could not rely on 11 U.S.C. § 363 (seeking settlement approval) as authority to pay Wilmington Trust’s fees and costs. Sustaining the U.S.

Earlier this month, teen clothing retailer Aéropostale filed for Chapter 11 bankruptcy protection, seeking to immediately close 154 of its over 800 stores located throughout the United States and Canada. Many of these stores are located in smaller shopping malls, which have been hit the hardest by the shift to online shopping.

The continued march of retail bankruptcies since 2015 includes Sports Authority, Vestis Retail Group, Inc. (the operator of Sports Chalet, Eastern Mountain Sports, and Bob’s Stores), Radio Shack, American Apparel, Quicksilver, Wet Seal, Delia’s and PacSun.

NASA defines a black hole as a place in space where gravity is relentless and pulls so much that not even light can get out.  And, so it goes with Chicago as it attempts to get out of its pension black hole. The recent Illinois Supreme Court opinion in Jones v. Municipal Employees’ Annuity and Benefit Fund of Chicago, 2016 IL 119618 (Ill. 2016) (“Jones”) may have created a wormhole or way through Chicago’s pension black hole.  That way through is collective bargaining, as discussed below.

This is the first of several posts on gathering agreements in bankruptcy, covenants running with the land and rejection claims that arise when a debtor finds gathering agreements financially burdensome. As our readers know, we waited with much anticipation for theSabine ruling and wait with equal anticipation for the ruling on similar issues in QuickSilver.  Being pragmatic business lawyers we decided to blog on what parties to gathering agreements should be doing now in light of the non-binding, advisory Sabine ruling.

San Bernardino’s Chapter 9 case is back in the news. On May 18, the City Council approved the City’s proposed exit plan for filing with the Bankruptcy Court in a 6 to 1 vote. San Bernardino’s plan is challenging to say the least and certainly consistent with Judge Jury’s January comment that “sometimes you have to get ugly to get pretty.” The plan reflects the City’s “Gordian Knot” of financial obligations to bondholders, employees and retirees, and the City’s need to deliver essential services to residents without raising taxes beyond the breaking point.

Recently the Eleventh Circuit agreed to hear Jefferson County’s (“JeffCo”) petition for appeal of U.S. District Court Judge Sharon Blackburn’s ruling refusing to dismiss one of three appeals filed by JeffCo’s sewer system ratepayers.

Bankruptcy Judge Chris Klein recently issued his formal confirmation opinion in Stockton’s Chapter 9 bankruptcy case. While there were no real surprises, the opinion makes for entertaining reading given the Court’s more than serious conclusion that: