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Supreme Court Holds That a Non-Debtor Retaining a Debtor’s Property Does Not Exercise Control Over the Property in Violation of the Automatic Stay

In January 2020, we analyzed a split among the Circuit Courts regarding whether a non-debtor holding a debtor’s property on the petition date has an affirmative obligation under section 362(a)(3) of the Bankruptcy Code to return that property to the debtor immediately following the filing of the bankruptcy petition.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Delaware Court of Chancery addresses derivative standing, solvency issues, and the law governing breach of fiduciary duty claims

The Delaware Court of Chancery recently issued an opinion in Quadrant Structured Products Company1that addresses creditors’ rights to bring derivative lawsuits against directors and officers of a corporation.  The Court held that Delaware law does not impose a continuous insolvency requirement and that the “traditional balance sheet test” is the appropriate test for determining solvency.  The opinion also provides a roadmap on the current landscape under Delaware law for analyzing breach of fiduciary duty claims. 

USA, Delaware, Company & Commercial, Insolvency & Restructuring, Litigation, Arnold & Porter, Breach of contract, Fiduciary, Standing (law), Business judgement rule, Delaware Supreme Court
Avoiding make-whole premiums and calculating cram down interest rates: what lenders and borrowers need to know about the appellate ruling in Momentive

The senior secured note holders recently lost their appeal of the bankruptcy court's decision confirming Momentive's chapter 11 plan.1

USA, Insolvency & Restructuring, Litigation, Arnold & Porter