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].

This week’s TGIF considers a recent Federal Court of Australia decision (Connelly (liquidator) v Papadopoulos, in the matter of TSK QLD Pty Ltd (in liq) [2024] FCA 888). In the case, it was determined that a restructuring adviser who engineered an asset-stripping scheme may be found liable for the full value of the loss arising out of the scheme.

Key Takeaways

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.

This week’s TGIF summarises the Federal Court of Australia’s recent decision granting leave to proceed against a company despite the appointment of a small business restructuring (SBR) practitioner under Pt 5.3B of the Corporations Act 2001 (Cth) (Corporations Act).

Key takeaways

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.

The Commonwealth Parliamentary Joint Committee on Corporations and Financial Services Corporate insolvency in Australia was released on 12 July 2023.

The Report states that the construction industry is experiencing one of the highest rates of insolvencies compared to other sectors. The Report cited ASIC data which shows that the number of companies entering external administration has increased relative to the same month in the previous two financial years, with the construction industry being the most highly represented.

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.

Section 503(b)(9) Overview

On April 17, 2023, the Fifth Circuit Court of Appeals, in Matter of RE Palm Springs II, L.L.C., 2023 WL 2966520 (5th Cir. April 17, 2023), held that a senior lender who uses economic leverage and asserts its legal rights to squeeze out a junior lender remains a good faith purchaser entitled to declare an appeal moot based on a sale under section 363(m) of the Bankruptcy Code. Key to the Fifth Circuit’s opinion was the fact that the actions in question were disclosed to the bankruptcy court in advance of it making the section 363(m) finding.

Facts

In a previous blog post from June 2022, we discussed the Tenth Circuit’s post-Sigel decision in John Q. Hammons Fall 2006 LLC v. U.S. Trustee (In re John Q. Hammons Fall 2006 LLC), 15 F.4th 1011 (10th Cir. Oct. 5, 2021), which held that the government must pay a refund to a Chapter 11 debtor based on what the debtor would have paid over the same time were the case in a Bankruptcy Administrator district.