On April 23, 2019, the United States District Court for the Southern District of New York, in fraudulent transfer litigation arising out of the 2007 leveraged buyout of the Tribune Company,1 ruled on one of the significant issues left unresolved by the US Supreme Court in its Merit Management decision last year.
Intercreditor agreements--contracts that lay out the respective rights, obligations and priorities of different classes of creditors--play an increasingly important role in corporate finance in light of the continued prevalence of complex capital structures involving various levels of debt. When a company encounters financial difficulties, intercreditor agreements become all the more important, as competing classes of creditors seek to maximize their share of the company's limited assets.
The Northern District of Illinois recently held that a collection letter sent to a consumer’s attorney seeking payment on a debt discharged in bankruptcy did not violate the Fair Debt Collection Practices Act based on the “competent lawyer” standard. The case is Grajny v. Credit Control, LLC, No. 18-C-2719, 2018 U.S. Dist. LEXIS 173682, 2018 WL 4905019 (N.D. Ill. Oct. 9, 2018).
As summarized in the March 2018 issue of the American Bankruptcy Institute Journal, ABI’s Consumer Bankruptcy Committee has recently issued several recommendations and made several observations regarding the treatment of student loans under the Bankruptcy Code, codified in Title 11 of the United States Code.
On January 17, 2017, in a long-awaited decision in Marblegate Asset Management, LLC v. Education Management Finance Corp.,1 the US Court of Appeals for the Second Circuit held that Section 316 of the Trust Indenture Act ("TIA") does not prohibit an out of court restructuring of corporate bonds so long as an indenture's core payment terms are left intact.
On December 5, 2013, Judge Steven Rhodes of the US Bankruptcy Court for the Eastern District of Michigan held that the city of Detroit had satisfied the five expressly delineated eligibility requirements for filing under Chapter 9 of the US Bankruptcy Code1 and so could proceed with its bankruptcy case.