The Supreme Court recently granted certiorari in PEM Entities LLC v. Levin, in which it will decide whether federal or a state law should apply when a debt claim held by a debtor’s insider is sought to be recharacterized in bankruptcy as a capital contribution and treated as equity. The case raises important questions about the extent to which the commencement of a proceeding under the U.S.
In Millenium Lab Holdings, Delaware District Court Judge Leonard Stark, on an appeal from a bankruptcy court order confirming a plan of reorganization, recently upheld a challenge to the bankruptcy court’s constitutional authority to release claims against non-debtor third parties under the plan.
Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware handed down an important ruling last week that turned aside most of an unusual challenge to the fees and expenses of an indenture trustee in the long-running Nortel chapter 11 case. The dispute has been watched closely by financial institutions that serve as trustees on bond issuances. (Kelley Drye & Warren LLP represented a large creditor in the Nortel case but took no part in the issues discussed here).
Judge Christopher Sontchi recently issued an important opinion in the Molycorp chapter 11 case.
In a highly-anticipated decision on a long-running bondholder dispute, the US Court of Appeals for the Second Circuit issued its judgment last week in Marblegate Asset Management LLC v Education Management Corp. It concluded that “Section 316(b) [of the US Trust Indenture Act 1939] prohibits only non-consensual amendments to an indenture’s core payment terms”, i.e. the amount of principal and interest owed and the maturity date.
Major legislative changes
Reform of English corporate insolvency framework
The Insolvency Service is reviewing responses to its consultation on significant reforms designed to improve the restructuring tools available to companies. These include:
On 22 November 2016, the European Commission announced a draft directive on insolvency, restructuring and second chance in the EU in the form of the EU Business Restructuring Directive (the “Proposed Directive“) which can be read here.
The U.S. Supreme Court will hear the case of Czyzewski v. Jevic Holding Corp. during the new term that began last week. The questions it presents are relatively simple. First, can a bankruptcy court, in dismissing a case under the U.S.
The ability of a secured creditor to credit bid its debt in connection with a sale of a debtor’s assets received a strong boost in a decision last month in the Chapter 11 case of Aeropostale from U.S. Bankruptcy Judge Sean Lane of the Southern District of New York.