The District Court for the Central District of California recently held that an assignee that acquired rights to a terminated swap agreement was not a "swap participant" under the Bankruptcy Code and, therefore, could not invoke safe harbors based on that status to foreclose on collateral in the face of the automatic stay. ^[1] The court ruled that the assignee acquired only a right to collect payment under the swap agreement, not the assignor's rights under the Bankruptcy Code to exercise remedies without first seeking court approval.

Background

On May 21, 2015, the United States Court of Appeals for the Third Circuit (the "Third Circuit") held that in rare instances a bankruptcy court may approve a "structured dismissal"- that is, a dismissal "that winds up the bankruptcy with certain conditions attached instead of simply dismissing the case and restoring the status quo ante" - that deviates from the Bankruptcy Code's priority scheme. See Official Committee of Unsecured Creditors v. CIT Group/Business Credit Inc. (In re Jevic Holding Corp.), Case No.

On October 31, 2014, Bankruptcy Judge Kaplan of the District of New Jersey addressed two issues critically important to intellectual property licensees and purchasers: (i) can a trademark  licensee use section 365(n) of the Bankruptcy Code to keep licensed marks following a  debtor-licensor’s rejection of a license agreement?; and (ii) can a “free and clear” sale of  intellectual property eliminate any rights retained by a licensee? In re Crumbs Bake Shop, Inc., et  al., 2014 WL 5508177 (Bankr. D.N.J. Oct. 31, 2014).

Earlier this year, we reported on a decision limiting a secured creditor's right to credit bid purchased debt (capping the credit bid at the discounted price paid for the debt) to facilitate an auction in Fisker Automotive Holdings' chapter 11 case.¹ In the weeks that followed, the debtor held a competitive (nineteen-round) auction and ultimately selected Wanxiang America Corporation, rather than the secured creditor, as the w

The Court of Appeal has decided that rent accruing during a period of administration should be treated as an expense of the administration, irrespective of the date on which it falls due for payment. Administration expenses are paid by administrators in priority to liabilities owed to holders of security.

Comfort letters can be a useful tool for providing an assurance of support from a parent to a subsidiary company. In some cases they help inform the decision of the board of a subsidiary and its continuing trade. It's possible for such letters to form binding obligations in law, if carefully considered and drafted.

Whether a secured creditor has an absolute right to credit bid at a sale under a chapter 11 plan has been the subject of conflicting decisions rendered by the Third, Fifth and Seventh Circuits.¹ The United States Supreme Court has resolved these inconsistent rulings with its decision in RadLAX Gateway Hotel, LLC, et al., v. Amalgamated Bank, ² which affirmed the Seventh Circuit’s holding that a secured creditor has an absolute right to credit bid in a sale under a chapter 11 plan.

Key points

• The High Court has ruled that, where a tenant goes into administration, rent which is payable in advance and falls due before the commencement of the administration is not recoverable by the landlord as an administration expense
• Landlords must take their place with other unsecured creditors in relation to sums payable before the appointment of administrators, even if they relate to a period during which the administrators had use of the property

Background