Over the past year, digital asset investors have become acutely aware of asset custody and counterparty credit risks due to the high-profile bankruptcies of Voyager, Celsius, BlockFi, and FTX. These investors have found that, at times, their assets may be stuck in a bankruptcy proceeding for years. However, these investors—now bankruptcy claim holders—have options for more immediate liquidity.
On May 16, 2016, the Supreme Court of the United States handed down its opinion in Husky International Electronics, Inc. v. Ritz, Case No. 15-145.
Adding to the unsettled body of case law on the enforceability of prepetition waivers of the automatic stay, on April 27, 2016, the U.S.
In In re Zair, 2016 U.S. Dist. LEXIS 49032 (E.D.N.Y. Apr. 12, 2016), the U.S. District Court for the Eastern District of New York became the latest to take sides on the emerging issue of “forced vesting” through a chapter 13 plan. After analyzing Bankruptcy Code §§ 1322(b)(9) and 1325(a)(5), the court concluded that a chapter 13 debtor could not, through a chapter 13 plan, force a mortgagee to take title to the mortgage collateral.
Background
In a case of first impression in Texas, the United States Bankruptcy Court for the Southern District of Texas held that the former majority member of a chapter 11 LLC debtor had to relinquish control of the LLC's Facebook page and Twitter account because they were property of the LLC's bankruptcy estate. In re CTLI, LLC, Case No. 14-33564, 2015 WL 1588085 (Bankr. S.D. Tex. April 3, 2015). CTLI, LLC was a Texas gun store and shooting range doing business as Tactical Firearms.
In the case of United States of America v. Edward P. Bond, No. 12-4803 (2d. Cir. August 13, 2014), the United States Court of Appeals for the Second Circuit (the "Second Circuit") issued a decision that could have far-reaching effects on how liquidating chapter 11 bankruptcy cases will be handled in the future.
The U.S. District Court for the Western District of Washington recently construed the terms of a customary loan agreement to preclude certain hedge funds viewed as “acquir[ing] distressed debt and engag[ing] in predatory lending” from voting on a debtor’s plan of reorganization. Meridian Sunrise Village, LLC v. NB Distressed Debt Investment Fund Ltd. (In re Meridian Sunrise Village, LLC), 2014 WL 909219 (W.D. Wash. Mar. 7, 2014).
In its bankruptcy filing under Japan's Civil Rehabilitation Law, Mt. Gox claims 6.5 billion yen, or around $64 million, in liabilities and 3.84 billion yen, or around $38 million, in assets.
Last week, the 8th Circuit B.A.P. affirmed, first noting that criminal judgments, including restitution awards and liens, are afforded special protection from bankruptcy discharge.