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New York bankruptcy judge disallows payment of make-whole premium

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.

USA, New York, Insolvency & Restructuring, Litigation, Schulte Roth & Zabel LLP, Bankruptcy
Secured creditors beware: have you surrendered your security

Obtain advice before you lodge a proof of debt or vote in a liquidation

Secured creditors should remember that submitting a proof of debt and voting in a liquidation may result in the loss of their security if they get it wrong.

The Supreme Court of New South Wales has delivered a timely reminder to secured creditors of a company in liquidation, where the secured creditor lost its security because it submitted a proof of debt for the full amount of its debt and voted on a poll at a creditor’s meeting for its full debt.

Australia, New South Wales, Insolvency & Restructuring, Litigation, Cooper Grace Ward, Debt, Liquidation, Secured creditor
Fulkoto: do liquidators have a power of sale in Queensland if they are a bare trustee?

Liquidators are commonly appointed to a company where, prior to liquidation the company was a trustee of a trust. Often when the liquidators are appointed, the company has ceased to be the trustee and a replacement trustee has not been appointed.

In these circumstances, the company in liquidation is a bare trustee in relation to the trust assets and the liquidator will assume this role until a replacement trustee is appointed. Often a replacement trustee is not appointed.

Does the liquidator as bare trustee have a power to sell trust assets?

Australia, Insolvency & Restructuring, Litigation, Private Client & Offshore Services, Cooper Grace Ward, Liquidator (law)
Fifth Circuit affirms bankruptcy court’s reasonableness review of oversecured lender’s legal fees in non-judicial foreclosure sale

The U.S. Court of Appeals for the Fifth Circuit held on June 23, 2014 that an oversecured lender’s legal fees were subject to the bankruptcy court’s review for reasonableness despite a court-ordered non-judicial foreclosure sale of the lender’s collateral. In re 804 Congress, LLC, ­­__ F.3d ­­__, 2014 WL 2816521 (5th Cir. June 23, 2014). Affirming the bankruptcy court’s power and reversing the district court, the Fifth Circuit found the lender’s utter failure to detail its legal fees with any documentary support to be fatal.

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USA, Insolvency & Restructuring, Litigation, Schulte Roth & Zabel LLP, Bankruptcy, Federal Reporter, Foreclosure, Attorney's fee, United States bankruptcy court, Fifth Circuit
Secured creditor unsuccessful in challenging liquidator’s lien

Secured creditors should not allow a liquidator to sell a secured asset without first:

Australia, Insolvency & Restructuring, Litigation, Cooper Grace Ward, Liquidation, Secured creditor, Liquidator (law), Unsecured creditor