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Say what you will about Detroit’s bankruptcy case, but when it is all said and done, the value for each of its participants most likely lies in the learning experience.   And, experience is sometimes a painful teacher.   One of the many take-aways is a framework for what constitutes a workable or“feasible” plan of adjustment (“Plan” or “Plan of Adjustment”) while recognizing the significant risk of implementation and post bankruptcy performance.

Detroit Highlights

On 11 December 2014, Justice Croft of the Victorian Supreme Court delivered judgment approving the settlement of multiple class actions brought by investors in managed investment schemes operated by an entity of the agribusiness Great Southern Group in 2005 and 2006.

Later this year the High Court will hear an appeal from the decision of the Victorian Court of Appeal in Re Willmott Forests Limited (Receivers and Managers appointed) (in liquidation) [2012] VSCA 202.

The decisions of the Court of Appeal and the trial judge were considered in our earlier alert that can be accessed by clicking here.

Pension issues in the American Airlines (AMR) bankruptcy1 have resulted in the Internal Revenue Service (IRS) issuing new final regulations, effective November 8, 2012 (Final Regulations), which broadly impact all debtors facing underfunded pension plan obligations. The Final Regulations provide chapter 11 bankruptcy debtors facing distress terminations of their tax-qualified defined benefit pension plans with the additional option of amending the plans to eliminate accelerated payment options.

The recent decision of the Victorian Court of Appeal in Re Willmott Forests Limited (Receivers and Managers appointed) (in liquidation) [2012] VSCA 202 gives liquidators comfort when disclaiming leases (as the liquidator of a landlord) pursuant to s 568(1) of the Corporations Act 2001 (Cth) (‘the Act’).

The US Supreme Court has ruled in Stern v. Marshall (June 23, 2011) that a bankruptcy court lacks jurisdiction to render final judgment on a bankruptcy estate’s compulsory counterclaim against a creditor arising under common law, despite a statutory grant of jurisdiction.

In a decision released on March 29, 2011, CDX Liquidating Trust v. Venrock Assocs., et al., 2011 U.S. App. LEXIS 6390 (7th Cir. March 29, 2011), the United States Court of Appeals for the Seventh Circuit, reversing the district court’s ruling, held that a director’s disclosure of a conflict, in and of itself, is insufficient to protect that director from liability for breach of fiduciary duty or disloyalty arising from that conflict.

In what appears to be a matter of first impression, Bankruptcy Judge Robert D. Drain, United States Bankruptcy Court for the Southern District of New York, has held that a statutory safe harbor against constructive fraudulent conveyance actions under the Bankruptcy Code involving securities transfers does not apply to the private sale of securities, even when there are no allegations of illegal conduct or fraud involved in the underlying transaction.