In an opinion issued on Sept. 20 by the United States Bankruptcy Court for the District of New Mexico, Judge David T. Thuma held that the Rooker-Feldman doctrine does not prevent a bankruptcy court from determining whether the automatic stay applies to pending state court litigation. See In re Shook, Case No. 24-10724-t7 (Bankr. N.M. Sept. 20, 2024) [ECF No. 54].

To prevent landlords under long-term real property leases from reaping a windfall for future rent claims at the expense of other creditors, the Bankruptcy Code caps the amount of a landlord's claim against a debtor-tenant for damages "resulting from the termination" of a real property lease.

Section 546(e) of the Bankruptcy Code's "safe harbor" preventing avoidance in bankruptcy of certain securities, commodity, or forward-contract payments has long been a magnet for controversy. Several noteworthy court rulings have been issued in bankruptcy cases addressing the scope of the provision, including its limitation to transactions involving "financial institutions" as transferors or transferees, its preemption of avoidance litigation that could have been commenced by or on behalf of creditors under applicable non-bankruptcy law, and its application to non-public transactions.

One of the fundamental goals of a chapter 11 bankruptcy is the maximization of value available for distribution to creditors. The "absolute priority rule" generally applicable in chapter 11 requires that each class of impaired and unaccepting creditors be paid in full before any junior class of claims or interests may receive distributions under the plan. Courts recognize a limited exception to the absolute priority rule, however, allowing prepetition shareholders to retain their interest in the debtor where they contribute new value toward the debtor's reorganization.

In a 2021 ruling, the U.S. Court of Appeals for the Second Circuit revived nearly 100 lawsuits seeking to recover fraudulent transfers made as part of the Madoff Ponzi scheme. In one of the latest chapters in that resurrected litigation, the U.S. Bankruptcy Court for the Southern District of New York held in Picard v. ABN AMRO Bank NV (In re Bernard L. Madoff Investment Securities LLC), 654 B.R. 224 (Bankr. S.D.N.Y.

In Matter of Imperial Petroleum Recovery Corp., 84 F.4th 264 (5th Cir. 2023), the Fifth Circuit was asked to address whether 28 U.S.C. § 1961(a) – the federal statute providing for post-judgment interest – applies in adversary proceedings even though 28 U.S.C. § 1961(a) doesn’t explicitly refer to bankruptcy courts.

Section 546(e) of the Bankruptcy Code's "safe harbor" preventing avoidance in bankruptcy of certain securities, commodity, or forward-contract payments has long been a magnet for controversy. Several noteworthy court rulings have been issued in bankruptcy cases addressing the application of the provision, including application to financial institutions, its preemptive scope, and its application to non-publicly traded securities.

In earlier posts, the Red Zone has discussed the Supreme Court’s ruling in Siegel v. Fitzgerald, 142 S. Ct. 1770 (2022), which held that increased U.S.

A bankruptcy trustee's ability to avoid and recover pre-bankruptcy preferential transfers is essential to preserving or augmenting the estate for the benefit of all stakeholders. In 2019, however, the Bankruptcy Code was amended to add a due diligence requirement to the Bankruptcy Code's preference avoidance provision, apparently as a way to minimize the volume of speculative and coercive preference litigation.

In Matter of Texxon Petrochemicals, L.L.C., 67 F.4th 259 (5th Cir. 2023), the Fifth Circuit held that even if an appeal is equitably moot, the appellate court nonetheless has appellate jurisdiction to consider the merits of the appeal, without reaching the issue of equitable mootness.