Manley Toys Limited once claimed to be the seventh largest toy company in the world. Due to ongoing litigation and declining sales, it entered into a voluntary liquidation in Hong Kong. On March 22, 2016, the debtor’s appointed liquidators and foreign representatives filed a motion for recognition under chapter 15 of the Bankruptcy Code. The motion was opposed by ASI Inc., f/k/a Aviva Sports, Inc. (“Aviva”) and Toys “R” Us, Inc. (“TRU”).
U.S. Bankruptcy Rule 9019 provides that on a motion brought by a trustee (and thus a chapter 11 debtor-in-possession as well) the court may approve a settlement. The prevailing view is that due to the court’s approval requirement, pre-court approval settlement agreements are enforceable by the debtor but not against the debtor. The District Court for the Eastern District of New York recently disagreed. It held that the statutory approval requirement is not an opportunity for the debtor to repudiate the settlement.
Directors and officers (D&Os) of troubled companies should be highly sensitive to D&O insurance policies with Prior Act Exclusion. While policies with such exclusion may be cheaper, a recent decision by the U.S. Court of Appeal for the Eleventh Circuit raises the spectre that a court may hold a loss to have more than a coincidental causal connection with the officer’s conduct pre-policy period and make the (cheaper) coverage worthless.
A U.S. House of Representatives Bill would amend the Bankruptcy Code to establish new provisions to address the special issues raised by troubled nonbank financial institutions.
In a 2-1 opinion, the Second Circuit overruled the district court in Marblegate Asset Management LLC v. Education Management Corp., finding no violation of the Trust Indenture Act (“TIA”) in connection with an out-of-court debt restructuring.
Background
Addressing a novel issue in In re: International Oil Trading Company, LLC, 548 B.R. 825 (Bankr. S.D. Fla. 2016), the United States Bankruptcy Court for the Southern District of Florida recently denied in part an involuntary debtor’s motion to compel production of communications between the judgment creditor who had filed the involuntary bankruptcy petition and the petitioner’s litigation funder. The Court found that the attorney-client privilege and work product protection were applicable to certain disclosures made to the litigation funder, a non-lawyer third-party.
On February 10, 2011, the United States Bankruptcy Court for the Eastern District of New York issued a memorandum decision addressing whether the alleged holder of a mortgage loan had sufficient status as a secured creditor to seek relief from the automatic stay to pursue a foreclosure action.1 After resolving the primary issue in controversy on purely procedural grounds and granting the requested relief, the Court analyzed whether an entity that acquires its interest in a mortgage loan through an assignment from Mortgage Electronic Registration Systems, Inc.
The United States Third Circuit Court of Appeals (the "Third Circuit") issued an opinion on February 16, 2011 in the American Home Mortgage chapter 11 proceeding that upheld a determination by the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") on the valuation of a creditor’s claim that in connection with the termination and acceleration of a mortgage loan repurchase agreement.1 The decision is significant because the Third Circuit affirmed the Bankruptcy Court’s decision that the post-acceleration market value of the mortgage loans was not a relevant m
On March 22, 2010, in a 2-1 decision, the Court of Appeals for the Third Circuit held that a debtor may proceed with an auction sale under a Chapter 11 plan without providing a secured lender the right to credit bid for its collateral.
On Feb. 11, 2009, the United States Court of Appeals for the Fourth Circuit issued its opinion in Hutson v. E.I. Dupont de Nemours and Co. (In re National Gas Distributors), attempting, in a matter of first impression, to define "commodity forward agreement" for purposes of eligibility for protection under the safe harbor provisions of the Bankruptcy Code. At first blush, this decision appears to provide the additional certainty that participants in the commodities markets require.