As one of the nation’s premier bankruptcy venues, the Eastern District of Virginia (“EDVA”) has attracted some of the largest and most complex corporate bankruptcies. While companies file chapter 11 bankruptcies in the EDVA for many reasons—experienced judges, well-established legal precedent, a robust bankruptcy bar and local rules, and an expeditious docket (dubbed the “Rocket Docket”)—national law firms are also cognizant that EDVA courts have generally approved their fees, even when they exceed prevailing geographic market rates.

National Rates in the EDVA

In June 2019, the U.S. Supreme Court issued its unanimous decision in Taggart v. Lorenzen, through which it turned to general standards governing contempt outside of bankruptcy in holding a creditor may not be found in contempt for its failure to comply with a discharge injunction when a fair ground of doubt exists as to whether the creditor’s actions are wrongful. 139 S. Ct. 1795, 1799–1804 (2019).

On Aug 30, 2021, the 3rd U.S. Circuit Court of Appeals became the first federal appellate court to confirm that claims arising against a debtor following confirmation of a Chapter 11 plan, but prior to the plan’s effective date, are subject to discharge. This ruling serves as a strong reminder for all creditors and counterparties of a bankrupt entity to stay vigilant through the “effective date” of a Chapter 11 plan, and to strictly adhere to any administrative claims bar date established in a bankruptcy case.

AML changes for court-appointed liquidators

Important changes for court-appointed liquidators to the regulations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (Act) will come into force on 9 July 2021.  These changes provide that, for a court-appointed liquidator:

The High Court has released its judgment in Re Halifax NZ Limited (In liq) [2021] NZHC 113, involving a unique contemporaneous sitting of the High Court of New Zealand and Federal Court of Australia.

Late in the evening on Feb. 23, 2021, the department store chain Belk Inc. and 17 affiliates filed prepackaged bankruptcy cases in the U.S. Bankruptcy Court for the Southern District of Texas. In addition to filing first-day motions, Belk also filed its disclosure statement and plan of reorganization, which already had been solicited and accepted by the vast majority of those entitled to vote.

In re Ultra Petroleum Corp. provides substantial support for the allowance of make-whole amounts pursuant to 11 U.S.C. § 502(b)(2) and that such are neither interest, unmatured interest nor the economic equivalent of unmatured interest. In re Ultra Petroleum Corp., No. 16-03272, 2020 WL 6276712, *3-*4 (Bankr. S.D. Tex. Oct. 26, 2020). The case also clarifies that bankruptcy courts may not permit a solvent debtor to ignore its contractual obligations to unimpaired classes of unsecured creditors.

Case Background

The real lesson from Debut Homes – don't stiff the tax (wo)man

The Supreme Court has overturned the 2019 Court of Appeal decision Cooper v Debut Homes Limited (in liquidation) [2019] NZCA 39 and restored the orders made by the earlier High Court decision, reminding directors that the broad duties under the Companies Act require consideration of the interests of all creditors, and not just a select group. This is the first time New Zealand’s highest court has considered sections 131, 135 and 136 of the Companies Act, making this a significant decision.

As a result of the economic fallout of COVID-19, more bankruptcies are on the horizon, especially as government aid programs expire and involuntary or voluntary moratoriums on creditor action come to an end. [1] Creditors should be aware and prepared to avoid potential claims for alleged violation of the discharge injunction under the Bankruptcy Code and related orders.

Five years after it refused to pay rent and took the landlord to the High Court, and two years after it was placed into liquidation on account of unpaid rent, the final branch of litigation brought by the directors of Oceanic Palms Limited (in liq) has been cut down by the Supreme Court.