The safe harbor protection of Bankruptcy Code (“Code”) §546(e) does not protect “transfers that are simply conducted through financial institutions,” held the U.S. Court of Appeals for the Seventh Circuit on July 28, 2016. FTI Consulting Inc. v. Merit Management Group LP, 2016 WL 4036408, *1 (7th Cir. July 28, 2016).
Recently, the United States Court of Appeals for the Second Circuit entered a decision in the General Motors bankruptcy case that found an exception to the “free and clear” language of Section 363(f) of the Bankruptcy Code2 where adequate notice of the sale order is not provided.3 However, the exception may not be far reaching due to the “peculiar” facts of the case.
Factual Background and Lower Court Decision
Bankruptcy courts may hear state law disputes “when the parties knowingly and voluntarily consent,” held the U.S. Supreme Court on May 26, 2015. Wellness Int’l Network Ltd. v. Sharif, 2015 WL 2456619, at *3 (May 26, 2015). That consent, moreover, need not be express, reasoned the Court. Id. at *9 (“Nothing in the Constitution requires that consent to adjudication by a bankruptcy court be express.”). Reversing the U.S.
Currently before the Supreme Court is Baker Botts, L.L.P. v. ASARCO, L.L.C.,2 in which the Court will determine whether bankruptcy judges have discretion to award compensation for the defense of a fee application under 11 U.S.C. § 330(a). The decision in Baker Botts will likely resolve a circuit split and make clear whether a defense of a fee application is necessary to the administration of the case and, therefore, compensable.
The U.S. District Court for the Southern District of New York, on May 4, 2015, affirmed U.S. Bankruptcy Judge Robert D. Drain’s decision confirming the reorganization plan for Momentive Performance Materials Inc. and its affiliated debtors.1 The Bankruptcy Court’s decision was controversial because it forced the debtors’ senior secured creditors to accept new secured notes bearing interest at below- market rates.
Following the Dec. 8 publication by the American Bankruptcy Institute (“ABI”) Commission to Study the Reform of Chapter 11 of a report (the “Report”) recommending changes to Chapter 11 of the Bankruptcy Code (“Code”),[1] we continue to analyze the proposals contained in the ABI’s 400-page Report. One proposal we wanted to immediately highlight would, if adopted, significantly increase the risk profile for secured lenders.
The American Bankruptcy Institute (“ABI”) Commission to Study the Reform of Chapter 11 issued today a 400-page report (the “Report”) recommending changes to Chapter 11 of the Bankruptcy Code (“Code”). The Report is the result of a two-year effort by 150 practitioner-ABI members.[1] Without considering the likelihood of Congressional passage in the near term, we will evaluate each significant proposed change separately in subsequent Alerts over the next several weeks.
The U.S. Court of Appeals for the Fifth Circuit, on Oct. 16, 2014, held that a “good faith transferee” in a fraudulent transfer suit “is entitled” to keep what it received “only to the extent” it gave “value.” Williams v. FDIC (In re Positive Health Management), 2014 WL 5293705, at *8 (5th Cir. Oct. 16, 2014). Reversing in part the district and bankruptcy courts, the Fifth Circuit narrowed their holding that the debtor had “received reasonably equivalent value in exchange for the debtor’s cash transfers.” Id. at *1-2.
On Aug. 26, 2014, Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York denied the payment of a $200 million make-whole premium. See Corrected and Modified Bench Ruling on Confirmation of Debtors’ Joint Chapter Plan of Reorganization for Momentive Performance Materials Inc. and its Affiliated Debtors, In re MPM Silicones, LLC, No. 14-22503 (Bankr. S.D.N.Y. Sept. 9, 2014) [D.I.
Before the Supreme Court this term is the question of whether a beneficiary individual retirement account (an “Inherited IRA”) is exempt from a debtor’s bankruptcy estate under 11 U.S.C. § 522(b)(3)(C) and (d)(12)2 of the Bankruptcy Code. The issue turns on 1) whether the funds in an Inherited IRA are “retirement funds,” and 2) whether an Inherited IRA is considered tax exempt under the Internal Revenue Code (the “Tax Code”).