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 chapter 15 decision by Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) suggests that third-party releases susceptible to challenge or rejection in chapter 11 proceedings may be recognized and enforced under chapter 15. This decision provides companies with cross-border connections a path to achieve approval of non-consensual third-party guarantor releases in the U.S.
Background
A recent chapter 15 decision by Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) suggests that third-party releases susceptible to challenge or rejection in chapter 11 proceedings may be recognized and enforced under chapter 15. This decision provides companies with cross-border connections a path to achieve approval of non-consensual third-party guarantor releases in the U.S.
Background
The Seventh Circuit Court of Appeal’s recent decision in State Bank of Toulon v. Covey (In re Duckworth)Case Nos. 14-1561 and 1650 (7th Cir. November 21, 2014) illustrates how a banker’s seemingly minor mistake in drafting secured loan documents granting a lien to secure a non-existent obligation can lead to avoidance of a lender’s security interest by the borrower’s bankruptcy trustee.
A recent decision from an Oregon bankruptcy court provides a cautionary tale for lenders attempting to “bankruptcy proof” their borrowers.
The Seventh Circuit Court of Appeals recently held that a plan under chapter 13 of the Bankruptcy Code can modify the rights of a purchaser of delinquent real estate taxes on a debtor’s home by providing for payment of those taxes over time rather than in a lump sum. See In re LaMont (No. 13-1187, 7th Cir. January 7, 2014).
Upon learning that its borrower has filed a case under chapter 11 of the Bankruptcy Code, a secured lender may decide not to participate in that case. The lender may want to ignore the bankruptcy case in order to avoid the expense of retaining bankruptcy counsel, or, relying on the general rule that liens pass through bankruptcy unaffected, may simply prefer to wait until the chapter 11 case ends and then enforce its lien. In a recent Fifth Circuit Court of Appeals decision, Acceptance Loan Company, Incorporated v.
On May 29, 2012 the United States Supreme Court ruled that a plan of reorganization may not be confirmed over the objection of a secured creditor if the plan provides for the sale of collateral free and clear of the creditor’s lien, but does not permit the creditor to credit bid at the sale. The ruling resolved a conflict between a decision from Seventh Circuit Court of Appeals, which denied confirmation of such a plan, and decisions from the Third and Fifth Circuit Courts of Appeal, which approved such plans.
On January 19, 2012, the 7th Circuit Court of Appeals issued an opinion in In re River East Plaza, LLC , 2012 WL 169760 (7th Cir. January 19, 2012), affirming an order by the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, granting an undersecured creditor's motion to lift the automatic stay and dismissing the debtor's single asset real case. The debtor attempted to defeat the mortgagee's motion to lift the automatic stay by proposing a "cramdown" Chapter 11 plan of reorganization.
Yesterday, we announced the results of our fourth annual Reuters HedgeWorld & Dykema Insolvency Outlook Survey, which provides an inside look at the distressed investing landscape through the eyes of 100 hedge fund managers.