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Debtor unable to provide adequate assurance; court denies motions to use cash collateral and obtain DIP financing priming original lien

In re LTAP US, LLLP, Case No. 10-14125 (KG) (Bankr. D. Del. Feb. 18, 2011)

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USA, Delaware, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Collateral (finance), Consideration, Life insurance, Cashflow, Secured loan, United States bankruptcy court
Priming lien approved: new loan use would benefit the estate + debtor’s sizable equity cushion = adequate assurance

In re Olde Prairie Block Owner, LLC, Bankr. No. 10B22668 (Bankr. N.D. Ill. March 11, 2011)  

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USA, Illinois, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Credit (finance), Debtor, Unsecured debt, Tax credit, Property tax, Limited liability company, Debt, Foreclosure, Default (finance), Secured loan, United States bankruptcy court
Collateral-order doctrine utilized in a case of first impression; court affirms broad equitable powers of a receiver

Securities and Exchange Commission v. Wealth Management, LLC, et al., 628 F.3d 323 (7th Cir. 2011)  

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USA, Capital Markets, Insolvency & Restructuring, Litigation, White Collar Crime, Reed Smith LLP, Collateral (finance), Security (finance), Market liquidity, Federal Reporter, Limited liability company, Hedge funds, Life insurance, Limited partnership, Bond credit rating, Pro rata, US Securities and Exchange Commission, Seventh Circuit
Replacement lien in rents in favor of secured creditor is not adequate protection where the debtor has no equity cushion

In re Buttermilk Towne Center, LLC, No. 10-8036, 2010 Bankr. LEXIS 4563 (B.A.P. 6th Cir. Dec. 23, 2010)

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USA, Banking, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Bond (finance), Bankruptcy, Debtor, Collateral (finance), Leasehold estate, Interest, Limited liability company, Debt, Mortgage loan, Default (finance), Secured creditor, Bénéfice, Municipal bond, Bankruptcy Appellate Panel
A proposed plan’s voting stock allocation causes an incurable change-of-control breach and impermissible reinstatement of secured debt

In re Young Broadcasting, Inc., et al., 430 B.R. 99 (Bankr. S.D.N.Y. 2010)

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USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Share (finance), Shareholder, Credit (finance), Debtor, Unsecured debt, Breach of contract, Board of directors, Interest, Debt, Voting, Default (finance), Secured loan, Pro rata, US District Court for the Southern District of New York
Post-confirmation cramdown interest rate: ‘market formula’ applies to oversecured

In re SJT Ventures, LLC, 2010 WL 3342206 (Bankr. N.D. Texas 2010)

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USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Interest, Limited liability company, Default (finance), Secured creditor, Commercial mortgage, Secured loan, Title 11 of the US Code, United States bankruptcy court
In a case of first impression, the circuit court determines that a trustee of a securitized investment pool is a ‘transferee’ in a preference action

Paloian v LaSalle Bank, NA, 619 F.3d 688 (7th Cir. 2010)

CASE SNAPSHOT

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Medicaid, Legal personality, Debtor, Accounts receivable, Limited liability company, Remand (court procedure), Tax return (USA), Investment funds, Cashflow, Discounted cash flow, Trustee, United States bankruptcy court, Seventh Circuit
Consideration of a TRAC clause under the UCC and economic realities required to determine if equipment leases are true leases or disguised financing

Hitchin Post Steak Co v General Electric Capital Corporation (In re HP Distribution, LLP), 436 B.R. 679 (Bankr. D. Kan. 2010)

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The United States Bankruptcy Court for the District of Kansas considered whether commercial vehicle leases that contained Terminal Rental Adjustment Clauses (or TRAC provisions) were true leases under Section 365 of the Bankruptcy Code or, instead, disguised financing transactions. The court held that the TRAC leases were true leases that must be either assumed or assigned pursuant to the terms of Section 365.

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Interest, Consideration, Liquidation, Bright-line rule, Uniform Commercial Code (USA), United States bankruptcy court
Texas district court affirms the contractual default interest rate where the debtor is solvent

Good v RMR Investments, Inc, 428 BR 249 (ED Texas, March 31, 2010)

CASE SNAPSHOT

A secured creditor in a chapter 11 case objected to the confirmation of the reorganization plan of the debtor, arguing that the proper “cramdown” interest rate (court-modified rate) was the pre-petition contractual default rate, rather than the significantly lower cramdown rate. After the debtor appealed, the District Court affirmed, holding that utilizing the contract rate of interest was appropriate because the debtor was solvent.

USA, Texas, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Interest, Limited liability company, Maturity (finance), Default (finance), Secured creditor, Deed of trust (real estate), Title 11 of the US Code, United States bankruptcy court, Fifth Circuit
Defense of imputation of an agent’s bad conduct to its principal clarified in Pennsylvania; independent auditor at risk for $1 billion in damages

Official Committee of Unsecured Creditors of Allegheny Health, Education and Research Foundation v PricewaterhouseCoopers, LLP(3d Cir No 07-1397, May 28, 2010)

CASE SNAPSHOT

USA, Pennsylvania, Insolvency & Restructuring, Litigation, Non-profit Organizations, Professional Negligence, Reed Smith LLP, Breach of contract, Fraud, Fiduciary, Audit, Negligence, Remand (court procedure), Collusion, Chief financial officer, Pennsylvania Supreme Court