Before ingesting too much holiday cheer, we encourage you to consider a recent opinion from the United States Court of Appeals for the Second Circuit.
Weil Bankruptcy Blog connoisseurs will recall that, in May 2019, we wrote on the Southern District of New York’s decision in In re Tribune Co. Fraudulent Conveyance Litigation, Case No. 12-2652, 2019 WL 1771786 (S.D.N.Y. April 23, 2019) (Cote, J.) (“Tribune I”).
A recent decision from the United States District Court for the Southern District of New York, In re Tribune Co. Fraudulent Conveyance Litigation, Case No. 12-2652, 2019 WL 1771786 (S.D.N.Y. April 23, 2019) (Cote, J.), has re-examined application of the “securities safe harbor” under section 546(e) of the Bankruptcy Code, 11 U.S.C. §§ 101–1532, to the transferees of “financial institutions” in so-called “conduit transactions,” following the United States Supreme Court’s 2018 decision in Merit Management Group, LP v. FTI Consulting, Inc., 138 S. Ct. 883 (2018).
Introduction
In re Katy Indus., Inc., 590 B.R. 628 (Bankr. D. Del. 2018) presented an interesting question: If a stalking horse bidder’s successful bid to purchase a company in chapter 11 was partially predicated upon a credit bid, and a portion of that credit bid was challenged after the sale closed, what would be the result for the bidder’s overall successful bid if that portion of the credit bid was eliminated?
Background
Yesterday, the United Kingdom’s Commercial Secretary to the Treasury launched a consultation on a new special-resolution regime, Special administration regime for investment firms, to strengthen the government’s ability to handle future insolvencies of failing investment banks to minimize cost and disruption of the overall national financial system.
Yesterday, Delaware Bankruptcy Judge Mary Walrath granted a request by Washington Mutual (WaMu) shareholders to appoint an independent examiner, to be chosen by the U.S. trustee, to review assets and claims in the company’s bankruptcy case related primarily to the 2008 seizure and sale of WaMu by the FDIC to JPMorgan Chase for $1.9 million.
Today, the Federal Deposit Insurance Corporation (FDIC) announced the closing of its previously announced sale of $233 million of notes backed by performing and non-performing commercial real estate (CRE) loans from 22 different financial institutions f
Friday, the Florida Office of Financial Regulation closed The Bank of Bonifay, headquartered in Bonifay, Florida, and the FDIC was appointed receiver. As receiver, the FDIC entered into a purchase and assumption agreement with First Federal Bank, headquartered in Lake City, Florida, to assume all of the deposits of The Bank of Bonifay.
Friday, the California Department of Financial Institutions closed 1st Pacific Bank of California, headquartered in San Diego, California, and the FDIC was appointed receiver.
Friday, the Minnesota Department of Commerce closed Access Bank, headquartered in Champlin, Minnesota, and the FDIC was appointed receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Prinsbank, headquartered in Prinsburg, Minnesota, to assume all of the deposits of Access Bank.