The United States Supreme Court unanimously[1] held that secured creditors have a statutory right to credit bid their debt at an asset sale conducted under a so-called "cramdown" plan. RadLAX Gateway Hotels, LLC et al., v. Amalgamated Bank (In re River Road Hotel Partners, LLC),__S.Ct.__ No. 11-166, 2012 WL 1912197 (U.S. May 29, 2012).

The United States District Court for the Southern District of New York (the "District Court") on March 29, 2012 held that a bankruptcy court sale order issued under Section 363 of the Bankruptcy Code ("Section 363") could not extinguish state law successor liability personal injury claims brought against the purchaser by third parties injured after the close of the bankruptcy case, but whose injuries arose out of conduct of the debtor prior to its bankruptcy. Morgan Olson LLC v. Frederico (In re Grumman Olson Industries, Inc.), 2012 WL 1038672 (S.D.N.Y. 2012).

Introduction

Hildyard J’s recent sanctioning of the scheme of arrangement proposed by PrimaCom Holding GmbH (‘’PrimaCom’’), a German incorporated company whose creditors were domiciled outside of the UK, has reaffirmed the extra-territorial jurisdiction of the English courts in respect of schemes of arrangement and confirmed their status as a useful instrument for foreign companies looking to restructure¹.  

The process

On December 13, 2011, the Act for the Further Facilitation of the Restructuring of Companies (ESUG), whose material provisions will come into force on March 1, 2012, was announced in the Federal Gazette. The ESUG bundles several reformatory efforts with regard to German insolvency law and will likely have significant effects on the daily practice. Generally, the restructuring of companies in financial crisis will be made easier. The creditors’ influence on the proceedings, including the selection of the person of the insolvency administrator, is increased.

On Dec. 21, 2011, the U.S. Bankruptcy Court for the District of New Jersey approved a liquidation plan for collateralized-debt obligation issuer (“CDO”) Zais Investment Grade Limited VII (“ZING VII”). The plan incorporates a settlement between senior noteholders who had initiated the bankruptcy case by filing an involuntary petition against the CDO, and junior noteholders who were appealing the Bankruptcy Court’s April 26, 2011 order granting the involuntary petition.

The UK Financial Services Authority (“FSA”) confirmed on 31 Oct. 2011 that MF Global UK Limited (“MF Global UK”) will be subject to the new Special Administration Regime (“SAR”).^[1] This is the first time that the new regime, set out in The Investment Bank Special Administration Regulations 2011 (“SAR Regulations”)^[2] has been invoked.

Background

The U.S. Bankruptcy Court for the District of New Jersey recently held that a Cayman Islands collateralized-debt obligation issuer (“CDO”) could be a debtor under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) and declined to dismiss an involuntary case commenced against the CDO by certain noteholders on the grounds that the notes held by such noteholders were “non-recourse” notes. Below is a discussion of the court’s decision and its potential implications. The decision is currently being appealed.

The U.S. Court of Appeals for the Fifth Circuit, on Aug. 16, 2011, affirmed the lower court’s decision authorizing reimbursement of expenses to qualified bidders for a reorganization debtor’s assets. In re Asarco, LLC, 2011 BL 213002 (5th Cir. Aug. 16, 2011). In the court’s view, the debtor provided “a compelling and sound business justification for the reimbursement authority.” Id. at *12.

Facts

On Aug. 30, 2011, the United States Bankruptcy Court for the Southern District of New York approved the disclosure statement with respect to the revised second amended joint Chapter 11 plan of Lehman Brothers Holdings Inc. and its affiliated debtors (the “Debtors”). The order approving the Debtors’ disclosure statement and establishing certain procedures related to the hearing to consider confirmation of the plan (the “order”) can be accessed here.

The United States Bankruptcy Court for the Southern District of New York, overseeing the bankruptcy cases of Lehman Brothers Holdings Inc. (“LBHI”) and its affiliated debtors (collectively, the “Debtors”), entered an order on Aug.