Two recent decisions from circuit courts of appeal – the Fifth and Ninth – have addressed a question that does not arise often: in a solvent-debtor chapter 11 case, is the debtor required to pay post-petition interest (commonly referred to as “pendency interest”) to unsecured creditors in order to render such claims unimpaired? And, if so, what is the applicable rate of interest to use? Additionally, a subsequent decision from the Second Circuit, while not ultimately reaching the issue, favorably cited the recent Fifth and Ninth Circuit decisions.

In a recent decision by the Tenth Circuit Bankruptcy Appellate Panel, the court held that a chapter 7 trustee could not sell an LLC membership interest pursuant to section 363 of the Bankruptcy Code because of a transfer restriction within the LLC operating agreement. Malloy v. Trak-1 Technology Inc.(In re Kramer), No. 21-005, 2022 WL 17176411 (B.A.P. 10th Cir. Nov. 23, 2022).

Over the span of two weeks in July 2022, two of the largest retail-facing cryptocurrency platforms, Celsius and Voyager, filed for chapter 11 bankruptcy protection.

The Bankruptcy Protector

On August 18, 2022, the United States Bankruptcy Court for the Southern District of Indiana, in In re BWGS, LLC, No. 19-01487-JMC-7A, 2022 WL 3568045 (Bankr. S.D. Ind. Aug. 18, 2022), narrowly interpreted the safe harbor provision in section 546(e) of the Bankruptcy Code by refusing to dismiss a lawsuit against a guarantor whose liability was eliminated by the debtor’s payment to the bank that held the guarantee.

Overview on Section 546(e) of the Bankruptcy Code

In New York, it is a standard practice to name all tenants residing in a building when foreclosing upon the property.

The Bankruptcy Protector

On June 6, 2022, the Supreme Court issued a unanimous ruling in Siegel v. Fitzgerald, 142 S. Ct. 1770 (U.S. June 6, 2022) that the increase in fees payable to the U.S. Trustee system in 2018 violated the uniformity aspect of the Bankruptcy Clause of the Constitution because it was not immediately applicable in the two states with Bankruptcy Administrators rather than U.S. Trustees.

Overview

The Bankruptcy Protector

The Bankruptcy Protector

Back in July, Craig Eller wrote in The Bankruptcy Protector about the continuing confusion amongst courts and litigants regarding the applicability of a 2018 increase in fees payable to the Office of the United States Trustee in chapter 11 cases.