A “federal [fraudulent transfer claim under Bankruptcy Code § 548] is independent of [a] state-court [foreclosure] judgment,” held the U.S. Court of Appeals for the Sixth Circuit on Dec. 27, 2021. In reLowry, 2021 WL 6112972, *1 (6th Cir. Dec. 27, 2021). Reversing the lower courts’ approval of a Michigan tax foreclosure sale, the Sixth Circuit reasoned that “the amount paid on foreclosure bore no relation at all to the value of the property, thus precluding the … argument that the sale was for ‘a reasonably equivalent value’ under the rule of BFP v.

End of CIGA restrictions

On 1 October 2021 the temporary changes to corporate insolvency law, brought about by the Corporate Insolvency and Governance Act 2020 (CIGA) and which seriously curtailed creditors’ ability to present winding-up petitions between 1 March 2020 and 30 September 2021, changed.

The coronavirus pandemic posed a significant challenge to the financial health of businesses across the UK. A sector additionally at the mercy of the markets following the easing of lockdown restrictions is the energy industry, with the wholesale price of natural gas (measured on a pence per therm basis) having risen dramatically from around 50p/therm in January 2021 to over 200p/therm during the first few weeks of October 2021.

A Chapter 11 corporate debtor’s monetary penalty obligation owed to the Federal Communications Commission (“FCC”), resulting from “fraud on consumers,” survived the debtor’s reorganization plan discharge, even when the FCC “was not a victim of the fraud,” held the U.S. District Court for the Southern District of New York on Sept. 2, 2021. In re Fusion Connect Inc., 2021 WL 3932346, *1 (S.D.N.Y. Sept. 2, 2021).

“[L]ack of good faith in a SIPA [Securities Investor Protection Act] liquidation applies an inquiry notice, not willful blindness, standard, and that a SIPA trustee does not bear the burden of pleading the transferee’s lack of good faith,” held the U.S. Court of Appeals for the Second Circuit on Aug. 30, 2021. In re Bernard L. Madoff Investment Securities LLC, 2021 WL 3854761, 91 (2d Cir. Aug. 30, 2021) (“Madoff”).

The author examines a recent decision by the U.S. Court of Appeals for the Third Circuit that involved whether a contract was, or was not, an executory contract.

“[B]ankruptcy inevitably creates harsh results for some players,” explained the U.S. Court of Appeals for the Third Circuit on May 21, 2021, when it denied a film producer’s claim for contractual cure payments in In re Weinstein Company Holdings, LLC. 1

The latest announcements

"`Staggering' legal fees in Boy Scouts Bankruptcy Case." So read the title of an article in The New York Times on May 11, 2021. According to the reporter, a "lawyer negotiating a resolution to the multi-billion dollar bankruptcy filed by the Boy Scouts of America billed $267,435 in a single month. Another charged $1,725 for each hour of work. New lawyers fresh out of law school have been billing at an hourly rate of more than $600." The bankruptcy judge presiding over the case has called the fee totals "staggering," said the reporter.

Suffering with mental health problems and being in financial difficulty are often strongly linked, with one frequently causing or worsening the other. The introduction of The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (referred to in this article as the ‘debt respite regulations’), which, with very limited exceptions, came into force on 4 May 2021, allows an eligible individual breathing space from any action a creditor may take for a ‘problem debt’.

“[B]ankruptcy inevitably creates harsh results for some players,” explained the U.S. Court of Appeals for the Third Circuit on May 21, 2021, when it denied a film producer’s claim for contractual cure payments. In re Weinstein Company Holdings, LLC, 2021 WL 2023058, *9 (3d Cir. May 21, 2021).