Bankruptcy Rule 2004 allows the examination of any entity with respect to various topics, including conduct and financial condition of the debtor and any matter that may affect the administration of the estate. Does a subordination agreement that is silent on the use of Rule 2004 prevent the subordinated creditor from taking a Rule 2004 examination of the senior creditor? Yes, says an Illinois bankruptcy court.

Rumors of another recession multiplied as the tumultuous second year of the Trump administration came to a close. Highlights of 2018 included a simmering trade war with China; political upheaval after the House of Representatives was retaken by Democrats in the midterm elections; mayhem in financial markets; and, in December, the beginning of the longest government shutdown in U.S. history, triggered by lawmakers’ refusal to provide $5.7 billion in funding for a U.S.-Mexican border wall.

In the wake of scandal-driven bankruptcies filed by nearly 20 U.S. Roman Catholic dioceses and religious orders, scrutiny has been increasingly brought to bear on the benefits and burdens that federal bankruptcy laws offer to eleemosynary (nonprofit) corporations. Nonprofits seek bankruptcy protection for a variety of reasons.

In the wake of scandal-driven bankruptcies filed by nearly 20 U.S. Roman Catholic dioceses and religious orders, scrutiny has been increasingly brought to bear on the benefits and burdens that federal bankruptcy laws offer to eleemosynary (nonprofit) corporations. Nonprofits seek bankruptcy protection for a variety of reasons.

Two United States Bankruptcy Judges for the Southern District of New York recently issued a joint opinion addressing common issues raised by motions to dismiss in two separate adversary proceedings – one pending before Judge Bernstein and the other before Judge Glenn (the “Adversary Proceedings”). The Adversary Proceedings were filed by the debtors in two chapter 11 cases, each involving an Anguillan offshore bank – National Bank of Anguilla (Private Banking Trust) Ltd. and Caribbean Commercial Investment Bank Ltd. (the “Debtor Banks”).

Manley Toys Limited once claimed to be the seventh largest toy company in the world. Due to ongoing litigation and declining sales, it entered into a voluntary liquidation in Hong Kong. On March 22, 2016, the debtor’s appointed liquidators and foreign representatives filed a motion for recognition under chapter 15 of the Bankruptcy Code. The motion was opposed by ASI Inc., f/k/a Aviva Sports, Inc. (“Aviva”) and Toys “R” Us, Inc. (“TRU”).

In U.S. Capital Bank N.A. v. Village at Lakeridge, LLC, No. 15-1509 (U.S. Mar. 5, 2018), the U.S. Supreme Court held that an appellate court should apply a deferential standard of review to a bankruptcy court's decision as to whether a creditor is a "nonstatutory" insider. Nonstatutory insiders are creditors who are not specifically designated as insiders under the Bankruptcy Code (such as officers, directors, and controlling shareholders), but who the bankruptcy court determines nonetheless have sufficient influence over a debtor to be deemed insiders.

The U.S. Supreme Court issued a highly anticipated ruling resolving a long-standing circuit split over the scope of the Bankruptcy Code's "safe harbor" provision exempting certain securities transaction payments from avoidance as fraudulent transfers. In Merit Management Group LP v. FTI Consulting Inc., the unanimous Court held that section 546(e) of the Bankruptcy Code does not protect transfers made through a financial institution to a third party regardless of whether the financial institution had a beneficial interest in the transferred property.

The initial year of the Trump administration colored much of the political, business, and financial headlines of 2017, both in the U.S. and abroad. Key administration-related developments in 2017 included U.S. withdrawal from the Paris climate accord; decertification of the Iranian nuclear deal; steps to renegotiate the North American Free Trade Agreement; the continued investigation of Russian election interference; the showdown with North Korea over nuclear weapons; U.S. recognition of Jerusalem as the capital of Israel; and the largest U.S.

In Varela v. AE Liquidation, Inc. (In re AE Liquidation, Inc.), 866 F.3d 515 (3d Cir. 2017), the U.S. Court of Appeals for the Third Circuit became the sixth circuit court of appeals to rule that a "probability standard" applies in determining whether an employer is relieved from giving 60 days’ advance notice to employees of a mass layoff under the Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act").