On January 4, 2016, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) deviated from SDNY precedent and held that, despite the absence of clear Congressional intent, the avoidance powers provided for under Section 548 of the Bankruptcy Code can be applied extraterritorially. As a result, a fraudulent transfer of property of a debtor’s estate that occurs outside of the United States can be recovered under Section 550 of the Bankruptcy Code.

Rare is the decision finding that bid rigging occurred.  Recently, though, the United States Bankruptcy Court for the District of Connecticut uncovered a bid rigging scheme in connection with the sale of property in a Canadian arrangement proceeding.  In re Sagecrest II LLC, et al., Case No. 08-50754 (Bankr. D. Conn. Dec.

On December 14, 2015, the United States Court of Appeals for the Second Circuit held that claims arising from securities of a debtor’s affiliate must be subordinated to all claims or interests senior or equal to claims of the same type as the underlying securities in the bankruptcy proceeding.

In yesterday’s edition of the Weil Bankruptcy Blog, we introduced 

On October 28, 2015, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) issued a decision that significantly expands the jurisdictional bases that foreign issuers can rely upon to obtain relief in the United States under Chapter 15 of the Bankruptcy Code.

In a blow to the Lehman Chapter 11 estates, the United States Bankruptcy Court for the Southern District of New York held on September 16, 2015 that Intel Corporation’s Loss calculation resulting from a failed transaction under an ISDA Master Agreement was appropriate.¹ The decision is significant both because of the dearth of judicial interpretation of the ISDA mechanics regarding the calculation of early termination amounts, and because it affirms the general market understanding that a non-defaulting party has broad discretion in calculating “Loss,” so long as its

We had a dream we’d go trav’lin’ together
We’d spread a little lovin then we’d keep movin’ on
Trav’lin’ along there’s a song that we’re singin’,
C’mon get happy
A whole lotta lovin’ is what we’ll be bringin’,
We’ll make you happy,
We’ll make you happy

(from “C’Mon Get Happy”)

Seeking to recharacterize a debt claim as an equity contribution to the debtor through the equitable powers of the bankruptcy court (something we’ve written about quite a bit in our blog) is one way to reduce creditor claims against the bankruptcy estate, but only in certain circuits.

On June 29, 2015, the United States Court of Appeals for the Second Circuit affirmed the decision of the United States Bankruptcy Court for the Southern District of New York, which held that claims asserted by counterparties in relation to bilateral repurchase agreements do not qualify for treatment as customer claims under the Securities Investor Protection Act of 1970 (“SIPA”).