Part 1 – Celsius Bankruptcy
The novel coronavirus COVID-19 pandemic has the potential to impact the U.S. economy at a level which could ultimately rival or surpass the global financial crisis of 2009. Reports from commercial landlords suggest that a majority of retail and restaurant tenants, perhaps as many as 75%, failed to make payments of rent due on April 1st.
Courts are often faced with the situation in which affiliated debtors file for Chapter 11 reorganization and request to have their cases jointly administered. While joint administration does not, without more, cause substantive consolidation of the assets and liabilities of the corporate group, jointly-administered debtors may propose a single plan of reorganization that establishes the recovery for all of the debtors’ creditors.
BACKGROUND
Snapshot
The Court of Appeal’s judgment in Jervis v Pillar Denton Limited (Game Station) [2014] EWCA Civ 180 on 24 February 2014 has brought welcome clarity to when rent qualifies as an administration expense.
The Court of Appeal has ruled that:
The United States Court of Appeals for the Second Circuit (the “Second Circuit”) recently followed the emerging trend of affording the safe harbor protections of section 546(e) of the Bankruptcy Code (the “Code”) to intermediary financial institutions acting as only conduits in otherwise voidable transactions.
Summary
On 24 July 2013, the Supreme Court handed down its long-awaited judgment in the Nortel/Lehman case: Re Nortel Companies [2013] UKSC 52. The Court looked at the position where a contribution notice (CN) or financial support direction (FSD) was issued by the Pensions Regulator (TPR) on a company that is already in insolvency proceedings in England (eg administration). How does the relevant obligation rank in the order of priority of payment?
Snapshot
The Supreme Court handed down its long-awaited judgment today in the Nortel/Lehman case on where a contribution notice (CN) or financial support direction (FSD) issued by the Pensions Regulator (TPR) on a company that is already in insolvency proceedings (eg administration) ranks in the order of priority of payment.
The United States Court of Appeals for the Eleventh Circuit (the “Eleventh Circuit”) has reinstated the controversial 2009 decision of the United States Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court”) that required a group of lenders to disgorge $421 million as fraudulent conveyances under sections 548 and 550 of the Bankruptcy Code.
We reported to you last month a significant development in the matter of In re TOUSA USA, when the United States District Court for the Southern District of Florida issued its opinion and order reversing the controversial holdings of the Bankruptcy Court in the TOUSA chapter 11 case as to the so-called “Transeastern Lenders,” a group of lenders who had previously been ordered to disgorge nearly ½ billion dollars received in repayment of indebtedness which the Court found constituted a fraudulent transfer under Sections 548 and 550 of the Bankruptcy Code.