Twenty-one major global banks have already signed a relaunched stay protocol developed by the International Swap Dealers Association and other leading industry organizations in coordination with the Financial Stability Board. The purpose of the protocol is to help ensure the orderly resolution of a troubled bank by having firms voluntarily agree to abide by foreign resolution regimes in connection with cross-border transactions. A prior protocol was signed by 18 major banks in November 2014. The relaunched protocol increases the types of covered financial contracts.

A federal judge in New York – the Hon. Richard J. Sullivan – mostly granted JP Morgan Chase Bank’s motion to dismiss claims brought on behalf of unsecured creditors of Lehman Brothers Holdings Inc. related to JPM’s requirement that Lehman Brothers Inc., LBH’s broker-dealer subsidiary, pledge and post extra collateral in September 2008, shortly before LBI filed for bankruptcy protection on September 15, 2008.

The Trustee for the Liquidation of MF Global Inc. – the defunct futures commission merchant that filed for bankruptcy in October 2011 – received approval from the US Bankruptcy Court overseeing its dissolution to make a final, cumulative 95 percent distribution on all allowed general unsecured creditor claims.

The recent decision of the United States Court of Appeals for the Third Circuit in In re One2One Communications, LLC may radically alter the ability of debtors to escape appeals of confirmed plans for reorganization.  The Third Circuit, which governs the influential Delaware bankruptcy courts, has for almost 20 years embraced the judicially created doctrine of “equitable mootness” as a basis for dismissal of ap

Unsecured general creditors of defunct MF Global, Inc. (other than those of its parent company MF Global Holdings Ltd.) will receive a final payment from the firm, giving them a total recovery of 95 percent of their approved claims, under a proposal made last week by the overseers of the liquidation of the firm and its parent company.

The United States bankruptcy judge overseeing the liquidation of MF Global Inc., approved the trustee’s proposal to pay  all unsecured general creditors $461 million. Once paid, this distribution would result in total distributions to unsecured general creditors of 72 percent of their approved claims.

The New York State Attorney General settled a lawsuit against Ernst & Young related to its involvement in the financial statement preparation of Lehman Brothers Holding, Inc. The NY AG had alleged that the auditing firm had countenanced Lehman’s inclusion of certain repurchase transactions as sales and not as financings, which permitted the firm to remove “tens of billions of dollars” of securities from its balance sheet. According to the NY AG, the repo transactions—known as “Repo 105”—“served no legitimate purpose.

The trustee for the liquidation of MF Global Inc. is seeking permission from the bankruptcy judge overseeing the firm’s dissolution to make a distribution of US $461 million to unsecured general creditors. If approved, this distribution would result in total distributions to unsecured general creditors of 72 percent of their approved claims. To date, the trustee has distributed 100 percent of approved claims of MF Global’s customers (totaling US $6.7 billion), and 100 percent of approved secured, priority and administrative claims.

Illinois Governor Rauner presented his turnaround agenda in his “State of the State” address last week and called for, among other things, the state “to extend to municipalities bankruptcy protections.”  Mirroring the proposed legislation introduced by Representative Ron Sandack in January, and reported on in an earlier post, Illinois seems positioned to provide municipalities with clear and direct access to Chapter 9 bankruptcy and

On February 6th, Federal District Judge Francisco Besosa ruled that Puerto Rico’s municipal debt-restructuring law, the “Recovery Act”, was unconstitutional stating that:  “The Recovery Act is pre-empted by the federal Bankruptcy Code and is therefore void.”  The Court also permanently enjoined current and future government officials from enforcing the Act.  Puerto Rico has announced that it will be appealing the ruling.