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Second Circuit Overturns Southern District in Marblegate

On Jan. 17, the U.S. Court of Appeals for the Second Circuit vacated the decision of the District Court for the Southern District of New York in Marblegate Asset Management, LLC v.

USA, New York, Capital Markets, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Second Circuit
Court rules lender’s intent is irrelevant in authorizing UCC termination statement

A lender cannot rely on its subjective intent in claiming that an otherwise properly filed UCC termination is ineffective, according to a recent decision by the United States Court of Appeals for the Second Circuit. Put another way, if a lender authorizes a termination statement, the termination is valid upon filing such UCC-3 even if the authorization was mistakenly given. While this result is not surprising, it does put lenders (and their counsel) on notice to be diligent in reviewing and authorizing the filing of UCC termination statements.

USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, JPMorgan Chase, Uniform Commercial Code (USA)
Second Circuit in AMR Corp. – “no make-whole” based on plain meaning of indentures and discusses consequences of section 1110 payments

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USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bond (finance), Default (finance), Title 11 of the US Code, Second Circuit
Stay here – Second Circuit in Residential Capital holds automatic stay can be applied to non-debtors where action has an immediate adverse economic consequence for estate

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USA, Insolvency & Restructuring, Litigation, Real Estate, Kramer Levin Naftalis & Frankel LLP, Debtor, Mortgage-backed security, Federal Housing Finance Agency, Second Circuit, Fourth Circuit
Tarnishing the debtor’s Halo – police power exemption applied to private actions

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USA, Insolvency & Restructuring, Litigation, Telecoms, Kramer Levin Naftalis & Frankel LLP, Fifth Circuit
Giving credit when due -- Supreme Court denied confirmation of Chapter 11 plan that precludes credit bidding

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In a unanimous decision (with Justice Kennedy not participating), the Supreme Court issued a decision in RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 2012 WL 1912197 (U.S. May 29, 2012), (“RadLAX”) in which it held that section 1129(b)(2)(A) of the Bankruptcy Code does not permit a debtor to “cram down” a plan of reorganization that provides for the sale of encumbered assets free and clear of liens at auction without permitting the lienholder to credit bid at such auction.

USA, Banking, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Debtor, Secured creditor, Title 11 of the US Code, Seventh Circuit
Seventh Circuit takes the long view in defining insider status for preference actions

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USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Debtor, Limited liability company, US Code, United States bankruptcy court, Seventh Circuit
Post-script – recent Enron “settlement payment” decision has first beneficiary

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USA, New York, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Unsecured debt, Security (finance), Default (finance), Subsidiary, Enron, Second Circuit, United States bankruptcy court, US District Court for the Southern District of New York
Now that’s settled – Second Circuit in Enron exempts redemption of commercial paper

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USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Debtor, Security (finance), Statutory interpretation, Safe harbor (law), Debt, Maturity (finance), Fair market value, Commercial paper, ING Group, Westlaw, Enron, US Code, Trustee, Second Circuit, United States bankruptcy court