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United States Court of Appeals for Second Circuit holds that section 546(e) safe harbor protects from avoidance transfers of fictitious profits in connection with Madoff Ponzi scheme

In In re Bernard L. Madoff Investment Securities LLC (“Madoff”),1 the United States Court of Appeals for the Second Circuit reaffirmed  its broad and literal interpretation of section 546(e) of the Bankruptcy Code, which provides a  safe harbor for transfers made in connection with a securities contract that might otherwise be  attacked as preferences or fraudulent transfers.

USA, Insolvency & Restructuring, Litigation, Mayer Brown, Security (finance), Safe harbor (law), Second Circuit
Southern District of New York deepens internal split over loophole in bankruptcy safe harbor for capital markets transactions

The Bankruptcy Court for the Southern District of New York recently held in Edward S. Weisfelner, as Litigation Trustee of the LB Creditor Trust v. Fund 1., et al.

USA, New York, Insolvency & Restructuring, Litigation, Mayer Brown, Bankruptcy, Debtor, Commodity broker, Leveraged buyout, Title 11 of the US Code
Second Circuit holds that chapter 15 debtors must satisfy eligibility requirements of section 109(a) of the Bankruptcy Code in order to be eligible for relief

In a case of importance to foreign representatives of foreign debtors seeking the assistance of US courts pursuant to chapter 15 of the Bankruptcy Code, the US Court of Appeals for the Second Circuit has held that the debtor eligibility requirements of section 109(a) of the US Bankruptcy Code apply in cases under chapter 15 as they would in cases under other chapters of the Bankruptcy Code. The decision in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), Case No. 13-612 (2d Cir. Dec.

USA, Insolvency & Restructuring, Litigation, Mayer Brown, Debtor, Title 11 of the US Code, Second Circuit, United States bankruptcy court
Personal jurisdiction

Tenth Circuit holds that Canadian nationals who conspire to commit a breach of fiduciary duty against a Delaware corporation operating exclusively in Oklahoma are subject to personal jurisdiction in Oklahoma despite their lack of physical contact with the state.  Canadian law firm alleged to have assisted the conspirators is not, however, subject to personal jurisdiction.

USA, Insolvency & Restructuring, Litigation, Baker McKenzie, Fiduciary, Personal jurisdiction, Delaware General Corporation Law, Tenth Circuit
In re Fairfield Sentry Ltd.: Second Circuit Court of Appeals provides guidance to “COMI” determinations in Chapter 15 cases

On April 16, 2013, in Morning Mist Holdings Ltd. v. Krys (In re Fairfield Sentry Ltd.),1 the US Court of Appeals for the Second Circuit issued an important decision informing fundamental concepts of cross-border insolvency law as implemented pursuant to Chapter 15 of the Bankruptcy Code.

USA, Insolvency & Restructuring, Litigation, Mayer Brown, Title 11 of the US Code, Second Circuit, United States bankruptcy court
District court holds that a bankruptcy action’s automatic stay, and the bankruptcy's court's power to enjoin violations of the stay, applied extraterritorially

Sec. Investor Prot. Corp. v. Bernard L. Madoff Inv. Secs., 474 B.R. 76 (2012)

The trustee for the Securities Investor Protection Act ("SIPA") liquidation of Bernard L. Madoff Investment Securities LLC ("BLMIS") filed a complaint in the bankruptcy court against Maxam Absolute Return Fund Ltd. ("Maxam"), seeking the return of about $100 million distributed to Maxam by BLMIS.  Maxam answered the complaint and then sued the trustee in the Cayman Islands seeking a declaration that it was not required to return the money. 

USA, Insolvency & Restructuring, Litigation, Baker McKenzie, Bankruptcy, Debtor, Injunction, Extraterritoriality
Bankruptcy court declines to accord comity to reorganization plan approved by Mexican court

In re Vitro, S.A.B. de C.V., No. 11-33335-HDH-15 (Bankr. N.D. Tex. June 13, 2012)

USA, Insolvency & Restructuring, Litigation, Baker McKenzie, Bankruptcy, Debtor, Comity, Title 11 of the US Code